Water (Special Measures) Act 2025

1B(a)

at end insert- "Financial transparency requirements In the Water Industry Act 1991, after section 35D (inserted by section 1) insert- “Financial transparency 35E Authority to secure publication of financial overview (1) The purpose of this section is that members of the public should have easy access to a concise, intelligible and up-to-date overview of the financial position of each relevant undertaker. (2) A relevant undertaker's "financial position” includes the amount and essential characteristics of the share capital and debt used to fund the operations of the undertaker. (3) The overview should include significant changes that- (a) took place in the period of 12 months before the publication of the overview, or (b) are expected to take place in the period of 12 months following that publication, provided that the changes have been publicly announced. (4) The Authority must from time to time decide- (a) what information should be included in the overview, and (b) in what format it should be published, in order to fulfil the purpose set out in subsection (1) (as read with subsection (3)). (5) The Authority must secure that each relevant undertaker is required to publish at least once every year, in a prominent place on its website, an up-to-date overview that accords with what the Authority has decided under (4). (6) It must do so by- (a) exercising its appointment powers, or (b) issuing rules under this section. (7) The Authority's “appointment powers” are— (a) its powers to impose and modify conditions of appointments under this Chapter, and (b) anything it may do by virtue of such conditions with the result that a relevant undertaker is required to act in a certain way. (8) Sections 35B(7) to (10), 35C and 35D apply in relation to rules under this section as they apply in relation to rules under section 35B.””

1B(b)

at end insert- “(ab) section (Financial transparency requirements) (financial transparency requirements);

2A(a)

at end insert- "(5) The first rules under section 35B of the Water Industry Act 1991 (inserted by subsection (3)) may not be issued unless- (a) the rules have been provided in draft to the Secretary of State, and (b) the period of 7 days beginning with the day on which the draft was provided has elapsed.”

1B

Clause 1, page 2, line 8, at end insert “, and to present such information on structuring and debt prominently, including on the website of the undertaker, in a format that can be readily accessed and understood, including by bill payers.”

1

Clause 1, page 2, leave out lines 4 to 8

2

Clause 1, page 4, line 33, leave out subsections (5) and (6)

3

Clause 10, page 15, leave out lines 6 and 7 and insert - "(a) sections 205A and 205B of the Water Industry Act 1991 (pollution incident reduction plans and implementation reports),"

4

After Clause 11, insert the following Clause – “Consumer charges Special provision in charges schemes (1) The Water Industry Act 1991 is amended as set out in subsections (2) and (3). (2) In section 143A(3)(b), after “regulations” insert “or, in the case of regulations made by the Secretary of State (rather than the Welsh Ministers), by which that entitlement is otherwise to be established". (3) After section 143A insert- “143AA Special provision under section 143A: financial arrangements (1) Subsection (2) applies if regulations under section 143A impose on relevant undertakers whose areas are wholly or mainly in England requirements of the sort described in subsection (2)(d) of that section. (2) The Secretary of State may by regulations establish a scheme for the purpose of distributing among the relevant undertakers that are subject to the requirements all or part of the costs incurred by them in complying with the requirements (with the distribution to be on such basis as is provided for in the regulations). (3) The scheme may operate by way of – (a) direct payments between relevant undertakers, or (b) payments into and out of a fund established and maintained under the regulations. (4) Subsections (5) and (6) apply if a scheme is established under subsection (2). (5) If the Secretary of State or the Authority makes price control provision, they must design the provision with a view to not preventing the passing-on of costs as described in subsection (7). (6) The Secretary of State may by regulations – (a) make provision about how the Authority is to comply with subsection (5); (b) modify the effect of any price control provision made by the Authority with a view to enabling the passing-on of costs as described in subsection (7). (7) The passing-on of costs occurs when a relevant undertaker is able to recoup its relevant net costs by charging additional amounts under section 142(1). (8) An undertaker's relevant net costs are the total of its costs incurred in- (a) complying with the requirements referred to in subsection (1), and (b) complying with the requirements of the scheme, less any payments it receives under the scheme. (9) In this section, “price control provision” means provision made by or under- (a) regulations under section 143A, (b) rules under section 143B, or (c) a condition of a relevant undertaker's appointment under Chapter 1 of Part 2, that restricts the amount that may be charged by a relevant undertaker under section 142(1). (10) Where a determination within section 12(3) (determination by CMA provided for by undertaker's appointment) involves the making of price control provision, subsections (5) and (6) apply in relation to the CMA as they apply in relation to the Authority. 143AB Special provision under section 143A: consultation (1) This section applies to – (a) regulations under section 143A that, in relation to relevant undertakers whose areas are wholly or mainly in England, make provision of the sort described in subsection (2)(d) of that section, and (b) regulations under section 143AA. (2) Before making regulations to which this section applies, the Secretary of State must (subject to subsection (3)) consult- (a) the Authority, (b) the relevant undertakers to which the regulations would apply, and (c) such other persons as the Secretary of State considers appropriate. (3) But the Secretary of State does not have to consult if — (a) the regulations only amend earlier regulations, and (b) the Secretary of State considers that the amendments are sufficiently minor that consultation is unnecessary.” (4) The Digital Economy Act 2017 is amended as set out in subsections (5) and (6). (5) In section 38 (disclosure of information to water and sewerage undertakers) – (a) in subsection (2), for “people living in water poverty” substitute “eligible people"; (b) after subsection (9) insert – “(9A) A person is “eligible” for the purposes of this section and section 39- (a) if the person is living in water poverty, or (b) in the application of the sections to a water or sewerage undertaker for an area which is wholly or mainly in England, if the person is among those for whom special provision is required to be made by regulations within subsection (3)(a).” (6) In section 39 (disclosure of information by water and sewerage undertakers), in subsection (2), for “people living in water poverty” substitute “eligible people (see section 38(9A))”.”

5

Clause 15, page 21, line 24, at end insert- “(aa) section 1 (rules about remuneration and governance);”

6

Clause 15, page 21, line 34, leave out paragraph (a)

7

Clause 15, page 22, line 7, leave out paragraph (a)

8

Clause 15, page 22, line 21, at end insert- “(aa) section (Special provision in charges schemes);"

9

Clause 15, page 22, line 40, leave out subsection (11)

NC20

To move the following Clause—
“Principles of best regulatory practice
In section 2 of the Water Industry Act 1991, after subsection (4) insert —
(4A) For the purposes of having regard to the principles of best regulatory practice, the Authority shall not employ any individual who has been employed by a relevant undertaker in the preceding three years.””

NC21

To move the following Clause—
“Environmental duties with respect to protected landscapes
After section 4 of the Water Industry Act 1991 insert—
“4A Environmental duties with respect to protected landscapes
(1) Where a relevant undertaker operates, or has any effect, on land within protected landscapes, that undertaker must—
(a) Secure and maintain “high ecological status” in the water in these areas by 2028;
(b) further the conservation and enhancement of wildlife and natural beauty;
(c) improve every storm overflow that discharges within these areas by 2028;
(d) reduce the load of total phosphorus discharged into freshwaters within these areas from relevant discharges by 2028 to at least 90% lower than the baseline as defined in Regulation 13(1) of the Waste Water Targets set under the Environment Targets (Water) (England) Regulations 2023.
(2) A relevant undertaker must be put into special administration, and not be eligible for a further licence, if it fails to—
(a) demonstrate adequate progress each year;
(b) meet the targets in subsection (1).
(3) Within one year of the day on which the Water (Special Measures) Act 2025 is passed, the Secretary of State must lay a report on the undertakers’ implementation of the environmental duties in subsections (1) and (2) before Parliament.
(4) Following the first report being published under subsection (3), a progress report on implementation must be included in the annual environment improvement plan, issued under section 8 of the Environment Act 2021.
(5) The Secretary of State must by regulations make provision requiring an undertaker to achieve bespoke objectives for specific iconic and the most culturally and ecologically significant waterways, including, where appropriate, complete removal of sewage discharge from the undertaker’s infrastructure.
(6) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(7) In this section—
“protected landscapes” includes national parks, national landscapes and national trails;
”land” includes rivers, lakes, streams, estuarine and other waterways;
”High Ecological Status” means the classification of water bodies defined in Regulation 6 of The Water Environment (Water Framework Directive) (England and Wales) Regulations 2017.””

NC23

To move the following Clause—
“Special administration for breach of environmental and other obligations
(1) Section 24 of the Water Industry Act 1991 (special administration orders made on special petitions) is amended as follows.
(2) After subsection (2)(a), insert—
(aa) that there have been failures resulting in enforcement action from the Authority or the Environment Agency on three or more occasions to—
(i) maintain efficient and economical water supply,
(ii) improve mains for the flow of clean water,
(iii) provide sewerage systems that are effectually drained,
(iv) comply with the terms of its licence, or
(v) abide by anti-pollution duties in the Environmental Protection Act 1990, Water Resources Act 1991, or the Environmental Permitting (England and Wales) Regulations 2016 (SI 2016/1154);”
(3) After subsection (2), insert—
“(2A) In support of an application made by virtue of subsection (1)(a) in relation to subsection (2)(aa), the Secretary of State must compile and present to the High Court records of—
(a) water pipe leaks
(b) sewage spilled into waterways, bathing waters, and private properties, and
(c) falling below international standards of effective water management.”””

This new clause aims to require the Secretary of State to place a water company into special administration arrangements if they breach certain environmental or other conditions.

NC24

To move the following Clause—
“Special administration: criminal convictions
After subsection (2)(e) of section 24 of the Water Industry Act 1991 insert—
“(f) that has been the recipient of two or more criminal convictions in the last five years.””

This new clause aims to exert pressure on companies to operate within the law by preventing water companies with numerous criminal convictions from remaining in business.

23

Clause 1, page 1, line 11, at end insert—
“(1A) The Authority must use its power under subsection (1) to issue rules which require—
(a) the interests of customers, and
(b) the environment,
to be listed as primary objectives in a relevant undertaker’s Articles of Association.”

15

Clause 1, page 2, line 3, at end insert—
“(d) requiring the management board of a relevant undertaker to include at least one representative of each of the following—
(i) groups for the benefit and interests of consumers;
(ii) groups for the benefit and interests of residents of the areas in which the undertaker is operational;
(iii) experts in water and sewerage policy and management; and
(iv) environmental interest groups.”

16

Clause 1, page 2, line 3, at end insert—
“(d) preventing a relevant undertaker from employing any individual who has been employed by the Authority in the preceding three years.”

25

Clause 1, page 4, line 35, leave out from “force” to the end of line 40

17

Clause 2, page 4, line 34, after "occurrence" insert "and impact

19

Clause 2, page 5, line 15, after "occurrence" insert "and impact”

18

Clause 2, page 5, line 17, at end insert—
“(ea) the use the undertaker plans to make of nature-based solutions for reducing the occurrence and impact of pollution incidents,”

11

Clause 3, page 7, line 35, at end insert—
“(e) the volume of the discharge.”

