Amendment 390

Levelling-up and Regeneration Bill - Committee (13th Day) – in the House of Lords at 6:45 pm on 18 May 2023.

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Baroness Willis of Summertown:

Moved by Baroness Willis of Summertown

390: Clause 153, page 182, line 9, at end insert—“(c) In upgrading each nitrogen significant plant and each phosphorus significant plant—(i) publish a compliance and investment plan for each plant before upgrades are commenced, setting out how upgrades will be delivered,(ii) within each compliance and investment plan set out how upgrades will, wherever feasible and possible, use catchment-based approaches and nature-based solutions to secure a reduction in nutrient discharges equivalent to those required to meet that limit, and(iii) report annually to the Water Services Regulation Authority, the Environment Agency and the local planning authority on progress against the agreed compliance and investment plan.”“(1A) The Water Services Regulation Authority and the Environment Agency must advise the local planning authority if compliance and investment plan monitoring suggests that the pollution standard will not be met; and a local planning authority may disapply its obligations under Schedule 12 to this Act on receipt of such advice.”Member’s explanatory statementThis amendment will require sewage undertakers to clearly set out plans for and provide annual reports on progress towards upgrading plants in sensitive catchment areas, including plans to prioritise use of catchment-based approaches and nature-based solutions to reduce nutrient pollution, thereby unlocking wider environmental benefits.

Photo of Baroness Willis of Summertown Baroness Willis of Summertown Crossbench

My Lords, Amendment 390 in my name, supported by the noble Baronesses, Lady Parminter and Lady Jones of Whitchurch, seeks to address a missed environmental opportunity in Clause 153, which takes very welcome steps to address nutrient pollution. The Government should be congratulated on this, as this nutrient pollution, which comes from houses and from farming, is devastating our freshwater habitats.

The statutory requirement in the Bill is to meet this nutrient removal through sewage disposal works and plants. Frustratingly, the clause specifies that this upgrade should take place only in these areas and has missed an opportunity to bring in nature-based solutions. The first reason this is a problem is that concrete-based solutions carry a really hefty price tag, as Wessex Water told me the other day, but they carry an even heavier climate cost. They have a very large carbon footprint. So what we have ended up with in the Bill is an environmental problem—nutrient pollution in our rivers—being addressed in a way that will create another environmental problem: significant carbon emissions.

There is an environmentally friendly alternative. This amendment suggests that water companies should also be given the option to reduce the level of nutrient pollution by using nature-based solutions, such as a buffer strip of forestry or wetland plants along the edges of a river. They all sound very nice and are often seen as a soft alternative. That is the real problem. There is now a really large scientific evidence base to demonstrate that such nature-based approaches are highly effective at reducing nutrient loads in rivers.

In a review of current nature-based nutrient reduction schemes across Europe in 2023, 450 schemes were reviewed and every single one of them reduced significantly the nutrient loads in the river. I want to illustrate this point in the UK by looking at some outcomes from a nature-based nutrient reduction scheme introduced into the River Ingol in Norfolk in 2017 by planting wetlands, which included 25,000 aquatic species, and riparian woodland with 1,400 trees. The total cost of this scheme was £192,000, compared to the £2 million cost of putting in a water treatment plant. Understandably, water companies are particularly interested in nature-based solutions.

I will focus very briefly on outcomes in the past four years, which were published about two months ago in a top scientific journal. In this nature-based approach—we are talking about wetlands and buffer strips—there was a 72% reduction in nitrates, a 69% reduction in phosphates and a 53% reduction in dissolved organic carbon in the river. That is just from planting trees and creating an aquatic wetland, at a fraction of the price. It also produced only half the carbon emissions that would have been emitted if there had been a water treatment plant. Along with that, there are other stacked benefits. I do not need to repeat them, but there is much higher aquatic and bird biodiversity and corridors are created which link up habitats. This is one example; there are many others already demonstrating this in the UK and across Europe, but we still think of nature-based solutions as touchy-feely, nice, easy options that do not really deliver. They absolutely deliver.

I have talked to various water companies about this because I wanted their opinion on these options. One I spoke to in particular was Wessex Water. It told me that one of the real issues with this legislation as currently drafted is that these water treatment plants might not be cost effective for small catchments. They are too expensive to put in place for small catchments, so a nature-based solution is much better for Wessex Water; it is right behind this. It looked at the upgrades required by the Bill and thinks they would cost £400 million more than nature-based solutions, so it is right behind the idea of bringing in nature, with all the added benefits that we can get.

