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Norman Baker : I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker : With this it will be convenient to discuss the following:

Amendment No. 132, in clause 57, page 75, line 5, at end insert—

'(11) In section 222 (application to Isles of Scilly)—
(a) in subsection (2), after the word "NRA", there is inserted the words "the Chief Inspector of Drinking Water"; and
(b) after subsection (2) there is inserted—
"(2A) The Secretary of State shall, within a period of one year after the coming into force of section 57 of the Water Act 2003, make proposals to the Council of the Isles of Scilly for the making of an order under subsection (2) in relation to the carrying out of the functions of the Chief Inspector of Drinking Water in those Isles.".'.

Amendment No. 131, in clause 62, page 83, line 36, at end insert—

'(3A) A water resources management plan that contains proposals for infrastructure investment intended to meet the requirements of an estimated growth in the quantities of water required, made by an undertaker for the purposes of subsection (3)(a) above, must include—
(a) a least cost planning assessment that shall address in particular the potential effects of investment in—
(i) water conservation promotion and education;
(ii) water efficiency technology; and
(iii) compulsory metering;
(b) a comparative risk assessment for each infrastructure investment option or alternative proposal considered; and
(c) such other information as the Secretary of State may specify in directions.'.

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Amendment No. 16, in clause 83, page 100, leave out lines 40 and 41 and insert

'have a duty to promote water conservation.'.

Government amendments Nos. 95 and 96.

Norman Baker: I am grateful to hon. Members who spoke in the previous debate for making their comments brief so as to allow discussion on the next group of amendments. I did not speak in that debate, but I wish to say that the Minister also has the support of the Liberal Democrats in respect of the measures on private sewers. He may reflect on the fact that he has managed to unite the whole House in supporting the Government on that measure. Perhaps he should look for other policies of the same nature. The new clause in question was tabled two hours before a public meeting on sewers that I attended in Polegate in my constituency, and it went down well with the voters.

New clause 11 deals with water pricing, which is a big issue for consumers and others. The cost of water varies widely, and wildly, from one area to another, and not always on the basis of any deep logic. The post-privatisation arrangements were somewhat unfair, and water pricing inequalities have continued ever since.

6.30 pm

A particular problem is that some water and sewerage companies have had to bear disproportionate costs because of the need to undertake environmental improvements. All hon. Members will be in favour of those improvements. Over the past 10 to 15 years, for instance, the quality of bathing water has improved markedly. However, that has had a disproportionate impact on water and sewerage companies in certain areas. The south-west has 30 per cent. of the English and Welsh coastline, but only 3 per cent. of the population—as well as a comparatively high amount of poverty. As a result, a disproportionate burden of environmental protection falls on that population. The Ofwat report, "Tariff structure and charges 2002–2003", shows that the average sewerage component of annual water bills is £125 in England and Wales, but £211 in the south-west. Combined with water provision costs, that makes an average annual combined bill of £326 in the south-west, compared with an average of £228 in the rest of the country.

The Government's position has always been that as the improvements benefit the local population, it is only right that that population should pay for them. As a principle, that cannot be faulted, but the problem is that environmental improvements in the south-west are not necessarily for the benefit of that region, but for that of the nation as a whole. A nationwide benefit derives from cleaning up our bathing waters that goes beyond that derived in the south-west. Although one could argue that there is a beneficial impact on tourism, for example, the current water pricing system does not take account of the national aspect.

We all want to enjoy clean beaches and unpolluted coastline, wherever we live. As a Member representing a coastline in the south-east, I do not want to be nimbyish by saying that as long as my coastline is all right, it does not matter what it is like in the south-west. I want the south-west and other areas to be as clean as the south-east. Nevertheless, a different method of pricing is

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required. The same principle applies to any region where the sewerage costs of domestic bills are particularly high because of the need to meet environmental regulations and requirements. New clause 11 seeks to establish the principle that where it can be assumed that a national benefit derives from environmental improvements, their cost should be spread more widely than the water and sewerage company that has to implement those benefits and, by extension, consumers in that area. The position has been made worse by the higgledy-piggledy post-privatisation water pricing arrangements, which should have been sorted out before now.

