Water Act goes on the statute book

The Water Act 2003 reached the statute book at the end of November after the Government got its plans for the fluoridation of drinking water supplies through the Commons despite a Labour rebellion. Late amendments to the legislation paved the way to a solution to the problems caused by private sewers, but there was little joy for businesses seeking more favourable abstraction licensing arrangements.

The Water Act's main provisions reform the abstraction licensing system, open the way to competition in water supplies to some 2,300 major customers, and overhaul the water industry's regulatory arrangements. There are also a series of lesser changes in areas ranging from pollution from abandoned coal mines and contaminated land to water conservation and discharge consents (ENDS Report 338, pp 40-41 ).

  • Abstraction licensing: In the Lords, much time had been taken up by special pleading on behalf of several industries. Quarry operators pressed for abstraction licences to run for as long as planning permissions, while the drinks industry sought a minimum licence term of 25 years - this in response to the Government's plans to make all new licences time limited and have existing licences voluntarily transferred to a time-limited footing, and then made subject to renewal every 12 years.

    These arguments were heard again in the Commons, along with continuing demands for the "presumption of renewal" of licences every 12 years to be written into the legislation. However, these and other industry campaigns failed to muster much head of steam in the Commons, and the abstraction provisions survived unscathed.

    In Committee on 18 September, Environment Minister Elliot Morley explained that some abstraction licences may run for more than the normal 12 years, depending on whether they meet four tests to be set out in Environment Agency guidance.

    The tests are whether the lifetime of the infrastructure "inseparably associated with" the licence will extend over the desired period of licence validity; whether there will be a continued need for the service or product associated with the infrastructure throughout that period of validity; that no significant concerns have been raised by the "fullest possible" appraisal of likely changes in economic and environmental circumstances which may have a bearing on the acceptability of the abstraction; and that the infrastructure "contributes to sustainable development".

    When licences come up for renewal, the three key tests, as previously announced, will be the ongoing need for the licence, the environmental sustainability of the abstraction, and an "efficient use" test.

    In Committee, the Government also resisted a Liberal Democrat amendment to convert all permanent abstraction licences to a time-limited basis over six years from 2012.

    The party's environment spokesman, Norman Baker, pointed out that 90% of licences are currently permanent, and none have lately been converted voluntarily to a time-limited footing. Without a statutory mechanism to require conversion there would, he said, be a "gaping hole in the achievements that the Government want from the Bill."

    Countering the amendment, Mr Morley said that the Government's preferred method of conversion was "predominantly voluntary" because of the "enormous cost implications" of compensation for mandatory conversion. Conversion will be encouraged by a revised charging scheme on which the Agency is due to consult shortly, with higher annual charges being payable for permanent licences.

    The Minister also promised a further Agency consultation on a "programme of prioritised conversion of licences to time-limited status where costs are proportionate to the benefits - that is, where severe damage is being caused." Compensation will be payable up to 2012 - or possibly a later date set by the Secretary of State - when permanent licences are varied or revoked, and the costs will be borne by all licence-holders through the charging system.

  • Water efficiency: The Bill started off without any provisions to promote water conservation, but thanks largely to Liberal Democrat efforts it ended up with three clauses on the issue before it left the Lords. These applied different water efficiency duties to the Secretary of State, the Environment Agency and all public bodies (ENDS Report 342, pp 36-37 ).

    In the Commons, however, the duty on the Secretary of State to "devise and implement measures to ensure that all persons and entities who use water do so without wasting it" was diluted by a Government amendment. The duty is now "where appropriate, [to] take steps to encourage the conservation of water," along with a requirement to submit progress reports to Parliament every three years.

    MPs felt they detected weasel words in the "where appropriate" phrase, but Mr Morley said it was well understood and meant "proportionate and cost-effective in terms of the measures that could be taken in an assessment of investment for both drinking water and other environmental benefits."

