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House of Lords Hansard
EUC Report: EU Freshwater Policy
05 December 2012
Volume 741

Motion to Take Note

Moved By

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That this House takes note of the Report of the European Union Committee on An Indispensable Resource: EU Freshwater Policy (33rd Report, Session 2010–12, HL Paper 296).

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My Lords, some have suggested that our report into water policy had the powers of a rain dance, for no sooner had we concluded the inquiry in April, which highlighted water shortage, than the heavens opened and we had one of the wettest summers on record. Even as we come to debate our report, much of the country seems to be under water. Yet, although ground-water levels in the UK have been topped up, we must not be complacent, as long-term trends that we face are very clear, and we face some difficult choices going forward.

The European Environment Agency observed that the number of countries affected by drought per decade rose from 13 in the period 1971 to 1980 to 24 in the period 2001 to 2011. The analysis showed that the drought occurrence not only increased in the central and southern areas of the EU but, significantly, also in the northern and eastern parts of the EU, in countries such as the UK and Sweden. The reasons for this are clear: intensification of agriculture; urbanisation; climate change; and, of course, a rising population.

Looking forward to 2050, we can expect a world population of some 9 billion, and so we will need to provide 70% more food and 80% more primary energy, and, of course, a significantly greater amount of water. Given that the supply of water is finite, this is a critical, if not urgent, matter, and we need to understand what our water policy should be in order to mitigate future crises. That is not easy. There is a great deal of uncertainty, particularly relating to climate change. However, one of our witnesses, Professor Alan Jenkins, put it very well. He said:

“Uncertainty is no reason for not doing anything”.

In 2010 we published a report on adapting EU agriculture and forestry to climate change. It is fair to say that the increasing water scarcity was a particular theme that came out of our inquiry. Subsequently we undertook an inquiry into innovation in EU agriculture, in which a key concept was sustainable intensification; that is, producing more from less, including, of course, less water.

It therefore seemed appropriate to us, given the increasing focus on water policy in the EU, to build on that previous work and to offer thoughts, some of which we hoped would be of assistance to the Government in developing their policy and to the Commission in preparing its blueprint for the future of EU water policy. Fortunately, that blueprint was published two weeks ago, and so, if I may, I will set out our conclusions and what the blueprint had to say about them.

We have to accept that the cost of water will have to rise. But before we can even think about that, we have to have a more fundamental consideration of how we value water. It is interesting to note that water is a scarce resource; yet, it has taken 20 years for the price of water to rise by 40%. When you look at the other scarce resource, energy, the price of gas has taken only five years to reach the same level.

The water framework agreement places an obligation on member states to do two things. One is to ensure that by 2010 water pricing policies provide adequate incentives for consumers to use water more efficiently. The second is to ensure an adequate contribution of the different users disaggregated into industry, agriculture and households. The object of that is to ensure that each pays an appropriate share of the cost of water services. That needs to take into account environmental and resource costs.

What surprised us was that during this inquiry, the UK’s regulator, Ofwat, told us that there is no real price placed on water in the UK. The Commission was critical in the blueprint of cost recovery in the UK. It appeared to us and to the Commission that water services were too narrowly defined and did not reflect environmental and resource costs, including self-abstraction by agriculture. Cost recovery is not transparently presented for all relevant user groups. Therefore, I ask the Minister to respond to that criticism and to answer how the UK will ensure as a matter of urgency that it is in a position to value water effectively.

Abstraction becomes important because it was regarded as not being effectively cost recovered. The Commission observed that the second most common pressure on ecological status right across the European Union stems from abstraction. In our report we urge the Government to accelerate their timetable for reform of the UK’s abstraction regime, a position that I know is shared by the EFRA Committee in the other place.

While we accept the Government’s position that the reform of the abstraction regime is a major piece of work, which should be evidence-based and carefully considered—that is, go slowly—is it not the case that changes made by this Government in other areas, including health and education, have been significant? We would welcome an application of a similar urgency and political impetus to tackle overabstraction, given the clear direction in the blueprint.

As regards water efficiency, scarcity can, in part, be addressed by efficiency. I have already mentioned abstraction but more must be done to tackle the scandalous levels of leakage and to encourage personal water efficiency. During our inquiry we were shocked to learn of the levels of leakage from water infrastructure. Why is it that in Germany the so called “sustainable economic leakage level” is 7% while in the UK it is 25%? In certain other countries in the European Union, it is as high as 50%. One way to encourage personal efficiency in water use is through metering. In our view, a greater use of metering needs to be considered. The Commission, quite rightly, describes metering as,

“a pre-condition for any incentive pricing policy”.

Does the Minister share that view?

Another example of innovation in water efficiency is water foot-printing. It has been calculated that, as a global average, it takes 70 litres of water to produce one apple and 15,000 litres to produce one kilo of beef. I do not know whether this is the experience of others but sometimes I have sat at a long lunch with rather dull company and hoped that some of that water could reform itself into a tidal wave and sweep away some of the clutter that we were facing. None the less, looking at the assessment of the amounts of water embodied in products and how the value of that water can be taken into account can make a real change to the way in which consumers make their choices. I am pleased to note that the Commission is very supportive of that concept.

A further area of efficiency is that of water reuse. One of the new legislative initiatives suggested by the Commission in its blueprint relates to water efficiency around this area. Many noble Lords may be aware of grey water use in Europe. This is lower-grade water which is used for irrigation. The Commission has identified that the use of this water faces certain obstacles because there are no standards. Because there are no standards, this leads to restrictions in the export and movement of agricultural products around the European Union. Therefore, it is suggesting that standards could help to alleviate this situation. Do the Minister and the Government have a view on the Commission’s analysis and are the Government planning to introduce such standards unilaterally?

Agriculture is a very large user of water. In our report, we urge member states to make use of rural development funds to support water management and water efficiency in agriculture. We were interested to note the Commission’s view that there is a lack of clear strategy in the UK defining the basic measures that all farmers should adhere to and what additional supplementary measures can be financed. Clearly, we do not want to pay for what we should expect as the norm.

The Government have indicated that a strategic framework for agriculture and water is being worked on across Defra. I should be grateful if the Minister could say more about that framework, including timing, and whether the Government consider that they will tackle the issues highlighted by the European Commission.

I now turn to urban diffuse pollution. This is a major issue as, within the European Union, most of us live in urban areas. During our inquiry, we were concerned that a recognition of the impact of agriculture on the water environment had in many ways diverted attention from the impact on urban diffuse pollution. We recognise that Defra is doing work on this and has published a consultation on its strategy for combating it. While we are supportive, I think that the proposal, rightly, is for a lot of this responsibility to be pushed to local communities. We are very supportive of local engagement. But is the Minister confident that communities will have the necessary tools at their disposal coherently to tackle key issues, such road run-off? Perhaps the Government might usefully draw on the experience of Danish colleagues, following the example of Copenhagen, as set out in Box 4 of our report.

We concluded that further research is required into urban diffuse pollution, particularly on run-off, sediment and waste water treatment. The pressure on costly urban systems could be reduced if the discharge or discard of chemicals into the sewerage system were to be reduced. In that context, we welcome the Commission’s commitment, in the blueprint, to present a report on pharmaceuticals and the environment.