One problem the Government have suggested—I understand where they are coming from—is that, if we widen the options, it could allow water companies to evade responsibility for meeting these new legal duties to reduce nutrient pollution. We absolutely do not want to do that, so Amendment 390 takes direct steps to make sure that that cannot happen by establishing additional compliance checks on companies to ensure that nutrient pollution reductions are delivered whatever the mix of methods. That is the most important thing. Companies can have a nature-based system or water treatment plants, but they have to demonstrate what is happening at the end. This amendment would require companies to secure Ofwat approval for a compliance and investment plan before any upgrade is commenced and to report annually to Ofwat, the Environment Agency and the local planning authority so that they progress against an agreed plan. This comes back to all the discussions we have had about baselines and marking targets through time. I believe that this extra reporting duty will deliver these upgrades. In addition, if every small river catchment ends up with a nature-based solution it will greatly enhance our efforts towards reaching 30 by 30 because we will have these incredible corridors down rivers to allow biodiversity to move, which is one of the things we are really missing in so much of this discussion and legislation right now.

I would go so far as to say that, without this statutory backing, the theoretical consensus that nature-based solutions are the optimal method will remain theoretical. We really need to do this, and we need a clear legal duty to deploy them where possible. I strongly recommend this win-win method of pollution reduction. This would provide a clearer legal duty on the water companies to look at this issue and introduce these really effective ways of reducing pollution. I beg to move.

Photo of Baroness Hayman of Ullock Baroness Hayman of Ullock Opposition Whip (Lords), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Levelling Up, Housing, Communities and Local Government) 7:00, 18 May 2023

My Lords, apart from the Government, I have the bulk of the other amendments in this group so I thought I would go through them now. I thank the noble Baroness, Lady Willis; she is very knowledgeable and it is interesting to hear what she has to say. She brings an extra dimension to our debates on this issue, and I hope the Minister will agree with that.

Part 7 provides an opportunity to address nutrient pollution, particularly from development. There is a duty on water companies to upgrade their sewage disposal works; that is welcome, but some of our amendments are to do with the wording, because we are a bit concerned that the wording about how water companies are to deliver the required upgrades is unnecessarily prescriptive. For example, Amendments 391 and 393 look at how the Government have come to the wording of the exemptions. Amendment 391 is to new Section 96D in Clause 153, which says:

“A plant is exempt … if … it has a capacity of less than a population equivalent of 2000”,

while further down it says,

“the plant has a capacity of less than a population equivalent of 250”.

The amendments probe where those figures have come from and why they are there.

My Amendment 400 probes whether broken sewage monitoring stations are contributing to sewage discharge. We are aware that Ofwat has recently announced that water and sewerage companies will face increased penalties from 2025 for using faulty or broken equipment to measure pollution from storm overflow pipes. Obviously we welcome that announcement, but the Government and the regulators need to enforce existing legislation. My amendment would place a duty on the Secretary of State to monitor the situation so we would ensure that what is legislated for actually happens. The narrow focus on sewage disposal works locations also means that the upgrades will be delivered onsite, usually through the traditional engineering methodology, which the noble Baroness, Lady Willis, talked about—using concrete, steel and chemicals has a high carbon cost.

My Amendment 401 probes the implementation of the environmental action plan. It asks the Minister for an explanation of how that is related to Part 7 and how it all ties together.

My Amendment 402 probes the potential for rebuilding sewage works with new concrete and steel rather than creating woodlands, reed beds and wetlands. The noble Baroness went into a lot of detailed explanation about why we need both options. A prescriptive site-specific approach closes down that environmentally beneficial alternative for upgrades. Habitat restoration can be done from wetlands and riparian woodlands and you can enhance farmland through hedges—the Minister knows all this. It would be good if that were also included as an option.

We know there have been pioneering partnerships between water companies and nature organisations, including locally where I am in Cumbria, and they have demonstrated how effective habitat restoration can reduce nutrient pollution levels and achieve nutrient neutrality. Again, why not use those pioneering partnerships to drive forward best practice? Other countries have done so, such as Belgium, so there is proper evidence and information as to why that is a good way forward.

