It is a great pleasure to follow my hon. Friend the Member for Cardiff North (Jonathan Evans). In a different incarnation, he was my Member of Parliament, and indeed my tenant, so our relationship goes back a long way. His expertise on insurance, which he brings to this debate, is well known. We have heard many other
contributions tonight, including from the hon. Member for Newbury (Richard Benyon), who has great experience and knowledge of these matters. Had he been introducing the Bill, he would have had three years to prepare, whereas my hon. Friend the Minister, whom I am pleased to see here, has had about three weeks. Nevertheless, he was a member of the Environment, Food and Rural Affairs Committee that scrutinised the draft Bill and will be aware of the detail and some of our concerns about things that are not in the Bill.
I broadly welcome the Bill. One of the vital challenges facing the UK is the need to protect the health of our rivers and lakes, while keeping water available and affordable. Water resources are currently under considerable pressure, and it is predicted that water constraints will become more severe in the future. There is limited competition in the current system, so I welcome the competition clauses, which will open the sector up to more competition and encourage the construction of more connections between water company areas. The introduction of retail competition among water companies could support greater water efficiency in the non-domestic sector.
Although I welcome the idea that businesses and local authorities can switch water suppliers, I recognise that individual consumers will not have that opportunity. The regulator must ensure that bills remain affordable, while expecting water companies to have the ability to invest in the infrastructure. We need consumer bills to be affordable now, but we must also recognise that water supplies are needed for the future, so I hope that we can amend the Bill in Committee to make it better for consumers and for the environment. There has been concern that, as companies compete for customers in the commercial sector, domestic customers may carry more of the costs of supply. We will need to hear from the Minister in Committee how that will be prevented.
The system for abstraction licences is not fit for purpose and is long overdue for reform. The Government have said that the work will have to wait until the mid-2020s, but it is important to address it much earlier than that. We need a system of licensing abstraction that balances resilience with the state of the environment.
One of Ofwat’s secondary duties is to promote sustainable development. Liberal Democrats would like to see that duty elevated to a primary level. For that reason, I intend to table an amendment in Committee to give Ofwat a primary duty to promote sustainability. I agreed with the comments of my noble Friend Baroness Parminter, in a debate on the Gracious Address in the other place, that a thorough examination is needed of the effect of the water industry on the environment now and in the longer term.
Ofwat seems to have a rather confused approach to sustainability. Let me quote from the supplementary written evidence submitted by Ofwat to the EFRA Committee in respect of the draft Water Bill:
“I provide further written evidence on specifically why we consider that our duty to contribute to sustainable development should not be elevated to a primary duty”,
yet it also said:
“Indeed, the core vision of our strategy is: ‘A sustainable water cycle in which we are able to meet the needs of water and sewerage services while enabling future generations to meet their own needs”,
It calls this “sustainable water”—it seems to me that its thinking is rather confused. My understanding of sustainability is that it is about balance, not conflict, and Ofwat should be well aware that its decision making can affect the environment as well as economic and social matters. I believe that Ofwat has accepted the need for sustainability as a primary duty and that the Government should legislate to establish it.