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EUC Report: EU Freshwater Policy

My Lords, some have suggested that our report into water policy had the powers of a rain dance, for no sooner had we concluded the inquiry in April, which highlighted water shortage, than the heavens opened and we had one of the wettest summers on record. Even as we come to debate our report, much of the country seems to be under water. Yet, although ground-water levels in the UK have been topped up, we must not be complacent, as long-term trends that we face are very clear, and we face some difficult choices going forward.

The European Environment Agency observed that the number of countries affected by drought per decade rose from 13 in the period 1971 to 1980 to 24 in the period 2001 to 2011. The analysis showed that the drought occurrence not only increased in the central and southern areas of the EU but, significantly, also in the northern and eastern parts of the EU, in countries such as the UK and Sweden. The reasons for this are clear: intensification of agriculture; urbanisation; climate change; and, of course, a rising population.

Looking forward to 2050, we can expect a world population of some 9 billion, and so we will need to provide 70% more food and 80% more primary energy, and, of course, a significantly greater amount of water. Given that the supply of water is finite, this is a critical, if not urgent, matter, and we need to understand what our water policy should be in order to mitigate against future crises. That is not easy. There is a great deal of uncertainty, particularly relating to climate change. However, one of our witnesses, Professor Alan Jenkins, put it very well. He said:

“Uncertainty is no reason for not doing anything”.

In 2010 we published a report on adapting EU agriculture and forestry to climate change. It is fair to say that the increasing water scarcity was a particular theme that came out of our inquiry. Subsequently we undertook an inquiry into innovation in EU agriculture, in which a key concept was sustainable intensification; that is, producing more from less, including, of course, less water.

It therefore seemed appropriate to us, given the increasing focus on water policy in the EU, to build on that previous work and to offer thoughts, some of which we hoped would be of assistance to the Government in developing their policy and to the Commission in preparing its blueprint for the future of EU water policy. Fortunately, that blueprint was published two weeks ago, and so, if I may, I will set out our conclusions and what the blueprint had to say about them.

We have to accept that the cost of water will have to rise. But before we can even think about that, we have to have a more fundamental consideration of how we

value water. It is interesting to note that water is a scarce resource; yet, it has taken 20 years for the price of water to rise by 40%. When you look at the other scarce resource, energy, the price of gas has taken only five years to reach the same level.

The water framework agreement places an obligation on member states to do two things. One is to ensure that by 2010 water pricing policies provide adequate incentives for consumers to use water more efficiently. The second is to ensure an adequate contribution of the different users disaggregated into industry, agriculture and households. The object of that is to ensure that each pays an appropriate share of the cost of water services. That needs to take into account environmental and resource costs.

What surprised us was that during this inquiry, the UK’s regulator, Ofwat, told us that there is no real price placed on water in the UK. The Commission was critical in the blueprint of cost recovery in the UK. It appeared to us and to the Commission that water services were too narrowly defined and did not reflect environmental and resource costs, including self-abstraction by agriculture. Cost recovery is not transparently presented for all relevant user groups. Therefore, I ask the Minister to respond to that criticism and to answer how the UK will ensure as a matter of urgency that it is in a position to value water effectively.

Abstraction becomes important because it was regarded as not being effectively cost recovered. The Commission observed that the second most common pressure on ecological status right across the European Union stems from abstraction. In our report we urge the Government to accelerate their timetable for reform of the UK’s abstraction regime, a position that I know is shared by the EFRA Committee in the other place.

While we accept the Government’s position that the reform of the abstraction regime is a major piece of work, which should be evidence-based and carefully considered—that is, go slowly—is it not the case that changes made by this Government in other areas, including health and education, have been significant? We would welcome an application of a similar urgency and political impetus to tackle overabstraction, given the clear direction in the blueprint.

As regards water efficiency, scarcity can, in part, be addressed by efficiency. I have already mentioned abstraction but more must be done to tackle the scandalous levels of leakage and to encourage personal water efficiency. During our inquiry we were shocked to learn of the levels of leakage from water infrastructure. Why is it that in Germany the so called “sustainable economic leakage level” is 7% while in the UK it is 25%? In certain other countries in the European Union, it is as high as 50%. One way to encourage personal efficiency in water use is through metering. In our view, a greater use of metering needs to be considered. The Commission, quite rightly, describes metering as,

“a pre-condition for any incentive pricing policy”.

Does the Minister share that view?

