Baroness McIntosh of Pickering:

Moved by Baroness McIntosh of Pickering

26: Clause 2, page 5, line 29, at end insert— “(7A) Before preparing a pollution incident reduction plan, a sewerage undertaker must consult with farmers, local authorities, developers and others to identify natural flood prevention solutions to prevent pollution incidents.”Member's explanatory statementThis amendment would require consideration of opportunities to retain water through natural solutions to prevent sewage mixing in combined sewers with excess rainfall, causing pollution incidents.

My Lords, I am delighted to have the opportunity to open on this very interesting group of amendments, and to speak to my Amendment 26. At the risk of having a love-in with the Minister and the Government, following on from the last group, I would like to commend her and her Bill team for listening to the debate we had on similar amendments in Committee. To be honest, the reason I tabled this amendment is that we discussed this issue very briefly when we met with the Minister and the noble Baroness, Lady Taylor, but I did not realise that I had not seen the text of the amendments the Government were submitting. I applaud and commend her Amendment 42 and others in this group; I will leave those who are moving those amendments to speak to them.

I have just a few words to say on Amendment 26 and the Pickering pilot scheme, with which I was associated in its latter stages and the success of which I still monitor very closely. Since we have had the Pickering scheme, the dam and the planting of the trees, Yorkshire Water and the Duchy of Lancaster have put some money in, and Pickering Town Council has agreed to maintain some of the work that has been done. I take the noble Baroness’s point, made at the conclusion of the second group, about the importance of the maintenance of sustainable systems going forward. I would like to think that that was a role model.

The one defect of that scheme was that there was no private finance, apart from Yorkshire Water, and I hope that other models will look to retain that going forward. It also had money from the Environment Agency, North Yorkshire Council and Ryedale District Council, as was. As I said, it is a role model that I hope other projects will follow. It has meant that Pickering Beck has not flooded Pickering or downstream since that time. I therefore commend the amendment to the House, although I shall not be pressing it because I favour the Government’s Amendment 42 in this regard. It would allow an opportunity to retain water through natural solutions in order to prevent sewage mixing and combining with excess rainfall, causing pollution incidents.

I hope that when the Minister responds, she will highlight how, as I have set out in Amendment 26, she would expect a sewerage undertaker to consult with Parliament, local authorities, developers and others to identify such natural flood-prevention solutions. If all the parties work together going forward, this will be very important work of the water commission, looking at a catchment management system that someone has to take control of. I commend Amendment 26 and I look forward to listening to others speak to their amendments. I beg to move.

My Lords, I will speak to government Amendment 48. I am extremely grateful to the Government for bringing forward this amendment, which reflects the substance of the amendment that I and others brought forward in Committee, and I am happy to support it by putting my name to it. That debate showed that there was a clear case for Ofwat doing more on environmental issues, and I thank the Minister and her officials for their extremely productive approach, openness in meetings and willingness to work together to address these concerns. I am really pleased that we now have on the face of the Bill a new duty for Ofwat to have regard to the need to contribute to our climate change and environmental targets when exercising its functions. It is so critical that this is factored into decision-making, so that opportunities to contribute to these targets are not missed or deprioritised.

While I am grateful for the progress we have made in seeking to redress the imbalance, it would have been preferable to have a stronger duty than “have regard to”. I know the reasons for using this language, but my previous wording, which would have obligated Ofwat to

“take all reasonable steps to contribute to” our climate and nature targets, would have provided a stronger obligation without caveats. Therefore, I very much hope that the progress we have made today is just the start of wider changes to ensure better environmental outcomes in our water industry. Perhaps the Minister can confirm that the question of how Ofwat will balance environmental duties and deal with the related trade-offs with other economic and consumer objectives will be looked at in detail as part of the water commission’s work.

I also want to raise the important issue of adaptation. My original amendment contained an additional limb which was intended to ensure that adapting to the current or predicted impacts of climate change, as identified in the most recent report of the Climate Change Committee, would also be part of Ofwat’s remit when exercising its functions. In discussions, the Minister said that adaptation is covered by the resilience strategic priority. However, this does not directly link back to current Adaptation Committee reports. I hope this too will be examined by the water commission, because in spite of having the resilience objective, this has not so far led to the new reservoirs we urgently need for housing and drought resilience. More clearly does need to happen, and I would be grateful for any assurances the Minister can give regarding adaptation.

