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Clause 12 - Arrangements for water undertakers to take water from other persons

Water Bill – in a Public Bill Committee at 3:15 pm on 5th December 2013.

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Photo of Thomas Docherty Thomas Docherty Shadow Minister (Environment, Food and Rural Affairs) 3:15 pm, 5th December 2013

I beg to move amendment 133, in clause 12, page 40, line 11, after ‘Ministers’, insert

‘and the Canal and River Trust,’.

Photo of James Gray James Gray Conservative, North Wiltshire

With this it will be convenient to discuss amendment 134, in clause 12, page 42, line 21, at end insert—

‘(ca) the Canal and River Trust,’.

Photo of Thomas Docherty Thomas Docherty Shadow Minister (Environment, Food and Rural Affairs)

I do not intend to speak for long. I am conscious of the need to make progress, particularly given the weather conditions we are suffering today.

The Canal & River Trust is a relatively new charity. Members who served on the Environment, Food and Rural Affairs Select Committee will recall that it took a close interest in the establishment of the trust. It is responsible for something like 2,000 miles of waterways and canals. I will work on the assumption that all hon. Members have seen the correspondence circulated by my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) earlier today.

The trust is the largest private supplier of water to water undertakers. Water sales to the water companies provide something in the region of just shy of £3 million to the trust each year, as well as providing a public need. The trust believes that the Bill in its current form will have a detrimental effect on the its existing and future water sales agreements. I hope that when the Minister responds, he can set out the Government’s position on that.

To be specific, as I understand it, the Bill as currently drafted will have a retrospective impact on existing agreements, although I suspect that that issue may be dealt with when the Minister explains his amendments. However, the trust is also concerned about the potential for unfair interference in its future agreements with water suppliers.

The amendment is technical, and would make the trust a consultee to ensure that its voice is heard when the regulators and the Government are determining future supply arrangements. We think that that is crucial given the trust’s strategic nature. It would be ironic if the Government, having established the Canal & River Trust just 18 months ago, were to inadvertently damage its ability to operate. I would very much welcome the Minister’s thoughts on that.

Photo of Dan Rogerson Dan Rogerson The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I welcome the spirit in which the hon. Gentleman made his remarks. Indeed, I would like to express my gratitude to a number of Members from all parties for being happy to discuss with me their concerns about the issue. As the hon. Gentleman pointed out, I met with the Chair of the Environmental Audit Committee, the hon. Member for Stoke-on-Trent North (Joan Walley), and the Chair of the Science and Technology Committee, the hon. Member for Ellesmere Port and Neston. Both of them have an interest in the issue that I think reflects constituency realities as well as their overarching interest in the future of the Canal & River Trust. I also met with a number of other hon. Members, including my predecessor as Minister, the hon. Member for Newbury, who is keen to ensure that we get things right on this issue.

Photo of Thomas Docherty Thomas Docherty Shadow Minister (Environment, Food and Rural Affairs)

My hon. Friend the Member for Ellesmere Port and Neston has asked me to extend an invitation to you, Mr Gray, and to the Committee to visit the museum in his constituency.

Photo of James Gray James Gray Conservative, North Wiltshire

That is extraordinarily kind, but I fear I may be a little busy that day.

Photo of Dan Rogerson Dan Rogerson The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

The Committee can assume that it has a standing invitation to that fine institution, for which we are all very grateful.

It may help if I set out a little of the background to clause 12 and relate that to the issue that the hon. Gentleman is seeking to address with his amendments. Clause 12 gives Ministers the power to make regulations concerning the supply of water for public supply by a person other than an incumbent water company. The regulations must be widely consulted on and approved by Parliament. The measure is designed to create a regulated market in which potential suppliers of water that are not incumbent water companies, such as farmers with on-farm reservoirs, are empowered—

Photo of Neil Parish Neil Parish Conservative, Tiverton and Honiton

To take as much water as they like.

Photo of Dan Rogerson Dan Rogerson The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

My hon. Friend expresses a view on behalf of the farming community, which I think was uttered tongue in cheek.

Potential suppliers of water will be empowered to sell water to the public supply, building resilience. We firmly believe that the Bill presents valuable opportunities for the Canal & River Trust in many areas.

We are aware of the concerns that the Canal & River Trust had about clause 12, and to address them we have tabled amendments to exclude historic agreements from  the scope of future regulations. For the market to work most effectively, we need to create a level playing field where new water entrants have clear expectations, rights and responsibilities, transparent pricing and fair rules. Everyone must be subject to the same rules.

