Surviving Drought (Environment and Climate Change Committee Report)

Lord Katz Excerpts

Wednesday 11th November 2026 Grand Committee

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

My Lords, it is an absolute pleasure to respond for the Government to this interesting and in-depth debate on the Environment and Climate Change Committee’s report. I thank all those who have brought their experience of sitting in the committee, but also their life experience, to bear on this debate and the consideration by the committee. I am very grateful to the noble Baroness, Lady Sheehan, for securing the debate and to the present members of the committee and indeed past ones; I take a moment to mention the Earl of Leicester and Lord Mancroft in that cohort. The experience demonstrated across the Committee today reflects the importance of the issues that we are discussing and the growing challenge that drought poses to our environment, economies and communities.

I say right now, because I might forget at the end as I will be in a rush, that I am sure I will not be able to answer all the questions, however hard I try, from the noble Lord, Lord Roborough, opposite. I will do my best and will of course reflect on Hansard and reply to Peers on those questions that I miss.

As everyone has noted, this debate comes at a particularly important time. Parts of England are currently experiencing severe drought conditions, reminding us that drought is no longer a distant risk that may arise at some point in the future. It is a challenge that we must confront now, while also strengthening our resilience to the droughts that climate change is expected to bring in the years ahead.

While severe drought is the highest classification in the Environment Agency’s drought framework, it does not in itself mean that public water supplies are at immediate risk. We have to be clear about that. It does, however, underline the need for the Government, regulators and water companies to act early and prepare for the possibility that conditions could worsen. The Government therefore welcome the committee’s report and all the recommendations that it contains. As has been noted, the Government have, with a couple of exceptions, accepted the report. Noble Lords rightly ask, where is the action and follow-up? I hope to be able to address at least some of those concerns in my response.

As we set out in our response earlier this year, the Government agree that action is needed across society to improve drought preparedness, strengthen water resilience and ensure secure supplies of water for people, businesses, agriculture and the natural environment. As many noble Lords have noted, particularly the noble Baroness, Lady Sheehan, the committee’s report was published before the severe drought conditions we are now experiencing in parts of the country. Those conditions only reinforce the importance of the issues raised by the committee and the action that is already under way across government and the water sector.

Before turning to longer-term resilience, I want first to address the current situation. Since severe drought was declared in parts of England, the Government have been working through the National Drought Group to co-ordinate the national response, alongside the Environment Agency, water companies and local partners. The National Drought Group plays a vital role in bringing together organisations responsible for managing water resources, protecting the environment and maintaining essential services. It is that cross-government, multi-agency and whole-society effort that many noble Lords mentioned, particularly the noble Baroness, Lady Sheehan. Through this collaboration, we are ensuring that action is informed by the latest evidence and that appropriate measures are implemented as conditions evolve.

We have increased engagement with water companies in the areas facing the greatest pressure, worked alongside local resilience arrangements where necessary, and have continued to assess the measures available to protect public water supplies and minimise impacts on the environment wherever possible. Water companies are implementing their statutory drought plans, while the Government and regulators continue to monitor conditions closely and prepare for further deterioration should that be necessary.

Managing the present drought is of course essential, but we cannot forget to build drought resilience. We must also address the underlying pressures on our water system and prepare now for the conditions we expect in the decades ahead. Many Members of the Committee, particularly the noble Earl, Lord Russell, spoke about the El Niño effect. However, responding to drought, as has been noted this afternoon, is just one part of the challenge. We must also strengthen our resilience to future droughts. Most if not all noble Lords spoke about the importance of better information, monitoring and planning. I agree that effective drought management depends on access to timely reliable data and governance arrangements. That is why the Government accepted the committee’s recommendations to strengthen drought data collection and accessibility.

I reassure the noble Baroness, Lady Sheehan, that work is under way with the Environment Agency and partners to explore the development of the drought data hub. This will bring together key information on drought conditions and impacts in a more accessible and integrated way. Alongside this, monitoring capabilities continue to improve, helping us to identify emerging risks earlier and support more informed decision-making across sectors.

Clear governance is equally important. The Government are working with the EA and the National Drought Group to improve the understanding of the roles and responsibilities of organisations involved in drought planning, preparedness and response, ensuring that action is co-ordinated and effective. A number of members of the committee, including the noble Baroness, Lady Sheehan, and the noble Lords, Lord Ashcombe and Lord Krebs, also highlighted the importance of reducing demand and using water more efficiently. The Government agree that improving water efficiency is one of the most effective ways of strengthening resilience while protecting the environment. That is why we continue to work with MHCLG on proposals to improve water-efficiency standards while supporting the accelerated rollout of smart meters to help customers better understand and manage their water use.

The noble Baroness, Lady Sheehan, and the noble Earl, Lord Russell, asked about the consultation on strengthening water-efficiency standards in new homes. I am afraid that all I can say right now is that the response is expected in due course. That is the finest of Civil Service language, but I am afraid I cannot give any more detail: this is a timeline of which we are very much aware.