I also welcome government Amendment 42. I hope that this will be a step forward in increasing the use of and spend on nature-based solutions, and lead to their greater and more systematic use to address adaptation issues such as flooding and drought.

Amendment 44, in the name of my noble friend Lady Boycott—who sends her apologies—is the same as the one tabled in Committee. It addresses the very real issue of water companies not being transparent with environmental data, and specifically does three things. First, subsection (1) would provide statutory underpinning to the Fish Legal case, making it beyond challenge that water companies are, and will remain, public authorities for the purposes of the Environmental Information Regulations 2004. This is necessary because, if it is not in legislation, its overturning by a future ruling remains a distinct possibility.

Secondly, proposed new subsection (2) would cut through the delaying tactics and refusals by water companies to make it clear that effluent and wastewater treatment data must, as a minimum, be proactively published by water companies. The water companies will be required by law to publish it up front, without anyone having to ask. This would be consistent with the expectation of transparency that we are setting though the Bill.

Thirdly, proposed new subsection (3) would amend the appeal and enforcement provisions in the 2004 regulations to allow members of the public to complain directly to the Information Commissioner about data not being proactively published—which they cannot at present.

In Committee, in response to this amendment, the Minister said that, while the Government supported the principle of transparency, these

“specific proposals duplicate pre-existing provisions and would create practical difficulties

However, we have looked, we cannot find these pre-existing provisions and we do not understand what the practical difficulties would be. All we are asking is for sewerage undertakers to publish data that they hold and which, under the Environmental Information Regulations 2004, they are meant to publish but do not because the regulations are effectively unenforceable.

Noble Lords and the Minister may have seen over the weekend an article in the Observer, which has already been mentioned, about precisely this issue. United Utilities has been fighting a legal challenge that has been brought upon it to not give the public access to environmental data on its—to be generous—“potential” pollution of Lake Windermere. First, it claimed that the phosphorus data was not environmental information, then that it was internal communication. Obviously, this is environmental. ICO agrees and has said that it should be published—but still it has not been.

In this example, we can see that some sewerage companies will not behave in the public interest unless forced to do so. In this amendment, we have an opportunity to address these refusals to be transparent. It would go some way to removing their supposed legal defence, forcing them to co-operate. I really hope that the Minister can get behind this today, as the only thing that will help here is words in statute. If there are specific concerns with the drafting, we would welcome her amending it at Third Reading.

In conclusion, I reiterate my thanks to the Minister and her team. We have made important progress for climate and nature in this Bill and we will start to see delivery of better outcomes for our precious river and coastal ecosystems.

My Lords, my Amendment 49 puts a clear and unambiguous environmental duty on Ofwat. It gives the authority a primary duty to protect the environment. I am well aware that the Government probably will come round to the Greens’ way of thinking in 10 or 15 years and that perhaps this side of the Chamber might come round to our way of thinking in 25 or 30 years, but we have to care now about our environment and our planet. What we have passed so far, although very welcome, is just not enough.

As the noble Baroness, Lady Willis, said, natural flood management is proving to be a cost-effective way of reducing flood risk, far cheaper than traditional construction involving lots of concrete. Water companies should be investing in these nature-based solutions to reduce the infrastructure cost of handling service water run-off, because every litre of water that soaks into the ground is a litre of water that does not flood into the water treatment system.

I have two requests of the Minister. Will the government amendments now provide a baseline so the Minister can take forward a piece of work to expand the use of natural flood management, especially where it is significantly cheaper than other methods? Secondly, will the Government please put these climate and nature amendments on the face of their Bills at drafting stage, rather than having to amend them down the line?

My Lords, it is always an absolute pleasure to follow the noble Baroness. I was going to call her “my noble friend”—but not quite yet. I am delighted to speak to my Amendment 55. I am grateful to my noble friend Lord Roborough, who has also signed the amendment, and I thank all noble Lords who spoke to this in Committee.

