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Baroness Byford: I thank the Minister for covering some of the issues that I raised. The noble Baroness, Lady Young, said that she felt that this amendment was very narrow and that it aimed at being of benefit to the water companies, but that other people would be affected. Indeed, if the water companies themselves are affected, it affects all the consumers too. They are the ones that are providing water for us, both as individuals and as companies, and that actually get the benefit of trying to get this legislation right. Therefore, I slightly disagree with the noble Baroness—indeed, the noble Lord referred to it too.

However, I have heard what has been said. I accept that there is the right of judicial review and that that has always been clearly there. But that is a fairly lengthy and a costly step to take. We were trying to ensure that there was another way that could be looked at. I should like to take this away and consider it. I beg leave to withdraw Amendment No. 105.

Amendment, by leave, withdrawn.

[Amendment No. 106 not moved.]

Clause 40 [Standards of performance in relation to water supply]:

Baroness Byford moved Amendment No. 107:

The noble Baroness said: Amendment No. 107 is linked with Amendment No. 113. Amendments Nos. 109, 110 and 111 slightly fall within the same remit. With the leave of the Committee, I hope that the Minister is happy to take them together. I know that they apply to two different sections, but it would seem logical to do so. We asked for them to be ungrouped,

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so it is our fault, not that of the Government. But if I can speak to Amendments Nos. 107 and 113, and then to Amendments Nos. 109, 110 and 111 together, it would be sensible.

Amendment No. 107 proposes inserting the words "and the appraisal". We are asking the Government to take into consideration the cost benefit analysis. After research has been completed, surely some cost analysis should be the norm. It may be that the Minister tells me that that is so—in which case my amendments probably will be unnecessary.

For the convenience of the Committee I shall speak to the other amendments as well. Amendments Nos. 107 and 113 deal with water—if I am right. Amendments Nos. 109, 110 and 111 deal with sewerage. I hope that I have the right ones linked together. The same argument goes for both sets of amendments. In effect, we are asking the Government to consider particularly Amendment No. 107 in order that appraisal is taken into account. Indeed, it is implemented again later in Clause 41. The same applies to the other three amendments. I beg to move.

Lord Whitty: As I understand it, the second batch of amendments are, in a sense, the substantive ones in that they would require the Secretary of State to carry out an appraisal of the effects expected from performance, and prevent him from making regulations if the results of the appraisal indicated that the financial impacts of the regulations outweighed the benefits.

We have produced the regulatory impact assessment with this Bill. In that context, we committed ourselves to producing a separate regulatory impact assessment on each occasion on which the powers under the overall sections were used. The scope of RIA is considerably wider than the way in which the appraisal is defined in this context.

Compared to a full regulatory impact assessment, the appraisal proposed is narrow. It concentrates heavily on financial costs rather than environmental or social gains and other indirect effects which are important to the water and sewerage sectors. Therefore, the commitment to RIA is actually a bigger commitment than what is being sought in these two groups of amendments via an appraisal.

Baroness O'Cathain: I am heartened to hear that. I agree with the Minister that if a regulatory impact assessment was in force for these issues it would be better than the amendment, but where is it on the face of the Bill?

Lord Whitty: I referred to the regulatory impact assessment that came with the Bill. That is where the commitment is. It is not on the face of the Bill in that sense.

Baroness O'Cathain: The reason for the amendment is to have something on the face of the Bill. If the Minister could bring forward his own amendment to

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put the regulatory impact assessment on the face of the Bill, that would be wonderful. What are the Minister's comments on that?

Lord Whitty: We shall consider the implications of that. Precedent issues are involved here. By and large the regulatory impact assessment process is carried out on the basis of ministerial undertakings and is not on the face of a Bill. That is because it is essentially a procedural issue and not a statutory issue. Clearly if a regulatory impact assessment is required for the proposed legislation as a whole, any undertaking within that would be carried out were those powers to be used.

Baroness Byford: I am grateful to the Minister. I accept his final comment and genuinely thank him for it. We are pleased that the Government will think about these amendments and come back with something that, hopefully, will put the measure on the face of the Bill. That is what we were after and that is what I think the Minister said. My understanding of what the Minister said—we shall need to read Hansard tomorrow—

Lord Whitty: I said that I would consider it. I then put in the huge qualification that we have to consider it in the context of how we deal with other RIA commitments.

