UK government defeated over plan to relax water pollution rules to boost homebuilding

LONDON (Reuters) - The British government's plan to relax rules around water pollution to enable the construction of thousands of new homes was defeated by the upper house of parliament on Wednesday.

The government said last month it planned to remove European Union "nutrient neutrality" laws it had retained post-Brexit, which are intended to ensure development does not pollute waterways with chemicals from sources such as agricultural fertiliser and untreated sewage.

Environmental groups opposed the move, saying it would further spoil dirty rivers.

The House of Lords voted by 203 to 156 to reject a government amendment to the Levelling-up and Regeneration Bill which would have allowed development in areas previously impacted by nutrient neutrality.

Ahead of the vote, Prime Minister Rishi Sunak's spokesperson said the government would not be able to reinsert the change if it lost the vote, which would be "devastating" for families wanting new homes.

Britain has for decades been grappling with an undersupply of homes. The government's Department for Levelling Up, Housing and Communities had said the rule change would enable more than 100,000 homes to be built by 2030.

The government said the opposition Labour Party were blocking house building.

Labour's deputy leader Angela Rayner said the party was committed to "serious reform and building a consensus for a credible alternative based on evidence, and not at the expense of rivers".

"We stand ready to sit down with the government, housebuilders and environmental groups to agree on a workable solution to build the homes we need."

(Reporting by Kylie MacLellan; Editing by David Gregorio)