Like so many other noble Lords today, I join in the great “love-in” for the Minister. All I will say, speaking from experience, is “Enjoy it while it lasts”. I pay tribute to the Minister and the officials who have engaged with me over the last few days since we last met. Echoing words that have already been said, looking back to where we were in Committee on this amendment, and on nature and the environment as a whole, the Government have listened and moved quite a lot. Collectively, we pushed, and the Government have listened. I think a lot of this comes down to the Minister, who cares about it and gets it.

I have tabled my amendment on nature-based solutions again because the Minister has probably done all the arm-twisting of officials and the Secretary of State that she can to get to where we are, but I would like to see whether we could go a little further. I am grateful for what the Government have done and to the Minister for tabling the two relevant government amendments that speak to my previous amendment. The first is Amendment 42, which focuses on the water companies and seeks to ensure that they explore the use of nature- based solutions through their drainage and sewerage management plans. This is a significant step forward from what we have been pushing, but I would like to hear from the Minister how else she sees the role of nature-based solutions in areas such as, for example, drought reduction, water storage and tackling pollution, which is covered in my amendment.

The second part of my amendment relates to the regulators. I am grateful that the Minister has moved quite a lot, to echo the words of the noble Baroness, Lady Willis of Summertown. There has been movement. The Government have tabled Amendment 48 in relation to Ofwat having regard to the need to contribute to the goals of the Climate Change Act and the Environment Act. I had a quick look at the Environment Act. From what I could see, it does address biodiversity and woodland cover. This is a significant and welcome move forward, but I have tabled the second part of my amendment again so that the Minister can, I hope, go further and set out the importance of nature-based solutions from a regulator’s point of view, and that if a company wishes to explore these solutions, it will be given the freedom to do so and not be penalised.

I will speak briefly to a couple of points that were made in Committee. The first was about the importance of communities. My good friend, the noble Baroness, Lady Boycott, sadly is not in her place, although she has a very good representative here. She spoke beautifully about what sounds like a fantastic project in Tiverton that is changing the path of the River Exe to avoid local flooding. It delivers not only that but biodiversity and involves schools, farmers and our furry friends the beavers—“nice beavers”, as Frank Drebin, would say. Having the community involved in these schemes is key. It is better that the private sector is the convenor, given that it has the power and local knowledge, unlike Whitehall. My digging around suggests that many of these water companies already do a lot of community engagement, but obviously it is something that my noble friend is trying to address in her Amendment 26.

Also in Committee, the noble Lord, Lord Cromwell, made the observation that there may be issues with doing nature-based solutions at scale. While supporting my amendment then, he said that they can and do have a role to play. He is right. This amendment does not force them on anyone, but merely says that they could play a part in a water company’s planning and the company should not be penalised for that.

In conclusion, a lot of this comes down to the language from the Minister, which I hope will build on what the Government have done in their movement today.

My Lords, as the noble Baroness, Lady McIntosh of Pickering said, this is an interesting group of amendments and we on these Benches welcome them. I do not wish to replicate what has been said but I have a few reflections.

Government Amendment 48, so ably spoken to by the noble Baroness, Lady Willis of Summertown, is extremely welcome. It could go further, but we on these Benches welcome it. We accept that the Bill is an interim measure and that the independent water commission is just that: independent. Nevertheless, it is important that the Government at this point in time are making a marker in the sand that the regulator should have greater regard for climate and environmental targets. That is extremely important and is the additional reason why on these Benches we welcome it.

Amendment 44 was introduced by the noble Baroness, Lady Willis of Summertown, on behalf of the noble Baroness, Lady Boycott. You would expect that we on these Benches, as Liberal Democrats and liberals, would welcome anything that enables local people to have more say on decisions that affect their lives, particularly the environment and climate decisions, because we know that, if they get involved and are caring about their environment, they will help protect it better. So we think that this is an extremely welcome amendment and we look forward to hearing what the Minister has to say in her response.

On the final group of amendments, on nature-based solutions, which we participated in in Committee, I think there is broad agreement. Everybody understands that we need water companies to look less at concrete and far more at green solutions. Government Amendment 42 is extremely welcome. The only point that I would make echoes that made by the noble Lord, Lord Gascoigne, when introducing his Amendment 55: there is an area where it could have gone a bit further. The noble Lord’s amendment talks powerfully about water storage and flood prevention; the Government’s amendment is welcome, but it excludes that. We on these Benches would like to hear a little more about how the Government see themselves taking that forward —mindful that it is not in their amendment. Having said that, we welcome these amendments.