12

Clause 3, page 7, line 38, leave out “subsection (1)(d)” and insert “subsections (1)(d) and (e)”

13

Clause 3, page 8, line 5, at end insert—
“(c) be uploaded and updated automatically, where possible;
(d) be made available on the undertaker’s website alongside searchable and comparable historic data.”

14

Clause 3, page 8, line 5, at end insert—
“(3A) The undertaker must ensure that, within 12 months of the passing of this Act, appropriate monitors are installed to collect the information required by subsection (1).”

22

Clause 3, page 8, line 27, leave out from start to “in” and insert “a Minister with specific responsibility for issues relating to the coast,”

20

Clause 4, page 9, line 29, leave out "use that is to be made of" and insert “priority that is to be given to”

21

Clause 9, page 13, line 40, leave out from “duties” to end of page 14, line 2

9

Clause 12, page 15, line 34, leave out from “to” to “such” in line 36 and insert “recover from its creditors”

26

Clause 12, page 15, line 39, at end insert—
“(2A) The Secretary of State may not require or permit any modified charges to be imposed on persons who do not receive services from the company for the purposes of making good any SAO loss.”

10

Clause 13, page 18, line 13, leave out from “to” to “such” in line 15 and insert “recover from its creditors”

27

Clause 13, page 18, line 18, at end insert—
“(2A) The Secretary of State may not require or permit any modified charges to be imposed on persons who do not receive services from the company for the purposes of making good any SAO loss.”

24

Clause 15, page 21, line 4, leave out subsections (2) to (8) and insert —
“(2) The provisions of this Act come into force on the day on which this Act is passed.”

NC22

To move the following Clause—“Consultation on public ownership of water companies (1) The Secretary of State must within three months of this Act coming into force, publish a public consultation on making provision for the transfer of ownership of undertakers to public ownership. (2) The consultation must consider— (a) the process of transferring private water companies to public ownership; (b) the circumstances in which water companies will be transferred to public ownership; (c) the establishment of new public bodies to manage water services; (d) transition arrangements for employees, contracts, and ongoing operations; (e) governance structures for publicly-owned water services, including provisions for local democratic control and accountability. (3) The Secretary of State must, within twelve months of the passing of this Act, lay before both Houses of Parliament a report on this consultation."

NC18

To move the following Clause—
“Special provision in charges schemes
(1) The Water Industry Act 1991 is amended as set out in subsections (2) and (3).
(2) In section 143A(3)(b), after “regulations” insert “or, in the case of regulations made by the Secretary of State (rather than the Welsh Ministers), by which that entitlement is otherwise to be established”.
(3) After section 143A insert—
“143AA Special provision under section 143A: financial arrangements
(1) Subsection (2) applies if regulations under section 143A impose on relevant undertakers whose areas are wholly or mainly in England requirements of the sort described in subsection (2)(d) of that section.
(2) The Secretary of State may by regulations establish a scheme for the purpose of distributing among the relevant undertakers that are subject to the requirements all or part of the costs incurred by them in complying with the requirements (with the distribution to be on such basis as is provided for in the regulations).
(3) The scheme may operate by way of—
(a) direct payments between relevant undertakers, or
(b) payments into and out of a fund established and maintained under the regulations.
(4) Subsections (5) and (6) apply if a scheme is established under subsection (2).
(5) If the Secretary of State or the Authority makes price control provision, they must design the provision with a view to not preventing the passing-on of costs as described in subsection (7).
(6) The Secretary of State may by regulations—
(a) make provision about how the Authority is to comply with subsection (5);
(b) modify the effect of any price control provision made by the Authority with a view to enabling the passing-on of costs as described in subsection (7).
(7) The passing-on of costs occurs when a relevant undertaker is able to recoup its relevant net costs by charging additional amounts under section 142(1).
(8) An undertaker’s relevant net costs are the total of its costs incurred in—
(a) complying with the requirements referred to in subsection (1), and
(b) complying with the requirements of the scheme,
less any payments it receives under the scheme.
(9) In this section, “price control provision” means provision made by or under—
(a) regulations under section 143A,
(b) rules under section 143B, or
(c) a condition of a relevant undertaker's appointment under Chapter 1 of Part 2,
that restricts the amount that may be charged by a relevant undertaker under section 142(1).
(10) Where a determination within section 12(3) (determination by CMA provided for by undertaker’s appointment) involves the making of price control provision, subsections (5) and (6) apply in relation to the CMA as they apply in relation to the Authority.
143AB Special provision under section 143A: consultation
(1) This section applies to—
(a) regulations under section 143A that, in relation to relevant undertakers whose areas are wholly or mainly in England, make provision of the sort described in subsection (2)(d) of that section, and
(b) regulations under section 143AA.
(2) Before making regulations to which this section applies, the Secretary of State must (subject to subsection (3)) consult—
(a) the Authority,
(b) the relevant undertakers to which the regulations would apply, and
(c) such other persons as the Secretary of State considers appropriate.
(3) But the Secretary of State does not have to consult if—
(a) the regulations only amend earlier regulations, and
(b) the Secretary of State considers that the amendments are sufficiently minor that consultation is unnecessary.”
(4) The Digital Economy Act 2017 is amended as set out in subsections (5) and (6).
(5) In section 38 (disclosure of information to water and sewerage undertakers)—
(a) in subsection (2), for “people living in water poverty” substitute “eligible people”;
(b) after subsection (9) insert—
“(9A) A person is “eligible” for the purposes of this section and section 39—
(a) if the person is living in water poverty, or
(b) in the application of the sections to a water or sewerage undertaker for an area which is wholly or mainly in England, if the person is among those for whom special provision is required to be made by regulations within subsection (3)(a).”
(6) In section 39 (disclosure of information by water and sewerage undertakers), in subsection (2), for “people living in water poverty” substitute “eligible people (see section 38(9A))”.”

This new clause supplements existing powers to provide for special charging arrangements for customers in need. It enables automatic enrolment, cost-sharing among water companies (and their customers), and broader information-sharing between public authorities and water companies; and imposes a requirement for consultation.

NC19

To move the following Clause—
“Civil penalties: equivalent reduction to customer bills
(1) The Secretary of State must make provision for any monetary penalties imposed on a water company to result in equivalent reductions to the amounts charged to customers by the relevant water company.
(2) In fulfilling its duties under subsection (1), the Secretary of State must arrange, annually—
(a) for the total amount of monetary penalties imposed on a water company in the previous year to be calculated;
(b) for that total to be divided by the number of customers of the water company;
(c) for each customer’s next bill from the water company to be reduced by that figure.
(3) Any reduction applied under this section must be indicated on a customer’s statement of account.
(4) In this section, “water company” has the meaning given by section 6(5).”

This new clause would provide for any fines imposed on water companies to result in equivalent reductions to customers’ bills.

1

Clause 3, page 8, line 5, at end insert—
“(c) be published on the home page of the undertaker’s website.”

This amendment would ensure that information regarding a discharge from an emergency overflow must be published on the home page of the undertaker’s website.

2

Clause 3, page 9, line 23, at end insert—
“141H Failure to report discharge from emergency overflows
(1) If a relevant undertaker fails to comply with its duties under section 141F—
(a) the undertaker commits an offence, and
(b) the chief executive of the undertaker commits an offence, subject to subsection (2).
(2) It is a defence for the chief executive to prove that they took all reasonable steps to avoid the failure.
(3) A person who commits an offence under this section is liable, on summary conviction or conviction on indictment, to imprisonment for a term not exceeding 5 years or an unlimited fine, or both.”

This amendment would make it an offence for an undertaker to fail to comply with its duty to report discharges from emergency overflows.

3

Clause 3, page 9, line 23, at end insert—
“141H Restriction on the use of emergency overflows in areas used for aquatic sports
(1) A sewerage undertaker must not permit a discharge from an emergency overflow in an area used for aquatic sports.
(2) In this section, an “area used for aquatic sports” is a section of any body of water connected to and within a one mile radius of—
(a) the clubhouse of a rowing club affiliated with British Rowing,
(b) a Royal Yacht association training centre or the clubhouse of an affiliate member, and
(c) the properties or facilities used by any organisation that the Secretary of State deems to provides water-based sporting activities for the purpose of teaching, training or leisure.
(3) If a relevant undertaker fails to comply with its duties under section (1)—
(a) the undertaker commits an offence, and
(b) the chief executive of the undertaker commits an offence, subject to subsection (4).
(4) It is a defence for the chief executive to prove that they took all reasonable steps to avoid the failure
(5) A person who commits an offence under this section is liable, on summary conviction or conviction on indictment,to imprisonment for a term not exceeding 5 years or an unlimited fine, or both.”

This amendment creates an offence for a sewerage undertaker to use an emergency overflow in an area used for aquatic sports.

4

Clause 10, page 14, leave out lines 35 and 36 and insert—
“(a) sections 205A and 205B of the Water Industry Act 1991 (pollution incident reduction plans and implementation reports),”

This amendment updates clause 10 to reflect amendments made to clause 2 in the Lords.

5

Clause 15, page 21, line 6, at end insert—
“(aa) section 1 (rules about remuneration and governance);”

This amendment brings clause 1 into force on Royal Assent.

6

Clause 15, page 21, line 16, leave out paragraph (a)

This amendment is consequential on Amendment 5.

7

Clause 15, page 21, line 30, leave out paragraph (a)

This amendment is consequential on Amendment 5.

8

Clause 15, page 22, line 1, at end insert—
“(aa) section (Special provision in charges schemes);”

This amendment brings NC18 into force two months after Royal Assent.

NC1

To move the following Clause—
“Water Restoration Fund
(1) No more than 60 days after the day on which this Act is passed, the Secretary of State must by regulations make provision for the establishment, operation and management of a Water Restoration Fund.
(2) A Water Restoration Fund is a fund—
(a) into which any monetary penalties imposed for specified offences must be paid, and
(b) out of which payments must be made for expenditure on measures to improve the quality of the freshwater environment in England.
(3) The Secretary of State must by regulations list the specified offences for the purpose of this section, which must include—
(a) any relevant provisions of the Water Resources Act 1991, including—
(i) section 24(4) (unlicensed abstraction or related works or contravening abstraction licence); 22 Water (Special Measures) Bill [HL];
(ii) section 25(2) (unlicensed impounding works or contravening impounding licence);
(iii) section 25C(1) (contravening abstraction or impounding enforcement notice);
(iv) section 80 (contravening drought order or permit);
(v) section 201(3) (contravening water resources information notice);
(b) regulations under section 2 of the Pollution Prevention and Control Act 1999 (regulation of polluting activities etc);
(c) regulations under section 61 of the Water Act 2014 (regulation of water resources etc).
(4) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(5) The Secretary of State may by regulations made by statutory instrument add to the list of offences specified in subsection (3).
(6) The provisions in this section replace any existing provision for the sums received for specified offences, including in section 22A(9) of the Water Industry Act 1991 (penalties).”

This new clause would require all funds from fines on water companies for environmental offences to be ringfenced for the Water Restoration Fund, for spending on freshwater recovery.

