Considered in Grand Committee
My Lords, in November last year, Ministers made a Statement in the other place on the Thames tunnel. This included our plans to introduce an order amending Section 14 of the Planning Act 2008, which would classify proposed major sewer projects as nationally significant infrastructure projects, or NSIPs for short. This Section 14 order is before your Lordships today.
We conducted a 12-week public consultation on the draft order last summer and published its summary of responses in January this year. More than 900 organisations and individuals were consulted about our proposals. The consultation documents were publicly available on Defra’s website, and two question-and-answer drop-in sessions for the public were held at Defra’s offices. We received a total of 44 responses to the consultation. The majority were from local planning authorities and individuals near to potential construction sites for the Thames tunnel project proposed by Thames Water. The outcome of the consultation showed that the draft order itself was not opposed. What opposition there was came mostly from local people living near proposed Thames tunnel construction sites. They were concerned that local planning authorities were being excluded from the streamlined NSIP planning application process.
The order would perform two functions. First, it would extend the categories of NSIPs to include major sewer developments with a capacity of 350,000 cubic metres or more. Secondly, it would allow public consultations that are carried out on such proposals before being designated as NSIPs to be treated as part of the planning application process as if they had indeed been classed as NSIPs.
The main advantage of classifying proposed major sewers as nationally significant infrastructure projects is that they would benefit from the existing streamlined NSIP planning application process under the Planning Act 2008. This involves a single application to the Planning Inspectorate for a development consent order.
The NSIP planning application process ensures that local authorities and local communities are included as an essential part of the whole process, enabling them to submit representations to the Planning Inspectorate as part of its consideration of an application. Democratic accountability is built into the system, with Ministers making the final decision on such applications at the end of the 12-month process, taking account of the recommendations of the Planning Inspectorate.
The planning application process for proposed major sewers was considered in February 2011 by the Environment, Food and Rural Affairs Select Committee as part of its scrutiny of the waste water national policy statement. The committee found it inconsistent that major sewer developments were not included as NSIPs alongside major new sewage treatment works within the Planning Act 2008. The committee recommended that the situation be rectified accordingly.
The order before your Lordships today meets that recommendation. It does not specifically refer to the Thames tunnel project. However, this is currently the only proposed major sewer development that would meet the threshold of the order. In the future there may be other such projects and so it is right that an appropriate legislative framework is in place to ensure that they too can progress with as little unnecessary delay as possible.
As far as the Thames tunnel is concerned, the waste water national policy statement was approved by Parliament and designated on 26 March. This sets out the need for the Thames tunnel as the most cost-effective, timely and comprehensive solution currently available to the problem of significant ongoing sewage pollution into the River Thames in London, when compared with the alternatives. It will enhance the ecology of the river and is estimated to directly employ around 4,200 people in its construction and in related sector works, with an estimated several thousand secondary jobs in the supply chain and wider London economy. Thames Water has set itself a target of employing local workers to make up to 20% of its tunnel construction workforce.
I know that many of your Lordships have firmly held views on the merits or otherwise of the Thames tunnel and I look forward to this debate during which, no doubt, many of these views will be put forward. However, I ask your Lordships to bear it in mind that the order may apply not only to the Thames tunnel but also to any similar major sewer projects that may be brought forward in the future. I commend the draft order to the House.
My Lords, there is clearly widespread support for this order, as the Minister said. The Environment, Food and Rural Affairs Committee in another place recommended that the Government go down this route and the responses to the consultation contained widespread support, including from the local authorities that would be affected by the Thames tunnel proposals. Therefore, on this side of the coalition, we support the order. It is important to remind ourselves why it is being brought forward. It is not about trying to speed up any decisions; it is about making a process that is timely and minimises unnecessary cost but remains democratically accountable.
This is a new type of engagement for the public in terms of how they respond to major sewer proposals; in the past DCLG has been very good at public education campaigns about how the public can engage which allays fears that these are processes that are somehow to speed things up and stop them being involved. Will the Minister be speaking to his colleagues in DCLG to ensure that a proper public consultation campaign is undertaken so that people realise how they can engage in this new major infrastructure order?