My noble friend Lord Sikka and others asked about improving water efficiency. The Government have a statutory target to improve public water supply consumption per person by 20%. These demand reduction measures are expected to save around 2,000 megalitres of water per day. Ofwat and the water companies launched the national water-efficiency campaign to promote water-saving behaviours earlier this year. We have also introduced mandatory water-efficiency labels that will help inform consumers on the water efficiency of products—I cannot be specific but, to respond to the noble Earl, Lord Russell, perhaps this might relate to taps—and help to save water and money and meet the demand reduction targets. Water-efficiency labelling is a key government intervention to support consumers and should save households around £1.9 billion on water bills and £1.8 billion on energy bills over 10 years.

Leakage reduction, as many argued, must remain a key priority: this was spoken to by the noble Lord, Lord Jay, and the noble Duke, the Duke of Wellington. Water companies have a responsibility to reduce leakage and to improve the resilience of their networks. Regulatory reporting on water company performance is expected shortly, and those water companies not on track to meet their leakage commitments will face appropriate regulatory action. We are very clear that they have a responsibility.

I owe the noble Duke, the Duke of Wellington, an apology in response to his question. Was it on Monday or yesterday?

[The Duke of Wellington (CB)]

It was on Monday.

[Lord Katz (Lab)]

Yes, Monday. They all blend into one sometimes. I realise now that I misunderstood the noble Duke’s question. We do have an ambition to urge water companies to act quicker. Perhaps I did not understand what he was asking. The Government have set an interim target to reduce leakage by 30% by 2032. We are expecting regulatory reporting this month, so watch this space. We are on it and we expect Ofwat to make sure that the water companies are too.

It is beyond unacceptable that 20% of the water supply is lost, whether we are in drought conditions or not. I think the water companies clearly understand the Government’s view on this, and I know that my honourable friend Minister Hardy has been very clear with them about this and the Government’s expectation of them, not least in the context of the forthcoming water Bill. An updated communications strategy, led by the National Drought Group, is in development to help promote year-round water efficiency and encourage more sustainable water use.

The noble Lords, Lord Ashcombe and Lord Frost, and the noble Baroness, Lady Jones of Moulsecoomb, asked a number of questions about development and building regulations. The Government have committed to lower water usage in homes to reduce consumption to 110 litres per person by 2050, and we are, as I said, working with MHCLG to explore where building regulations could tighten water efficiency standards and enable consumers to save on their water and energy bills by using less water. Building regulations provide an opportunity for government to ensure that the water requirements of new housing are reduced to create environmental headroom for growth.

There was a fair amount of discussion about the Government’s decision to reject the third recommendation of the committee’s report on water companies being statutory consultees. To be clear, it is not that we do not understand the importance of this, but the dynamic should be reversed. The baseline is that there is a clear expectation that water companies plan properly for growth, and they have water management resource plans that drive them to do this, including preparing for one-in-500-year drought events. I am sure that many Members of the Committee are aware of that. So water companies have to plan for growth, which is why we are prescribing in the requirements that water and sewerage companies assist regulations, so they are obliged to assist with plan-making where reasonably requested. Water and sewerage companies are also listed as consultation bodies, so they will be made aware of key plan-making consultations where they have an interest. I hope that gives some comfort that we absolutely understand the importance of this.

The noble Lord, Lord Krebs, asked specifically what we are doing in existing homes. There is a really important role here for smart meters in improving resilience, as I said. We expect to install around 10 million smart meters by 2030, which will help customers to identify where they have leaks and better understand their water use. It will also help water companies to detect leakage and manage demand more effectively. So that area feels really important for the current housing stock, as well as for taking action with the new housing that we hope to build.

There was a lot of discussion about data centres. I am aware of the time, so I will not spend as much time as I could on this. The right reverend Prelate the Bishop of Manchester, the noble Baroness, Lady Jones of Moulsecoomb, and the noble Earl, Lord Russell, all mentioned the impact of data centres. It is always pleasant to be able to say that I concur with the noble Lord, Lord Roborough, on this. It is important to understand that current evidence suggests that most data centres are not intensive water users. Another figure I will cite to the right reverend Prelate the Bishop of Manchester is that a techUK survey in 2025 indicated that 55% of data centres surveyed use dry or waterless cooling, 44% use hybrid and only 5% are water-cooled. Environment Agency analysis suggests that data centres in England currently use around 1.9 billion litres of water from the public water supply each year.

I will give some reassurance. The Committee will probably be aware that, on 28 October, Minister Hardy—I mention her again—issued a Statement on enabling sustainable data centre growth through responsible water energy. This set out that data centres will be asked to follow a water-use hierarchy, prioritising demand management, efficiency and alternative water supplies, before requesting a public water supply connection. We see what is happening in America. There is a very different landscape in this country, as the noble Lord, Lord Roborough, said, but we are very clear about the potential dangers. We want to expand data centres, as the Committee will be aware, but this is how we will do it.