NC2

To move the following Clause—
“Abolition of the Water Services Regulation Authority
(1) The Water Industry Act 1991 is amended as follows.
(2) For section 1A (Water Services Regulation Authority) substitute the following—
“ 1AAbolition of the Water Services Regulation Authority
(1) The body corporate known as the Water Services Regulation Authority (in this Act referred to as “the Authority”) is abolished.
(2) All references to the duties and functions of the Authority in this Act or any other enactment are null and void.”
(3) Omit Schedule 1A (The Water Services Regulation Authority).”

This new clause abolishes Ofwat.

NC3

To move the following Clause—
“Impact of the Act on the Environment Agency
The Secretary of State must, within 12 months of the passing of this Act—
(a) review the impact of this Act on the Environment Agency;
(b) consider whether the Environment Agency requires any additional resources to meet the additional requirements placed upon it by this Act.”

NC4

To move the following Clause—
“Duty to publish maps of sewage catchment networks
After section 205 of the Water Industry Act 1991 insert—
“205ZA Duty to publish maps of sewage catchment networks
(1) Each relevant undertaker must publish a map of its sewage catchment network.
(2) A map published under this section must illustrate any relevant pumping stations, pipes, and other works constituting part of the undertaker’s sewerage network.
(3) Maps published under this section must be published within 12 months of the passing of this Act, and must be updated whenever changes are made to the sewage catchment network or the components listed in subsection (2).
(4) Maps published under this section must be made publicly accessible on the undertaker’s website.””

NC5

Charlie

To move the following Clause—
“Duty to prevent chemical pollutants entering the water environment
After section 68 of the Water Industry Act 1991 (Duties of water undertakers and water supply licensees with respect to water quality), insert—
“68A Duty to prevent chemical pollutants entering the water environment
(1) It shall be the duty of a water undertaker to take such steps as are necessary to reduce and prevent chemical pollutants, including but not limited to poly- and perfluorinated alkyl substances, entering the water environment.
(2) In fulfilling its duty under subsection (1), a relevant undertaker must publish a strategy outlining how it intends to reduce and prevent chemical pollutants entering the water environment.
(3) In developing a strategy under subsection (2), a relevant undertaker must consult with appropriate agencies, including but not limited to—
(a) the relevant Government department;
(b) the Authority;
(c) the Environment Agency; and
(d) the Drinking Water Inspectorate.
(4) A strategy under subsection (2) must include consideration of how the costs of reducing and preventing chemical pollutants entering the water environment are to be borne or recovered, where such consideration must prevent such cost recovery from resulting in additional charges being made upon consumers.””

NC6

To move the following Clause—
“Licence conditions about nature recovery
In the Water Industry Act 1991, after section 17FB insert—
“17FC Nature recovery
(1) reducing flood risk and pollution incidents, improving water quality and benefiting nature restoration in their catchment area.
(2) The Authority must not take any action that discourages or prevents a relevant undertaker from making an investment in accordance with subsection (1).””

This new clause would make it a condition of all water companies’ licences to consider nature-based solutions to flood risk, improving water quality and benefiting nature restoration in their catchment area, and prevent the regulator from discouraging or stopping such investments.

NC7

To move the following Clause—
“Review of price review process
In section 2 of the Water Industry Act 1991, after subsection (2B) insert—
“(2BA) In furthering its objectives and purposes under subsection (2A), the Authority must, within 12 months of the passing of the Water (Special Measures) Act 2025, review its practices as to reviewing price limits.
(2BB) A review under subsection (2BA) must consider—
(a) whether the current practice of price reviews every five years should be replaced with an annual, or otherwise more frequent, system;
(b) how changes to inflation and other financial or economic changes could or should be reflected in prices charged by water companies;
(c) how any future system of price reviews could better support undertakers in planning and delivering investments beyond a single asset management plan period.””

NC8

To move the following Clause—
“Prohibition on bail-out of water company shareholders and creditors
(1) The Secretary of State and His Majesty’s Treasury must not directly or indirectly discharge, assume, or guarantee any debts of legal entities in any water company group subject to proceedings under section 24 of the Water Industry Act 1991 (special administration orders made on special petitions), except in accordance with subsection (2).
(2) The special administrator of a water company may reduce the debts owed by the regulated entity to its creditors by up to 100 per cent, taking into account the future forecast expenditure over the short, medium and long term and subject to the administrator’s confidence in the company’s ability to accommodate this spending.
(3) The prohibition set out in subsection (1) and the reduction of debts set out in subsection (2) must not include pension, wage and other obligations owed to employees, excluding any past or current member of a board of directors, within the water company group.”

This new clause aims to allow up to 100% of debts to be cancelled in the event of special administration proceedings, taking into account the scale of investment required to hit the future targets established by the Authority.

NC9

To move the following Clause—
“Ofwat to publish guidance on debt levels after administration
In section 2 of the Water Industry Act 1991, after subsection (2D) insert—
“(2DZA) For the purposes of ensuring that relevant undertakers are able to finance the proper carrying out of their functions under subsection (2A)(c), the Authority must establish guidelines to be followed by relevant undertakers who have been in special administration.
(2DZB) Guidelines produced under subsection (2DZA) must—
(a) set out a maximum level of debt which can be accrued by the undertaker;
(b) set out a process for agreeing capital expenditure necessary for service improvements, bill increases, and changes to operating costs while the undertaker is subject to the Special Administration Regime;
(c) state the penalties which will be imposed for breaches of such guidelines, which may include—
(i) financial penalties;
(ii) prohibitions on the payment of dividends or other bonuses; or
(iii) such other special measures as the Authority deems appropriate.””

NC11

To move the following Clause—
“Duty on sewerage undertakers to monitor overflows at sewage treatment works, pumping stations and on the sewer network
(1) The Water Industry Act 1991 is amended as follows.
(2) In section 94—
(a) after subsection (1)(b) insert—
“(c) to make provision for the accurate collection of data relating to its performance in fulfilling its duties under paragraphs (a) and (b).”
(b) after subsection (2) insert—
“(2A) In performing its duties under subsection (1)(c), a sewerage undertaker must—
(a) install volume flow meters in all locations where sewage overflows occur, including sewage treatment works, pumping stations and on the sewer network for which it is responsible;
(b) establish appropriate required capacities for each sewage treatment works and pumping station;
(c) publish information on the data and calculations used to establish such required capacities; and
(d) install all required monitoring tools within 12 months of the passing of this Act.””

NC10

To move the following Clause—
“Database of performance of sewerage undertakers
(1) The Water Industry Act 1991 is amended as follows.
(2) In Chapter 3 of Part II (Protection of customers etc), after section 27ZA (Power to require information for purpose of monitoring) insert—
“27ZB Duty to establish database
(1) It shall be the duty of the Authority to establish and maintain a database containing information relating to the performance of sewerage undertakers.
(2) The database must—
(a) be publicly and freely accessible;
(b) enable uploaded information to be updated in live-time;
(c) contain such data or information as the Authority thinks is necessary for the purposes of public transparency as to the performance of sewerage undertakers; and
(d) contain—
(i) current and historic data; and
(ii) data and information which has been independently collected or analysed. This will include start time, end time and duration of all sewage spill events for Event Duration Monitors as well as flow data from flow monitors. In all cases the location of the meter must be accurately stated.
(3) The Authority may impose penalties on undertakers who fail to provide such information as is required by this section in a timely manner.””

NC12

To move the following Clause—
“Rules about performance-related pay
(1) The Water Industry Act 1991 is amended as follows.
(2) After section 35D (inserted by section 1 of this Act) insert—
“35E Rules about performance-related pay
(1) The Authority must issue rules prohibiting a relevant undertaker from giving to persons holding senior roles performance-related pay in respect of any financial year in which the undertaker has failed to prevent all sewage discharges, spills, or leaks.
(2) The rules issued under subsection (1) must include—
(a) provision designed to secure that performance-related pay which, if given by a relevant undertaker, would contravene the pay prohibition on the part of the undertaker, is not given by another person;
(b) that any provision of an agreement (whether made before or after the issuing of the rules) is void to the extent that it contravenes the pay prohibition;
(c) provision for a relevant undertaker to recover any payment made, or other property transferred, in breach of the pay prohibition.
(3) For the purposes of subsection (1)—
(a) “performance-related pay” means any payment, consideration or other benefit (including pension benefit) the giving of which results from the meeting of any targets or performance standards on the part of the relevant undertaker or the person to whom such payment, consideration or benefit is given;
(b) a person holds a “senior role” with a relevant undertaker if the person—
(i) is a chief executive of the undertaker,
(ii) is a director of the undertaker, or
(iii) holds such other description of role with the undertaker as may be specified.””

This new clause creates a new section in the Water Industry Act 1991 to require Ofwat to ban bonuses for water company bosses if they fail to prevent sewage discharges, spills, or leaks.

NC13

To move the following Clause—
“Rules about competitive procurement in water infrastructure
(1) The Water Industry Act 1991 is amended as follows.
(2) After section 35A insert—
“Rules about competitive procurement in water infrastructure
(1) The Authority must issue rules requiring relevant undertakers to use competitive procurement processes in respect of procurement relating to water infrastructure.
(2) If the Authority considers that a relevant undertaker is contravening the rules, the Authority may give the undertaker a direction to do, or not to do, a particular thing specified in the direction.
(3) It is the duty of a relevant undertaker to comply with a direction given under subsection (2), and this duty is enforceable by the Authority under section 18.
(4) Rules under this section may—
(a) make different provision for different relevant undertakers or descriptions of undertakers;
(b) make different provision for different purposes;
(c) make provision subject to exceptions.
(3) The Authority may from time to time—
(a) revise rules issued under this section, and
(b) issue the revised rules.”

NC14

To move the following Clause—
“Ofwat consideration of pollution targets for price reviews
(1) The Water Industry Act 2011 is amended as follows.
(2) After section 17I insert—
“17IA Duty to have regard to pollution targets in carrying out price reviews
When carrying out a periodic review for the purpose of setting a Price Control in respect of one or more relevant undertakers, the Authority must have regard to the performance of the relevant undertaker or undertakers against pollution targets across the previous five years.””

NC15

To move the following Clause—
“Database of performance of sewerage undertakers
(1) The Water Industry Act 1991 is amended as follows.
(2) In Chapter 3 of Part II (Protection of customers etc), after section 27ZA (Power to require information for purpose of monitoring) insert—
“27ZB Duty to establish database
(1) It shall be the duty of the Authority to establish and maintain a database containing information relating to the performance of sewerage undertakers.
(2) The database must—
(a) be publicly and freely accessible;
(b) enable uploaded information to be updated in live-time;
(c) contain such data or information as the Authority thinks is necessary for the purposes of public transparency as to the performance of sewerage undertakers; and
(d) contain—
(i) current and historic data; and
(ii) data and information which has been independently collected or analysed including—
(a) the start time, end time and duration of all sewage spill events,
(b) flow data from flow monitors,
(c) the location of each flow meter from which flow data is provided.
(3) The Authority may make rules about the provision of data and information under this section.
(4) Rules under subsection (3) must include rules relating to information provided about the location of flow meters.
(5) The Authority may impose penalties on undertakers who fail to provide such information as is required by this section.””

