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.