Improving resilience is not simply about reducing demand but about ensuring sufficient and reliable supplies of water for the future. The scale of that challenge is significant. As many have noted, the EA’s national framework forecasts a water shortfall of around 5 billion litres per day by 2055. That is why we continue to support, as a Government, a twin-track approach: reducing demand while investing in new and enhanced water resources. That includes major strategic infrastructure. We are accelerating the delivery of nine new reservoirs, alongside strategic water transfer schemes. Construction is already under way, as we have heard, on the Havant Thicket reservoir, while local solutions will also be important in helping communities, farmers and businesses strengthen their resilience.

I want to reassure the noble Lord, Lord Jay of Ewelme, that we are accelerating the construction of those reservoirs. It is a key part of improving long-term resilience. It takes time, but that is why we have a twin-track approach of making sure that we reduce leakage in the present while preparing for the future by building this infrastructure. I think we can all agree that we should have done more much earlier. We are where we are and would not be starting from here if we could help it.

Several noble Lords spoke about the role of agriculture and local water management, including the noble Lords, Lord Ashcombe, Lord Trees, Lord Krebs and Lord Roborough. I am not going to cover all the ground that was raised. I will leave some comments about the strategic finance incentive to correspondence. I want to be clear that the Government continue to support water abstraction groups, which help local abstractors collaborate and participate in planning water resources. Since the start of the programme in 2024, the number of water abstraction groups has increased from eight to 14, with further groups expected to be established in the coming year.

We are supporting local water resilience through the Environment Agency’s local resource options programme, which has enabled groups of farmers and growers to identify and develop projects that improve water security, including irrigation reservoirs and water storage schemes. More than 30 projects have been completed, with several already progressing towards implementation. The Environment Agency is developing a multisector approach to explore shared water resilience solutions across a wider range of water users.

The noble Baroness, Lady McIntosh, and the noble Lords, Lord Trees and Lord Jay, all wisely raised the importance of letting those who know local landscapes and hydrology contribute to the effort to save water, and we are very keen and alert to ensuring that that can happen. The Government are also supporting farmers directly as part of this year’s drought support package. Up to £15 million is being made available through the water management grant to support the development of on-farm reservoirs and strengthen drought resilience across the sector.

The committee was also right to highlight the importance of modernising water management and regulation. The noble Lord, Lord Krebs, was one of those who mentioned this. We remain committed to reforming abstraction licensing and moving towards a more modern, digital and responsive system. Defra and the Environment Agency are also conducting an innovative smart abstraction trial in the Cam catchment, using real-time monitoring data and alerts to help farmers abstract water when conditions allow, while protecting river flows. Early findings of this trial are encouraging, and the pilot will continue until March next year.

Many noble Lords talked about and raised the importance of nature-based solutions, not least my noble friend Lord Sikka and the noble Lords, Lord Krebs and Lord Trees. The Government agree that nature-based solutions have an important role to play in strengthening resilience to both drought and flooding, while delivering wider environmental benefits.

The noble Lord, Lord Krebs, asked about spongy soils. I agree that improving soil health and reducing soil compaction can help land absorb and retain more rainfall, reduce surface run-off and allow more water to infiltrate into the ground, thus helping groundwater recharge.

The right reverend Prelate the Bishop of Norwich talked about peatlands and moorlands. Restoring degraded peatlands can improve the landscape and the landscape’s natural water storage capacity by slowing the movement of water through the catchment, reducing the incidence of drought and flood risk. Previously, we have had discussions that I have enjoyed participating in about the regulations around burning. That is very much what those regulations are designed to tackle.

At this point I will also address the question from the right reverend Prelate the Bishop of Norwich about chalk streams. I reassure him that the Government are focused on protecting and recovering chalk streams through investments across a wide range of areas in our Storm Overflows Discharge Reduction Plan and locally led project funding. Between 2025 and 2028 the water restoration fund is investing over £1.4 million of water company fines and penalties in chalk stream projects.

I am going to run out of time. Throughout today’s debate, there has been a consistent theme: the need to ensure that England is prepared for a future in which droughts are likely to become more frequent and severe. The committee’s report has made an important contribution to that discussion, and its central message is clear: we need to take a more proactive and long-term approach to drought resilience, ensuring proper investment and innovative and strong partnerships. Progress is being made but we also recognise that there is more to do. Climate change means that drought preparedness must remain a long-term national priority.

I have not had time to touch on the issue of food security that the noble Lord, Lord Trees, rightly raised, but I say to him that we have refreshed our approach to food resilience and stakeholder engagement through the establishment of a food preparedness group. We understand the importance of food security; it is of course national security.

Our ambition is clear: a country that uses water more efficiently, has secure and resilient supplies, protects and enhances the natural environment and is better prepared for the challenges of the future. In closing, I hope that I have demonstrated both the progress already being made and the Government’s determination to go further. I know that I have utterly failed to answer more than a fraction of the questions posed, and I have been slightly selective—are we not always?—but I beg the Committee’s indulgence in that. Once again, I thank all those who participated in this debate and the noble Baroness, Lady Sheehan, for securing it.