National Party leader Christopher Luxon believes the Government’s backdown on Three Waters entrenchment points to “absolute chaos” within Labour’s Cabinet and caucus.

This morning, Leader of the House Chris Hipkins announced the entrenchment clause that was added to Three Waters legislation while the House was sitting under urgency last month will be removed following criticism from some of the country’s top law academics.

Last month, politicians debated under urgency various stages and amendments to the Water Services Entities Bill - the first in a suite of laws to enact the Three Waters reforms.

Among those was a provision, proposed by Green MP Eugenie Sage, to ensure there was an obligation to maintain public ownership and control of water services and significant assets, something the public has been concerned about.

A threshold of 60 per cent to overturn such a provision in future was settled upon.

In response, a group of the country’s top public law academics urged the Government to change the provision, saying it could set a “dangerous precedent”.

Law Society president Frazer Barton penned a strongly-worded letter to Local Government Minister Nanaia Mahuta last week.

 “The entrenchment clause is undemocratic: it proposes to bind the hands of future governments on a contestable policy position,” Barton said.

Today, Hipkins called the clause a mistake.

“It was a mistake to put the entrenchment clause in and the Government will fix the issue as soon as the House resumes on Tuesday.

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“The intention to protect assets from being sold was right, but entrenchment usually requires a super majority or 75 per cent of the parliament to vote for it.

“The approach in this amendment allowed an entrenchment provision to pass in a way that is not typical for Parliament. That has wider ramifications that we are not comfortable with. That’s why we will fix the issue.

 “It’s also important Parliament strengthens the rules around entrenchment generally to avoid this in the future.”

Leader of the House Chris Hipkins says the entrenchment clause in the Three Waters legislation was a mistake. Photo / Mark Mitchell

The Water Services Entities Bill will be sent back to the Committee of the Whole House to remove the entrenchment provision.

When asked how entrenchment in this fashion was approved in the first place, Hipkins couldn’t give Newstalk ZB a clear answer other than to say entrenchment was discussed in relation to public ownership of water assets, but that the nature of the entrenchment had changed to the 60 per cent threshold at some point.

Luxon, speaking to media from Parliament’s forecourt this morning, described the situation as an “utter shambles” that suggested incompetence on Labour’s behalf.

“It just speaks to absolute chaos, I’d say, happening within the caucus and Cabinet management, that you end up not knowing about an issue like this and [it’s] actually poor implementation, poor governance and as a result we’ve got a shambles.”

He felt it proved the Government should ditch Three Waters - aimed to shift the governance of water services from local councils to four large entities - and find a workable solution with councils.

Hipkins today also said the wider matter around entrenchment will be sent to the Standing Orders Committee, where all parties are represented, in order to strengthen the protections for entrenchment provisions.

“We will ask the Committee to look at where entrenchment provisions are appropriate and what majority should be required for them,” Hipkins said.

“It is important to note the entrenchment clause only applied to maintaining public ownership of water assets. In order to protect against privatisation of these assets we will also be seeking political assurances from the National and ACT parties via letters that ask them to commit to public ownership.”

Luxon, who confirmed National was opposed to selling water assets, said the letter was little more than a “political stunt”.

“By saying, ‘Yes we don’t want to privatise those assets’, we’re actually saying yes to those four mega entities.

“We’re not interested in any of that conversation, we want these assets back under local ownership.”