Water: Supply and Infrastructure

Lord Katz Excerpts

Wednesday 14th May 2025 Lords Chamber

[Lord Rooker]

To ask His Majesty’s Government what steps they are taking to ensure sufficient supply of water, and what assessment they have made of the adequacy of water infrastructure in this regard.

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

My Lords, statutory water resource management plans set out how water companies intend to deliver a secure supply of water. Water companies are required to publish new plans every five years. The 2024 plans have been scrutinised by the Environment Agency and Ofwat to ensure that companies can meet future challenges. The UK and Welsh Governments’ Independent Water Commission will recommend reforms to reset the water sector. It will report by summer 2025.

[Lord Rooker (Lab)]

I thank my noble friend for that Answer—his first Oral Answer from the Dispatch Box—and I hope all the others are as good as that. Is it correct that, at the current rates of consumption, by 2050 this country will be 5 billion litres of water a day short—that is one-third of our supply—and that the rumoured answer to this, which I approve of, is that we need nine new reservoirs? Is this is confirmed? Given our pathetic infrastructure work in this country, should we not get started quickly?

[Lord Katz (Lab)]

I thank my noble friend for that question. He is correct that we are predicted to get to a 5 billion litre a day water supply demand gap by 2050. However, I am pleased to tell him that he is also correct to mention that we are developing nine new reservoirs, in addition to the Havant Thicket reservoir, which is already under way and will be online by 2032. The Government secured a record level of investment in water infrastructure, with £104 billion of investment to be delivered between April 2025 and the end of March 2030. Reservoirs are just part of the story: they sit alongside other water schemes, such as transfer pipelines, nine new desalination projects and seven new recycling schemes. In fact, while they are important, the real prize in terms of closing that huge supply and demand gap is 65% more effective demand management, including tackling leakage.

[The Duke of Wellington (CB)]

My Lords, the Minister just mentioned 2050. It is a fact, unfortunately, that the government target for reducing leakage by 2050 is only 50% from the current level of leakage, which is, of course, far greater than it should be. Does the Minister agree that we ought to have a more ambitious target than simply reducing by 50% the current very high level of leakage by 2050?

[Lord Katz (Lab)]

I thank the noble Duke for his question. Leakage is at its lowest level in two decades and in December last year Ofwat allocated £720 million as part of its 2024 price review investment package to continue work to reduce leakage, focusing on things such as smart technologies and better data. The important thing to bear in mind is that the package supports continuing progress now on reducing leakage, with a requirement for companies to cut leakage by 17% between 2025 and 2030. It is important that we take action on this important issue now as well as trying to meet those long-term targets.

[Lord Deben (Con)]

Essex & Suffolk Water has announced that it cannot provide any extra water to any new business or extension of any business until 2036 and that the offices that are on site for Sizewell C are provided water by tankers. How on earth can we build this ridiculous Sizewell C when we do not have enough water to provide the office with drink?

[Lord Katz (Lab)]

The noble Lord is right to say—as my noble friend Lord Rooker also suggested—that we desperately need new infrastructure now and as soon as possible. I would like to be able to stand here and say that a number of new reservoirs are currently under way because of decisions that had been taken perhaps by previous Governments. I cannot do that, but I can point to the £104 billion investment in water infrastructure. That will do things such as help us build the 1.5 million homes. It will help us build the new nuclear infrastructure that he is referring to and generate the regional economic growth this country needs. We are working with colleagues in the MHCLG to explore how building regulations—and I think this is across the piece, not just domestic housebuilding—can tighten water-efficiency standards so that we are better able to rely on natural supplies rather than tankers.

[Earl Russell (LD)]

My Lords, we are on course for possibly the driest spring on record, having received only 35% of the expected rainfall. Our farmers are at the forefront of this fight against climate change. The harvest in 2024 was the worst on record. The next 10 days are critical for our arable farmers. Can the Minister commit that, if rainfall does not come, this Government will support our farmers?

[Lord Katz (Lab)]

I thank the noble Earl for his question. He brings our attention to a really important aspect of the water supply. He is absolutely right that we have had dry weather; I believe it has been the driest start to the year in the north of the country since 1929. Drought plans must be produced by water companies every five years. In fact, water companies are now planning to improve drought resilience to mitigate droughts that are so severe you see them only once every 500 years. We are very serious about tackling this.

I am pleased to be able to tell the House that the Water Minister, Emma Hardy, met the National Drought Group, which is convened by the Environment Agency, earlier this month to ensure that action is taken to safeguard water supply in all areas, including farming. The farming road map, which we are due to publish later this year, will help spell out how farmers can take more control of this. We have heard today from the NFU about how it is working with Defra to pilot initiatives such as on-farm private reservoirs, which would allow farmers to use their own water rather than rely on the public supply. This would be of benefit to both farmers and the wider population.

[Lord Roborough (Con)]

It was depressing to read that water companies are already asking consumers to ration water in mid-May, with our temperate maritime climate providing ample rainfall over the winter and with water bills at all-time highs. Do the Government believe that the Cunliffe review’s terms of reference sufficiently emphasise guaranteeing supplies to avoid this situation in future?

[Lord Katz (Lab)]

I thank the noble Lord for his question. Sir Jon Cunliffe is leading the Independent Water Commission in a once-in-a-generation review of the whole water supply system, including regulation. On its terms of reference, it can go wherever it wants in its inquiries. I am sure the noble Lord, given his interest in this area, will have made his own representations in response to the call for evidence. Again, all I can say is that we have secured over £100 billion of investment to spend on improving the water supply. I wish I could stand here and say there are many more reservoirs in train instead of just one, but there are not, and we are where we are. This Government will pick up and clean up the mess the last Government left.

[Lord Wigley (PC)]

My Lords, the Minister will be aware that several conurbations in England, including Liverpool, Birmingham and London, get their water supplies from reservoirs in Wales. In these circumstances, should permission not be given to obtain increased levels of water capacity from reservoirs in Wales only with the agreement of the Welsh Government?

[Lord Katz (Lab)]

I did not expect to get on to the balkanisation of water supply, but I will say that the independent commission led by Sir Jon Cunliffe is undertaken on behalf of the UK Government and the Welsh Government. If the noble Lord has concerns about water supply from Wales into England, I am sure that he will be making representations to the Cunliffe review. This is a national water system; it must serve all companies, all businesses and all households in the United Kingdom.

[Baroness Winterton of Doncaster (Lab)]

My Lords, my noble friend the Minister referred to the water resource management plans. Will he consider requiring water companies, when they publish these plans, to set out the implications for the workforce? What are the apprenticeship opportunities? What are the job and training opportunities? We could then see what it means in terms of regional growth, reducing regional inequalities and stimulating regional economies. Could he talk to Ministers in other departments about making this happen and perhaps start with Yorkshire Water, for example?

[Lord Katz (Lab)]

I thank my noble friend for that question. It is an interesting idea, and I would be very happy to take it up with government colleagues. To be absolutely clear, the investment that we have secured is not good simply for the water supply, it is good for our economy. The £104 billion will create tens of thousands of jobs across the country. It will improve regional economic performance in places such as Yorkshire and further afield, and it will allow us to stimulate economic growth across the regions as well as improving the water supply.