NC16

To move the following Clause—
“Establishment of Water Restoration Fund
(1) The Secretary of State must, within 60 days of the passing of this Act, make provision for the establishment, operation and management of a Water Restoration Fund.
(2) A Water Restoration Fund is a fund—
(a) into which any monetary penalties imposed on water companies for specified offences must be paid, and
(b) out of which payments must be made for expenditure on measures—
(i) to help water bodies, including chalk streams, achieve good ecological status, and improve ecological potential and chemical status;
(ii) to prevent further deterioration of the ecological status, ecological potential or chemical status of water bodies, including chalk streams;
(iii) to enable water-dependent habitats to return to, or remain at, favourable condition;
(iv) to restore other water-dependent habitats and species, especially where action supports restoration of associated protected sites or water bodies.
(3) The Secretary of State must, by regulations, list the specified offences for the purposes of this section, which must include—
(a) any relevant provisions of the Water Resources Act 1991, including—
(i) section 24(4) (unlicensed abstraction or related works or contravening abstraction licence);
(ii) section 25(2) (unlicensed impounding works or contravening impounding licence);
(iii) section 25C(1) (contravening abstraction or impounding enforcement notice);
(iv) section 80 (contravening drought order or permit);
(v) section 201(3) (contravening water resources information notice);
(b) any relevant regulations under section 2 of the Pollution Prevention and Control Act 1999 (regulation of polluting activities etc) related to water pollution;
(c) regulations under section 61 of the Water Act 2014 (regulation of water resources etc).
(4) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(5) The provisions in this section replace any existing provision for the sums received for specified offences, including in section 22A(9) of the Water Industry Act 1991 (penalties).”

NC17

To move the following Clause—
“Rules about borrowing
After section 154B of the Water Industry Act 1991 (financial assistance for major works) insert—
“Chapter III
Rules about borrowing for undertakers
154C Restrictions on undertakers relating to borrowing
(1) The Secretary of State may by regulations made by statutory instrument implement a limit on borrowing by a relevant undertaker.
(2) Where a relevant undertaker has total borrowing exceeding the limit set by regulations made under subsection (1), the relevant undertaker may not make a payment of dividends, capital, assets, or interest to shareholders or controlling entities.
(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””

This new clause would enable limits to be placed on the amount of money that can be borrowed by a water or sewerage undertaker, and prevent an undertaker who has exceeded such limits from being able to pay dividends to shareholders.

NC35

To move the following Clause—
“Companies to be placed in special measures for missing pollution targets
In section 2 of the Water Industry Act 1991, after subsection (2D) insert—
“(2DZA) For the purposes of ensuring that the functions of water and sewerage undertakers are properly carried out, the Authority must establish—
(a) annual, and
(b) rolling five-year average
pollution targets which must be met by water and sewerage undertakers, and the penalties to be imposed for failure to meet such targets.
(2DZB) The performance of a water or sewerage undertaker against such targets must be measured through independent analysis of monitoring data.
(2DZC) A timetable produced under subsection (2DZA)(b) must require the following reductions in the duration of sewage spill events, using the annual total hours’ duration of all sewage spill events recorded by Event Duration Monitors, based on an average from the last five years, as a baseline—
(a) a 25% reduction within five years;
(b) a 60% reduction within ten years;
(c) an 85% reduction within fifteen years; and
(d) a 99% reduction within twenty years.
(2DZD) A water or sewerage undertaker which fails to meet pollution targets set out by the Authority will be subject to such special measures as the Authority deems appropriate, which may include—
(a) being required to work on improvement projects with or take instruction from the Authority, the relevant Government department, or such other bodies or authorities as the Authority deems appropriate; and
(b) financial penalties.””

5

Clause 15, page 22, line 40, leave out subsection (11)

NC27

To move the following Clause—
“Environmental duties with respect to national parks
After section 4 of the Water Industry Act 1991 insert—
“4A Environmental duties with respect to national parks
(1) Where a relevant undertaker operates, or has any effect, on land within national parks or the Broads, that undertaker must—
(a) Secure and maintain “high ecological status” in the water in these areas by 2028;
(b) further the conservation and enhancement of wildlife and natural beauty;
(c) improve every storm overflow that discharges within these areas by 2028;
(d) reduce the load of total phosphorus discharged into freshwaters within these areas from relevant discharges by 2028 to at least 90% lower than the baseline as defined in Regulation 13(1) of the Waste Water Targets set under the Environment Targets (Water) (England) Regulations 2023.
(2) A relevant undertaker must be put into special administration, and not be eligible for a further licence, if it fails to—
(a) demonstrate adequate progress each year;
(b) meet the targets in subsection (1).
(3) Within one year of the day on which the Water (Special Measures) Act 2025 is passed, the Secretary of State must lay a report on the undertakers’ implementation of the environmental duties in subsections (1) and (2) before Parliament.
(4) Following the first report being published under subsection (3), a progress report on implementation must be included in the annual environment improvement plan, issued under section 8 of the Environment Act 2021.
(5) The Secretary of State must by regulations make provision requiring an undertaker to achieve bespoke objectives for specific iconic and the most culturally and ecologically significant waterways, including, where appropriate, complete removal of sewage discharge from the undertaker’s infrastructure.
(6) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(7) In this section—
“the Broads” has the same meaning as in the Norfolk and Suffolk Broads Act 1988;
“land” includes rivers, lakes, streams, estuarine and other waterways;
“High Ecological Status” means the classification of water bodies defined in Regulation 6 of The Water Environment (Water Framework Directive) (England and Wales) Regulations 2017.””

This new clause would require water companies to adhere to and deliver stronger environmental objectives and duties within National Parks and the Broads, so as to protect waters across National Parks from sewage. The new clause would give the Secretary of State regulation-making power to extend protections to specific bodies of water, such as Lake Windermere.

NC28

To move the following Clause—
“Independent review: companies exiting a special administration regime
(1) The Secretary of State must, within six months of the passing of this Act, either—
(a) commission an independent review, or
(b) take steps to extend the terms of reference of any existing independent review or commission,
to consider the merits of changing the law to provide that a water company exiting a special administration regime becomes a company mutually owned by its customers.
(2) A review under subsection (1) must consider—
(a) the general merits of mutual ownership of water companies in such circumstances, and
(b) what model of mutual ownership would be most suitable.
(3) The Secretary of State must, as soon as practicable after receiving a report of a review under subsection (1), lay before both Houses of Parliament—
(a) a copy of the report, and
(b) a statement setting out the Secretary of State’s response to that report.”

This new clause would require the Secretary of State to commission an independent review of the potential merits of changing the law so that a water company exiting a special administration regime becomes a company mutually owned by its customers.

NC29

To move the following Clause—
“Ofwat consideration of pollution targets for price reviews
(1) The Water Industry Act 2011 is amended as follows.
(2) After section 17I insert—
“17IA Duty to have regard to pollution targets in carrying out price reviews
When carrying out a periodic review for the purpose of setting a Price Control in respect of one or more relevant undertakers, the Authority must have regard to the performance of the relevant undertaker or undertakers against pollution targets across the previous five years.””

NC30

To move the following Clause—
“Database of performance of sewerage undertakers
(1) The Water Industry Act 1991 is amended as follows.
(2) In Chapter 3 of Part II (Protection of customers etc), after section 27ZA (Power to require information for purpose of monitoring) insert—
“27ZB Duty to establish database
(1) It shall be the duty of the Authority to establish and maintain a database containing information relating to the performance of sewerage undertakers.
(2) The database must—
(a) be publicly and freely accessible;
(b) enable uploaded information to be updated in live-time;
(c) contain such data or information as the Authority thinks is necessary for the purposes of public transparency as to the performance of sewerage undertakers; and
(d) contain—
(i) current and historic data; and
(ii) data and information which has been independently collected or analysed including—
(a) the start time, end time and duration of all sewage spill events,
(b) flow data from flow monitors,
(c) the location of each flow meter from which flow data is provided.
(3) The Authority may make rules about the provision of data and information under this section.
(4) Rules under subsection (3) must include rules relating to information provided about the location of flow meters.
(5) The Authority may impose penalties on undertakers who fail to provide such information as is required by this section.””

NC31

To move the following Clause—
“Special administration orders: credit ratings
(1) The Water Industry Act 1991 is amended as follows
(2) In section 24 (special administration orders made on special petitions)—
(a) after subsection (1A) insert—
“(1B) Where a company which is a qualifying water supply licensee or qualifying sewerage licensee—
(a) is required, as a condition of its licence, to maintain two Issuer Credit Ratings which are Investment Grade Ratings from two different Credit Rating Agencies, and
(b) ails to comply with that requirement,
the Secretary of State must make an application to the High Court by petition under this section.”, and
(b) in subsection (2), after (c) insert—
“(ca) that the company—
(i) is required, as a condition of its licence, to maintain two Issuer Credit Ratings which are Investment Grade Ratings from two different Credit Rating Agencies, and
(ii) has failed to comply with that requirement”.”

NC32

To move the following Clause—
“Rules about competitive procurement in water infrastructure
(1) The Water Industry Act 1991 is amended as follows.
(2) After section 35A insert—
“Rules about competitive procurement in water infrastructure
(1) The Authority must issue rules requiring relevant undertakers to use competitive procurement processes in respect of procurement relating to water infrastructure.
(2) If the Authority considers that a relevant undertaker is contravening the rules, the Authority may give the undertaker a direction to do, or not to do, a particular thing specified in the direction.
(3) It is the duty of a relevant undertaker to comply with a direction given under subsection (2), and this duty is enforceable by the Authority under section 18.
(4) Rules under this section may—
(a) make different provision for different relevant undertakers or descriptions of undertakers;
(b) make different provision for different purposes;
(c) make provision subject to exceptions.
(3) The Authority may from time to time—
(a) revise rules issued under this section, and
(b) issue the revised rules.”

NC33

To move the following Clause—
“Responsibility in relation to planning issues
(1) The Water Industry Act 1991 is amended as follows.
(2) In section 37 (General duty to maintain water supply system etc), after subsection (1) insert—
“(1A) When participating in a planning consultation, or when otherwise providing advice in relation to a planning matter, a water undertaker must provide—
(a) full and accurate information, and
(b) an honest assessment,
in relation to its current and future ability to fulfil its duties under subsection (1).
(1B) An undertaker which fails to provide information required under subsection (1A) will be subject to such penalties as the Authority may impose.
(1C) Where, in providing information required under subsection (1A), an undertaker expects not to be able to fulfil its duties under subsection (1), the undertaker must establish a plan to meet its requirements by a relevant time.
(3) In section 94, after subsection (2) insert—
“(2A) When participating in a planning consultation, or when otherwise providing advice in relation to a planning matter, a water undertaker must provide—
(a) full and accurate information, and
(b) an honest assessment,
in relation to its current and future ability to fulfil its duties under subsections (1) and (2).
(2B) An undertaker which fails to provide information required under subsection (2A) will be subject to such penalties as the Authority may impose.
(2C) Where, in providing information required under subsection (2A), an undertaker expects not to be able to fulfil its duties under subsections (1) and (2), the undertaker must establish a plan to meet its requirements by a relevant time.
(2D) An undertaker which fails to carry out a plan established under subsection (2A) will be subject to such penalties as the Authority may impose.””