Another example of innovation in water efficiency is water foot-printing. It has been calculated that, as a global average, it takes 70 litres of water to produce one apple and 15,000 litres to produce one kilo of beef. I do not know whether this is the experience of

others but sometimes I have sat at a long lunch with rather dull company and hoped that some of that water could reform itself into a tidal wave and sweep away some of the clutter that we were facing. None the less, looking at the assessment of the amounts of water embodied in products and how the value of that water can be taken into account can make a real change to the way in which consumers make their choices. I am pleased to note that the Commission is very supportive of that concept.

A further area of efficiency is that of water reuse. One of the new legislative initiatives suggested by the Commission in its blueprint relates to water efficiency around this area. Many noble Lords may be aware of grey water use in Europe. This is lower-grade of water which is used for irrigation. The Commission has identified that the use of this water faces certain obstacles because there are no standards. Because there are no standards, this leads to restrictions in the export and movement of agricultural products around the European Union. Therefore, it is suggesting that standards could help to alleviate this situation. Do the Minister and the Government have a view on the Commission’s analysis and are the Government planning to introduce such standards unilaterally?

Agriculture is a very large user of water. In our report, we urge member states to make use of rural development funds to support water management and water efficiency in agriculture. We were interested to note the Commission’s view that there is a lack of clear strategy in the UK defining the basic measures that all farmers should adhere to and what additional supplementary measures can be financed. Clearly, we do not want to pay for what we should expect as the norm.

The Government have indicated that a strategic framework for agriculture and water is being worked on across Defra. I should be grateful if the Minister could say more about that framework, including timing, and whether the Government consider that they will tackle the issues highlighted by the European Commission.

I now turn to urban diffuse pollution. This is a major issue as, within the European Union, most of us live in urban areas. During our inquiry, we were concerned that a recognition of the impact of agriculture on the water environment had in many ways diverted attention from the impact on urban diffuse pollution. We recognise that Defra is doing work on this and has published a consultation on its strategy for combating it. While we are supportive, I think that the proposal, rightly, is for a lot of this responsibility to be pushed to local communities. We are very supportive of local engagement. But is the Minister confident that communities will have the necessary tools at their disposal coherently to tackle key issues, such road run-off? Perhaps the Government might usefully draw on the experience of Danish colleagues, following the example of Copenhagen, as set out in Box 4 of our report.

We concluded that further research is required into urban diffuse pollution, particularly on run-off, sediment and waste water treatment. The pressure on costly urban systems could be reduced if the discharge or discard of chemicals into the sewerage system were to

be reduced. In that context, we welcome the Commission’s commitment, in the blueprint, to present a report on pharmaceuticals and the environment.

It is particularly interesting that one chemical, EE2, which is present in oral contraceptives, makes its way into the sewerage systems across Europe. To give noble Lords some idea of the extent of this, it is estimated that over the next 20 years, we will have to spend £27 billion to clean this up. That gives a sense of the scale of the challenge that we are facing.

Some solutions may be found in the European Innovation Partnership on Water, to which we drew attention in our report. The essence of this is networking between researchers, companies, public authorities and consumers. How this trickles down involves those at the local level and taking it forward is one of the key challenges that we face. Again, it would be useful to have confirmation that the Government are actively engaging with practitioners and stakeholders to bring this fledgling initiative to their attention so that, locally, people know that they can become engaged from the beginning.

Perhaps I may say a few words on governance. Engagement with stakeholders takes me to a core conclusion of our report and a significant shortcoming that we see in the blueprint. We were extremely impressed by the evidence we received about the work that is taking place organically at catchment level—that is, the sub river basin level—to manage fresh water in the UK and Australia. We heard some extremely good evidence from the south-west of England and some extremely good evidence about what is going on in Australia. The essence is to engage local communities in the appreciation of their rivers so that they get to understand all the consequences of actions and the benefits arising from them. However, none of these local initiatives will work without leadership, technical support and financial resources. Where one of these is missing, success is impossible. Can the Minister reaffirm the Government’s commitment to sharing their experience of catchment management with others as an example of best practice? Spreading this is very important.

So far I have said very little about our views on implementation of the water framework directive, which is, after all, the core of the EU’s freshwater policy. On first experience of implementation, our conclusion was that it has been a great force for good. Yes, implementation is proving challenging, yet the very aspiration of seeking to achieve good status is clearly helpful. Based on the very strong view that we received from witnesses, we emphasised the need for a more nuanced approach to reporting progress in improving the quality of water courses, going beyond the changes in status. As the Government wrote in their response:

“Achieving good status is a long term goal and it needs to be recognised that preventing deterioration and making progress towards achieving good status are … achievements”.

We firmly agree with that. However, I would welcome comments from the Government as to how they consider that such recognition can be introduced into UK reporting procedures.