| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
Lord Dubs: My Lords, I thank my noble friend for what he said. First, given that we seem to have had a lot of warning of this year's water difficulties, would it not be better if the water companies built more reservoirs? We have plenty of rain but we do not have the storage capacity to meet the needs arising from the weather we have had. Secondly, can my noble friend
17 May 2006 : Column 278
explain why, at a time of water shortages, the water companies are making record profits? People simply do not understand that.
Lord Rooker: My Lords, I will come to the point about reservoirs in a moment. On the latter point, since privatisation water companies have invested £55 billion from their profits. There is no competition between companies in terms of supply through pipes to the customer, but the water regulator could say to them that their profit distribution would be restricted if they did not perform well, and that money would be diverted, in the public interest, to investment in the infrastructure. That is a very seductive point and I have made it many times in the past, wearing other hats, as I have talked about the rip-off merchants and so on. But the fact is that the water companies have invested £55 billion since privatisation. Wearing one of my previous hats, that is one reason why we are bringing in water charges in Northern Ireland—so that we can get proper investment. There is no water charge there, so there is no income stream.
The water companies have plans for five new reservoirs in the south-east of England and three extended reservoirs to be built between 2008 and 2020. The plans are public knowledge but planning permission has not been obtained and that will all be some way down the road. My noble friend is right that we need to save more water but reservoirs are not purely the answer. The mere fact that reservoirs exist means that water is removed from the environment, so we need to do lots of other things to make better use of our water resources.
Lord Forsyth of Drumlean: My Lords, I welcome the noble Lord's conversion to the theory of privatisation, but I am with his noble friend Lord Dubs. Thames Water is one of the water authorities with the biggest leakage problems. It is reporting record profits and, indeed, its German owners are going to float it on the Stock Exchange because it is such a good cash-generating machine. How can the Minister possibly be satisfied with the operation of Ofwat as regulator in these circumstances when the company is writing to people in London telling them to plant in their gardens cacti or other plants that do not need water, and that their supplies may be threatened and they may be getting standpipes? It is the regulator's job to prevent that happening.
It is true that the Government cannot be blamed for a particularly dry period, but there is a normal distribution of rainfall and the regulator's job is to ensure that the companies prepare for that. I understand that the previous regulator of Ofwat encouraged the water authorities to reduce their spending on maintenance. Frankly, it is quite outrageous that consumers are told to share baths and so on, while the water companies are not doing everything they can—they have the resources—about the water that is pouring into the ground.
Lord Rooker: My Lords, it is true that Thames Water has a bad record on leakage compared with
17 May 2006 : Column 279
other water companies. I do not believe that there is any doubt about that. However, it has undertaken additional spending in 2003–04 and has spent an extra £200 million out of its profits in that period because Ofwat would not allow the entire amount to be passed on to customers' bills, which it was planning to do. In some ways that was effectively a financial penalty, but it gets the work done. Thames Water failed its overall 2004–05 leakage target by 10 megalitres a day—1.1 per cent To that extent, on leakages Thames Water is a failed company. I do not know any more about the detail. I certainly draw the attention of the House to Ofwat and what has been said. For the first time since 1999–2000, in the past year, Thames Water has reduced its overall leakage. The company may have failed in the past, but slowly it is starting to put things right.
Lord Livsey of Talgarth: My Lords, does the Minister know that Welsh Water—Dwr Cymru—a not-for-profit company, which has been extremely successful and which is chaired by the noble Lord, Lord Burns, is now managing to invest its profits in infrastructure? One has only to go round Wales to see the amount of work and investment taking place in preventing leakage and such matters. Is that not a model that might be extended to other parts of the United Kingdom?
Lord Rooker: My Lords, it sounds as though people have a lot to learn from the Welsh.
Lord Borrie: My Lords, my noble friend has said that he would not wish to roll out a full national system of water metering, despite the fact that at the moment water metering operates in only a quarter of the country. In qualification, he said that in stress areas one could have drought orders, which would enable water metering to be introduced, but that is a short-term measure. Drought orders and stress-area orders are short-term measures. This occurs not just occasionally but seemingly every few years. We want a long-term measure, which I believe is water metering, so that there is an incentive to be cautious in the use of water. At present, there is no need for three-quarters of the population to be cautious or modest in their use of water. Naturally, I entirely agree with the Minister that there will have to be subsidies and special arrangements for vulnerable and large families that are poor, but that does not alter my general point that at the moment the incentives go all the wrong way.
Lord Rooker: My Lords, I share some of my noble friend's sentiments. Currently the Government have no plans to impose universal water metering. However, the mere installation of meters is a massive incentive for people to save water and vulnerable people would need to be considered, as we said at Question Time on fuel poverty.
The regulations introduced in 1999 provide for the water companies to take forward compulsory metering in areas deemed to have water scarcity status.
17 May 2006 : Column 280
It is a back-stop provision. The first application for that status was submitted last year and approved by the Secretary of State in March 2006. Other companies may be considering applying. Companies have to assess the pressures on them and on their supplies and their access to water.
Lord Blaker: My Lords, I declare an interest in that I live in the south-east, which is the worst affected area. The noble Lord appeared to say that the cause of the drought problem in the south-east is largely the size of the population and their propensity to consume water. Does he recall that, not many years ago, the Deputy Prime Minister declared it essential for 1 million new homes to be built in the south-east in not much more than the next decade? Was he aware of the problem that we have been talking about when he made that statement?
Lord Rooker: Yes, my Lords. I covered that, because it was raised in the question of the noble Baroness, Lady Byford, about the extra homes which are rightly needed. People ought to have a choice over where they can affordably live. Too many people are being driven away from where they have lived and been brought up; that is not right. We therefore need more homes built at a higher density. The fact of the matter is that modern homes are much more water efficient than the rest of the 25 million dwellings in this country. They use less water per head, because of how they are built and their installation. Those factors were fully taken on board.
The other question was about the water companies. The water companies and the Environment Agency were fully involved in the production of the communities plan. I am not blaming people in the south-east; it just happens to be where there is currently less water where water is drawn from. There is no blame attached to people for this, we just have to take account of it. But there is a large population in the south-east, and the water resources are not necessarily in the same place as the people.
The Countess of Mar: My Lords, when the Minister was explaining to the noble Baroness, Lady Byford, the difficulties of transporting water to people, it occurred to me that perhaps we should resort to transportation of people to water. Does the Minister agree that, while people have a right to houses in villages where they have lived for generations, there has also been an enormous influx of people to the south-east from the north of England and Scotland? Can some long-term planning not be done to encourage these people to go back to their roots, providing jobs where their roots are instead of expecting the south-east to cope with the indigenous as well as additional population?
When I was a schoolgirl in the 1950s out in Kenya, I learned that the eastern coast of England was much drier than the western side.
| Next Section | Back to Table of Contents | Lords Hansard Home Page |