I shall be brief because we still have quite a bit to get through. I finish by reiterating our strong support for everything that the noble Baroness, Lady Willis, has said and her amendment, and I urge the Minister to consider accepting it. We also support the amendment tabled by the noble Lord, Lord Stunell.

Photo of Lord Stunell Lord Stunell Liberal Democrat

My Lords, Amendment 393ZA is in my name and I thank the noble Baroness, Lady Hayman of Ullock, for her support in advance. I want to offer my support for all that the noble Baroness, Lady Willis, said. It was extremely knowledgeable and powerful, and I hope very much that the Minister will be able to give her a positive response.

My amendment responds to the specific ambiguities in the text of the clause in front of us. Clause 153 amends the Water Industry Act 1991, and in its new Section 96D(5) it provides that:

“The Secretary of State may by regulations specify” which sewage treatment plants are exempt from control of nutrient discharge. That subsection (5) follows a couple of preceding subsections which detail, as the noble Baroness, Lady Hayman of Ullock, pointed out, that plants of a particular size are exempt in any case. As I understood it from reading the legislation, very small-scale plants might be exempted. On top of that, we have subsection (5), which says that the Secretary of State may by regulations specify any sewage treatment plant that they decide is exempt. It is exactly the same area of concern that I expressed previously: it would appear that the Secretary of State is being given a free card to decide on exemptions, additional to those written into the earlier part of the new section.

A less scrupulous water company—we all know that they have suddenly become extremely scrupulous, which is very good to hear; of course, I absolutely take what they are saying in good faith—might think it worth while pursuing an exemption for a plant to avoid the costs. The noble Baroness, Lady Willis, has alluded to the substantial costs for them if they are required to comply. That is reflected pretty fully in the concept in the same clause: that if an exemption is ever withdrawn—in other words, if you thought that you had an exempt plant but the Secretary of State decides that the exemption is withdrawn—there is a seven-year period in which to become compliant. Once the exemption is withdrawn, you have seven years to get back into compliance. That indicates the cost and difficulty somebody would face if they found themselves with a plant which they had to make compliant.

The point I am trying to make, not very articulately, is that there is a real benefit to an operator in avoiding having to put in the necessary measures which this clause prescribes. There will be voices raised and pressures brought to bear on the Secretary of State to be very relaxed, and to operate subsection (5) in addition to the statutory exemptions in the preceding subsections. One could imagine that the greatest pressure would come from somebody operating a sewage plant which had had persistent breaches in standards that they regarded as being too onerous or expensive to comply with. They would make some special pleading to the Secretary of State that they should be exempted. That is exactly the situation that ought to be strongly resisted, and which this legislation should prevent happening.

That is the context for my amendment. It creates a clear legislative bar to any diminution of existing standards in the decision-making by a future Secretary of State. It could well be linked to Amendment 390, moved by the noble Baroness, because some kind of offset might be made in relation to nature-based solutions, as against expensive capital investment in a plant. I can imagine that that would be a sensible way to go. It may therefore be better for my amendment to be in some way melded with the noble Baroness’s.

The point I am trying to make, which I hope the Minister will accept, is that we need to be absolutely certain that proposed new Section 96D(5) is not used as a lever to exempt plants which otherwise should be properly brought up to standard and made compliant with the regulations. I hope the Minister fully understands that I am probing a situation which at the moment is ambiguous and very much a commercial pressure point for the companies operating these plants. I seek an assurance from the Minister that he has heard what has been said will perhaps be able to come back on Report with something accurately reflecting the nature of the debate we are having.

Photo of Baroness Parminter Baroness Parminter Chair, Environment and Climate Change Committee, Chair, Environment and Climate Change Committee 7:15, 18 May 2023

My Lords, I support the noble Baroness, Lady Willis, in her Amendment 390, to which I have added my name. It is a really important amendment as we struggle to meet the Government’s environmental target and our need to build more homes and develop our land. We have to do that in a way that understands there are fundamental environmental problems we need to address, particularly nutrient pollution.

It is clear that we need a statutory underpinning for nature-based solutions because, without that, they are not going to happen. We have evidence of that. You only have to look through previous price reviews, in which Ofwat turned down recommendations from water companies for nature-based solutions because, on a crude cost-benefit analysis, putting in a grey concrete storm tank was a damn sight cheaper than wetlands and various other proposals. If my memory serves me right, Ofwat turned down some very detailed and thoughtful proposals from Anglian Water because of the cost. Unless there is statutory underpinning, Ofwat will just carry on with its usual economic model.

