The EU Directive

We are greatly obliged to Stuart Agnew MEP, (or more specifically his anonymous researcher) for the following. The message I take is:

"The correspondent’s point about the standing charge being inappropriate as an “effective tool for water conservation” is correct"

you can read for yourself the vaguenesses and deviances used by government and water companies to circumvent the directive

Mr Agnew asked his researcher to look into the matter and she has produced the following report, which I hope you will find of interest:

The Water Framework Directive (2000/60/EC) requires Member States to establish a framework for the protection of inland surface waters (rivers and lakes), transitional waters (estuaries), coastal waters and groundwater. It intended to ensure that all aquatic ecosystems and, with regard to their water needs, terrestrial ecosystems and wetlands meet 'good status' by 2015 (now subject to a 12 year extension period). Water policy is a devolved matter, managed by DEFRA and the Environment Agency for England and Wales: it was transposed here through The Water Environment (Water Framework Directive) (England and Wales) Regulations 2003 (Statutory Instrument 2003 No. 3242) for England and Wales.

One innovative aspect of the WFD of which the correspondent is aware was Article 9, which obliges Member States to use pricing for water-related services as an "effective tool for promoting water conservation". This should allow the environmental costs of water to be reflected in the price of water under the “polluter pays” principle. Paragraph 11(3) a) of the 2003 implementing SI requires that river basin management plans (RBMPs) must include the information requested under Article 9(2) (recovery) and 9(4) (exemption from the recovery of costs where applicable) of the WFD.

Article 9 WFD reads as follows:

                        Article 9: Recovery of costs for water services

1. Member States shall take account of the principle of recovery of the costs of water services, including environmental and resource costs, having regard to the economic analysis conducted according to Annex III, and in accordance in particular with the polluter pays principle.

Member States shall ensure by 2010:

• that water-pricing policies provide adequate incentives for users to use water resources efficiently, and thereby contribute to the environmental objectives of this Directive,

• an adequate contribution of the different water uses, disaggregated into at least industry, households and agriculture, to the recovery of the costs of water services, based on the economic analysis conducted according to Annex III and taking account of the polluter pays principle.

Member States may in so doing have regard to the social, environmental and economic effects of the recovery as well as the geographic and climatic conditions of the region or regions affected.

The principle of cost recovery has a long tradition in some countries, but is not the norm in others. Article 9(4) therefore permits derogations against the principle of cost recovery: The Irish for a long time had a derogation against Article 9 water pricing based on a lack of established practices of water charging (due to the abundant availability of water in that country), however controversially legislation was introduced in 2013 which created a water pricing system and the derogation was lost.

In the UK, privatisation of water services in 1989 resulted in regionalised providers who supply, treat and charge for water services, and who are regulated by Ofwat. Reporting compliance with the WFD is through the regional authorities (Environment Agency for England and Wales), who are responsible for implementing the actions envisaged by the WFD to bring rivers and watercourses up to “good” standard and meeting the reporting standards required under the legislation through preparing RBMPs. RBMPs are required to provide the cost recovery information required by Article 9, even though these charges are implemented and collected by the local water companies. Still, the effectiveness of the system of charging is not a key determinant. The Commission’s 2015 evaluation of the UK’s implementation of the WFD showed that RBMPs had been implemented correctly across the country, but that in relation to Article 9 “domestic users of water are still not charged according to usage whereas agriculture and industry users are” . No further comment followed.

The correspondent’s point about the standing charge being inappropriate as an “effective tool for water conservation” is correct for the reasons he identifies, however the Article 9 pricing scheme is sufficiently vague that a wide interpretation of the requirement is possible. RBMPs simply have a reporting obligation, not an accountability or evaluation obligation.  The Commission’s own research from 2010 on the implementation of Article 9 highlights the great number of problems with Article 9, and in particular the scope for the “social, environmental and economic effects of the recovery” to justify a wide range of opt outs from strict polluter pays pricing.

The key social argument is that water is a human right. The EU has no right to behave as if it owns water that humans use for personal use (including that in our bodies..?). Differential pricing would disproportionately hurt the worst off in society and treating all users of water as “polluters” of a fundamental common good could be seen as an insult to human dignity: .

However, differential pricing to encourage water efficiency can be achieved through water metering. UK water companies in areas of ‘serious water stress’ (where current or likely future household demand is a high proportion of the water available to meet that demand) may choose to introduce universal metering programmes through their water resources management plans, if the evidence shows that this is the most cost-beneficial way to address the issue. Others can do it voluntarily. (Anglia RMBP 2015:

In conclusion, the requirements to introduce a pricing policy and to differentiate between industry, agriculture and personal users under Article 9 WFD have been met in the UK. The standing charge and metering both exist to price water, even though the former does not encourage direct efficiency in usage. It is, however, extremely difficult to assert that any given pricing policy is inadequate due to the wide range of factors that can be taken into account in designing and implementing a pricing system, and direct pricing can be seen as equally damaging for social and economic reasons. Therefore, whilst the standing charge does not encourage effective water conservation, other tools do, and the broader social implications of the taxation of water, and EU interference in a basic human right, are more important.