It is particularly interesting that one chemical, EE2, which is present in oral contraceptives, makes its way into the sewerage systems across Europe. To give noble Lords some idea of the extent of this, it is estimated that over the next 20 years, we will have to spend £27 billion to clean this up. That gives a sense of the scale of the challenge that we are facing.

Some solutions may be found in the European Innovation Partnership on Water, to which we drew attention in our report. The essence of this is networking between researchers, companies, public authorities and consumers. How this trickles down involves those at the local level and taking it forward is one of the key challenges that we face. Again, it would be useful to have confirmation that the Government are actively engaging with practitioners and stakeholders to bring this fledgling initiative to their attention so that, locally, people know that they can become engaged from the beginning.

Perhaps I may say a few words on governance. Engagement with stakeholders takes me to a core conclusion of our report and a significant shortcoming that we see in the blueprint. We were extremely impressed by the evidence we received about the work that is taking place organically at catchment level—that is, the sub river basin level—to manage fresh water in the UK and Australia. We heard some extremely good evidence from the south-west of England and some extremely good evidence about what is going on in Australia. The essence is to engage local communities in the appreciation of their rivers so that they get to understand all the consequences of actions and the benefits arising from them. However, none of these local initiatives will work without leadership, technical support and financial resources. Where one of these is missing, success is impossible. Can the Minister reaffirm the Government’s commitment to sharing their experience of catchment management with others as an example of best practice? Spreading this is very important.

So far I have said very little about our views on implementation of the water framework directive, which is, after all, the core of the EU’s freshwater policy. On first experience of implementation, our conclusion was that it has been a great force for good. Yes, implementation is proving challenging, yet the very aspiration of seeking to achieve good status is clearly helpful. Based on the very strong view that we received from witnesses, we emphasised the need for a more nuanced approach to reporting progress in improving the quality of water courses, going beyond the changes in status. As the Government wrote in their response:

“Achieving good status is a long term goal and it needs to be recognised that preventing deterioration and making progress towards achieving good status are … achievements”.

We firmly agree with that. However, I would welcome comments from the Government as to how they consider that such recognition can be introduced into UK reporting procedures.

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I have been listening with great care to my noble friend’s very instructive and lucid remarks. I declare an interest as a director of an American company that is engaged in purification of water involving the fracking process. I did not hear my noble friend say anything about fracking. The amounts of water that are going to be involved in the United States are stupendous. Perhaps he could enlighten us as to whether his report took account of the possibility of fracking spreading to this country at anything like the scale it is proposed to extend to in the United States.

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I will deal with that now. We did not look at fracking, but we are looking at it in the context of our inquiry into energy, which will be very critical. We hope to report on that in the spring of next year.

One issue that concerned us greatly in this inquiry—as in a number of others that we have conducted—was the consistency of monitoring and enforcement across the EU. Time and again we conduct inquiries and find that we in this country have monitored and enforced effectively, only to look across at other countries in the Union and find a somewhat less than enthusiastic attitude to monitoring and enforcement. Therefore it is very comforting that, in the case of water, both the Government and the Commission accept the need to strengthen monitoring and enforcement. The Government make a series of commitments in this regard in their response, including working on harmonising monitoring programmes, reporting procedures, and sampling and analytical methods. These commitments are very welcome. However, given our concerns, can the Minister please tell us how the Government plan to take these ambitions forward? We see this as a critical area.

I have spoken today on behalf of my committee, many of whose members are present here, and I pay particular tribute to those members whose engagement and insight really brought energy to the inquiry. I also thank the committee’s specialist advisers—in this case, Professor Robert Harris of the University of Sheffield and Dr Jonathan Wentworth of the Parliamentary Office of Science and Technology; their support was of great value. In the months since the report was published, we have seen the commission's blueprint, and we have seen progress with the pilot catchment management and the draft UK consultation on urban diffuse pollution. Those are all very important steps forward, but we are looking to see more action.

To conclude, I return to where I started. Notwithstanding the recent weather, there is a need for urgency. We believe that the water framework directive is a force for good, but we believe that more must be done quickly to operationalise the policy and the aspirations. We need action on pricing, on abstraction and on diffuse pollution, and we need it quickly. Some 250 years ago, Benjamin Franklin noted that when the well is dry, we know the value of water. Looking across the EU, from Cyprus to Estonia to Essex, the wells are beginning to run dry and we need to do something about this rather quickly. Securing fresh water for future generations in the UK and Europe is a fundamental responsibility. We need to recognise that we will have to pay for it and we need to take the long-term view, as I suggest our forebears did when they made the great 19th century investments in water and sewerage, for which we have been grateful for more than 100 years. I beg to move.

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My Lords, I was a member of Sub-Committee D for two terms and very much enjoyed my time on it. During the first term we looked at the water framework directive and its introduction; during the second term we did a quick follow-up inquiry. So I am particularly grateful to have the opportunity today to listen to the introduction by the noble Lord, Lord Carter of Coles. I am also grateful to other members of the committee who will contribute today, and for the opportunity to make a few brief points myself.

This debate on water issues should be the first of many that we will have. As the noble Lord, Lord Carter, said, the recent floods and the drought that we had earlier in the year are an indication of how severe things are likely to get with the more extreme weather that climate change is predicted to bring. Even before that, water policy has been seen as more and more crucial over the past 20 years. I believe that it was President Gorbachev who founded Water for Life and Peace because he saw it as one of the areas that would give rise to conflict in the 21st century. There is no doubt that we cannot afford to be complacent in any way about water from any point of view of security, whether actual security or food security, and so on.

Today I will limit myself to talking about priority substances, governance in terms of the water framework directive, and measurement of successful quality improvement of water bodies. First, I will talk about the priority substances explained on pages 13 and 14 of the report. A great many were listed by the water framework directive the first time around. There was an indicative list of main pollutants, of which some of the most worrying were those that possessed carcinogenic or mutagenic properties, or properties that can affect the reproductive and hormonal functions of creatures, including ourselves, of course. Then there are the persistent hydrocarbons and bio-accumulable organic toxic substances, which are all worrying, and that list is now to be added to.

The fact is that since we talked about this the first time, I do not think that we have got anywhere near tackling the substances on the current list. They have been placed in the “too difficult” box, or are too expensive to tackle. As the noble Lord, Lord Carter of Coles, has said, the estimate at the moment is that they will cost £27 billion to clean up. However, we have known for more than a decade, for example, that the endocrine disruptors are affecting the ability of dog whelks to breed. Before anyone thinks, “Well, who cares about dog whelks?”, the same effect is likely to spread to fish. Then there is the news today, which is very topical given this debate, of the much lower sperm counts in France. Maybe we are busy wiping ourselves out as a species, through our water. In any case, it is a form of pollution that must be tackled as a priority.

Paragraph 48 of the report suggests that we need “more knowledge” before tackling existing and new pharmaceuticals. However, given the science that we are already beginning to see and examples such as those I have just mentioned, we cannot afford to wait for another decade before we take action. Effluent-containing substances, such as endocrine disruptors and other things that could affect the ability of the whole gamut of animals to breed, will require waste water treatment when such things are flushed. As long as we persist in flushing such drugs out of our body, down the lavatory and into the rivers, we are going to have a very dangerous problem.

