My Lords, I shall speak also to Amendments 111 and 112. I want also to express support for Amendment 113, which is in this group. The purpose of the amendments is very simple: to put in the Bill a duty on Ofwat to further sustainable development. This has not been a short debate; it started a number of years ago and follows on from debates that we had in relation to Ofgem, about how you bring the regulator to understand that its duties as an economic regulator also encompass the environment and issues going forward into the future.
The wording of the previous amendment—I will have to check this—referred not just to present and future customers but to acting for the good of present and future customers. This comes to the heart of the problem that I see in the Bill. We have a greater understanding of the changes that have taken place in the environment. I believe that climate change is a fact: anybody standing up to their waist in water on the Somerset Levels at the moment would believe that we live in a situation where the climate is changing. Of course, the problem is that, at a time when there are
floods, the idea of drought seems somehow very distant. However, it was not very long ago that we were actively discussing droughts.
My noble friend Lord Moynihan is sitting in his place. I remember a discussion we had in the Bishops’ Bar about water, because there was a real possibility that London would not have enough water and the Olympics were coming up. My noble friend Lord Moynihan said, “That’s fine; we have an agreement with Thames Water that we will get water whatever happens”. I am not sure that the Olympics would have been the fantastic success that they were—and I must commend him on the work he did on them—if people in the surrounding area were having to deal with massive water shortages because we were throwing water without reservation at the Olympics.
This comes to the heart of the issue: that there has to be a change in our view of water. Water has very much been seen as a resource that could be dealt with because it just comes out of the tap and you pay for as much as you want. With a population that is growing so rapidly, however, and with the constraints we are facing in our urban areas, we are going to face real issues about the amount of water that we can actually use. Therefore, putting in the Bill the word “sustainability” would change the very nature of how Ofwat would go about its duties. It should look not just at the economic issues, because looking just at the price is a very narrow definition.
The cost of those floods is going to be substantial indeed, and the cost of droughts to water companies is incredibly expensive. Noble Lords will remember the time when Yorkshire Water actually had to tanker drinking water by lorry. That is an incredible expense which would have to be borne by the consumer. We may have had 220% of our normal rainfall pattern, but last year we were looking at one of the wettest droughts in history. It did not change the fact that the water companies still had real problems with the aquifers and the amount of water available.
I realise that the Minister is going to say that the duties of resilience that the Government have put in the Bill deals with my concerns. My problem with the duties is that, while the Minister and the Defra team have worked incredibly hard to make sure that those resilience duties are encompassing, resilience has a different concept of dealing with an issue, while sustainability is talking about how we can look into the future to deal with those issues.
The Government will probably reject this amendment. I always live in absolute hope that the Government will see the error of their ways—as the Labour Government did in 2008 when they moved forward in changing Ofgem’s duties—and come forward to say, “My noble friend Lord Redesdale’s amendment is quite perfect in every way. We will accept it and he is to be commended”. That would, of course, be the end of it, but I have a feeling that they might reject it. Obviously, after 23 years and however many thousands of amendments I have put down that have been rejected out of hand, they might well come forward with that position. However, I think there is a discussion to be had. It is central to this Bill that we change how the
regulators view this, not just in economic terms but realising that there must be a holistic approach and we have issues to deal with.
I have not met anybody with whom I have discussed this issue who has not turned around and said, “Surely, sustainability of the water supply has to be the starting point, because without water being sustainable, we will actually die”. You cannot do without water for very long. It is a ridiculous position to say that this is absurd rumour-mongering; we have a Statement after noon today on the floods. Within a year or two we will have Statements on the next drought that we face. These things come and go. Just because we are not in a drought at the moment does not mean that it will not happen. Therefore, while the Government might be fundamentally opposed to sustainability, a discussion looking at some of the aspects that could be added to the resilience clause would be very helpful.
Noon
The issue I would look at most closely is water efficiency. That is a duty for the water companies but not for Ofwat. Ofwat sets the funding in five-year cycles. If it does not make it a main priority, the water companies will not see it as one. It is a bit like with local authorities: if something is not statutory at the moment, such as local museums, it gets cut. Without water efficiency being set as a priority, Ofwat will not make it one. I say this because water efficiency is actually down to the actions that we take as individuals. Everybody sitting in this Chamber uses far too much water. We are some of the most profligate water users in the world. We must change our behaviour and realise that water is a scarce resource. We probably have to train people to understand that they must change their businesses. I must declare an interest as I am the chief executive of the Energy Managers Association. Most energy managers see water as a major cost to their business and are doing a lot to reduce that cost. Of course, there is also a major energy cost. About 1 kilowatt of energy is used to get water to you and 1 kilowatt to deal with sewage taken from you. There is a massive carbon and energy cost in water.
I very much hope that the Minister will agree to look at water efficiency and maybe even at adding to resilience the issue of catchment areas. Of course, that is the issue we are all talking about at the moment. If he did that, sustainability would not be an issue that I felt needed to be taken to the next stage. However, if the Minister decides that the Government have gone far enough and they will not take this issue any further, at the next stage I will obviously seek support from around the House to vote on this issue. It is core to the whole Bill. The White Paper setting out what would be in the Bill had water efficiency through almost every page, yet it is not mentioned in the Bill. That is a fundamental flaw of the Bill at the moment. I very much hope that the Minister will agree to have a discussion on this issue between now and Report. The rather surprising alacrity with which Committee followed Second Reading caught some of us a little unaware but I hope we will have time to have some of those discussions before the next stage of the Bill. I beg to move.