This amendment is an important way of ensuring we get that win-win of nature-based solutions as we seek to address our nutrient pollution problems. It is an elegant way to move forward on the Dasgupta review, which talked about finding new ways to build nature into our economic model. Giving this a statutory underpinning would, as I have just made clear, give Ofwat the confidence to build into its economic models support for nature-based solutions. We know these are going to be fundamental if we are going to get to our 30 by 30 target.

The only thing I want to say, because it is late and so much has been brilliantly said by the noble Baroness, Lady Willis, is that you would expect us to say this. We are the usual green environmentalists. But I hope the Minister hears that we are also saying that we understand why this is important. We need development, and there is stalemate in many housing developments because the nutrient pollution issues cannot be solved. We are trying to be constructive in resolving that problem. We are not just saying this with our usual green hats on. We realise that this is a tricky issue which needs resolving.

It is not just us in the environmental groups, such as Wildlife and Countryside Link. The House of Lords Science and Technology Committee did an excellent report on nature-based solutions recently. Again, this underpins the support for this amendment. The Government’s own environmental improvement plan talks about the benefits of nature-based solutions. If you are going to deliver on your own words, then you should be supporting this.

For me, the most important and powerful thing is that the water companies support this amendment. In addition to the comments made individually to the noble Baroness, Lady Willis, Water UK put out a release saying that the water companies want this amendment. It would be wonderful to be able to say that this amendment has been supported on a day when the water companies have said, “Mea culpa”, said sorry for the appalling way that they have handled our sewage problems, and promised that they will put £10 billion-worth of new investment into this area. This would ensure that we get the win-win, both to overcome some of our problems with building the homes we need and to ensure that we get the benefits we need for our hard-pressed nature.

Photo of Lord Benyon Lord Benyon The Minister of State, Department for Environment, Food and Rural Affairs

I am grateful to noble Lords for their contributions. I will come to the various points but, first, I say that I agreed with nearly everything that the noble Baroness, Lady Parminter, said, particularly the quotation from Dasgupta. But her criticism of Ofwat is slightly out of date: I had those arguments with it a decade ago. It liked a bit of concrete and steel then because it could measure water going into it and the quality going out, and it did not trust nature-based solutions because it could not get that degree of measurement of asset value. There has been a sea-change in how we do that, but I agree with her in every other respect.

On this group on nutrient pollution standards, I begin my remarks with Amendment 390. I agree with the noble Baroness, Lady Willis of Summertown, and others that we should ensure that water companies deliver this new statutory duty in a timely way. Throughout the delivery of the Water Industry National Environment Programme, the Environment Agency regularly liaises with water companies to ensure progress and to address risks to delivery. Under Section 202 of the Water Industry Act, the Government have the power to request that water companies provide information regarding the delivery of improvements to wastewater infrastructure, and we intend to use these powers if necessary.

Should it become evident that a delay in upgrading a particular wastewater treatment works is unavoidable, the legislation makes provision for the Secretary of State to disapply the requirement placed on local planning authorities to assume that the upgrade will be delivered by 1 April 2030 for the purposes of a habitats regulations assessment. The Secretary of State must notify local planning authorities accordingly so that they can factor this into their planning discussions.

I agree with the noble Baroness that we should ensure that water companies are delivering against this duty in a way that maximises benefits for the environment, and ensure that nature-based solutions are a vital part of our sewage treatment infrastructure. The Government want to see water companies making use of these solutions as part of the treatment processes that they apply. In the strategic policy statement for Ofwat, we set out that water companies should

“increase … the use of nature-based solutions where appropriate”.

The new statutory duty has been designed to ensure that water companies can use nature-based solutions as part of the wastewater treatment process—for example, water companies may use integrated wetlands to remove nutrients from wastewater. The legislation also allows water companies to use nature-based solutions as part of this process. I am repeating myself, so I will move on, as the hour is late.

In the most recent strategic policy statement for Ofwat, the Government set the clear expectation that it should continue in this form. Therefore, I assure the Committee that sufficient provisions are already in place to ensure that nature-based solutions are taken forward where appropriate.