My Lords, I thank my noble friend Lady McIntosh of Pickering for moving the first amendment in this group. I shall speak to my noble friend Lord Gascoigne’s Amendment 55 as well as government Amendments 42 and 48.

Amendment 55 is a powerful, concise amendment, and I congratulate my noble friend Lord Gascoigne on his commitment to, and passion for, making the case for nature-based solutions within the water industry. My noble friend’s amendment has two parts— both are important for the future of nature-based solutions in the water sector. The first would require water companies to give due consideration to nature-based solutions for meeting their statutory obligations. The second would prevent the regulator blocking the use of nature-based solutions.

The Minister has two amendments in this group that make significant additions to the Bill around the use of nature-based solutions. Amendment 42 requires undertakers to explain the contribution from nature-based solutions. Amendment 48 is a broad amendment that could also contribute towards nature-based solutions being used for their wider benefit to nature restoration. I am most grateful to the Minister for her constructive engagement on my noble friend Lord Gascoigne’s amendment, and for these government amendments. It is clear from these discussions that the Minister cares deeply about nature recovery.

However, I ask the Minister to clarify the approach taken by Ofwat to the use of nature-based solutions within the water and sewage industry. I am aware that £2 billion of investment is included within the draft determinations. However, we on these Benches wish to be reassured that, where suitable and at no additional cost to consumers, further nature-based investment is possible within this determination and beyond. To echo my noble friend Lord Gascoigne and the noble Baroness, Lady Parminter, we would also like reassurance that nature-based solutions will be used not just in drainage and sewerage but throughout the water supply and treatment network, including catchment restoration for flood prevention, drought mitigation and water quality.

I am sympathetic to the intentions of Amendment 26 in the name of my noble friend Lady McIntosh of Pickering. This would appear to be captured within our Amendment 55 as a specific case but also potentially within the government amendments. The water companies are perfectly positioned to stimulate nature restoration at scale and without using the public purse. We welcome these government amendments and look forward to the Minister explaining how impactful she believes they will be.

My Lords, I again thank noble Lords for the discussion on this group, for their amendments and for the thoughtful consideration that we have had since Committee on these issues regarding the environmental duties of water companies and the regulators.

Amendment 26 tabled by the noble Baroness, Lady McIntosh of Pickering, and Amendment 55 by the noble Lord, Lord Gascoigne, would require water companies to consider further opportunities to use nature-based solutions. I thank noble Lords for meeting me to discuss these amendments and nature-based solutions more broadly.

One thing the Government are clear about on these amendments is that water companies need to be encouraged to increase their use of nature-based solutions. In line with that, I am very pleased to see that Ofwat has proposed an allowance of over £2 billion for investment in nature-based solutions in the draft determinations at price review 2024. Alongside this, Ofwat has been clear, publicly, that it remains open to companies to identify where additional nature-based solutions can be delivered. We very much support this approach.

The noble Baroness, Lady McIntosh, and the noble Lord, Lord Roborough, mentioned the catchment approach. Again, that is something we are very supportive of. If we are to make a real difference in our water quality, and our approaches to our waterways, we need a whole-catchment approach.

Ofwat’s £200 million innovation fund aims to grow the water sector’s capacity to innovate. Since 2020, the fund has awarded funding to 93 collaborative projects where water companies work with different sectors to solve the water sector’s biggest challenges. The main- streaming nature-based solutions to deliver greater value project is one example that is working to overcome barriers to the adoption of nature-based solutions.

What I am trying to get across is that the nature-based solutions the Government are supporting are not just about what is in the Bill; it goes much broader than that. That is important, because we need to look at this approach right across the board. I hope that helps to reassure noble Lords and answer some of their questions.