The report does not mention—at least I did not spot it—nano-substances. This is another very worrying development. The development of nanosilver is under way as an effective way of cleaning clothes in a virtually water-free way, but will those substances end up in our waste water, too? I think that the report is right to mention the worries, but it does not put over urgently enough the need to deal with them.

As the report says, governance is a key issue; linking communities back into their rivers and catchment is the way to affect behaviour change in our use of water and valuing of ecosystems. Some very good work has been done by the Wildlife Trust, for example, giving examples of how our water use can lower river levels until they cease to be viable ecosystems.

In paragraph 200, however, the report is plainly wrong, when it says that,

“novel governance approaches are despite, rather than because of, EU policy”.

Actually, it was quite the opposite. The original water framework directive really encouraged public involvement under Article 14, which was quite a long article—I shall not read it all out now. It was basically about public information and consultation and it said:

“Member States shall encourage the active involvement of all interested parties in the implementation of this Directive”.

It went on to specify a number of ways in which that would happen. Here in the UK, the attempt the first time round was, with a few notable exceptions, pretty poor.

I should declare an interest at this moment, because my husband was chairman of the Wessex Regional Flood Defence Committee and chaired one of the pilot catchment areas. We had debates on record in this Chamber; the noble Baroness, Lady Young of Old Scone, took part in them when she was at the Environment Agency. The agency was at that time unwilling to involve the public as much as the spirit of the water framework directive encouraged. Water companies were caught up in issues such as pricing and what comes out of the tap rather than whole-cycle costings. So at the time we wasted the opportunity for the public to be involved, and it is not because Europe got it wrong but because we did not interpret the water framework directive correctly.

There is also a problem of size. The designated size of the river basins means that the public will never relate to those, and I accept that the Government do not expect them to. Catchment areas or even subsets of those are what communities relate to. The smaller the geographical unit, the more likely you are to get real public involvement.

The recommendation in paragraph 201 is right in saying that one key is local authority energy and engagement with the water framework directive, and it goes on to suggest that some sort of duty could be put on water companies and local authorities to co-operate with each other. That is a constructive and helpful suggestion, because we need to kick-start that co-operation to get a far more engaged basis for this sort of work. The best results to date of catchment management plans have been exactly as a result of this approach, where local authorities have really got stuck in with their water companies and changed the way in which many things happen.

Finally, on measurement of water body status, I am very pleased that the report concentrates on the fact that status categories are too blunt. Paragraph 180 talks about “mapping of ecosystem services” informing choices of,

“technological solutions to be applied”,

moving away from the,

“‘one size fits all’ approach”.

The evidence from the Westcountry Rivers Trust is that,

“water quality objectives at present are only quasi-ecological”,

and are based on,

“point source pollution but not diffuse acute pollution”.

The trust mentions,

“biotic indices for macro-invertebrates”.

The point is that the initial water framework directive was a first attempt, and most member states had, and still have, big problems, as the noble Lord pointed out, with measuring water body quality in an outcome-related fashion. Nevertheless, refining measurements should be an absolutely key priority for us in the UK for this next phase, which ties in with governance.

I expect that your Lordships remember how the public imagination was caught by fish returning to the Thames as a sign that it was getting much cleaner. Fishermen and birdwatchers, who observe the top of the river food chain, have a good idea of the health of the river. Of course, the absence of creatures at the top of the chain might be due to other causes, as was the case with otters. However, the presence of creatures at the top of the food chain in numbers that you might expect, whether they are kingfishers, cormorants, otters, water voles, salmon or trout, means that things are likely to be healthy at the bottom of the chain, too. The Environment Agency’s website has a map you can interrogate on local river quality—and that is a very good start. It shows chemical quality and nutrient quality, but biological quality usually seems to be left blank. Is that because the mapping has not been done, which is what the report hints at?

I congratulate the committee again on a very helpful report, which will push us in the right direction.

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My Lords, there is no doubt that water is a valuable commodity. Sadly, we cannot yet control the amount that falls from the sky. Speaking as a farmer in the south-west of England in 2012, I can only say, “I wish!”. But, even after so much rain, we still do not value our water enough in this country.

I believe that we have now reached the stage where the UK needs to introduce compulsory metering. I realise that in some old blocks of flats it is difficult to achieve, but it is not impossible, even if special support funding might be required to disentangle the pipes in all the nooks and crannies, in some instances. But until everyone is on a meter, not everyone will value the water they use. In the UK, we currently use 160 litres per head per day, whereas in Germany, where they have universal metering, they use only 110 litres per head per day.

To go to the other extreme, in India, where until recently the belief was that water should always be provided free by the state, the result was that in some villages you could only get water from a tap for eight minutes per day. However, now they are charging for water, and the service has begun to improve. The Indian Government have at last understood that it is the poor who suffer most from cheap water. The rich can afford private bore-holes or other independent schemes. But the Government have now realised that it is best to put the right price on water and introduce other social measures where help is needed. The lesson learnt was that using water, one of the heaviest commodities around, to transfer wealth, did not make sense.

Back in the UK, although the circumstances are obviously very different, there are parallels with India. If, as at present in the UK, you have voluntary metering, only those who reckon to pay less will apply for a meter. Thus the rest end up sharing a greater overall cost to be averaged out between them. Often this means, as in India, that the poor end up paying more for the water they use than they should do. If we were to introduce metering we could perhaps even go one step further and apply the increasing block tariff method. This is a scheme that is counter to normal economic practice, whereby the more you buy, the more you pay per unit. China, Singapore and several countries in the Middle East and even in the EU now use this method. It is particularly effective for industry, especially for the electricity-generating industry, which can be a huge user of water unless the right capital investment is made. This scheme encourages the right capital investment. The trick is to get the charges and the percentage increase at the right level to encourage good practice without being overly punitive.

Going back to India for a moment, one of the major ongoing problems there is the established right of farmers to take water from the aquifers largely for free, without much control over the quantity. As a result, India removes nearly 100 cubic kilometres of water more from its aquifers than the recharge rate every year. I realise that in the UK, agricultural abstractions amount to only about 2% of all usage, but nevertheless, if we could develop a more flexible system of abstraction licences that looks to future needs, it could be beneficial to industrialists, generators, farmers, environmentalists and domestic consumers alike.

That brings us to Australia, where they are solving the considerable problems in the Murray-Darling river basin by changing or transferring from riparian or historical abstraction rights to tradable rights. It is a sort of water quota system that gives both long- and short-term flexibility to all parties: you can sell or buy, as well as lease, the right you have or need. This, incidentally, includes the Government, who buy entitlements to give to the environment. It means, for example, that in a drought, when water suddenly becomes expensive, rice growers reduce their irrigation or even their total production that year, but survive by selling or leasing their entitlements which, of course, are very expensive that year. Often it is agriculture that sells to mining or electricity-generating interests. Some farmers have actually sold their total allocation but survive on annual licences as and when needed. Municipalities buy excess entitlements and when they have enough for safety, they can rent some back to farmers on a flexible basis. Of course, it is important that the market is properly controlled and regulated, and above all, what is needed is a water trading system for the future, not the past. That means it must allow for the possibility of reducing rains and therefore the ability to reduce the total licensed abstractions.