NC34

To move the following Clause—
“Principles of best regulatory practice
In section 2 of the Water Industry Act 1991, after subsection (4) insert —
“(4A) For the purposes of having regard to the principles of best regulatory practice, the Authority shall not employ any individual who has been employed by a relevant undertaker in the preceding three years.””

22

Clause 1, page 1, line 11, at end insert—
“(1A) The Authority must use its power under subsection (1) to issue rules which require—
(a) the interests of customers, and
(b) the environment,
to be listed as primary objectives in a relevant undertaker’s Articles of Association.”

18

Clause 1, page 2, line 3, at end insert—
“(ca) requiring the management board of a relevant undertaker to include at least one representative of each of the following—
(i) groups for the benefit and interests of consumers;
(ii) groups for the benefit and interests of residents of the areas in which the undertaker is operational;
(iii) experts in water and sewerage policy and management; and
(iv) environmental interest groups.””

19

Clause 1, page 2, line 8, at end insert—
“(e) preventing a relevant undertaker from employing any individual who has been employed by the Authority in the preceding three years.”

21

Clause 1, page 4, line 35, leave out from “force” to the end of line 40

23

Clause 2, page 5, line 9, after "occurrence" insert "and impact”

25

Clause 2, page 5, line 27, after "occurrence" insert "and impact”

24

Clause 2, page 5, line 29, at end insert—
“(ea) the use the undertaker plans to make of nature-based solutions for reducing the occurrence and impact of pollution incidents,”

13

Clause 3, page 8, line 10, at end insert—
“(e) the volume of discharge.”

14

Clause 3, page 8, line 13, leave out “subsection (1)(d)” and insert “subsections (1)(d) and (e)”

15

Clause 3, page 8, line 18, at end insert—
“(c) be uploaded and updated automatically, where possible; and
(d) be made available on the undertaker’s website alongside searchable and comparable historic data.”

16

Clause 3, page 8, line 18, at end insert—
“(3A) The undertaker must ensure that, within 12 months of the passing of this Act, appropriate monitors are installed to collect the information required by subsection (1).”

17

Clause 3, page 9, line 1, leave out from start to “in” and insert “a Minister with specific responsibility for issues relating to the coast,”

10

Clause 3, page 9, line 38, at end insert—
“141H Restriction on the use of emergency overflows in areas used for aquatic sports
(1) A sewerage undertaker must not permit a discharge from an emergency overflow in an area used for aquatic sports.
(2) In this section, an “area used for aquatic sports” is a section of any body of water connected to and within a one mile radius of—
(a) the clubhouse of a rowing club affiliated with British Rowing,
(b) a Royal Yacht association training centre or the clubhouse of an affiliate member, and
(c) the properties or facilities used by any organisation that the Secretary of State deems to provides water-based sporting activities for the purpose of teaching, training or leisure.
(3) If a relevant undertaker fails to comply with its duties under section (1)—
(a) the undertaker commits an offence, and
(b) the chief executive of the undertaker commits an offence, subject to subsection (5).
(4) It is a defence for the chief executive to prove that they took all reasonable steps to avoid the failure.
(5) A person who commits an offence under this section is liable, on summary conviction or conviction on indictment, to imprisonment for a term not exceeding 5 years or an unlimited fine, or both.”

This amendment creates an offence for a sewerage undertaker to use an emergency overflow in an area used for aquatic sports.

26

Clause 4, page 10, line 4, leave out "use that is to be made of" and insert “priority that is to be given to”

27

Clause 9, page 14, line 11, leave out from duties to end of line 13

11

Clause 12, page 16, line 11, leave out from “to” to “such” in line 13 and insert “recover from its creditors”11

12

Clause 13, page 18, line 31, leave out from “to” to “such” in line 33 and insert “recover from its creditors”

20

Clause 15, page 21, line 22, leave out subsections (2) to (8) and insert—
“(2) The provisions of this Act come into force on the day on which this Act is passed.”

NC9

To move the following Clause—
“Companies to be placed in special measures for missing pollution targets
In section 2 of the Water Industry Act 1991, after subsection (2D) insert—
“(2DZA) For the purposes of ensuring that the functions of water and sewerage undertakers are properly carried out, the Authority must establish—
(a) annual, and
(b) rolling five-year average
pollution targets which must be met by water and sewerage undertakers, and the penalties to be imposed for failure to meet such targets.
(2DZB) The performance of a water or sewerage undertaker against such targets must be measured through independent analysis of monitoring data.
(2DZC) A water or sewerage undertaker which fails to meet pollution targets set out by the Authority will be subject to such special measures as the Authority deems appropriate, which may include—
(a) being required to work on improvement projects with or take instruction from the Authority, the relevant Government department, or such other bodies or authorities as the Authority deems appropriate; and
(b) financial penalties.””

NC7

To move the following Clause—
“Abolition of the Water Services Regulation Authority
(1) The Water Industry Act 1991 is amended as follows.
(2) For section 1A (Water Services Regulation Authority) substitute the following—
“ 1AAbolition of the Water Services Regulation Authority
(1) The body corporate known as the Water Services Regulation Authority (in this Act referred to as “the Authority”) is abolished.
(2) All references to the duties and functions of the Authority in this Act or any other enactment are null and void.”
(3) Omit Schedule 1A (The Water Services Regulation Authority).”

This new clause abolishes Ofwat.

NC16

To move the following Clause—
“Licence conditions about nature recovery
In the Water Industry Act 1991, after section 17FB insert—
“17FC Nature recovery
(1) It is a condition of all licences granted under section 17A (water supply licences) that relevant undertakers must give due consideration to nature-based solutions targeted at reducing flood risk and pollution incidents, improving water quality and benefiting nature restoration in their catchment area.
(2) The Authority must not take any action that discourages or prevents a relevant undertaker from making an investment in accordance with subsection (1).””

This new clause would make it a condition of all water companies’ licences to consider nature-based solutions to flood risk, improving water quality and benefiting nature restoration in their catchment area, and prevent the regulator from discouraging or stopping such investments.

NC8

To move the following Clause—
“Duties of water regulators for clean water
(1) The Water Industry Act 1991 is amended as follows.
(2) In section 2 (General duties with respect to water industry)—
(a) omit paragraph (2A)(c);
(b) in subsection (2B), omit from “by” to the end of the subsection and insert—
““ensuring—
(a) clean drinking water,
(b) bathing waters of excellent quality,
(c) lakes, rivers and beaches of high ecological status,
(d) the conservation of water resources, and
(e) reasonable water bills.””
(3) In section 3 (General environmental and recreational duties), in subsection (2), before paragraph (a) insert—
(aa) a requirement to achieve excellent quality of all bathing waters, lakes, rivers and beaches of high ecological status, and elimination of sewage, waste and other pollution so far as reasonably practicable from all waterways;””

This new clause would amend Ofwat’s consumer duty to prioritise clean water and bill levels instead of commercial competition.

NC10

To move the following Clause—
“Impact of the Act on the Environment Agency
The Secretary of State must, within 12 months of the passing of this Act—
(a) review the impact of this Act on the Environment Agency; and
(b) consider whether the Environment Agency requires any additional resources to meet the additional requirements placed upon it by this Act.”

NC11

To move the following Clause—
“Duty to publish maps of sewage catchment networks
After section 205 of the Water Industry Act 1991 insert—
“205ZA Duty to publish maps of sewage catchment networks
(1) Each relevant undertaker must publish a map of its sewage catchment network.
(2) A map published under this section must illustrate any relevant pumping stations, pipes, and other works constituting part of the undertaker’s sewerage network.
(3) Maps published under this section must be published within 12 months of the passing of this Act, and must be updated whenever changes are made to the sewage catchment network or the components listed in subsection (2).
(4) Maps published under this section must be made publicly accessible on the undertaker’s website.””

NC12

To move the following Clause—
“Environmental duties with respect to chalk streams
(1) The Water Industry Act 1991 is amended as follows.
(2) After section 4, insert—
“4A Environmental duties with respect to chalk streams
(1) Where a relevant undertaker operates, or has any effect on chalk streams, that undertaker must—
(a) secure and maintain high ecological status of such chalk streams, and
(b) clearly mark chalk streams which are of high ecological status.
(2) In this section “high ecological status” relates to the classification of water bodies in The Environment (Water Framework Directive) (England and Wales) Regulations 2017.””

NC13

To move the following Clause—
“Guidance on poly- and perfluorinated alkyl substances
After section 86ZA of the Water Industry Act 1991, insert—
“86ZB Guidance on poly- and perfluorinated alkyl substances
(1) The Secretary of State must by regulations made by statutory instrument make provision for the regulation of poly- and perfluorinated alkyl substances in drinking water based on guidance issued by the Drinking Water Inspectorate.
(2) Until the Secretary of State makes provision for the regulation of poly- and perfluorinated alkyl substances, water and sewerage companies must implement any relevant guidance issued by the Drinking Water Inspectorate.
(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.””

This new clause would require the Secretary of State to make regulations relating to the presence of poly- and perfluorinated alkyl substances in drinking water based on guidance issued by the Drinking Water Inspectorate, and require water companies to follow the Inspectorate’s guidance in the interim.

NC14

To move the following Clause—
“Duty to prevent chemical pollutants entering the water environment
After section 68 of the Water Industry Act 1991 (Duties of water undertakers and water supply licensees with respect to water quality), insert—
“68A Duty to prevent chemical pollutants entering the water environment
(1) It shall be the duty of a water undertaker to take such steps as are necessary to reduce and prevent chemical pollutants, including but not limited to poly- and perfluorinated alkyl substances, entering the water environment.
(2) In fulfilling its duty under subsection (1), a relevant undertaker must publish a strategy outlining how it intends to reduce and prevent chemical pollutants entering the water environment.
(3) In developing a strategy under subsection (2), a relevant undertaker must consult with appropriate agencies, including but not limited to—
(a) the relevant Government department;
(b) the Authority;
(c) the Environment Agency; and
(d) the Drinking Water Inspectorate.
(4) A strategy under subsection (2) must include consideration of how the costs of reducing and preventing chemical pollutants entering the water environment are to be borne or recovered, where such consideration must prevent such cost recovery from resulting in additional charges being made upon consumers.””

NC15

To move the following Clause—
“Citizen science
(1) The Secretary of State must take steps to engage citizens regarding the monitoring of water and sewerage undertakers, as part of its regulatory efforts.
(2) This engagement must include the production of toolkits and data sharing.
(3) The Secretary of State must also consider funding citizen science projects regarding the monitoring of water and sewerage undertakers.”