Baroness Byford: I accept the Minister's clarification. But he indicated that he would consider it and, without tying the Minister to anything specific, I am grateful for that. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Duke of Montrose moved Amendment No. 108:

    Page 46, line 22, after "undertakers" insert "or licensed suppliers"

The noble Duke said: In moving Amendment No. 108, I shall speak also to Amendment No. 112.

Under Section 38 of the Water Industry Act the Secretary of State may make regulations for the purpose of facilitating the determination of the extent to which breaches of prescribed obligations amount to breaches of the general duty to maintain an efficient and economical system of water supply.

Clause 40(6), to which this amendment refers, requires the Secretary of State to specify the water undertaker or undertakers to which any regulatory proposals may refer. I am puzzled as to why the new licensed water suppliers are not included in subsection (6). Is there not a chance that these suppliers might breach the general duty to supply laid out in Section 37 of the 1991 Act?

Under subsection (3) of the clause, for the purposes of making regulations, whether or not it is after an application, there appears a category of,

    Xsuch other persons or bodies as the Secretary of State may consider appropriate".

But there is no such mention in the case I am discussing.

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Amendment No. 112 addresses the same general point. If a licensed water supplier would be affected by regulations, would it not be appropriate that a notice is also served on that supplier? I look forward to hearing the Minister's reply. I beg to move.

Baroness Miller of Chilthorne Domer: The issue of when water undertakers should be the only specified body and when water undertakers and licensed suppliers should be specified has arisen time and again in the Bill. I, too, look forward to hearing the Minister's response.

5.45 p.m.

Baroness Farrington of Ribbleton: As the noble Duke said, Amendments Nos. 108 and 112 assume that statutory performance standards will apply to licensed water suppliers. This will not be the case. The standards exist to supplement the general duty on undertakers to provide an efficient and economic system of supply in their area. Licensed water suppliers will use the system but undertakers will remain responsible for the performance of the system which they own and operate. The standards will, therefore, apply only to them and not to licensed water suppliers.

They will compete on price and on service standards and the access agreement will deal with system issues to the satisfaction of the undertakers. It is therefore the role of the undertaker, through the contract and the agreement, to cover this area. Licensed water suppliers will not accept the responsibility that falls on the undertakers.

The Duke of Montrose: I thank the Minister for clarifying the issue as regards the fine line between the undertakers and the licence holders, which takes a bit of unravelling. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 109 to 112 not moved.]

Clause 40 agreed to.

Clause 41 [Standards of performance in relation to sewerage services]:

[Amendment No. 113 not moved.]

Baroness Byford moved Amendment No. 114:

    Page 48, line 10, after "for" insert—


The noble Baroness said: I apologise to the Committee for getting water and sewerage mixed up in the previous group of amendments. If the Committee will bear with me, I shall be dealing on this occasion, I hope, with sewerage in respect of Amendments Nos. 114, 115 and 116.

Sewerage and drainage systems are designed to cope with existing and planned development. The system has to be managed to cope with excessive rainfall and demand. However, water companies have no discretion as to where a developer or householder connects to the drainage or sewerage systems. Some

8 Apr 2003 : Column GC38

developments are designed with sustainable drainage systems such as soakaways. This may mean that there is no surface water sewer.

Currently there is nothing to prevent a householder from connecting his surface water run-off to the public foul sewer. Such an overloading of systems can lead to sewer flooding. There is a case for allowing water companies to reject or amend developers' plans for connections in cases where it may lead to problems for existing infrastructure and to suggest alternative connection solutions.

All Members of the Committee will be aware of the proposed enormous housing developments, particularly for the South and the South East. I wonder how much consideration has been given to the pressure that will place on existing sewerage maintenance and infrastructure. Again, I should be grateful if the Minister will respond to that issue.

We believe that there should be a requirement to develop a sewerage system that is planned and managed in a sustainable manner to reduce the risk of flooding from sewers and which would ensure consideration of sewerage and ancillary works at an early stage of the development and construction process. The amendments ask the Government to carry out a quantitative economic and statistical appraisal. I advanced the same argument in regard to Amendments Nos. 109, 110 and 111, which dealt with water. These amendments deal particularly with sewage and sewerage responsibilities. I beg to move.

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