The regulators have, for example, recently approved several new and innovative nature-based solutions. One example is the use of sustainable drainage systems in Mansfield to manage flood risk. That is a £76 million scheme and includes over 20,000 sustainable additions to the built environment in the area, including rain gardens, planters and permeable paving, creating the equivalent of 23 Olympic-size swimming pools of storage and protecting 90,000 people from flood risk. Again, this is about much more than just what is in the Bill. There is further funding proposed for nature-based solutions alongside this—for example, reed beds and wetlands—and the Government are also supporting water companies trialling nature-based solutions for groundwater-induced storm overflows. There is a lot of work going on in this area.

Having said that, we recognise the strong support in this House for the Government to do more to ensure greater use of nature-based solutions across drainage and sewerage systems specifically. I am therefore pleased to table Amendments 42, 61 and 64, which require sewerage undertakers in England and Wales to address how nature-based solutions have, or will, contribute to the resilience and development of their network within their drainage and sewerage management plans. I thank noble Lords who have expressed their support for these amendments today.

Drainage and sewerage management plans are the key planning mechanism for the entirety of the sewerage undertakers’ wastewater network. This new requirement will ensure that water companies consider the use of nature-based solutions at the very start of the investment planning process. In this way, they embed solutions into delivery.

We intend to commence this new requirement very quickly—two months after Royal Assent—and it will apply also in respect of the next round of drainage and sewerage management plans, which will be published ahead of the 2029 water price review. Sewerage undertakers will need to demonstrate that they have addressed the use of nature-based solutions in their draft, and final, drainage and sewage management plans and will be held to account if they fail to do so, because there is no point in bringing forward amendments if they are not going to be delivered as swiftly and as effectively as possible.

The noble Baroness, Lady Willis, asked whether the review would look at things such as adaptation and further environmental matters around reservoirs. Absolutely: the review has a very broad scope in these areas. I remind the House that in our manifesto we pledged to build new reservoirs, because we know how critical they are.

I hope that noble Lords agree that these government amendments will support the future exploration, development and delivery of nature-based solutions by adding this requirement into existing planning frameworks.

I turn to Amendment 44, in the name of the noble Baroness, Lady Boycott. I thank the noble Baroness, Lady Willis, for introducing it on her behalf. It looks to improve public access to real time and operational water company data. I will explain why the Government do not support the amendment; I had a discussion with the noble Baroness, Lady Boycott, about this. I know that the noble Baroness has questioned this, but we believe the amendment would duplicate existing requirements for transparency from water companies.

We also believe that Clauses 2 and 3 are designed to enhance those existing requirements. Clause 2 will ensure that all water companies publish information annually on the frequency and seriousness of pollution incidents, as well as the steps they are taking to reduce them. Clause 3 will require companies to publish discharge data for emergency overflows. This will ensure that discharge data from all sewage overflows will be published in near real time. The Environment Agency also regularly releases information and reports, such as the environmental performance assessment, to support the transparency and scrutiny of water companies.

Furthermore, case law and the Information Commissioner’s Office are clear: water companies are public authorities for the purposes of the Environmental Information Regulations. As I set out in Committee, the Information Commissioner’s Office already acts on complaints and has taken several steps to ensure water companies release information to the public. The noble Baroness, Lady Willis, mentioned the poor behaviour of some water companies and referred in particular to United Utilities and Windermere. We have had much discussion on this; the noble Baroness, Lady Parminter, also mentioned it. Action by the ICO includes recently issuing a practice recommendation to United Utilities. We need to ensure that water companies then act on those recommendations.

The amendment aims to create a novel route of challenge through the courts for failure of public authorities to proactively disclose information. It follows that this would also create a new route for water companies to appeal. Apart from being administratively challenging and at odds with the current legislative framework that flows from requests for information, we are concerned this could actually slow down implementation of the Information Commissioner’s decisions. Although I completely understand the noble Baroness’s intention, we do not think this amendment is needed and it may have unintended consequences. We hope the noble Baroness will not press it.

Amendment 49, in the name of the noble Baroness, Lady Jones of Moulsecoomb, seeks to place an environmental duty on Ofwat through adding two new subsections to Section 2 of the Water Industry Act 1991. Ofwat has a number of existing duties linked to protecting the environment, including a core duty under the Water Industry Act to work to ensure the long-term resilience of water companies’ supply and sewerage systems to adapt to environmental pressures, including climate change. However, the Government have listened to the strong feeling in the House in support of adding further to Ofwat’s environmental duties.