I turn to Amendment 391 in the name of the noble Baroness, Lady Hayman of Ullock. Upgrading wastewater treatment plants smaller than a plant capacity of 2,000 population equivalent would require significant investment in new infrastructure and deliver minimal environmental benefit, and it is therefore unlikely to represent value for money. However, we have provided a power for the Secretary of State to lower the plant capacity in individual catchments so that, where appropriate, we can require upgrades at smaller treatment works too.

Although I welcome Amendment 392 in the name of the noble Baroness, Lady Hayman of Ullock, it is unnecessary because the Secretary of State will of course consider all relevant information and advice before making any exemptions from achieving the nutrient pollution standard. In addition, if a wastewater treatment plant is exempt from this statutory duty, the Environment Agency will still make use of environmental permits to set limits on the quality of wastewater being discharged, thereby ensuring that the water environment is protected.

In relation to Amendment 393, I reassure the Committee that wastewater treatment plants with a capacity of less than 250 population equivalent can already be designated as not exempt where appropriate. If the evidence shows that it is necessary to put enhanced treatment in place at a wastewater treatment plant with a capacity of less than 250 population equivalent, the legislation allows for the Secretary of State to do so within a set timeframe.

I agree with the noble Lord, Lord Stunell, that we should ensure that nutrient pollution standards for wastewater are protected. However, as already made clear, wastewater treatment works that are exempt will still be subject to all the other existing standards set by the Environment Agency on a site-specific basis, but I am happy to continue discussions on this as the Bill progresses.

Amendment 400 raises the issue of accurate monitoring and reporting. I agree that this is critical. Under this Government, we have gone from just 7% of storm overflows being fitted with event duration monitors in 2010 to over 90% today, and by the end of this year that will rise to 100%. The Environment Agency already regulates many water quality monitoring stations through permits to ensure that they operate to established regulatory standards. We aim to bring forward regulations to implement a new duty on water companies to report data on sewage discharges from storm overflows in near real time. In those same regulations, we will implement a duty to monitor the water quality impacts of those discharges. That will make the UK world leaders in understanding the impact of sewage discharges on the receiving environment. I therefore reassure the Committee that this amendment is not necessary, as the Government are already taking steps to ensure the accurate and timely reporting of monitoring data from wastewater treatment works. The Committee should expect further announcements on this soon.

Considering Amendment 401 in the name of the noble Baroness, Lady Hayman of Ullock, I will assume that she is referring in it to the environmental improvement plan. The plan includes the steps that we are taking to meet the legally binding long-term target to reduce phosphorus loadings from treated wastewater to the water environment. Every five years, the Government must review the environmental improvement plan and update it as necessary to ensure that it contains any further policies needed to achieve long-term and interim targets. It is therefore important that we retain flexibility to update the actions in the plan rather than setting them on a statutory footing, so that we can ensure that the actions reflect the most appropriate path to achieving our policy. It will be for this and the other place to hold Ministers to account on this in future years.

Government Amendments 393A to 393J will improve the enforceability of these provisions by making it clear that the Environment Agency needs to treat excess nutrient pollution discharge which results from the failure to deliver upgrades on time as environmental damage. The sewerage undertaker would then be liable to remediate the excess nutrient pollution determined as having been discharged. For the reasons set out, which I hope provide sufficient reassurance, I ask the noble Baroness, Lady Willis, to withdraw Amendment 390, and noble Lords not to move the other amendments in their names and to support the government amendments.

Photo of Baroness Willis of Summertown Baroness Willis of Summertown Crossbench 7:30, 18 May 2023

My Lords, I thank all noble Lords and Baronesses who have participated in the debate, particularly the noble Baroness, Lady Hayman of Ullock, and the noble Lord, Stunell, for their excellent additional points. I thank the noble Baroness, Lady Parminter, for her support of my amendment.

I urge the Minister to consider this matter further. I give him one reason why: if we have so much legislation out there already, why is it not working? If you look at recent government funding for wastewater treatment plants and schemes—I checked it earlier today—not a single one that has been funded is a nature-based solution; they are all concrete. That suggests to me that people are not taking this seriously; the water companies are certainly not looking at nature-based solutions.

I would like to discuss this further with the Minister’s department, if possible. I appreciate his answers and know that this matter is not straightforward, but we need to put legislation in place that means that nature-based solutions are on the same footing as concrete solutions—they are not right now. With that, I beg leave to withdraw my amendment.

Amendment 390 withdrawn.

Amendments 391 to 393ZA not moved.