This new clause would require the Secretary of State to take steps to facilitate citizen science regarding the monitoring of water companies.

NC24

To move the following Clause—
“Database of performance of sewerage undertakers
(1) The Water Industry Act 1991 is amended as follows.
(2) In Chapter 3 of Part II (Protection of customers etc), after section 27ZA (Power to require information for purpose of monitoring) insert—
“27ZB Duty to establish database
(1) It shall be the duty of the Authority to establish and maintain a database containing information relating to the performance of sewerage undertakers.
(2) The database must—
(a) be publicly and freely accessible;
(b) enable uploaded information to be updated in live-time;
(c) contain such data or information as the Authority thinks is necessary for the purposes of public transparency as to the performance of sewerage undertakers; and
(d) contain—
(i) current and historic data; and
(ii) data and information which has been independently collected or analysed. This will include start time, end time and duration of all sewage spill events for Event Duration Monitors as well as flow data from flow monitors. In all cases the location of the meter must be accurately stated.
(3) The Authority may impose penalties on undertakers who fail to provide such information as is required by this section in a timely manner.””

NC17

To move the following Clause—
“Introduction of single social tariff
(1) The Secretary of State must, within 12 months of the passing of this Act, make provision for the introduction of a single national social tariff.
(2) A “single social tariff” means a national scheme for the charging of consumers which enables consumers who meet certain criteria to be subject to discounted charges.
(3) For the purposes of this section, “certain criteria” may include, but not be limited to, a consumer’s age, income, or employment status.
(4) The provision of a single national social tariff is to be without prejudice to any special provision under section 143A(2)(d) of the Water Industry Act 1991.”

NC18

To move the following Clause—
“Public ownership of water companies
After section 17 of the Water Industry Act 1991 insert—
“17ZA Public ownership of undertakers
(1) The Secretary of State may by regulations made by statutory instrument make provision for the transfer of ownership of undertakers to public ownership.
(2) Regulations under this section may include provisions for—
(a) the process of transferring private water companies to public ownership;
(b) the circumstances in which water companies will be transferred to public ownership;
(c) the establishment of new public bodies to manage water services;
(d) compensation arrangements for current shareholders and bondholders;
(e) transition arrangements for employees, contracts, and ongoing operations;
(f) governance structures for publicly-owned water services, including provisions for local democratic control and accountability.
(3) Before making regulations under this section, the Secretary of State must conduct a public consultation on the proposed transfer to public ownership.
(4) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.””

This new clause would enable the nationalisation of water and sewerage undertakers, and require the Secretary of State to conduct a public consultation in advance of any proposed transfer to public ownership.

NC19

To move the following Clause—
“Ofwat responsibility for the financial stability of water companies
In section 2 of the Water Industry Act 1991, after subsection (2D) insert—
“(2DZA) For the purposes of ensuring that relevant undertakers are able to finance the proper carrying out of their functions under subsection (2A)(c), the Authority must establish rules for the purposes of ensuring the financial stability of water or sewerage undertakers.
(2DZB) Rules produced under subsection (2DZA) must include—
(a) a prohibition on water or sewerage undertakers having offshore holding companies;
(b) a requirement that the Regulated Capital Value for each undertaker is annually reconciled against the market values of the undertaker’s equity and debt.””

NC20

To move the following Clause—
“Review of the water industry
(1) The Secretary of State must consider as part of any review into the water industry the following—
(a) the functions and performance of the Water Services Regulation Authority, and the case for its abolition;
(b) whether a public benefit company could better perform the role of current undertakers.
(2) The consideration under subsection (1)(a) must analyse the case for replacing the Water Services Regulation Authority with a new corporate body known as the Clean Water Authority, with the following general duties—
(a) to issue guidance to undertakers, and enforce the implementation of that guidance, requiring undertakers to meet excellent standards concerning—
(i) the provision of clean drinking water,
(ii) the maintenance of bathing waters of excellent quality,
(iii) the maintenance of lakes, rivers and beaches of high ecological status,
(iv) the conservation of water resources, and
(v) the charging of reasonable water bills;
(b) to issue rules prohibiting a relevant undertaker from giving to persons holding senior roles performance-related pay in respect of any financial year in which the undertaker has failed to meet any relevant targets set by the Authority;
(c) to swiftly revoke the licence of water companies that have performed poorly, as defined by the Authority, with particular regard to the standards set out in paragraph (a);
(d) to require relevant undertakers to have arrangements in place for environmental experts to be members of a board, committee or panel of the undertaker;
(e) to issue stringent and legally-binding targets concerning sewage discharges affecting bathing waters and highly sensitive nature sites;
(f) to mandate that undertakers publish publicly-accessible live time data on the recorded volume, duration and number of sewage spills on a single site maintained by the Authority;
(g) to perform unannounced inspections with regard to the duties under this subsection.”

NC21

To move the following Clause—
“Review of price review process
In section 2 of the Water Industry Act 1991, after subsection (2B) insert—
“(2BA) In furthering its objectives and purposes under subsection (2A), the Authority must, within 12 months of the passing of the Water (Special Measures) Act 2025, review its practices as to reviewing price limits.
(2BB) A review under subsection (2BA) must consider—
(a) whether the current practice of price reviews every five years should be replaced with an annual, or otherwise more frequent, system;
(b) how changes to inflation and other financial or economic changes could or should be reflected in prices charged by water companies;
(c) how any future system of price reviews could better support undertakers in planning and delivering investments beyond a single asset management plan period.””

NC22

To move the following Clause—
“Prohibition on bail-out of water company shareholders and creditors
(1) The Secretary of State and His Majesty’s Treasury must not directly or indirectly discharge, assume, or guarantee any debts of legal entities in any water company group subject to proceedings under section 24 of the Water Industry Act 1991 (special administration orders made on special petitions), except in accordance with subsection (2).
(2) The special administrator of a water company may reduce the debts owed by the regulated entity to its creditors by up to 100 per cent, taking into account the future forecast expenditure over the short, medium and long term and subject to the administrator’s confidence in the company’s ability to accommodate this spending.
(3) The prohibition set out in subsection (1) and the reduction of debts set out in subsection (2) must not include pension, wage and other obligations owed to employees, excluding any past or current member of a board of directors, within the water company group.”

This new clause aims to allow up to 100% of debts to be cancelled in the event of special administration proceedings, taking into account the scale of investment required to hit the future targets established by the Authority.

NC23

To move the following Clause—
“Ofwat to publish guidance on debt levels after administration
In section 2 of the Water Industry Act 1991, after subsection (2D) insert—
“(2DZA) For the purposes of ensuring that relevant undertakers are able to finance the proper carrying out of their functions under subsection (2A)(c), the Authority must establish guidelines to be followed by relevant undertakers who have been in special administration.
(2DZB) Guidelines produced under subsection (2DZA) must—
(a) set out a maximum level of debt which can be accrued by the undertaker;
(b) set out a process for agreeing capital expenditure necessary for service improvements, bill increases, and changes to operating costs while the undertaker is subject to the Special Administration Regime;
(c) state the penalties which will be imposed for breaches of such guidelines, which may include –
(i) financial penalties;
(ii) prohibitions on the payment of dividends or other bonuses; or
(iii) such other special measures as the Authority deems appropriate.””

NC25

To move the following Clause—
“Duty on sewerage undertakers to monitor overflows at sewage treatment works, pumping stations and on the sewer network
(1) The Water Industry Act 1991 is amended as follows.
(2) In section 94—
(a) after subsection (1)(b) insert—
“(c) to make provision for the accurate collection of data relating to its performance in fulfilling its duties under paragraphs (a) and (b).”
(b) after subsection (2) insert—
“(2A) In performing its duties under subsection (1)(c), a sewerage undertaker must—
(a) install volume flow meters in all locations where sewage overflows occur, including sewage treatment works, pumping stations and on the sewer network for which it is responsible;
(b) establish appropriate required capacities for each sewage treatment works and pumping station;
(c) publish information on the data and calculations used to establish such required capacities; and
(d) install all required monitoring tools within 12 months of the passing of this Act.””

NC26

To move the following Clause—
“Rules about performance-related pay
(1) The Water Industry Act 1991 is amended as follows.
(2) After section 35D (inserted by section 1 of this Act) insert—
“35E Rules about performance-related pay
(1) The Authority must issue rules prohibiting a relevant undertaker from giving to persons holding senior roles performance-related pay in respect of any financial year in which the undertaker has failed to prevent all sewage discharges, spills, or leaks.
(2) The rules issued under subsection (1) must include—
(a) provision designed to secure that performance-related pay which, if given by a relevant undertaker, would contravene the pay prohibition on the part of the undertaker, is not given by another person;
(b) that any provision of an agreement (whether made before or after the issuing of the rules) is void to the extent that it contravenes the pay prohibition;
(c) provision for a relevant undertaker to recover any payment made, or other property transferred, in breach of the pay prohibition.
(3) For the purposes of subsection (1)—
(a) “performance-related pay” means any payment, consideration or other benefit (including pension benefit) the giving of which results from the meeting of any targets or performance standards on the part of the relevant undertaker or the person to whom such payment, consideration or benefit is given;
(b) a person holds a “senior role” with a relevant undertaker if the person—
(i) is a chief executive of the undertaker,
(ii) is a director of the undertaker, or
(iii) holds such other description of role with the undertaker as may be specified.””

This new clause creates a new section in the Water Industry Act 1991 to require Ofwat to ban bonuses for water company bosses if they fail to prevent sewage discharges, spills, or leaks.

9

Clause 2, page 5, line 10, at end insert—
“(2A) A pollution incident reduction plan must, in particular, state how the undertaker intends to reduce the occurrence of pollution incidents in national parks that are attributable to its system.”

6

Clause 2, page 7, line 14, at end insert—
“(5) An implementation report must be published on the relevant undertaker’s website in a form which is publicly accessible.”

7

Page 16, line 2, leave out Clause 12

8

Page 18, line 22, leave out Clause 13

5

Clause 15, page 22, line 40, leave out subsection (11)

This amendment reverses the “privilege amendment” made in the Lords.

NC3

To move the following Clause—
“Civil penalties: equivalent reduction to customer bills
(1) The Secretary of State must make provision for any monetary penalties imposed on a water company to result in equivalent reductions to the amounts charged to customers by the relevant water company.
(2) In fulfilling its duties under subsection (1), the Secretary of State must arrange, annually—
(a) for the total amount of monetary penalties imposed on a water company in the previous year to be calculated;
(b) for that total to be divided by the number of customers of the water company;
(c) for each customer’s next bill from the water company to be reduced by that figure.
(3) Any reduction applied under this section must be indicated on a customer’s statement of account.
(4) In this section, “water company” has the meaning given by section 6(5).”

This new clause would provide for any fines imposed on water companies to result in equivalent reductions to customers’ bills.

