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