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Water Bill 2013-14
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Following the government publishing the water white paper 'Water for Life' in December 2011, a draft Bill was confirmed in the Queen's speech of 9 May 2012, and was published on 10 July 2012. The Bill was presented to Parliament by Owen Paterson MP on 27 June 2013.
The proposals introduce a new approach to water management, with the aim of stabilising consumer bills, protecting water resources, and ensuring water companies are as efficient as possible.
The white paper constituted of the government's response to a number of reviews:
- Martin Cave's Review of Competition and Innovation in Water Markets;
- Anna Walker's Review of Charging for Household Water and Sewerage Services;
- Defra's consultation on water affordability, established in response to Anna Walker's review; and
- the Review of Ofwat and consumer representation in the water sector.
The Bill aims to:
- Create new provisions which will provide the Government with legal powers to regulate the water industry and ensure that flood insurance is affordable.
- Introduces measures to improve the condition of rivers by encouraging local organisations to improve water quality and make sure water is extracted from the environment in the least harmful way;
- Reform the water industry and deregulate water markets to drive economic growth;
- Enable business and public sector customers to negotiate better services from suppliers and cut their costs;
- Removes barriers that have discouraged new entrants from competing in the water market;
- Asks water companies to consider where water trading and inter-connecting pipelines could help ensure secure water supplies at a price customers can afford;
- Introduce new laws to increase drought resilience.
- Enable water companies to introduce new social tariffs for people struggling to pay their bills and seeks to tackle bad debt which ordinary householders have to bear the cost of to the tune of £15 per year; and
- Tackle the historic unfairness of water infrastructure in the South West.
The House of Commons second reading of the Bill took place on 25 November 2013. After a short debate, the Bill was passed to a Public Bill Committee. The first day of committee was held on 3 December 2013. The committee heard evidence from witnesses including National Flood Forum, British Insurance Brokers' Association, RSPB, The Chartered Institution of Water and Environmental Management, Association of British Insurers (ABI) and Sustainability First.
On the second day of committee (5 December 2013), clauses 1-15 and schedules 1-5 were considered. Clauses 2-5, 13-15, schedules 1 and 3 were agreed to. Clauses 1, 6-12 and schedules 2, 4 and 5 were agreed to, as amended. The third day of committee took place in 10 December 2013. The committee considered clauses 16-46 and schedules 6-8 of the Bill. Clauses 20, 25, 26, 38, 40, 42-46 and schedules 6, 8 were agreed to. Clauses 16-19, 21, 24, 27, 28, 34-37, 39, 41 and schedule 7 were agreed to, as amended. Clause 23 was agreed to on division
The fourth day of committee took place on 12 December 2013. The committee considered clauses 47-57 and schedules 9-10 of the Bill. Clauses 48-52, 54, 55, 57 and schedules 9-10 were agreed to. Clauses 53 and 56 were agreed to, as amended. Clause 47 was disagreed to. New Clauses 1-22 were added to the Bill. In the final day of committee stage (17 December 2013), the committee added New Clauses 24, 42, 43 and New Schedule 1 to the Bill. The Bill was reported with amendments.
The report stage for the Water Bill took place on 6 January 2013. During the stage, the House of Commons considered amendments to clauses 12, 21, 22, 29, 30, 64, 77 and schedules 4, 5, 7, 11 of the Bill. New Schedule 1 was added to the Bill. The Bill was passed to the third reading stage, where after a short debate was subsequently passed to the House of Lords for further consideration.
The House of Lords first reading for the Water Bill was held on 7 January 2014. The Bill was brought from the Commons, read a first time and ordered to be printed. The second reading took place on 27 January 2014. After a short debate, the Bill was subsequently passed to a committee.
In the first day of committee stage in the Lords of the Water Bill (4 February 2014), the government resisted all attempts to amend the Bill from the opposition and made many technical amendments to the Bill.
In what was a very complex debate members of the committee sought clarification on many aspects of the Bill and discussed the need for a more radical approach to the structure of the industry, the issue of retail competition in the non-domestic sector and the role of the Consumer Council for Water. The de-averaging of consumer bills also proved a focus on discussion.
Aside from technical amendments laid by the government, no other amendments were agreed or voted on during the second day of committee stage of the Water Bill on 6 February 2014.
The opposition attempted to require that landlords provide information on tenants so as to address the issue of bad debt and to give additional powers to Ofwat to reopen a price review. However following reassurances, these were withdrawn.
Labour also raised the issue of a National Affordability Scheme for water, an issue which they promised to return to, despite assurances from the government.
Flooding and the impact on business dominated the discussion during the third committee stage debate of the Water Bill, on 11 February 2014. More generally, the particularities of the Flood Reinsurance scheme were scrutinised, but the government resisted acceding to opposition amendments on the matter.
The issue of fracking and water supplies was also discussed.
Peers discussed what safeguards were in place to protect domestic customers from increased competition in the non-domestic sector, as well as the risks of de-averaging of charges during the first day of report stage of the Water Bill on 25 March 2014.
The Opposition also tabled amendments requiring incumbent water companies to separate off their retail services. Whist they were withdrawn, the minister recognised strength of feeling on the issue and undertook to introduce amendments at third reading to allay concerns.
The Opposition was also defeated on their bid to introduce a national affordability scheme. Furthermore moves to require water companies to follow up on any debt with the specific resident customer were withdrawn after the government re-stated their commitment to a voluntary scheme already established. Lord Whitty's amendment to provide more information to Ofwat in the context of a decision to reopen the price review was also rejected by the government and withdrawn.
During the final report stage debate (31 March 2014) in the Lords on the Water Bill, the opposition's amendments on the regulation of fracking activities were rejected, as were amendments to widen the scope of the Flood Re insurance scheme.
Government amendments forming the official response to the Delegated Powers Committee on the flood insurance clauses were also accepted.
The Water Bill received its third reading on 8 April 2014, where the government tabled extensive amendments on retail exits for non-household premises. The minster stressed that work needed to be carried out to consider the practical implications of exits, to develop more detailed policy and that extensive consultation was essential.
Government amendments on this were accepted, despite concerns over the late tabling of such extensive changes to the Bill.
The remainder of the debate primarily focused on Flood Recovery and whether the government would review the scheme on a five-yearly, annual or rolling basis.