    Existing examples of the actions which might be taken under the duty, said Mr Morley, included the new enhanced capital allowances scheme for water-saving equipment (ENDS Report 346, p 34 ), the Watermark project for benchmarking water use in public buildings, and the development of a voluntary water efficiency labelling scheme for products.

    However, in Committee on 21 October, the Minister resisted a Liberal Democrat amendment to establish a water saving trust, modelled on the Energy Saving Trust and funded by a small levy on abstraction licences or by pooling of water companies' water efficiency budgets.

    Mr Morley said that there may be an argument for a water saving trust in the future, but its costs, benefits and effectiveness would need to be evaluated first. However, he promised to ask the Environment Agency to consider the concept of a trust as part of a review it is carrying out of further steps to promote water efficiency. Conclusions are expected in about six months.

    There was only one dissenter from the prevailing view that minimising water demand is a desirable objective. At Report stage in the Commons on 10 November, former Conservative Minister John Redwood said: "For some people, we hear that it is somehow not environmentally friendly to want rising water use. Yet anyone who understands the water cycle knows that we do no damage by using water...Let us use it as often as possible. In a growingly prosperous society, we should expect rising water demand."

  • Private sewers: Another important clause which did not originate with the Government was an amendment dealing with private sewers.

    Around 8.5 million households in England and Wales are served by an estimated 80-200,000 kilometres of private sewers, and there has been growing concern about sewage flooding and pollution caused by sewer blockages - numbering up to 280,000 per year - and other failures. Many householders are unaware that their properties are connected to a private sewer and that they are responsible for its upkeep. Maintenance is also impeded when some owners refuse to pay.

    In Committee on 21 October, Paddy Tipping (Lab, Sherwood) tabled an amendment to empower the Secretary of State to make regulations requiring sewerage undertakers to implement schemes to adopt private sewers in a designated area. This was one of five options put forward in a Government consultation last summer, and Mr Tipping argued that "it is in the public interest that there should be a responsibility on the sewerage authorities to spread the cost across their customers."

    At Report stage, the Government introduced its own amendment which essentially follows Mr Tipping's model, but also provides for consultation on, and appeals against, particular adoption schemes.

    Mr Morley stressed that the new clause was an enabling power and "not a recipe for the wholesale transfer of private sewers to sewerage undertakers." Neither had the Government decided on the best way forward on the issue. Its initial response to the consultation is expected within six months, but further work will have to be done, he emphasised.

    A change of ownership of private sewers was favoured by 86% of respondents to the consultation paper, of whom 92% regarded adoption by the water companies as the best option.

    "The bad news," said Mr Morley on 21 October, "is that the costs may be very high." A study for the Government concluded that the annual cost of maintaining private sewers might be around £115 million - equivalent to an extra £5 or so on water bills if all private sewers were adopted by sewerage undertakers.

    The Commons passed the Government's amendment without demur, but when the Bill returned to the Lords an amendment to block the new clause was moved by Conservative peer Lord Dixon-Smith.

    Accusing the Government of an abuse of parliamentary privilege, he said there had been no discussion of the clause: "We have no knowledge in any way, shape or detail of how it would work. There is no financial information that would enable us to judge whether or not it is in the interests of householders connected to existing private sewers." However, his amendment was rejected by 61 votes to 14.

  • Water fluoridation: The Government created controversy when it introduced a last-minute amendment in the Lords to make it easier for drinking water supplies to be fluoridated (ENDS Report 343, pp 36-37 ).

    The same arguments about the extent of the dental health benefits of fluoridation, the risks associated with long-term exposure to fluoride and the human rights implications of compulsory fluoridation were aired when the Bill moved to the Commons. But MPs were especially preoccupied with how the testing of public opinion on fluoridation would work.

    In the health White Paper which preceded the Bill, the Government said that responsibility for conducting public consultations on fluoridation would be transferred from health authorities to local authorities. In the event, though, the legislation provides for strategic health authorities to carry out the task.

