As you have shown, Madam Deputy Speaker, there are many amendments in this group, so I shall try to make my explanation as brief as possible, as I sense that that will be popular.
This group of amendments was tabled in the other place to build on and strengthen further the existing environmental protections under the Bill and to provide reassurance regarding the timetable for abstraction reform and its relationship to the upstream reforms in the Bill. In particular, this group of amendments reinforces environmental protections under the bulk supply and private water storage regimes, improves the resilience duty and the strategic policy statement, and places a new duty on the Secretary of State to provide Parliament with a progress report on abstraction reform.
This group also contains a number of minor and technical amendments. As before, I will not dwell on them, but I am happy to consider any points that hon. Members wish to make. The Government welcome the scrutiny that the Bill has received, and we have listened carefully to all the speeches made in this House and another place. Protection of the environment is close to my heart, and it is important to the Government too. Indeed, one of the Bill’s main objectives is to increase the resilience of our water supplies to ensure a future in which water is always available to supply households and businesses without damaging the environment. I am therefore delighted to bring back a number of important amendments that will ensure the continued protection of the environment.
First, the Government have strengthened environmental protections under the bulk supply regime under clause 8. There are already several bulk supply agreements in the current system and there are a number of environmental protections in place. However, we have listened to the concerns raised on this issue during the passage of the Bill and have enhanced those protections accordingly. Ofwat can only order, vary or terminate a bulk supply agreement at the request of one of the parties, and after consulting the Environment Agency or Natural Resources Wales. Our amendments strengthen the consultation requirement by clarifying the fact that Ofwat can take environmental considerations into account before ordering, varying or terminating a bulk supply agreement. The amendments add a requirement for Ofwat to consult the Environment Agency and Natural Resources Wales before it issues the codes in this area.
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Water companies have statutory environmental duties that prevent them from entering into bulk supply agreements that would damage the environment. However, our amendments reinforce this protection by adding a requirement for such codes to require the parties to a bulk supply agreement to consult the relevant environmental regulator before entering into the agreement. We have also added an enforceable duty on the supplying party to provide information about the water supplied at the request of the relevant environmental regulator.
Secondly, we have strengthened the environmental protections with regard to water supply agreements under clause 12. We have amended the clause so that the regulations about water supply agreements between incumbent water companies and other relevant parties can require Ofwat to consult the Environment Agency or Natural Resources Wales before ordering, varying or terminating such an agreement. The amendments to clauses 8 and 12 will provide a greater role for the Environment Agency and Natural Resources Wales. We recognise the important role that those bodies play in ensuring that environmental considerations are taken into account. This is a more proactive approach and one that the regulatory bodies too support.
Thirdly, I am pleased to note the widespread support for the new resilience duty under clause 22. Following debates in another place, that support has been further strengthened so that it explicitly requires Ofwat to promote the efficient use of water by water companies. That could include, for example, capturing and retaining water by investing in new water storage or by tackling leakage. That will ensure that this precious resource is used as efficiently as possible, and it will contribute towards the Bill’s objective of increasing resilience in the water sector.
Fourthly, we have amended clause 24 so that the Secretary of State and Welsh Ministers must have regard to social and environmental matters when setting strategic priorities and objectives for Ofwat. Clause 24 is designed to help Ofwat to weigh all the relevant considerations appropriately when making regulatory decisions. We agree with Members in the other place that the consolidated guidance must include social and environmental considerations. We have therefore clarified the fact that social and environmental matters form an integral part of this process.
Finally, we have tabled a significant amendment that will place a new duty on the Secretary of State to report to Parliament on progress on abstraction reform in England within five years of Royal Assent. This amendment signals the Government’s determination to progress abstraction reform and ensures that the Government are fully accountable to Parliament for the delivery of this commitment. In practice, this will mean that a written progress report will be laid before Parliament no later than early 2019. We cannot commit to a timetable for introducing legislation on abstraction reform, but our aim is to introduce the necessary legislation early in the next Parliament. The report will also provide the opportunity to update Parliament on the preparations for implementation of both abstraction reform and upstream reform, and how the two are closely aligned, as well as setting out any other progress on moving towards a more sustainable abstraction regime.