My Lords, I spoke about this project—well I did not actually speak, my noble friend made my speech for me because I was on the sleeper to Scotland. He did an extremely good job especially when it apparently diverged from our party policy, but there we are. I do not have a particular problem with the concept of an order such as this amending the planning process because I have always supported the Infrastructure Planning Commission and its successor. I did, however, have a chuckle when I read the impact assessment for this project: in answer to the question of what was the CO2 equivalent change in greenhouse gas emissions in millions of tonnes of CO2 equivalent, the answer was “not applicable”.
When I worked out that for the Thames tunnel— I do not know whether Thames Water is still going to move all the spoil away by road—that was going to be 500 trucks a day, the idea that that would not produce any CO2 was laughable. Of course, many other bits of CO2 will come out of the construction, let alone the operation. The matter might be a little detailed but it needs looking at again.
Since the debate on 27 March, things have moved on and Thames Water has produced a second consultation report. It has made some changes but I do not think it has recognised that it may have an unnecessarily expensive scheme. The eminent water engineer, Chris Binnie, produced a report, about which I shall speak in a minute and which could reduce infraction fines by obtaining improvement much sooner than 2023, which I believe is the latest date for the scheme to be completed. We must not forget that the cost is now something like £4.2 billion, plus I think that the estimate of infraction has gone up to £1.5 billion. There is, of course, always a risk of cost overrun in tunnelling. Further, there is the estimated £80 per annum for 30 years that every Thames Water customer will have to pay, with or without the extra subsidy from the Government that was agreed a couple of months ago. Therefore, I suggest that the Government ought at this stage to take a step back and reflect before spending nearly £6 billion of taxpayers’ money, which may not even satisfy the European Commission’s requirements. Indeed, we do not yet know what those requirements will be until the Court has concluded its deliberations.
Mr Binnie’s report refers to a possible fine of £1.5 billion. He believes that the fish issue can be addressed much more cheaply and that the same applies to the problems of sewage, litter and health impacts in the London docks. He says that these rather smaller issues could be addressed within two or three years, although one of them will not be resolved until 2023, which is more than 10 years away. However, all this is dependent on the European Court’s judgment, which will go back to the European Commission. Therefore, I argue that it is well worth trying to introduce some interim measures. That would probably reduce the fine significantly as the matter is assessed on a five-point basis and if you make improvements, the fine goes down.
This project has gained a momentum of its own, as do many big projects, some of which one likes and some of which one does not like. This theory of mine as regards projects gaining a momentum of their own goes back many years. Ministers like to put their names to big projects but these projects do not always survive political pressures. That is true of Governments of all parties, and 2023 is a very long time away, although I am sure that the Minister opposite does not fall into that category. However, I am concerned about where the independent advice is to be found in all this. I understand that the person in Ofwat who is responsible for this project used to work for Thames Water and that the person responsible for the technical advice on this scheme used to be responsible for the Mogden sewage works. I also understand that during the hearings that the noble Earl, Lord Selborne, held a few months ago, Thames Water referred to Ofwat and the Environment Agency as its team. This should not be a team. The regulator has an independent role. It is all wrong that they should all be one happy family when they are spending £6 billion of taxpayers’ money. Nobody is looking at alternatives. The Minister said in his introduction to the debate that this was the best scheme, having considered alternatives, but who is considering the alternatives?
I suppose it is not surprising that people are not looking at alternatives but this needs to be done. If one looks at some of the mitigating measures produced by Mr Binnie and others, there are probably many of them. We also need to make sure that if the Thames tunnel scheme goes ahead, it achieves the results we want. However, we do not know what the Commission will decide in this regard. I hope that the Minister will advise his colleagues that it is time to take a step back and look at alternatives. I would very much welcome a quick meeting with him to go through this in more detail. In the mean time, I shall not oppose the order and wish it well. However, I am not sure that I wish the project well at this stage.
“Infrastructure investment is vital to the UK economy and jobs”.