Of course, the key to success of any system of sharing out this precious commodity called water is overall catchment management, as several noble Lords have already mentioned. Catchment management is about ecosystem services: not only the supply of clean water and the treatment of sewage but landscapes, habitats, irrigation, food, sport, central heating, cooling systems and protection from flooding, among many others. People probably value these services—being the results of water management—more than the water itself. That applies particularly when our population has to face its three biggest worries: drought, flooding and pollution.

Wherever problems exist, the most important thing is to manage our rivers as whole catchments. We are beginning to understand that if problems are caused by the many different activities of too many humans, then the solutions can only be found in the way these activities occur: the way we farm, the way we live, the way we manufacture and consume and the way we plan our urban and rural communities. They can all provide solutions to our water-based problems. We need to understand better how a catchment-based approach can be adopted and how to build the respective capabilities to operate it. Integrated catchment management is in contrast to a piecemeal approach that artificially separates land management from water management. They are inseparable; we rely on the health of both for many of the things we value. Experience shows that considering this locally will help engage communities to take ownership and act.

Catchment management requires leadership to ensure that we get the essential co-ordination covering the many different aspects of land and water management: agriculture, water supply, wastewater, waste management, highway and urban storm runoff, stream corridor restoration and development and, particularly, planning. Working practices are needed that work top-down with standards and guidelines and yet facilitate local partnership arrangements and appropriate delegation, creating local ownership within local catchments. That is the basis of Elinor Ostrom’s famous polycentric system of water governance. It is to be hoped that the revised EU water framework directive will greatly encourage such governance both here and on the continent. When I say “continent” in the context of this debate, of course I mean Europe, but my aspiration is that we might eventually stimulate similar practices and improve water management where it really matters: on the continent of Africa.

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My Lords, I declare my interest as a member of Sub-Committee B and thank the noble Lord, Lord Carter, for introducing our report so well. Like him, I thank those who helped us with the report and all those who gave evidence to us.

Water has been cast as the bloodstream of the biosphere; it is therefore absolutely critical that we get it right. However, the Minister should understand that water is a much bigger and more complex problem than the Government’s White Paper, Water for Life, suggested. An increasing number of individuals, companies, organisations and agencies are involved, some of which are area specific. They all need to work together within the same framework and the same integrated policy, looking at the big picture.

In paragraph 201, we welcomed the requirement of the National Planning Policy Framework to take into account water management issues. That is only a start. As the noble Lord, Lord Carter of Coles, said, there ought to be much more integration among the water companies. Moreover, something that has not been mentioned yet is the vast amount of water involved in the production of energy. That, again, is a different government department. I hope my noble friend will consider the idea of having an overarching group to look at all these problems with a view to getting a sustainable water policy and water security by 2025. The Institute of Civil Engineers suggested the establishment of a water security task force. That proposal attracts me greatly because this is such a complicated area, covering so many government departments, that it needs a more holistic approach than is being taken at the moment.

One conclusion we reached was that the cost of water was going to rise. Even with the present cost of water, a lot of people are not paying the full amount. Can my noble friend tell me what percentage of households are not paying their full water bills at the moment? I think that it is quite a large percentage, but if water prices have to rise, it is going to be an even greater percentage unless we can link water bills to greater water efficiency.

On the cost of water, the Government replied to us in their summary that they were currently revising their social and environmental guidance to Ofwat ahead of the next price review in 2014. Having looked at that guidance, I think that it is horribly overprescriptive. That takes me to our recommendation in paragraph 215, which relates to water catchment areas. These will vary hugely across the country, depending on where the water is and the type of water that is within the particular catchment. The guidance to Ofwat is going to have to be a lot more flexible than that proposed by the Government in order for it to have the effect that we want of allowing the catchment areas to become the starting process for a better infrastructure for water.

The water framework directive is slightly odd, as we discovered as we continued our discussions and debates. It has a pretty good objective but in most circumstances its goals are unobtainable. It is slightly odd to welcome a directive where the goals are unobtainable and the Commission can take infraction proceedings against member states, but I agree with our report that it has driven member states forward in trying to improve the quality of water. Can my noble friend tell me what the Commission’s policy is with regard to taking action against member states?

Page 4 of the Government’s reply on this matter, concerning paragraph 188 of the report, states:

“Achieving good status”—

that is, under the water framework directive—

“is a long term goal”.

That is a misleading statement and I am sorry that the Government made it. Actually, the water framework directive requires that all inland, estuarial and coastal waters within RBPs must reach at least good status by 2015. That is not a long-term goal; it is only just over two years away. It is true that the water framework directive goes on to 2027, but it will start clicking in at a very early stage and there is no way that countries in Europe are ever going to meet the requisite criteria.

With regard to river basin management plans, which have been key to the water framework directive, can my noble friend tell me where we are with the four renegade countries—Belgium, Greece, Portugal and Spain—that did not submit plans in time? I find it slightly odd that the Commission produced a report based on river management plans when a sixth of the EU did not even submit them.

I turn, as did my noble friend Lady Miller of Chilthorne Domer, to the subject of priority substances. I take a different view from the one that she takes. From the evidence that we got, I am not certain that the Commission has been given the right advice about the seriousness of these pollutants. It is very easy for it to say that it needs to prescribe more substances, and indeed on 31 January this year it put forward a directive to add another 15 substances to the priority substances list. However, as the noble Lord, Lord Carter of Coles, identified, adding only one substance will cost £27 billion. These are huge amounts of money, and it will cost considerably more than £27 billion to deal with these problems. It is absolutely right that they should be dealt with if there is proper scientific evidence to back that up, but our evidence indicated that the Commission’s evidence for making decisions is not as good or as detailed as it should be.

I turn to our recommendation in paragraph 200 about governance. This relates to catchment management, which I have already touched on, but the government response also mentions the Environment Agency. We did not get written evidence from the Environment Agency, and I consider that to be one of the real downsides of our report. It is appalling that the agency did not write to us, although it gave us oral evidence. When it comes to catchment management, is not the Environment Agency now just too big an organisation to look at water on such a local level? It is the biggest agency in Europe, if not the world, and it is unwieldy and inflexible. Like Defra, handling anything that is not centralised is anathema to it. As long as a body such as the Environment Agency works in a centralised way, I do not see catchment areas working as we would hope. For them to work, substantial institutional, social and political changes will be required, but the present policy does not allow for that.

Paragraph 205 concerns payments to landowners. In their reply, the Government mention the work of the Forestry Commission. Can my noble friend update me on the current state of play there?

Paragraph 213 deals with the “polluter pays” principle. It is interesting that Blueprint for Water recently heavily criticised the Government in its assessment of where government work on water had got to over the past four or five years. The “polluter pays” principle is highlighted as one of the areas where not enough has been done. Of course, some polluters are easy targets—particularly farmers and landowners. They are easy to identify and it is on their land that a lot of the rain falls. However, to my mind it is not so much a question of tackling landowners and farmers; I consider urban waste water to be a far more serious problem, with chemicals being washed into the sewerage system. Individuals in urban areas have no understanding of the complications that they cause in relation to downstream clear-up. Not only should the polluter pay but the provider of services should be paid. The Government say in their response that they are going to publish an action plan with regard to expanding schemes. Can my noble friend tell me when that will be available? The government response indicated that it would be available later this year. This year is now almost over and we are approaching the next year, so can my noble friend update me on that?