It would not be appropriate for regulations to confer functions on the Canal & River Trust. In line with our commitment in the Bill to a level playing field, we do not want to benefit any one party above any other. Similarly, it is unnecessary to make the Canal & River Trust a statutory consultee. Like many other stakeholders, the trust is an important stakeholder in the process of developing clause 12 and any future regulations made under it. I am happy to commit to working closely with the trust to ensure that it is fully involved in the process of developing the detail of the regulations and market codes. Please be assured that we intend the regulations to be proportionate, fair and acceptable to all parties, including the Canal & River Trust, and as clear and easy to use as possible.

Regarding the concerns further raised in writing by the hon. Member for Ellesmere Port and Neston, it is important to put on the record that we understand the Canal & River Trust’s concerns and that we are in ongoing dialogue. The Chief Secretary was at the meeting with the hon. Member for Dunfermline and West Fife which I attended and it was a very helpful discussion. We will continue to work with the trust on the detail of the regulations and market codes under clause 12.

Our intention is not to cause harm to the financing of the trust through this clause. It is very much against our policy aims, as the hon. Gentleman assumes. I can make clear that our objectives with the clause are as I have described: a level playing field for all participants, but one that is transparent and provides clarity, which protects suppliers and new entrants. Renewals of existing agreements can be included within the scope of the regulations and the Government’s amendments make that absolutely clear. I hope in that spirit, and in the helpfulness which the hon. Gentleman extends, he will feel willing not to press his amendment.

Photo of Thomas Docherty Thomas Docherty Shadow Minister (Environment, Food and Rural Affairs)

I am most grateful for that useful response. With the Committee’s permission, I will withdraw the amendment. I am satisfied with the spirit in which it is offered and will continue to consult with my hon. Friend the Member for Ellesmere Port and Neston. If we feel dissatisfied, we obviously reserve the right to bring the matter back on Report, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Dan Rogerson Dan Rogerson The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I beg to move amendment 26, in clause 12, page 40, line 15, at end insert—

‘(d) make provision excepting water supply agreements of such description as the regulations may specify from the effect of—

(i) any provision of the regulations, or

(ii) any provision of the codes or rules made under the regulations.’.

Photo of James Gray James Gray Conservative, North Wiltshire

With this it will be convenient to discuss Government amendment 27.

Photo of Dan Rogerson Dan Rogerson The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

This clause gives Ministers powers to make regulations concerning the supply of water for public supply by a person other than an incumbent water company. It is designed to create a regulated market in which potential suppliers of water who are not incumbent water companies, as we have set out, are empowered to sell water to the public supply, building on resilience.

Our amendments make it clear that future agreements, for example variations of historic agreements, could also be excluded from the scope of the future regulations where it is considered appropriate. We believe this has always been possible, but we are making it clear in the Bill.

Amendment 26 agreed to.

Amendments made: 27, in clause 12, page 40, line 26, at end insert—

‘(4) Nothing in provision made under this Chapter affects a water supply agreement made before any regulations under this section first come into force.’.

Amendment 28, in clause 12, page 41, line 33, leave out ‘subsection’ and insert ‘subsections (2A) and’.

Amendment 29, in clause 12, page 41, line 45, leave out ‘to require rules to be revised or’.

Amendment 30, in clause 12, page 41, line 46, leave out ‘or revised’.

Amendment 31, in clause 12, page 41, line 46, at end insert—

‘(2A) Regulations conferring a power on the Minister as described in subsection (1)(f) must provide that—

(a) if the power is exercised to impose a requirement in respect of agreements for such supplies of water as are referred to in paragraph (a) or (b) of the definition of “the Minister” in section 66M(3), it may not be exercised again in respect of such supplies of water as are referred to in that paragraph, and

(b) if the power to impose a requirement in respect of agreements for such supplies of water as are referred to in paragraph (a) or (b) of the definition of “the Minister” in section 66M(3) is not exercised on the first occasion on which it may be so exercised, it may not be exercised in respect of such agreements as are referred to in that paragraph on a later occasion.’.—(Dan Rogerson.)

Clause 12, as amended, ordered to stand part of the Bill.

Clauses 13 to 15 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(John Penrose.)

Adjourned till Tuesday 10 December at five minutes to Nine o’clock.

 Written evidence reported to the House

WB 07 Scottish Flood Forum

WB 08 NFU

WB 09 CLA

WB 10 All-Party Parliamentary Fire Safety & Rescue Group

WB 11 Thames Water