Wales Bill - Report (1st Day)

Part of the debate – in the House of Lords at 6:15 pm on 14th December 2016.

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Photo of Baroness Morgan of Ely Baroness Morgan of Ely Shadow Spokesperson (Wales) 6:15 pm, 14th December 2016

My Lords, I was reflecting on how passionate and moving some of the speeches about water were in Committee, and then I remembered that we are also dealing in these provisions with sewerage, and we do not really get quite as excited about that.

I will speak to my Amendment 43, which would introduce a new clause to amend Section 27 of the Water Industry Act 1991. I acknowledge that there has been a degree of movement on the issue of Ofwat and its accountability to the Welsh Assembly. My amendment would require the Secretary of State to consult Welsh Ministers before giving general directions to Ofwat, the water regulator. Obviously, these directions would be in connection with matters relating to water and sewerage operators in Wales or where licensed activities are carried out using the supply system of water or sewerage operators in Wales. At an earlier stage of the passage of the Bill, I explained why these changes are necessary and I listened very carefully to the Minister’s reply. I have therefore changed the amendment I proposed at that point so that his concerns relating to any non-devolved areas of Ofwat functions, which he alluded to again in his opening statement today, would be taken out so that there can be no question of the Assembly interfering in areas beyond its competence in relation to giving guidance on what Ofwat should do in Wales.

It should be emphasised that we are not interested in trying to step beyond the Welsh Assembly competence here. However, we believe that Ofwat should be accountable to the National Assembly for Wales and Welsh Ministers for the function that it exercises in Wales. Without this new clause, Welsh Ministers will find themselves in the bizarre situation of regulating water and sewerage operators in Wales but with the Secretary of State being able to exercise his function of giving a general direction to Ofwat without any consultation whatever with the Welsh Ministers. We do not think that that issue has been addressed yet.

I support the point made by the noble Lord, Lord Wigley, on the need for an unequivocal statement on the face of the Bill that Wales is now responsible for matters relating to water. We have not got that and it would be good to have it. Sometimes, when it is such a politically sensitive issue, it makes sense to write it into the Bill to make sure that people understand the politics of what is going on; it is not all about law. That is probably true also in relation to reservoirs. I have heard what people have said before, and yes, the Welsh Assembly has the ability through the laws that it has even now to stop reservoirs and a future Tryweryn happening. But let us do it because it is the right thing to do, and because it is politically sensitive and something that people in Wales would really appreciate.

I will deal now with the Government’s amendments that relate to water. Noble Lords will recall, as we have just heard, the much-heralded announcement and fanfare in the media that everything was going to change in relation to water and that we were all thrilled. Yes, the idea that an intergovernmental protocol should be established on cross-border issues including water is a good thing. But it was also made clear that the Secretary of State’s existing legislative and executive powers of intervention in relation to water should be removed in favour of mechanisms under the intergovernmental protocol. The Secretary of State cannot now use those interventionist powers with regard to water. That is a good thing because we can deal with it through this protocol.

However, I return to the point made by the noble Lord, Lord Wigley. What is in this protocol? We have no idea. If no agreement can be reached on the protocol, it is possible that those intervention powers may never be removed. What will happen if there is a dispute between the two Governments in terms of what should happen in that protocol? Specifically, to whom would any disagreement be referred and how do the UK Government envisage this section would work in practice? We have no clarity on this protocol. We are clearly concerned about it.

I am also concerned about this proposed new clause from the Government concerning the reciprocal cross-border duties in relation to water. This was not part of the Silk commission and we are concerned. We heard alarm bells ringing because of a reference to the Water Industry Act 1991, which again the noble Lord, Lord Wigley, emphasised, was based on the issue of promoting competition as the only way to secure the interests of consumers. I understand that the Minister made a reference to that at the beginning of his statement but can I be absolutely clear that this issue of promoting competition will not be enforced on Wales in this cross-border understanding? Please correct me if I have not understood—this is not about imposing competition on Wales where we do not want it in relation to water.

Scotland and England do not have cross-border operators and as such the issue in respect of consumers is not as obvious. But the Solway Tweed river basin district covers both Scotland and England and decisions either side of the border would impact on the other. I am not aware that such a requirement exists in the Scotland Act, so why do the Government propose to insert it into this Bill at such a late stage in the scrutiny process?