Virtual water is a hugely interesting area and it will undoubtedly become much more topical in the not too distant future. What is interesting here is the amount of water that it takes to produce goods. If one looks at water on that basis rather than on a purely domestic basis, one finds that more than three-quarters of the water that we use in this country is imported, with less than a quarter coming from our own resources. It is also interesting to note that in the 20 years up to 2007 western Europe was the world’s largest importer of water, calculated on a virtual-water basis. The Commission is telling us how to conserve our water supply while we are taking water from the rest of the world, which in many cases has many more problems than we have, as the noble Lord, Lord Cameron, said.

I go back to where I started; we should have an overarching body to look into the whole subject of water and guide the Government in getting a sustainable policy for water security in the years to come. The noble Lord, Lord Carter of Coles, referred to the report we are currently undertaking on energy. Germany’s dash for coal and the increase in coal-fired power stations have come in the recent past, subsequent to the Commission publishing its papers. What the Germans propose totally distorts anything that has been agreed, and it will be the same in this country. However we tackle the energy crisis, it will require a huge amount of water. That needs to be taken account of when planning how to use water throughout the country. I do not believe that the Government have got their head around this. They have two different departments dealing with the same substance. I hope that my noble friend will have something positive for me on that.

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My Lords, I congratulate my colleagues on Sub-Committee D for producing this report, especially those in the background who actually wrote most of it. I also thank my noble friend Lord Carter of Coles for—if I can put it this way—his robust chairmanship. The title of the report is An Indispensable Resource, but like so many other environmental goods, water is often treated as though there is an indefinite amount to go round. As climate change advances, it is likely to become a very scarce resource indeed, especially on a global level, although at some times and in some areas there will be too much of it as well. In other words, a mixture of droughts and floods—as other noble Lords have said—is a vision of our future.

In the UK over the past several years, we have seen just such a mixture. The same is also true at a somewhat more violent level on the continent, for example prolonged droughts interspersed with violent storms and flooding in the Mediterranean area. There was also an unprecedented flash flood in Copenhagen in July 2011, which completely paralysed the city. A recent daunting report on these issues was produced by the European Environment Agency only about a week ago. This showed that the past 10 years were the warmest on record in Europe—again the shape of things to come. I have four questions for the Minister. I shall make some comments and ask for his responses on the report, the Government’s response and the Commission’s blueprint.

First, as elsewhere, climate change will have a differential impact in the UK affecting different areas in opposing ways. Some areas will not have enough water and, as I said before, others will have too much. Water will have to be shipped around the country and new flood defences built. My question for the Minister is how can a national programme be developed, given the level of the industry’s privatisation in England and Wales? As the report makes clear, the English system is more or less unique in the EU in terms of the level of privatisation. Can that be reconciled with adequate overall planning for the future? Secondly, the Government’s response on water savings seems rather thin and inadequate. The report quotes figures of 20% of water wasted across the EU due to inefficiencies. New infrastructure will be needed, but we have to consider other strategic initiatives too. One is inducing culture change in the use of water by business and consumers. As someone who has worked on the many aspects of the field of reducing carbon emissions, it has proved difficult to change people’s everyday habits. Does the Minister think this can be achieved in the area of water efficiency, whether by metering or other means? I have to say that in other areas we have been notably unsuccessful in producing such behaviour change.

Thirdly, we will need some radical advances in technology. The report mentions rainwater harvesting as one area, but there are many others too. Do the Government see the European Innovation Partnership on water as likely to be of any value? What in substance does the Minister see it potentially delivering? Finally, picking out the point touched on by the noble Earl, virtual water is an important notion in this, especially for the future. It is an issue which is important internally in the EU because a lot of water is used invisibly, as it were, in manufacturing and service industries. As the noble Earl mentioned, it is also important in the UK and EU more generally in terms of the embodied water in imports. In this sense, it is similar to CO2 levels, where the EU has, on the face of things, been reducing emissions since 1990. However if you include CO2 emissions produced by transferring manufacture to China and other developing countries the picture looks very different. Does the Minister think that virtual water can effectively be measured and can we base practical policy on it? It is an intrinsically important aspect of the total mix when we try to produce a rational policy on water management. In conclusion, though, the Government’s response was pleasingly detailed, interesting and certainly took the work we did with due seriousness.

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My Lords, I am grateful for the opportunity to comment briefly on this report. I congratulate my noble friend Lord Carter of Coles on chairing the committee. It emphasises the serious issue of water resource shortage in certain parts of Europe. I propose to concentrate my remarks on London, where there is a growing shortage of water, as we all know. First, as my noble friend said, there are large volumes of leaks, which do not help the situation. However, if the current plans for the Thames tunnel are implemented, the Government are losing a great opportunity to deal with water shortage and the water quality of the Thames as one policy, rather than disjointed plans for dealing with the Thames, the tideway tunnel and dabbling in water conservation. I was grateful for the meeting with the Minister last week to discuss this issue and no doubt it will continue.

The tunnel from Hammersmith to somewhere near Becton will cost £4.2 billion, which will apparently put £80 on each Thames Water customer’s bill. Originally I heard this would be for 30 years, but recently I have heard it will be for much longer. Thames Water originally said this was needed to deal with 39 million tonnes of water a year, but last week, apparently, it revised its estimates down to 18 million tonnes a year. This is quite a surprising reduction. I hope the capital costs and annual bills will not be subject to 100% variation. It is a worry. My concern is that the problem with most of the demand for this tunnel is the high peaks of rain run-off during heavy rainfall. Even with a tunnel, overflows will still occur, so to me the obvious solution is to collect the rainfall and store it individually or collectively, rather than allow it to go into the sewers in the first place. I am told this is done very effectively in Philadelphia in the United States. I know that some people are coming across from there next week to demonstrate what they have done—there are many similarities between here and Philadelphia.

The system is called SUDS and the idea is to store the heavy rainfall in pervious surfaces, such as asphalt, water butts or lots of small things, which they say works even in an urban environment such as London. The water will then either drain more slowly into the sewers or, even better, be collected and treated for reuse as fresh water—so one is almost killing two birds with one stone. It works, and I believe that it would work in London. It would certainly obviate the need for the Thames tunnel and the horrible idea of £80 a year on our bills.

The report provides a challenge and an opportunity for the Government to follow the recommendations, as the noble Lord, Lord Cameron, said, to create integrated catchment management as the key.

I know that all Ministers of all parties love big projects because they think that in future years they will cut the ribbons when those projects open. The “future year” for the Thames tunnel is 2023, I am told, which is probably beyond the lifespan of any Minister in their present job. However, in this case, before committing to £4.2 billion of expenditure, the Government ought to follow the committee’s recommendation and investigate the alternatives to bring together water conservation, treatment and waste water as a coherent whole before it is too late.

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My Lords, I am grateful to noble Lords for allowing me to speak in the gap. I apologise to the noble Lord, Lord Carter of Coles, for missing his opening two minutes. I could not get down quick enough and I apologise. I am afraid that my speech will be very staccato.