NC4

To move the following Clause—
“Rules about borrowing
After section 154B of the Water Industry Act 1991 (financial assistance for major works), insert—
“Chapter III
Rules about borrowing for undertakers
154C Restrictions on undertakers relating to borrowing
(1) The Secretary of State may by regulations made by statutory instrument implement a limit on borrowing by a relevant undertaker.
(2) Where a relevant undertaker has total borrowing exceeding the limit set by regulations made under subsection (1), the relevant undertaker may not make a payment of dividends, capital, assets, or interest to shareholders or controlling entities.
(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””

This new clause would enable limits to be placed on the amount of money that can be borrowed by a water or sewerage undertaker, and prevent an undertaker who has exceeded such limits from being able to pay dividends to shareholders.

NC5

To move the following Clause—
“Licence conditions about nature recovery
In the Water Industry Act 1991, after section 17FB insert—
“17FC Nature recovery
(1) It is a condition of all licences granted under section 17A (water supply licences) that relevant undertakers must give due consideration to nature-based solutions targeted at reducing flood risk and pollution incidents, improving water quality and benefiting nature restoration in their catchment area.
(2) The Authority must not take any action that discourages or prevents a relevant undertaker from making an investment in accordance with subsection (1).””

This new clause would make it a condition of all water companies’ licences to consider nature-based solutions to flood risk, improving water quality and benefiting nature restoration in their catchment area, and prevent the regulator from discouraging or stopping such investments.

NC6

To move the following Clause—
“Reporting of impact of the Act on pollution
The Secretary of State must publish—
(a) within three months of the passing of this Act, an assessment of the expected impact of the Act on the overall level of pollution caused by the activities of relevant undertakers; and
(b) three years after the passing of this Act, an assessment of the actual impact of the Act on the overall level of pollution caused by the activities of sewerage undertakers.”

This new clause would require the Government to publish its expectations as to the impact of the Act on pollution caused by water and sewerage undertakers and an assessment of the actual impact of the Act on such pollution.

1

Clause 1, page 2, leave out lines 4 to 8

This amendment removes the requirement for rules made by Ofwat under clause 1 to include reporting requirements on finance.

2

Clause 1, page 4, line 33, leave out subsections (5) and (6)

This amendment removes the requirement for rules made by Ofwat under clause 1 to be brought into force by statutory instrument.

3

Clause 3, page 8, line 18, at end insert—
“(c) be published on the home page of the undertaker’s website.”

This amendment would ensure that information regarding a discharge from an emergency overflow must be published on the home page of the undertaker’s website.

4

Clause 3, page 9, line 38, at end insert—
“141H Failure to report discharge from emergency overflows
(1) If a relevant undertaker fails to comply with its duties under section 141F—
(a) the undertaker commits an offence, and
(b) the chief executive of the undertaker commits an offence, subject to subsection (2).
(2) It is a defence for the chief executive to prove that they took all reasonable steps to avoid the failure.
(3) A person who commits an offence under this section is liable, on summary conviction or conviction on indictment, to imprisonment for a term not exceeding 5 years or an unlimited fine, or both.”

This amendment would make it an offence for an undertaker to fail to comply with its duty to report discharges from emergency overflows.

NC1

To move the following Clause –
“Special administration for breach of environmental and other obligations
(1) Section 24 of the Water Industry Act 1991 (special administration orders made on special petitions) is amended as follows.
(2) After subsection (2)(a) insert—
“(aa) that there have been failures resulting in enforcement action from the Authority or the Environment Agency on three or more occasions to—
(i) maintain efficient and economical water supply,
(ii) improve mains for the flow of clean water,
(iii) provide sewerage systems that are effectually drained,
(iv) comply with the terms of its licence, or
(v) abide by anti-pollution duties in the Environmental Protection Act 1990, Water Resources Act 1991, or the Environmental Permitting (England and Wales) Regulations 2016 (SI 2016/1154);”
(3) After subsection (2) insert—
“(2A) In support of an application made by virtue of subsection (1)(a) in relation to subsection (2)(aa), the Secretary of State must compile and present to the High Court records of—
(a) water pipe leaks,
(b) sewage spilled into waterways, bathing waters, and private properties, and
(c) falling below international standards of effective water management.””

This new clause aims to require the Secretary of State to place a water company into special administration arrangements if they breach certain environmental or other conditions.

NC2

To move the following Clause—
“Establishment of Water Restoration Fund
(1) The Secretary of State must, within 60 days of the passing of this Act, make provision for the establishment, operation and management of a Water Restoration Fund.
(2) A Water Restoration Fund is a fund—
(a) into which any monetary penalties imposed on water companies for specified offences must be paid, and
(b) out of which payments must be made for expenditure on measures—
(i) to help water bodies, including chalk streams, achieve good ecological status, and improve ecological potential and chemical status;
(ii) to prevent further deterioration of the ecological status, ecological potential or chemical status of water bodies, including chalk streams;
(iii) to enable water-dependent habitats to return to, or remain at, favourable condition;
(iv) to restore other water-dependent habitats and species, especially where action supports restoration of associated protected sites or water bodies.
(3) The Secretary of State must, by regulations, list the specified offences for the purposes of this section, which must include—
(a) any relevant provisions of the Water Resources Act 1991, including—
(i) section 24(4) (unlicensed abstraction or related works or contravening abstraction licence);
(ii) section 25(2) (unlicensed impounding works or contravening impounding licence);
(iii) section 25C(1) (contravening abstraction or impounding enforcement notice);
(iv) section 80 (contravening drought order or permit);
(v) section 201(3) (contravening water resources information notice);
(b) any relevant regulations under section 2 of the Pollution Prevention and Control Act 1999 (regulation of polluting activities etc) related to water pollution;
(c) regulations under section 61 of the Water Act 2014 (regulation of water resources etc).
(4) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(5) The provisions in this section replace any existing provision for the sums received for specified offences, including in section 22A(9) of the Water Industry Act 1991 (penalties).”

15A

Clause 2, page 4, line 31, leave out “and publish” and insert “, publish and implement”

This amendment would require water companies to implement pollution incident reduction plans.

1

Clause 1, page 2, line 2, after “consumers” insert “and representatives from environmental groups”

This amendment, in conjunction with another amendment in the Duke of Wellington’s name to clause 1, seeks to ensure that undertakers take into consideration the views of environmental groups alongside the views of consumers.

5

Clause 1, page 2, line 41, after “consumers” insert “and representatives from environmental groups”

This amendment, in conjunction with another amendment in the Duke of Wellington’s name to clause 1, seeks to ensure that undertakers take into consideration the views of environmental groups alongside the views of consumers.

6

Clause 1, page 2, line 42, leave out “board,”

This amendment seeks to give consumers and environmental groups a forum to represent their interests without impacting the effectiveness of the board of a relevant undertaker.

9

Clause 1, page 4, line 21, at end insert—
“35E Rules about performance-related pay
(1) Within one month of the day on which the Water (Special Measures) Act 2024 is passed, the Authority must issue rules prohibiting a relevant undertaker from giving to persons holding senior roles performance-related pay in respect of any financial year in which the undertaker has failed to prevent sewage discharges, spills, or leaks (“the pay prohibition”).
(2) The rules issued under subsection (1) must include—
(a) provision designed to secure that performance-related pay which, if given by a relevant undertaker, would contravene the pay prohibition on the part of the undertaker, is not given by another person;
(b) that any provision of an agreement (whether made before or after the issuing of the rules) is void to the extent that it contravenes the pay prohibition;
(c) provision for a relevant undertaker to recover any payment made, or other property transferred, in breach of the pay prohibition.
(3) For the purposes of this section—
(a) “performance-related pay” means any payment, consideration or other benefit (including pension benefit) the giving of which results from the meeting of any targets or performance standards on the part of the relevant undertaker or the person to whom such payment, consideration or benefit is given;
(b) a person holds a “senior role” with a relevant undertaker if the person—
(i) is a chief executive of the undertaker,
(ii) is a director of the undertaker, or
(iii) holds such other description of role with the undertaker as may be specified;
(c) “specified” means specified in rules under this section.
(4) To issue rules under this section, the Authority must follow the procedures in section 35C.”

This amendment creates a new section in the Water Industry Act 1991 to require Ofwat to ban bonuses for water company bosses if they fail to prevent sewage discharges, spills, or leaks.

41

Clause 3, page 8, line 6, at end insert—
“141H Emergency overflow permit restriction
An environmental permit to allow an emergency overflow may not be granted to a sewerage undertaker solely for the reason of an electrical power failure at sewage disposal works.”

This amendment seeks to prevent the granting of permits which allow emergency overflows in the case of electrical power failures at sewage disposal works.

44

After Clause 3, insert the following new Clause—
“Water and sewerage undertakers: the Environmental Information Regulations 2004
(1) A water or sewerage undertaker appointed under the Water Industry Act 1991 is a public authority for the purposes of the Environmental Information Regulations 2004.
(2) In regulation 4 of the Environmental Information Regulations 2004 (S.I. 2004/3391) (dissemination of environmental information), in paragraph (4)(b), at the end insert “; and
(c) all effluent or wastewater treatment works monitoring data held by water and sewerage undertakers appointed under the Water Industry Act 1991, to include operational monitoring data in addition to any data required under permits issued under the Environmental Permitting (England and Wales) Regulations 2016 (S.I. 2016/1154).”
(3) Section 50 of the Freedom of Information Act 2000 (application for decision by Commissioner) as read with regulation 18 of the Environmental Information Regulations 2004 (enforcement and appeal provisions) shall be read as if a request for information made by the complainant to a public authority includes a complaint concerning any failure proactively to publish information under regulation 4 of the Environmental Information Regulations 2004 (S.I. 2004/3391).”

This amendment would reduce the difficulties and obstacles that the public experience in getting access to real-time and operational data held by the water companies pursuant to their roles as sewerage undertakers under the Water Industry Act 1991 and would enable any failure to proactively publish such data to be referred to the Information Commissioner for investigation.

45

Clause 6, page 10, line 9, after “if” insert “the Authority,”

This amendment would add Ofwat as a relevant agency with the obligation to impose a fixed monetary penalty on a water company in respect of a specified offence.

46

After Clause 6, insert the following new Clause—
“Water Restoration Fund
(1) No more than 60 days after the day on which this Act is passed, the Secretary of State must by regulations make provision for the establishment, operation and management of a Water Restoration Fund.
(2) A Water Restoration Fund is a fund—
(a) into which any monetary penalties imposed for specified offences must be paid, and
(b) out of which payments must be made for expenditure on measures to improve the quality of the freshwater environment in England.
(3) The Secretary of State must by regulations list the specified offences for the purpose of this section, which must include—
(a) any relevant provisions of the Water Resources Act 1991, including—
(i) section 24(4) (unlicensed abstraction or related works or contravening abstraction licence);
(ii) section 25(2) (unlicensed impounding works or contravening impounding licence);
(iii) section 25C(1) (contravening abstraction or impounding enforcement notice);
(iv) section 80 (contravening drought order or permit);
(v) section 201(3) (contravening water resources information notice);
(b) any relevant regulations under section 2 of the Pollution Prevention and Control Act 1999 (regulation of polluting activities etc) related to water pollution;
(c) regulations under section 61 of the Water Act 2014 (regulation of water resources etc).
(4) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(5) The provisions in this section replace any existing provision for the sums received for specified offences, including in section 22A(9) of the Water Industry Act 1991 (penalties).”