This brings me to my Amendments 48, 62 and 65. I reiterate that the independent commission remains the right place to fundamentally review the roles and responsibilities of the water industry regulators. I say this to make it clear that any changes made now to Ofwat’s duties could therefore be superseded by the outcomes of the commission. It is important that that is clear to noble Lords. I have spoken with many noble Lords about this in recent weeks and I know they understand that the amendments put forward by the Government can therefore be only a short-term measure before more fundamental reforms are brought forward.

However, I heard the voice of the House when it said we needed to act quickly, so I am pleased to confirm that the Government have tabled amendments that will require Ofwat to have regard to the need to contribute to achieving targets in the Environment Act 2021 and the Climate Change Act 2008 when carrying out its functions. These amendments will further ensure that Ofwat’s work to contribute to the achievement of environmental targets complements the work of the Government, who are ultimately responsible for the Environment Act and climate change targets. Importantly, these amendments clearly demonstrate our expectations that the environment is considered by Ofwat in our drive to clean up our rivers, lakes and seas.

I also want to be clear that the government amendments intend to complement Ofwat’s existing duties relating to biodiversity and climate resilience. This is why the government amendments do not consider climate adaptation, as Ofwat already has a core duty under the Water Industry Act 1991 to work to ensure the long-term resilience of water companies’ supply and sewerage systems. This core duty means that Ofwat is already required to promote water companies’ long-term planning to adapt to environmental pressures, including climate change.

It will be for Ofwat, as the independent regulator, to determine how it applies the Government’s new obligation to its regulatory decision-making, while ensuring that this new duty sits alongside, rather than takes precedence over, other duties. The Government do not believe in regulation, or in imposing statutory duties for public bodies to have regard to existing legislation, just for the sake of it. In fact, we are in the process of reviewing regulation right across other sectors as part of our mission to ensure strong and sustainable economic growth.

However, this Government were elected, among other reasons, because they listened to and understood the strength of public feeling about the performance of the water industry, and pledged to take immediate action to improve it. These amendments have been brought forward in response to the concerns of the House and of the public, and in the light of the very specific roles and responsibilities of the water industry regulators. I hope the House accepts that these amendments demonstrate that the Government have listened to concerns surrounding Ofwat’s duties and nature-based solutions, and that noble Lords will accept them as a clear signal of our intent to ensure the environment is considered by Ofwat and the review in our drive to clean up our rivers, lakes and seas.

My Lords, I thank the Minister for summing up what has been an excellent debate and I thank all those who spoke. The noble Baroness, Lady Willis of Summertown, spoke not only to her own amendment but to that of the noble Baroness, Lady Boycott, very eloquently indeed. The noble Baroness, Lady Jones of Moulsecoomb— I call her my noble friend—spoke to her amendment with familiar passion, as did my noble friend Lord Gascoigne, following the excellent work he did in Committee. The noble Baroness, Lady Parminter, speaks with great authority on these issues. I also thank my noble friend Lord Roborough for his contribution.

The mood of the House is very much to support the government amendments. I congratulate the Minister and the Bill team on the work they have done in this regard, and on being in listening mode to those around the House. I have just a couple of thoughts. I think we are all committed to storage, which has been the success of the Pickering pilot scheme. It is not far from Cumbria; I hope those who live further afield, across the border in Lancashire, might come to see the excellent work we did. There is an outstanding problem on storage, with the Reservoirs Act 1975, as to when it becomes a reservoir. The de minimis rules need to be addressed. If the water commission can look at that, it would be very welcome indeed. With the greatest will in the world, it is difficult to have storage if it is then said to be a reservoir, but the farmers, golf clubs or whatever do not have the means to maintain it.

In addition to all the funds the Minister mentioned, I urge her and her department to look at how ELMS can work with water companies—I know that United Utilities and Yorkshire Water have a good record in this regard—to come up with nature-based water solutions on farmland. That would be very welcome indeed. With those few remarks, I beg leave to withdraw Amendment 26.

Amendment 26 withdrawn.