We held an important review of resource which, whether it concerns drought, flooding or pollution, is crucial to us all. One issue that came across in one or two of the contributions that we received was the lack of urgency, particularly among the water companies. That certainly worried me enormously, and so I might name them. The way we monitor, enforce and bring together differing standards was another common denominator, as other noble Lords have said.

One issue that has not been touched on in the debate—unless it was mentioned before I came into the Chamber—was the question of how we take water samples. The noble Lord, Lord Lewis, when he was with us, was very critical of this. He questioned what water samples were taken, at what time of day and, therefore, what the results were.

Noble Lords have already covered local catchment areas and some of the good practices that are taking place in that area. Public engagement in that is also hugely important and the sharing of best practice cannot be underestimated.

The committee looked at the “one out, all out” approach and felt that it was a very blunt instrument. However, within that, we recognised that progress had been achieved. If we had not had that approach, perhaps we would not have progressed as much. Perhaps the Minister will comment on whether there has been any different thinking in that area.

Jumping ahead to rural development and, particularly, the agricultural programme, £21.5 million has been allocated this year to consider diffuse pollution from agriculture. I wonder how much of that money has been used, in how many projects and whether any that has not been used can be carried forward for another year.

Other noble Lords have referred to leaks. In our report, we considered the question of allowing water prices to increase. However, before we do that, I hope that we will hold the water companies and others providing water to account. It seems to be the wrong way round. We should encourage the water companies to rectify the situation rather than allow them to put up their prices. I look forward to hearing the responses of other people but I, too, would like to pick up on a comment that was made and say that the Government’s response has been encouraging, but there is a lot of work to be done.

I ask the Minister to respond on the issue of virtual water. It is our responsibility in this country to use our water as best we can. As my noble friend Lord Cameron of Dillington inferred, many countries in the world do not have that option. It would be irresponsible of us not to make use of what we have to the best of our ability. In doing that, and in food production particularly—I remind the House of my family’s farming interest—we have a great responsibility which we cannot afford to dodge.

I thank the noble Lord, Lord Carter, and the team who looked after us so well. I again apologise to the House for being two minutes late and, therefore, for a worthwhile speech being useless.

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My Lords, I am sure that the noble Baroness’s speeches are never useless or worthless. We have enjoyed her contribution.

Clean water is a fundamental element of life. Traditionally, we have enjoyed it without thought at the turn of a tap, and have used and discarded it without thought. With climate change bringing huge volatility between droughts and floods, we are all now fully aware that water must be managed effectively. I declare my interest as a farmer in Cheshire.

The report by Sub-Committee D is very timely. I thank my noble friend Lord Carter of Coles, the committee chairman, for his excellent introduction and his committee for its coherent analysis and recommendations. It has produced its views at a time when the Commission, member states and interested agencies and groups have been in discussion on fresh-water policy before publication of the blueprint. The water framework directive has generally been accepted as a force for good. It has put the element of water into all environmental analyses from many diverse organisations and has had the added value of fostering co-operation between member states, most of which have now undertaken river basin management plans.

As each element in the transition to better management of water resources develops, it is imperative to take stock, assess and share best practice. The report informs a fitness check necessary to underpin the blueprint. There is general agreement that the implementation of river basin management plans has been challenging, but very instructive and informative. It has highlighted the challenge of costs, the challenge of the realities of gathering information and conducting assessments, and the need for innovation and an inclusive approach, not least because of the unforeseen problems that have been discovered.

The report has been welcomed by the Government and the EU Commission. Both will share in the assessment and challenges as policy develops. In general, the Government responses reveal that they largely understand many elements of the just short of 40 recommendations, are aware of the issues and are planning to provide answers to the challenges. The recently published blueprint will build in and on the common implementation strategy to continue to provide a positive role to bring about the framework’s directional objective—namely, to make water use in the EU more sustainable.

The blueprint outlines a three-tier approach: first, improving implementation of current water policy via the water framework directive; secondly, increasing the integration and recognition of water policy objectives into all relevant policy areas; and, thirdly, responding to lessons learnt and gaps in the current framework. It will undertake these elements by issuing guidance and developing existing measures, largely avoiding new legislative proposals.

That brings me to tonight’s debate and the issues highlighted by noble Lords. I draw attention to the cost of water—nearly all noble Lords highlighted this, including the noble Lords, Lord Carter and Lord Cameron, the noble Earl, Lord Caithness, and the noble Baroness, Lady Byford—and how we have to steer a course towards the right price and the right pricing policies. I agree with the noble Lord, Lord Cameron, that these need to be correct for the resource and that measures such as the social tariff—which we look forward to seeing from the Government—can be introduced where needed to reduce pressures.

The noble Lords, Lord Carter and Lord Cameron, raised the issue of reform of the abstraction regime and highlighted the urgency with which this must now be brought forward, even though there are significant challenges ahead. The third issue to find commonality in the debate is that of agriculture and its share of the problems vis-à-vis the urban perspective.

I go along with other noble Lords, especially the noble Baroness, Lady Miller, in their understanding of how we must pay attention to priority substances that will arise in future, such that we have our eyes on how we can effect changes and improvements in that regard before they become a growing problem.

Other noble Lords were also eloquent in highlighting the core of the report, especially the importance of capture management, strategic planning, and decisions being made within an effective system that takes account of more than one level of governance. The co-operation between companies will be vital. The noble Lord, Lord Giddens, highlighted the problem of how to effect this on a national basis.

Lastly, I will share with the noble Lord, Lord Carter, the highlighting of water footprints for the future, and ask the Minister how much attention is being given by the Government to water reuse? Also, in what areas does HMG consider that they can be most effective? Following on from that, I will also ask the Minister about future plans for carbon disclosure reports and water disclosure reports, which I understand Defra is co-funding. Which government department is taking the lead on this and how is Defra co-ordinating its policies with that department?

In conclusion, the debate has highlighted the vital issue of water management. In future its importance can only increase.

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My Lords, I start by thanking the noble Lord, Lord Carter of Coles, for initiating this debate, and his committee for its report, An Indispensable Resource: EU Freshwater Policy. We are also debating the recent publication of the European Commission’s communication, A Blueprint to Safeguard Europe’s Water Resources.

Like the noble Lord, Lord Granchester, I declare an interest as the owner of a farm, through which a tributary of the Thames flows. I am also the proud possessor of a bore-hole.

As our recent weather has shown, in many parts of the United Kingdom we currently have too much water, but noble Lords will recall—and several have referred to—the position we were in last winter, heading into spring with parts of the country facing severe drought. As the noble Lord, Lord Carter, said, how quickly the rain came, and that position changed. While we cannot, as the noble Lord, Lord Cameron, said, change the weather, we can ensure that we are in the best position to deal with its implications and plan appropriately for those times when there is too much or too little of this essential resource available for both humanity and the environment.

The Government welcome the European Union committee inquiry into the blueprint and its recommendations as a helpful contribution to the debate. The Government are committed to improving the quality of our waters and we welcome the committee’s conclusion that the water framework directive has been a force for good. We are committed to implementing the directive, not merely from a legal point of view but because we believe we have a clear moral imperative, and an economic one. Many of the committee’s recommendations have also found their way, in some form, into the recently published blueprint communication.