That is the first sentence in the background paper to the order today. It is wonderful to hear the Minister speak to it and, as we have been reminding him and his Government constantly, place it at the top of the action for growth agenda. This order is coming forward just before the Recess. The Water Industry (Financial Assistance) Bill was scheduled for the day before the Easter Recess. From this side, we welcome them at whatever time. We will very much take these orders as a quasi-Committee stage—as a Committee stage was denied to the water industry Bill as a money Bill—to follow up the progress of activity.
This order fulfils the recommendation in the EFRA committee report on the draft waste water national policy statement that the Government should bring forward proposals to amend the Planning Act 2008 to bring large-scale sewerage infrastructure, such as the Thames tunnel, within the planning regime for nationally significant infrastructure projects. As the Minister said in his introduction, this order is concerned with the construction and alteration of infrastructure for waste water. Currently, around 39 million cubic metres of waste water enters the Thames every year from London’s combined sewage overflows. When storm water capacity is exceeded, they discharge. On average, that happens once a week. The urgency of the work as a health hazard and to improve the environment is increased by the infraction proceedings being pursued against the UK by the European Commission for breaches of the directive.
Is there any update the Minister could give since the passing of the Bill in March? Is he now more confident that the scheme will be fit for purpose for the long haul? Is there an outcome he can share from the consultation undertaken by Thames Water Limited in the early months of this year, a measure spoken to by my noble friend Lord Berkeley, who also asked questions about the costs and outcomes of the scheme? It is very encouraging that the amendment to Section 35 of the Planning Act 2008 came into force in April instead of in December this year. The memorandum points out in its policy options analysis that this will save costs: each month’s reduction in time will save in the region of £5 million.
I thank the Minister for his letter following the passage of the Bill in March. I shall follow it up with a few questions for information on the detail of the order today. The memorandum lists the groups contacted in the consultation process undertaken last year on the capacity threshold of 35,000 cubic metres and indicates 62% agreement with the threshold and 73% agreement with the proposed supplemental provisions. The noble Baroness, Lady Parminter, mentioned the local groups established in response to the Thames tunnel proposals. Will the Minister give an indication of the percentage agreement of community groups within the overall figures? Can we be assured that the worried section of the population, apart from all the relevant authorities and planning associations, is on the whole happy with the proposal? I know the Minister mentioned this in his opening remarks.
On the capacity threshold, will the Minister indicate what increase in capacity over today is indicated by 35,000 cubic metres? What level of occurrence will overwhelm this capacity? Has there been any assessment of what increases in households the system will adequately cover or for how long, assuming all other activity remains the same?
From our debate on the Bill in March, the Minister will know that we look to encourage many more water efficiency proposals to come forward: to separate out as far as possible water runoff from the sewerage system; to reduce the replacement of gardens and green space with paved areas; to replace hard non-permeable surfaces with porous materials; and, last but not least, to encourage measures to reduce household consumption of water. Can the Minister update the Committee today on any of those aspects since the Bill’s passage?
The memorandum also outlines the fact that 350,000 cubic metres capacity was informed by experience of large projects. Could the Minister explain what is meant in the memorandum when it says that in the next 10 years the proposed Thames tunnel has an estimated capacity of 1,580,000 metres? The memorandum also mentions the reviews of the scheme into the future. May I ask that the Minister builds into that regime a review to be implemented as any overspill occurs? That will underline that the hygiene problems of London are to be consigned to the past.
Finally, in a debate on the Water Industry (Financial Assistance) Bill, we called for apprenticeships to be set up and included in the project. We welcome the remarks made by the Minister on future projects in his opening statement. With all that said, we agree to take note of the orders today.
My Lords, it has been an interesting if fairly brief debate and exchange of views that I hope will inform your Lordships for future occasions. I tend to agree with the noble Lord, Lord Berkeley, that perhaps it might be useful to have a meeting of Peers and those at Defra some time in the autumn where we can bring together all those matters. A debate such as this has helped considerably to bring to the fore some of the issues that are being considered by government. After all, there is a contingent liability to government in the Water Industry (Financial Assistance) Bill in these matters, and those are not undertaken lightly or without the Government having a proper care of what is involved.
