Select Committee on Environment, Food and Rural Affairs Third Special Report



The Environment Sub-committee of the Select Committee on Environment, Transport and Regional Affairs carried out an inquiry on the draft Water Bill in January-February 2001. The Select Committee report was published on 3 April 2001. This is the Government's response.

The Government welcomes the Committee's overall support for the draft Water Bill. The Committee has commented on the lack of clauses on competition and the use of economic instruments in relation to water abstraction. While we recognise the Committee's concern, we believe that publishing the draft Bill was worthwhile. The public consultation, which ended on 31 January, generated a large amount of interest. Around a hundred and fifty submissions were received from a wide range of individuals and organisations. The Government will be publishing a full response to that consultation shortly.

The Government published a statement on competition policy on 30 March 2001, and will publish a consultation paper early in the new year. The Government published its statement on the use of economic instruments, Tuning Water Taking, on 28 June.

The two aspects of the Bill on which the Committee made specific recommendations were abstraction licensing and sustainable development. The concerns of the Committee and the Government's response are detailed below. Bracketed paragraph numbers refer to the paragraphs of the Committee's report.

Abstraction Licensing

Human Rights Act 1998


We strongly support the proposed reforms of the abstraction licensing system, especially in order to ensure that water abstraction does not take place at the expense of the environment. (paragraph 6)

We remain concerned that the provision to revoke abstraction licences without compensation could face challenge under the Human Rights Act 1998. (paragraph 8)


The Government is very grateful to the Committee for its support. As we said at the outset of our review of the system in 1997, our aim is 'to ensure that abstraction licensing and related arrangements provide full protection to the water environment while enabling fair and flexible measures for meeting properly managed demand for water resources.' This aim encapsulates the balance that has to be struck between the rights and responsibilities of abstractors and the need to protect the environment. We believe that, taken with the measures that the Environment Agency is putting in place, principally through its Catchment Abstraction Management Strategies, our proposed legislation will enhance the already significant awareness amongst water abstractors of their responsibilities towards the environment. Environmental groups will in turn be aware of the fundamental needs of society to use water in a responsible way. This is why we called our March 1999 White Paper Taking Water Responsibly.

Against that background, it remains the Government's hope that, over the next decade or so, water abstractions causing serious environmental damage will have been removed, through a process of improved efficiency of water use, shared scientific study and, wherever possible, voluntary action to deal with any confirmed abstraction problems. We remain of the view that, after a reasonable period of notice, it would be unreasonable for those who persist with damaging water abstractions to expect any compensation if those abstractions need to be curtailed. It is the view of the Department that the proposal to withdraw compensation for variation or revocation of abstraction licences set out in clause 17 of the Draft Bill is compatible with the Convention rights as defined in section 1(1) of the Human Rights Act 1998.

Trickle Irrigation


Trickle irrigation is an efficient form of irrigation. We urge the Government to consider how trickle irrigation can be guaranteed fair treatment in the new system of abstraction licensing. Where resources are scarce, the needs of existing trickle irrigators whose use has been notified to the Environment Agency must be considered equal to those of existing licensed abstractors. The Environment Agency will be responsible for implementing the licensing system and they must be provided with a very clear framework by Government which defines how trickle irrigators are to be introduced to the scheme whilst ensuring that environmental protection is not compromised (paragraph 14).


The Government fully appreciates that trickle (and drip) irrigation can be more water efficient than spray irrigation. We want to encourage its use where it is a more efficient and viable alternative to spray irrigation. We are currently drawing up transitional provisions, which will aim to ensure that established use of trickle irrigation is not disadvantaged compared to abstractions licensed for other agricultural or horticultural purposes. As set out in Taking Water Responsibly, there will be a transitional period of at least two years from when the Water Bill comes into force for currently exempt abstractors such as trickle irrigators to apply for licences. During that two year period, the Environment Agency will be required to ensure that there is no derogation of their abstractions. Trickle irrigators will be treated in an even-handed way. We would not want them to be placed at a disadvantage compared to other abstractors.

Sustainable Development


We are concerned that the pursuit of sustainable development is not sufficiently prominent within the role of the Director-General. We therefore recommend that Ofwat should be given a duty 'to facilitate sustainable development'. So framed, the duty will help to provide an appropriately broad and balanced context in which co-operative working between the economic regulator, the Environment Agency and other actors in the regulatory process can flourish (paragraph 20).

Government response

The Government is committed to protecting the environment and aims to ensure that water supplies are managed as sustainably, reliably and efficiently as possible and so will support investment in protecting the environment. The Government is also committed to ensuring that its social objectives are considered alongside environmental and economic considerations. This is in line with the principles of sustainable development.

The Government has already proposed in the draft Water Bill to introduce new powers to enable the Secretary of State to issue social and environmental guidance to the Director General of Water Services. This puts into legislation what has happened at past price reviews and is in line with the provisions in the Utilities Act 2000 for the other utility regulators. This will give Ministers the necessary powers to issue guidance to ensure that Ofwat takes proper account of the Government's policies on sustainable development.

The Committee has recommended that the Director General should be given an explicit sustainable development duty and that this should be written on the face of the Bill. (This was in line with an earlier recommendation by the Environmental Audit Committee report published last November.[1]) In his evidence to the Environmental Audit Committee, February 2001, the Director General volunteered for such a duty.

The Government has considered the Committee's recommendation in the light of responses to consultation on the draft Water Bill. We propose to amend the existing clauses of the draft Bill to give the Director General a specific sustainable development duty as the Committee recommends. We propose that this duty should be worded along similar lines to that provided for the Strategic Rail Authority (SRA) by the Transport Act 2000. Clause 207 (2) (b) states that the SRA "shall act in a way best contribute to the achievement of sustainable development."

1   7th Report of the Environmental Audit Committee: 'Water Prices and the Environment' HC 597 - I (ISBN 0 10 268400 6) Back

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