Contents

Executive Summary

Chapter 1:- Introduction

Inception of the review

Present water abstractions in England and Wales

Present licensing system

Aim of the Review

Intention and structure of this Consultation Paper

Chapter 2:- The Role of Economic Instruments

Introduction

Economic instruments and efficiency

Characteristics of the Water Environment

Environmental costs of abstraction

Abstraction Charges

- level and structure of a charge

- basis of a charge

Practical Benefits of charging

Trading in the current licensing system

Development of trading

- mechanics of trading

- requirements for efficient trading

- delineation of trading possibilities

- size of trading area

- information and other transactions costs

Time limits and re-issue of tradeable licences

Uncertainty and Drought Situations

Initial allocation of trading licences

Interaction with economic regulation of the water companies

Chapter 3:- Authorisation of Abstractions

Principles

Proposals for new types of authorisations

Exemption of small abstractions from authorisation requirements

Registration of small abstractions

One-off abstractions

Authorisation according to abstraction purpose or effect

- transfers

- trickle/drip and other irrigation

- impoundings

Chapter 4:- Applications and Authorisations to Abstract

Information on water resources position

Determining the environmental effects of applications

Policy for determining applications

Purpose and efficiency of use

Other authorisation conditions

Return of abstracted water

Economic instruments

Duration of authorisation

Management of time-limited authorisations

Renewal of time-limited authorisations

Time limits to be applied to new authorisations

Trading in time-limited licences

Chapter 5:- Rights and Liabilities of Authorised Abstractors

Principles

Protection of authorised abstractions

Abstractors' rights to vary their authorisations

Succession policy

Variation and revocation of new authorisations

Revocation of unused authorisations

Liabilities

Chapter 6:- Administration of Abstraction Authorisation

Harmonisation of authorisation administration

Variation procedures

Action on non-compliance with conditions

Appeals

Chapter 7:- Making Changes to Existing Abstraction Licences

Revocation and variation

Abstractions causing environmental damage to designated sites

Time-limiting existing licences

Revocation or variation arrangements in the longer term

Chapter 8:- Abstraction Charges

Purposes of abstraction charging

The charging base

Setting the charges

Drought permits and drought orders

Chapter 9:- Further Controls to Secure Efficient Use of Abstracted Water

Enforceable water management arrangements

Transfers of water between water companies

Information on water use

Drought contingency plans

Promotion of efficient use

Chapter 10:- Summary of Proposals

Chapter 11:- Draft Regulatory Appraisal

Appendix A: Details of the Existing Abstraction Licensing System

Appendix B: Economic Instruments Applied to Water Abstraction in Other Countries

Appendix C: Table of Proposed Exemptions, Registrations and Authorisations

Appendix D: Regulatory Appraisal Table

Annex 1: List of Consultees

Glossary of Terms