    Many MPs objected to this arrangement. Leominster MP Bill Wiggin, who led for the Conservatives, commented at Report stage: "The Minister has insisted that any decision to fluoridate water will be determined by 'local' people after 'local' consultation. Strategic health authorities are not local. The SHA for my constituency is in Coventry, which is a long way from Herefordshire so it is not local in any sense of the word."

    David Drew (Lab, Stroud) voiced a related concern when he revealed that he had received letters from two SHAs - Greater Manchester and Avon, Gloucestershire and Wiltshire - "urging me to support the provisions on the basis that we should have a fluoridated water supply. How can these authorities carry out open, honest and democratic consultations when they are telling us which way to vote?"

    Sensing problems, Ministers had changed their tune by Report stage. Junior Health Minister Melanie Johnson promised that, while SHAs will own the consultation process, local authorities will play "a major part" and their views "will need to be taken into account at every step of the consultation."

    The concession proved enough to stave off an embarrassing defeat. Despite support from 52 Labour MPs, including Foreign Secretary Jack Straw, a Tory amendment to put the consultation process in the hands of local authorities was defeated by 243 votes to 200 - one of Labour's smallest majorities since 1997.

    MPs also sought greater clarity about the mechanics of public consultation. Miss Johnson gave little away, saying that the details would be set out later in regulations. But she rejected the idea of local referendums on the grounds that "judgments have to be made in weighing up the thousands of responses generated as a result of widespread consultation over time."

    The Minister did not appease her critics when she said that a fluoridation proposal will not proceed "if all the indicators are overwhelmingly against it" - suggesting that SHAs might be able to disregard unfavourable findings.

    At other points, Miss Johnson used the established formula that a "clear majority" would have to be in favour for fluoridation to go ahead. But she sowed further confusion at Report stage when, asked whether the results of public consultations would be binding on SHAs, she replied: "We are clear that health authorities should accede [sic] to the proposal to ask for fluoridation in their area if consultations ascertain that the local population is in favour of it."

    A number of Government amendments were made to the fluoridation clause in the Commons, of which the most important enables Ministers to indemnify water undertakers and licensed suppliers against any liabilities arising from fluoridation.

    Other issues debated in the Commons were:

  • The sustainable development duty on the new Consumer Council for Water which had been inserted in the Lords was reshaped. Instead of being required narrowly to have regard to benefits to consumers from sustainable development, the Council must now "exercise and perform its powers and duties in the manner which it considers is best calculated to contribute to the achievement of sustainable development."

  • A clause inserted in the Lords to require various actions from the Government to implement the EU water framework Directive was scrapped in the Commons.

    When the Bill returned to the Lords, the originator of the clause, Liberal Democrat peer Baroness Miller, said that everyone "with anything to do with water" was "angry, disappointed and disbelieving that the Government could have put this legislation through without as much as a reference to the water framework Directive. After all, this will be the biggest change in our water management, certainly in living memory...Without the backing of primary legislation, the water framework Directive has been downgraded in importance."

  • Renewed efforts by the Environmental Industries Commission to abolish statutory restrictions prohibiting the Environment Agency from reviewing discharge consents more frequently than every four years fared no better in the Commons.

    In the Lords, an amendment drafted by the EIC would have enabled the Agency to review consents at any time (ENDS Report 340, pp 41-43 ). A revised amendment tabled in the Commons would have required it to review consents for discharges into waters of less than "good" ecological status or containing priority substances under the water framework Directive at least every four years, but any action stemming from the review would then have rested with the Secretary of State.

    Introducing the amendment, Sue Doughty (LibDem, Guildford) said that consents are currently reviewed by the Agency less than once every ten years on average, and that and the four-year non-intervention period were not a good basis for implementing the Directive.

    The amendment, she said, would help avoid a last-minute approach to implementation. But Mr Morley said that it was unnecessary because the Directive did not have to be fully implemented until 2015. He also claimed that powers already exist to override the four-year non-intervention period - though these are cumbersome and would be difficult to use on a broad basis should this prove necessary.

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