A Blueprint to Safeguard Europe’s Water Resources outlines a three-tier strategic approach: first, improving implementation of current EU water policy by making full use of the opportunities provided by the current laws; secondly, increasing the integration of water policy objectives into other relevant policy areas; and thirdly, filling the gaps of the current framework, particularly in relation to the tools needed to increase water efficiency.

The UK Government have welcomed the communication and are pleased that, by and large, new regulatory tools are not proposed as the method for filling in the gaps. We strongly believe that the right framework is in place and efforts must be made to make that work, rather than automatically turning to the regulatory toolbox to provide the magic wand to solve a particular problem.

The majority of the blueprint actions are voluntary measures, such as new guidance documents to be developed with other member states. Other actions involve calling for the integration of EU water policy into other EU policies and improving the enforcement of EU legislation. There is only one possible legislative proposal on developing standards for water reuse. While we would prefer not to assume that regulation is the most appropriate vehicle for achieving this, we can understand the potential benefits for doing so, particularly with regard to meeting commercial and food production requirements on ensuring food safety.

In responding to the committee’s recommendations, I would like to highlight the following developments. We have committed to delivering improvements to our aquatic environment through a catchment-based approach, to which the noble Lord, Lord Carter of Coles, referred. We have established 66 pilots with a range of hosts, including charities, private water companies, established partnerships, and of course the Environment Agency and Natural England. These hosts are engaging with interested parties, and planning water improvement actions at the local level. The evaluation of these pilots will inform the approach for wider national adoption from April next year.

Water catchment plans will help target and share delivery of the measures we need to tackle both urban and agricultural diffuse sources of pollution. This will make a very real difference and up our game in improving the environmental status of our waters. We have recently published a consultation on how to address urban sources of diffuse pollution.

In the rural sector we now have various options available under agri-environment schemes to protect water quality. We will also have invested over £70 million within this spending review period, giving practical advice and grants for water quality improvements to farmers, through the catchment-sensitive farming project.

Last year we published the water White Paper setting out our vision for a resilient water industry that can meet future demands, and we are well on our way to achieving our goals through measures to tackle water efficiency, leakage, pollution, unsustainable abstraction and more. The draft water Bill published in July is another of the tools we are using to help us deliver the water White Paper’s vision for an efficient, resilient water sector that can attract long-term investment. The Bill will reform the water market and remove barriers to competition.

Our reform package will drive forward both innovation and efficiency by bringing in new players and new ways of thinking and by using market forces to keep down customer costs. This will not only benefit customers and stimulate growth, but will also contribute to our future resilience, and the environment.

As regards abstraction, which the noble Lord, Lord Carter, and others spoke about, we know that damaging over-abstraction is happening. We are reforming the abstraction regime to ensure that it is fit to meet the challenges of climate change and increasing demand. These are complex long-term issues. We need to make sure that we get this right. We will be consulting on proposals next year. It is worth saying that the Environment Agency’s “Restoring Sustainable Abstraction” programme is returning around 55 billion litres of water per year to the environment in England and Wales, which represents the domestic water use of a city the size of Leeds. We are also working with Ofwat and the Environment Agency to develop better tools and incentives to help water companies manage their abstractions sustainably.

Noble Lords have raised a large number of questions. I will do my best to address them. The noble Lords, Lord Carter and Lord Grantchester, raised the question of reuse. At this stage the Commission is considering developing a regulatory instrument setting EU standards for reuse of water for irrigation and industrial purposes. This could help remove obstacles to the free movement of agricultural produce irrigated with reused water, encourage reuse, and reduce pressure on water resources. No proposal is likely before 2015. There is not enough information available on the Commission’s thinking to form a view, but any initiative to reduce pressure on increasingly scarce water resources is worth consideration.

The noble Lords, Lord Carter, Lord Cameron and Lord Giddens, all asked about our attitude to metering. Metering can have advantages for some customers, cutting their bills and encouraging efficiency. Although many customers would see reduced bills if they were on a meter, others, especially large families in properties with low rateable values, would see their bills rise. For some, water might seem cheap and for them metering could have a perverse impact; they may say, “I am paying for it, so I shall use as much as I like”. Metering is not a solution in itself; it needs to be supported by good information and help to drive down water use. In view of those complexities, the Government do not propose to put in place a blanket approach to universal metering across the country. Water companies are best placed to find the appropriate local solution in discussion with their customers. They need to consider it as an option in water-stressed areas. As the climate changes and the population grows, the case for universal metering may change, but our view is that it will do so at different times in different areas.

The noble Lord, Lord Carter, asked how we would take forward our plans to deal with enforcement. The Environment Agency and the Rural Payments Agency, where appropriate, enforce the existing suite of regulations that are in place to protect our aquatic environment. In regard to abstraction, we are using a power in the Water Act 2003 to enable licences causing serious damage to our rivers to be removed or altered without compensation.

The noble Lord, Lord Carter, asked about the pricing of water. The independent regulator, Ofwat, sets price limits for water and sewerage companies every five years through a price review. The Government are not involved in price setting, although the Secretary of State uses a strategic policy statement and social environmental guidance to Ofwat to inform the price review process. That sets out policy objectives that Ofwat must have regard to in the performance of its functions. Currently, the Government are consulting on their guidance to Ofwat ahead of the next price review in 2014. That will reflect the Government’s policy objectives set out in the natural environment White Paper and the water White Paper. He also asked how we are making water pricing more transparent. As part of Ofwat’s price review, stakeholders, including the Consumer Council for Water, are working with water companies as part of customer challenge panels with the aim of improving the transparency of water bills.

The noble Lord, Lord Carter, asked about reporting. Domestically, the Environment Agency will improve reporting procedures by publicising the number of chemical and ecological components that show an improvement in status each year. That information will better reveal the level of progress that is often hidden by the aggregated description of overall status. Work is already under way to develop a statistically robust system for reporting the number of improved individual components. At EU level, the water framework directive sets out what has to be reported to the Commission and current reporting information systems are structured accordingly, reflecting the method for assessing the state of the water environment. Updates of the river basin management plans will contain an assessment of progress towards the achievement of environmental objectives and the European Environment Agency is publishing data that show the individual components of good status. Changes to the formal reporting system would require amendments to the directive and restructuring of the information systems, so that may not be achievable in the short term.

The noble Lord, Lord Carter, and my noble friend Lord Caithness asked about urban diffused pollution. We have just published a consultation on how to address pollution from urban areas. A strategy will be developed in 2013 in light of feedback from the consultation and of the views of and report by the committee. There is a wide range of issues in the urban environment and it would be key to work with local authorities to develop solutions to them.

The noble Lord, Lord Carter, asked about sharing experience between catchments. My department and the Environment Agency have put in place processes to foster the sharing of best practice and the things that have not gone so well between catchments. We also promote the work of the catchment-based approach at the European level through the various fora that exist.

My noble friend Lady Miller of Chilthorne Domer asked about public participation in implementing the water framework directive. The UK was complimented by the Commission on the steps that it took to engage people in the first river basin management plans. However, we recognise that we could do more and the development of the catchment-based approach is one step towards engaging more interested people at a more local level.

