Highly politicised liquid assets


It didn't feel much like it yesterday, driving back from mid Wales, wipers going all the way but by the looks of things, it's going to be a long, dry summer.

Drought warnings are already in place in many areas of England and even the Easter weekend washout will have done little to increase water levels.

If today's headlines suggesting Wales should sell its water resources to England at a market rate are anything to go by then it's going to be a long, dry and politically torrid summer too.

Today has seen one of those strange news coincidences.

Firstly, the former chief executive of Welsh Water, John Elfed Jones tells tonight's Taro Naw programme (21:30 on S4C) that water, like oil, should be seen as a national resource and exploited to make money for Wales.

This morning, in the sort of coincidence that makes programme producers very happy indeed, it also emerged that Severn Trent, one of the water giants that supplies 8 million customers across the centre of the UK, stretching from the Bristol Channel to the Humber, and from mid-Wales to the East Midlands from reservoirs including Llyn Clywedog in the Cambrian Mountains, is negotiating a not-for-profit deal to sell 30 million litres of water a day to Anglian Water -- one of the companies which has enforced a hosepipe ban in England.

Now ok, the water won't come from Welsh reservoirs - rather from boreholes beneath Birmingham - but, so the argument goes, without the Welsh water, they wouldn't have 30 million litres a day to spare for Anglian.

The political context of Wales and water hardly needs to be rehearsed here again - a fact acknowledged by Dwr Cymru in their press release today where they say:

"Integrated management of water resources across England and Wales is currently the subject of much discussion. This is a matter for government, however, historically, water has been a highly politicised issue in Wales, and we would imagine any decision over future water resource storage and supply to have the support of the Welsh Government and people of Wales. If a realistic proposal for a water transfer scheme in Wales was put forward, as a not for profit company Welsh Water would be best placed to take the lead in its consideration."

Plaid Cymru have renewed their call for Wales to have full control over its water. The strange thing is that it already does - sort of.

Water and flood defence is one of the 20 devolved fields under the Government of Wales Act, where powers are fully devolved. They include water supply and sewerage, including abstraction and impounding of water, resources management, water quality, the water industry, water charges, safety of reservoirs and so on. Pretty comprehensive, you might say. The exceptions are relatively limited too.

So what is to stop Wales, in the end, passing a law to say that all water gathered in Wales must stay in Wales - unless English water consumers stump up?

Quite a lot actually, I think. (I've had a stab at disentangling this before, when Wales was last advised "to look at water in the same way as the Arabs look at oil: as a saleable commodity')

Buried in the "Miscellaneous" provisions of the Act is a far reaching power given to the Secretary of State to intervene should the Assembly or Ministers do anything that might have "a serious adverse impact" on water resources, supply or quality in England. So that law, and virtually any other more limited legislation, would certainly fall foul of that.

What might happen, though, if Wales, be it Dwr Cymru, the Assembly or Ministers decided they were going to charge England for EXTRA water supplies from new reservoirs, over and above what is transferred now? Couldn't it be argued that the extra water would have a positive, rather than adverse effect on English water supplies and therefore the Secretary of State's power might not be exercisable?

Hanging over all this, of course, is the constitutional position of Wales within the UK. Does the Welsh political class want to get itself into a position where it is demanding significant extra revenues from England by virtue of its hilly terrain and rainy climate?

Should a delegation travel from Wales to London to meet the Treasury and the Department for the Environment asking for a market rate for water transfers, I imagine the first response would be an examination of the financial transfers between England and Wales. Overall public spending in Wales is around £27bn a year. Gerald Holtham and his Commission estimated the total tax revenue from all taxes, income, corporation, business rates and so on in Wales to be around £19bn a year.

Putting a value on Wales' liquid assets could trigger a deluge of difficult questions.

Betsan Powys Article written by Betsan Powys Betsan Powys Former political editor, Wales

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  • rate this

    Comment number 16.

    Does anyone happen to KNOW (I can speculate) whether water reservoirs pay rates into the local economy??
    If they do, then flooding poor agricultural land with suitable geography, is half-way reasoble.
    This isn't affected whether it be the Elan Valley or increasing a Cumberland lake.
    It doesn't matter who drinks it, providing they are paying for it, locals included.

  • rate this

    Comment number 15.

    Fortunately for the peoples of Britain water is controlled by companies and the markets.

    The expression 'bite the hand that bleeds you' when referring to the peoples of England is outrageously provocative.

  • Comment number 14.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 13.

    Selling Water resources is logical! Seeing all the pathetic comments as usual from our anglicised posters saying charging for water is the slippery slope is ridiculous? Trillions of Tons of coal was sold to England to contradict their foolish rants, it wasn't given for free or out of blind loyalty? I'd rather sell our water to benefit Wales rather than it be given for nothing. Luddites!

  • rate this

    Comment number 12.


    I can think of another saying that goes 'bite the hand that bleeds you'.

  • rate this

    Comment number 11.

    Pathetic and dangerous idea, play that game and Wales will lose out in the long run, ever heard the saying ' dont bite the hand that feeds you' ?

  • rate this

    Comment number 10.

    Pie in the sky
    before getting carried away with the idea of holding England to ransom for water just remember that it also rains on the Pennines and on the Lake District and have any of the water enthusiasts seen Kielder Water.
    Definately an unhatced chicken

  • rate this

    Comment number 9.

    As you say Bethan, the Act is very clear on what the Government of Wales can't do... "serious adverse impact on water resources, supply or quality". It says what is covered (resources, supply and quality) and does not include price, which could easily have been included if it was intended. This isn't saying WG should place a levy on water or not, just that the Act doesn't stop it so doing.

  • rate this

    Comment number 8.

    starter even.

  • rate this

    Comment number 7.

    The fiscal deficit in Wales ( Identifiable spending less tax accrued) has been calculated by Alan Trench, the constitutional expert who specialises in devolution, as 6.3 billion pounds. This is often misrepresented as a subsidy from England to Wales. The UK runs a fiscal deficit of 155 billion, our share of that is 7.75 billion. So in fact we are 1.45 billion better off than the UK.

  • rate this

    Comment number 6.

    A non started, no debate required.

  • rate this

    Comment number 5.

    Mind boggling nonsense - the UK already subsidises Wales by several Billions.
    Does any one in the Welsh public service or political arena stop and think things through.

    As Cameron pointed out last week the performance of the Welsh Government in delivering essential services has been less than adequate - Time Welsh Voters took note.

  • Comment number 4.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 3.

    This is stupid - as a nation, we are reliant upon wealth generated in England for much of the money that Wales gets.

    Starting to charge England for water is the start of a slippery slope that Wales will not benefit from.

  • rate this

    Comment number 2.

    So with an estimated £8bn shortfall between taxable revenue and public spending, just how much is Wales' water resource worth to rich England as a commercial product, and one absolutely essential to industry and life at that? It's got to be considerable, and the nature of climate change suggests it's going to become an even more valuable resource in the future.

  • rate this

    Comment number 1.

    Confused Bethan, Is Welsh Water a Nationalised Industry under the control of Welsh Government or in the hands of private shareholders who would benefit from any extra revenue raised by selling water to England and very little benefit to Wales if any!?


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