As I said in my opening speech, it is appropriate that the issue of this order amending Section 14 of the Planning Act 2008 should be separate from the specific matter of the Thames tunnel. However, I do understand that the Thames tunnel is the only one that fits the Bill at the moment. So we have two elements to the debate today—one about the statutory instrument before us, which I have commended to the Committee, and the other about the broader issues. I hope that I can indulge the Grand Committee by talking about Thames tunnel matters, because it is clearly a public platform.
I am very grateful to my noble friend Lady Parminter for her general support for this project. As I say, it is not something that the Government have entered into lightly. Indeed, it is of course Thames Water that is entering into the project; the Government are providing a framework against which they can make their application. I assure her that Thames Water expects to commence its publicity notice in mid-July, which will publicise the impending planning application in early 2013. There has been a lot of public liaison by Thames Water itself, but of course that will mean that the consultation on the planning process opens up formally at that time.
The noble Lord, Lord Berkeley, whose professional and parliamentary expertise on matters of tunnels I respect, mentions the Binnie report. Our view is that the environmental criteria set in 2007 remain robust; they are not gold-plated in any way, and we cannot afford to downgrade them. Alternatives such as a western tunnel or a piecemeal approach—and I do not mean that in a derogative sense—which the noble Lord recommended, showed that there can be considerable problems. None of the alternatives identified during the extensive studies carried out over the past decade has been able to deal swiftly and adequately with the true environmental and health objectives of the Thames Tideway, while at the same time complying with statutory obligations. For example, separate rainwater from foul water sewerage systems would be far more costly, possibly £12 billion. It would be extremely disruptive and would take far too long to complete.
The shorter west London tunnel coupled with green infrastructure measures would still not fully reduce the volume and frequency of discharges either sufficiently or quickly, so we would not, in fact, be able to meet the environmental and health objectives.
I am grateful to the Minister for that response. I have heard that statement from him and others before. But this kind of thing needs debating. Nobody is quite sure what standard is trying to be achieved that would meet either UK or European legislation because we do not know what the European Court will say. I hope that that is something we can talk about in the meeting in the autumn and I am grateful to the Minister for agreeing to that meeting.
It would be useful. I am satisfied that Defra has thought this matter through. Clearly, at the current stage of the economic cycle, we are not looking to spend money that it is beyond the capacity of this Government to endorse. I will come on to the European Court in relation to that. The interim measures, as I said, will not meet the waste water directive. That is one of the difficulties. We have to consider the urban waste water directive. The proposal to construct a tunnel should be sufficient to avoid fines completely if it is delivered to the planned timetable.
Within that process, it is important for the noble Lord to understand that although we expect a judgment concerning London in the next few months, if we lose and the European Commission wishes to pursue fines because it does not think that we are addressing the issue properly, it needs to return to the Court for further judgment. The Court has wide discretion about the levels of fines depending on several factors including the seriousness and the duration of the breach. In this case, we would expect the level of fines against the UK to be significant and set at a level to act as an incentive to remedy that breach as quickly as possible. But fines would be levied until the breach is rectified. Currently, the proposed Thames tunnel offers the solution most likely to rectify the problem within the shortest time.
We cannot prejudge this issue, but clearly we are seeking to address it. It has arisen over a century or more of the growth of London and the growth in its sewage. Much of our sewerage infrastructure was built by Bazalgette 150 years ago and is clearly no longer capable of coping.
I think that I have covered those questions raised by the noble Lord, Lord Berkeley, and I now wonder if I have some points to help the noble Lord, Lord Grantchester. I am grateful for his contribution, which was supportive of the process that the statutory instrument is trying to bring about. Indeed, he is grateful for the Government tabling this debate because it is something that the Opposition have supported in the past.
There is no question of us seeking to curtail debate. I hope that the noble Lord will accept that. The money Bill was a money Bill and we were not able to debate that further. I hope that he is happy with the suggestion I made to the noble Lord, Lord Berkeley. There were a number of detailed questions that he asked me and I hope that he will forgive me if I write to him on those matters. I can make sure that other noble Lords who spoke in the debate get a copy of that letter.
I thank the noble Lord very much for that suggestion. I conclude my remarks by saying that the order will help to prevent some of the indecision and delay that has gone on around many of these projects and the additional costs incurred by them. I hope that it will prove to be of utility for this Government and future governments.