My noble friends Lady Miller and Lord Caithness asked about control at source of pharmaceuticals. The control of sources is generally more cost effective and better for the environment than trying to clean up after the event. However, current EU pharmaceuticals legislation does not allow for authorisation of a human medicine to be withheld on environmental grounds. DG SANCO is drafting a report into the effect of pharmaceuticals on the environment, which is expected to be published mid-2013. We expect that report to contain recommendations for possible amendments to the current regulatory framework for medicines.

The noble Lords, Lord Cameron and Lord Berkeley, spoke about integrated river basin management. The water framework directive, and its delivery through river basin management plans, essentially forms the basis of adopting an integrated river basin management approach. However, the Government recognised, after the publication of the first set of river basin management plans in December 2009, that we needed to adopt a more local-level approach to water management that brings together quantity and quality issues as well as flooding. That is why we are currently piloting the catchment-based approach to see whether that could form a stronger basis on which to bring together the various parts of the water cycle and to consider issues in a more integrated way.

My noble friend Lord Caithness asked about the Commission’s policy on taking action against member states which do not meet their obligations. The Commission has commenced proceedings against some member states in regard to non-conformity with the water framework directive, such as those that did not publish their river basin management plans by the deadline of 22 November 2009. My noble friend also asked whether we will have a water security task force, as the whole area of water covers so many government departments. We do not propose to have a water security task force, but a cross-government network already exists to deal with water security issues and it was called upon most recently, this year, to deal with our drought problems.

The noble Lord, Lord Giddens, asked about our attitude to the European innovation partnership. We aim to use the participatory process of the catchment-based approach to ensure that those working at practitioner level have the opportunity to engage with the European innovation partnership on water. The Water Sector Innovation Leadership Group will also consider ways in which practitioners and other stakeholders can make the most of the opportunities offered by the water EIP. He also asked about innovation. We are in the process of refreshing the Water Sector Innovation Leadership Group. That comprises representatives from my department, Ofwat, the Environment Agency and the water sector and provides leadership and direction to drive innovation to meet future challenges. It will meet in January 2013. We have provided £1 million towards a water security competition, run by the Technology Strategy Board.

The noble Lord, Lord Giddens, asked how we can develop a national programme despite privatisation. Privatisation does not stop our aim to meet our future resource requirements. We are considering the possibility of water trading between companies and look forward to working with other member states and the Commission to consider how we could use that mechanism. He asked how we can measure virtual water, and several noble Lords spoke about that. My department has commissioned a research project to evaluate the resources that are available to businesses to assess and understand the impacts of their water use. It will be published very soon. We are developing new guidance for businesses on how to measure and report environmental impacts. That will encourage organisations to consider their water use, including along the supply chain and to report against that. He also asked how we can change people’s behaviour to increase efficiency. That is an important point. A number of campaigns have been undertaken by water companies, the Consumer Council for Water, the Environment Agency and others to increase efficiency in water use by the public and by industries.

The noble Lord, Lord Berkeley, raised the issue of the Thames tunnel. He mentioned that we had a meeting recently. It is unacceptable on environmental and health grounds that about 20 million tonnes of untreated waste water currently enter the Thames in London when we receive as little as 2 millimetres of rain. Thames Water’s Thames tideway tunnel project offers the most cost-effective, comprehensive and timely solution compared with all the other solutions that we have seen. We are working with Ofwat, Infrastructure UK and Her Majesty’s Treasury to ensure that the financing and delivery costs of this large and complex project provide value for money for Thames Water customers and UK taxpayers. We are conscious of the impact on local communities and we welcome Thames Water’s two public consultations, which were an opportunity to hear from those affected. Thames Water’s planning application to the Planning Inspectorate is expected to be made in early 2013 and local communities will continue to be able to voice concerns on the proposals within the 18-month process.

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My Lords—

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My Lords, I am sorry but I am running out of time and I have a number of questions still to get through. I am sure that the noble Lord, Lord Berkeley, and I will have further discussions on this subject.

My noble friend Lady Byford asked for an update on the chemical status of water samples. Across the EU, the Commission is focusing work under the common implementation strategy in regard to chemical monitoring and reporting for the next phase, commencing next year. This is an area where there is wide variability across the EU. The UK is in a stronger position than a number of other member states, but we recognise that we have more work to do in this regard. That is why the Environment Agency has made reducing uncertainty in classifications a priority in the first half of this river basin planning period. More than 12,500 investigations will be completed by the end of this financial year, which will improve significantly our understanding of the aquatic environment and provide the building blocks for taking decisions and developing the next set of river basin management plans.

My noble friend asked what the Government are doing to improve the “one out, all out” principle. The Government believe that this is essentially a sound way of assessing the state of the water environment. Domestically, the Environment Agency will improve reporting procedures by publicising the number of chemical and ecological components that show an improvement in status each year. This information will show the level of progress that is often hidden by the aggregated description of overall status. Work is already under way to develop a statistically robust system for reporting the number of improved individual components.

My noble friend asked about the £21.5 million available this year from the RDPE. This contributes to the Catchment Sensitive Farming project, which offers practical advice and capital grants to the farming community to make changes on-farm. The majority of this funding goes into the small capital grant scheme to make actual on-farm changes. The farmer also contributes 50% of the payment. This year the £7.9 million that Defra invested in the Catchment Sensitive Farming project has brought in £22 million per annum from European funds and £20.5 million from farmers.

Noble Lords have asked a large number of questions. I have done my best to answer as many as I can. I am trespassing upon the Companion already and I hope that noble Lords will allow me to write in response to any questions that I have not so far answered. I thank again the noble Lord, Lord Carter of Coles, and all noble Lords who have spoken. I will take away the words that they have given me today and think carefully about them.

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My Lords, I thank all noble Lords for their contributions. This evening we have been debating an important issue and what we have heard from all contributors has served to underline that.

A number of themes have emerged during this debate. Importantly, there was the issue of governance and local involvement, a point made by the noble Baroness, Lady Miller of Chilthorne Dormer, who was supported in that by the noble Lord, Lord Cameron of Dillington. We discussed the tools that are available to drive these changes, such as metering, which the noble Lord, Lord Cameron, mentioned, and trading in water rights. Virtual water was a theme from the noble Earl, Lord Caithness, supported by the noble Lord, Lord Giddens.

The dominant theme of the evening has been urgency. We are grateful to the Minister for picking up that sense of urgency, which we feel is needed in this important area.

I thank the noble Lord, Lord de Mauley, for setting out the views of the Government. We look forward to seeing how they take these messages forward for debate and discussion on their own domestic water policy and, more importantly, how they take it forward in discussions with the EU as a result of the blueprint and the common agricultural policy.

In my opening remarks I referred to Benjamin Franklin’s words of wisdom about the worth of water. At the same time, another commentator, Thomas Fuller, said that we never know the worth of water until the well is dry. Let us not wait until all the wells of Europe are dry before facing up to the true value of water. Of the messages that have come out tonight, the one that I would choose to flow through this debate is that we should look to the value and at how to spend it wisely.

Motion agreed.

House adjourned at 7.45 pm.