Amendment No. 132, which stands in the name of my hon. Friend the Member for St. Ives (Andrew George), relates to a water inspectorate for the Isles of Scilly.

Andrew George (St. Ives): I am grateful to my hon. Friend for drawing attention to that amendment, which is very important to the 2,000 of my constituents who are inhabitants of the Isles of Scilly. The Isles of Scilly have been excluded from some of the provisions in the Bill and in previous Acts. If we are to raise standards in water-related environmental matters, particularly drinking water, on the Isles of Scilly, it is important that such amendments are accepted in order to bring them up to the standards that are taken for granted in other parts of the country.

Norman Baker: My hon. Friend makes an important point. It is correct that the Isles of the Scilly are excluded from some legislation, but my hon. Friend looks after his constituents assiduously, and I am sure that any omissions are flagged up in this House through amendments and by other means. I hope that the Minister will respond to the point.

Amendment No. 131, which was tabled in my name and in that of my hon. Friend the Member for Guildford (Sue Doughty), would introduce a rather radical approach to water infrastructure development—radical in this country, that is, but less so elsewhere. It reflects aspects of best performance in the United States, where energy suppliers are not allowed to build new capacity for generation until they have demonstrated that they can meet by other means the requirements that are placed on them. That is the correct environmental approach, which the amendment would apply to the water industry in this country. It says, in effect, that in meeting the challenge of growing demand for water, it cannot and should not, for environmental reasons, be assumed that the only option is to find a way to supply that extra demand. The Government should not base their framework on "predict and provide". Increased abstraction, new reservoirs and new treatment facilities have a considerable environmental impact. We must consider ways of reducing demand, whether by encouraging water efficiency measures or considering metering in certain areas. Various levers can be pulled to reduce demand for water in a more environmentally-friendly way than churning up the countryside to produce new reservoirs. The water companies have not always paid attention to those alternatives: they need a bit of encouragement from the Government to do so.

Groundwater levels have reached record lows in some areas—for example, in Chilgrove in west Sussex, Ardingly in Sussex, and Arlington in my constituency—where levels are down to 22 per cent.—but there has

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been no concerted, high-profile campaign to persuade consumers to reduce their water usage. On 5 November, the Environment Agency received its first application from a water company for a drought permit, which affects the Cuckmere and Ouse rivers in my constituency. There is not much evidence that the water company in question had done much to restrain consumer demand. I mention examples from my constituency, but doubtless there are others all over the country.

Water companies do not appear to have in mind alternatives to providing new infrastructure; they therefore need encouragement. It is possible to meet legitimate water demands through alternative means such as water efficiency and metering. We should adopt that approach, which is tried and tested in other countries. I hope that the Minister will view that with the seriousness with which the amendment was tabled.

Mr. Wiggin: I shall restrict my remarks to amendment No. 16, which would insert a requirement to

All hon. Members should recognise that wording, because it was widely supported in Committee. My amendment would strengthen the wording of the Bill with regard to water conservation by further emphasising the need for each public authority to have a stricter duty to conserve water in order to improve water efficiency. Proper conservation of water must take place at every opportunity, but the Bill does not enforce that duty strongly enough. Public authorities should have a greater degree of responsibility to promote better management of water; my amendment would ensure that.

I remind the Minister that Conservative Members voted for this amendment, but that he and his colleagues voted it down. The hon. Lady who tabled it is unavailable at the moment—I believe that she is unwell—but it is most important that this duty is included in the Bill. The existing wording is not nearly strong enough—indeed, it is rather weaselly in comparison with what it should be. I therefore urge the Government to support the amendment: I am sure that in their heart of hearts they would like to do so.

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