This amendment would require all funds from fines on water companies for environmental offences to be ringfenced for the Water Restoration Fund, for spending on freshwater recovery.

47

After Clause 6, insert the following new Clause—
“Water Restoration Fund: payment from penalties
(1) Any monetary penalties imposed by the Environment Agency, the Nature Resources Body for Wales or the Authority for offences in relation to water pollution must be paid into the Water Restoration Fund.
(2) The Water Restoration Fund must use money from such penalties for expenditure on measures to improve the quality of the freshwater environment in England and Wales.”

This amendment would require the money from penalties imposed on water companies for water pollution offences to be paid into the Water Restoration Fund. It would also require the Water Restoration Fund to spend this money on measures to improve the quality of the freshwater environment in England and Wales.

51

Leave out Clause 10

This amendment would prevent consumers in England from being charged higher water bills to cover any losses incurred by the Government as a result of the Secretary of State’s decision to make a special administration order.

52

Leave out Clause 11

This amendment would prevent consumers in Wales from being charged higher water bills to cover any losses incurred by the Government as a result of the Secretary of State’s decision to make a special administration order.

56

After Clause 12, insert the following new Clause—
“Special administration: criminal convictions
In section 24 of the Water Industry Act 1991 (special administration orders made on special petitions), after subsection (2)(e) insert—
“(f) that the company has been the recipient of two or more criminal convictions in a five-year period.””

This amendment aims to exert pressure on companies to operate within the law by preventing water companies with numerous criminal convictions from remaining in business.

57

After Clause 12, insert the following new Clause—
“Governance structure of the Authority
After section 1A of the Water Industry Act 1991 (Water Services Regulation Authority), insert—
“1B Governance structure of the Authority
(1) The board of directors of the Authority regulating water companies must have—
(a) at least 25% of its members elected by its employees, and
(b) at least 25% of its members chosen by local authorities in the water catchment area, in consultation with independent environmental and consumer groups.
(2) Every employee and bill-payer has the right to be entered on the register of the Authority.
(3) Employees as a group are entitled to a minimum of 25% of the total votes in the general meeting of the Authority.
(4) Bill-payers as a group are entitled to a minimum of 25% of the total votes in the general meeting of the Authority.
(5) Every employee and bill-payer is entitled to cast a binding vote on remuneration of all directors.””

The Clause would empower employees and bill-payers to have an effective say in the affairs of the Authority.

58

After Clause 12, insert the following new Clause—
“Rules about borrowing
After section 154B of the Water Industry Act 1991 (financial assistance for major works), insert—
“CHAPTER III Rules about borrowing for undertakers
154C Restriction on borrowing
(1) The Secretary of State may by regulations made by statutory instrument implement a limit on borrowing by a relevant undertaker.
(2) Where a relevant undertaker has total borrowing exceeding the limit set by regulations made under subsection (1), the relevant undertaker may not make a payment of dividends, capital, assets, or interest to shareholders or controlling entities.
(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””

59

After Clause 12, insert the following new Clause—
“Review of the costs of bringing water companies into public ownership
(1) The Secretary of State must, within six months of the passing of this Act, lay before each House of Parliament a report evaluating the costs of bringing water companies into public ownership.
(2) The report must contain an analysis of—
(a) the extent to which the market value of water companies is based on expectations that the United Kingdom Government, or water bill payers, are underwriting the future profits of the water companies;
(b) options for compensating shareholders and bondholders, including potential discounts linked to dividend payouts and failures to invest in infrastructure;
(c) the likely capital and revenue costs of transferring water companies into public ownership;
(d) a comparison of the likely difference in total costs to taxpayers and water bill payers between transferring water companies into public ownership and not doing so.”

This amendment requires a full assessment of the costs of bringing water companies into public ownership, discounting the extent to which the market value of water companies is based on taxpayers and water bill payers underwriting the future profits of the water companies.

11

Clause 1, page 4, line 25, at end insert—
“(5) The first rules issued under section 35B of the Water Industry Act 1991 (as inserted by subsection (3)) must be published by the Authority within six months of this Act coming into force and provided to the Secretary of State and do not take effect until the Secretary of State has made regulations made by statutory instrument to bring them into effect.
(6) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

40

Clause 3, page 6, line 26, at end insert “including both on the website, or subsequent public and remotely accessible information display technology, of the undertaking and simultaneously sent to the Authority, which must then provide for timely posting of discharge information from all undertakers in one place that is remotely accessible by the public”

This amendment would ensure that certain information is more readily accessible, including in a single and coordinated location for the public and civil society to access in as near to real time as practicable.

55

After Clause 12, insert the following new Clause—
“Licence conditions about nature recovery
In the Water Industry Act 1991, after section 17FB insert—
“17FC Nature recovery
(1) It is a condition of all licences granted under section 17A (water supply licences) that relevant undertakers must give due consideration to nature-based solutions targeted at reducing flood risk and pollution incidents, improving water quality and benefiting nature restoration in their catchment area.
(2) The Authority must not take any action that discourages or prevents a relevant undertaker from making an investment in accordance with subsection (1).””

This amendment would make it a condition of all water companies’ licences to consider nature-based solutions to flood risk, improving water quality and benefiting nature restoration in their catchment area, and prevent the regulator from discouraging or stopping such investments.

After Clause 9, insert the following new Clause- "Giving the Authority a primary duty to protect the environment (1) Section 2 of the Water Industry Act 1991 (general duties with respect to water industry) is amended as follows. (2) After subsection (2A)(a), insert - "(aa) to further the environmental objective;"

2

Clause 1, page 2, line 3, at end insert—
“(d) requiring a relevant undertaker to report not less than annually to the Authority on actual or planned financial structuring or restructuring of the undertaker, including debt levels, commercial strategy and any associated risks, including to the long-term sustainability of the undertaking.”

The amendment requires that financial engineering becomes a regular focus area for timely reporting in order to assist in regulators’ understanding and alert them in good time to risks or distortions in a water company.

3

Clause 1, page 2, line 8, at end insert—
“(iia) meeting relevant standards issued under the Flood and Water Management Act 2010, in particular the standards in Schedule 3 (sustainable drainage),”

8

Clause 1, page 2, line 42, at end insert—
“(6A) The Authority must arrange quarterly meetings between its own representatives and civil society organisations for the purposes of—
(a) regular, recorded feedback from civil society to regulators on water and water-related environment issues;
(b) highlighting priorities and timelines for specific action;
(c) reviewing progress against actions agreed at previous meetings;
(d) minuting the discussions, including actions agreed, and publishing these on the Authority’s website, or by any means that is in due course equally accessible to the public, within 10 calendar days of each meeting.”

This amendment will oblige regulators and water companies to engage effectively and formally with civil society and to record transparently feedback, agreed actions and performance outcomes.

26

Clause 2, page 5, line 29, at end insert—
“(7A) Before preparing a pollution incident reduction plan, a sewerage undertaker must consult with farmers, local authorities, developers and others to identify natural flood prevention solutions to prevent pollution incidents.”

This amendment would require consideration of opportunities to retain water through natural solutions to prevent sewage mixing in combined sewers with excess rainfall, causing pollution incidents.

39

Clause 3, page 6, line 18, at end insert—
“(e) the date by which an explanation of reasons why the discharge occurred is expected to be made publicly available.”

43

After Clause 3, insert the following new Clause—
“Report on implementation of Schedule 3 of the Flood and Water Management Act 2010
The Secretary of State must, within six months of the passing of this Act, lay before each House of Parliament a report on the effect of this Act on the implementation of Schedule 3 of the Flood and Water Management Act 2010 (sustainable drainage).”

49

Before Clause 8, insert the following new Clause—
“Giving the Authority a primary duty to protect the environment
(1) Section 2 of the Water Industry Act 1991 (general duties with respect to water industry) is amended as follows.
(2) After subsection (2A)(a), insert—
“(aa) to further the environmental objective;”
(3) After subsection (2D), insert—
“(2DZA) The environmental objective mentioned in paragraph (2A)(aa) above is—
(a) to protect the environment;
(b) to ensure compliance by persons engaged in commercial activities concerned with the provision of water and sewerage services with all relevant legal obligations on—
(i) sewage collection, treatment and disposal,
(ii) the abstraction of water resources, and
(iii) the conservation of biodiversity, and
(c) to contribute to meeting all relevant targets set out under the Environment Act 2021.””

This amendment aims to place a clear and unambiguous environmental duty on Ofwat.

[Withdrawn]
After Clause 12, insert the following new Clause—
“Public ownership of water companies
After section 17 of the Water Industry Act 1991 insert—
“17ZA Public ownership of undertakers
(1) The Secretary of State may by regulations made by statutory instrument make provision for the transfer of ownership of undertakers to public ownership.
(2) Regulations under this section may include provisions for—
(a) the process of transferring private water companies to public ownership;
(b) the circumstances in which water companies will be transferred to public ownership;
(c) the establishment of new public bodies to manage water services;
(d) compensation arrangements for current shareholders and bondholders;
(e) transition arrangements for employees, contracts, and ongoing operations;
(f) governance structures for publicly-owned water services, including provisions for local democratic control and accountability.
(3) Before making regulations under this section, the Secretary of State must conduct a public consultation on the proposed transfer to public ownership.
(4) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.””

53

After Clause 12, insert the following new Clause—
“Prohibition on bail-out of water company shareholders and creditors
(1) The Secretary of State and His Majesty’s Treasury must not directly or indirectly discharge, assume, or guarantee any debts of legal entities in any water company group subject to proceedings under section 24 of the Water Industry Act 1991 (special administration orders made on special petitions), except in accordance with subsection (2).
(2) The special administrator of a water company may reduce the debts owed by the regulated entity to its creditors by between 50 and 100 per cent, taking into account the persistence of pollution, the breaches of terms of appointment, the level of returns on capital while pollution or breaches occurred, and the priority given to returns on capital over principal duties.
(3) The prohibition set out in subsection (1) and the reduction of debts set out in subsection (2) must not include pension, wage and other obligations owed to employees, excluding any past or current member of a board of directors, within the water company group.”

This amendment aims to allow 50-100% of debts to be cancelled in the event of special administration proceedings, taking into account the seriousness of environmental breaches, excessive returns on capital, costs that creditors have already imposed on the public, and any risk-taking.

54

After Clause 12, insert the following new Clause—
“Special administration for breach of environmental and other obligations
(1) Section 24 of the Water Industry Act 1991 (special administration orders made on special petitions) is amended as follows.
(2) After subsection (2)(a), insert—
“(aa) that there have been failures resulting in enforcement action from the Authority or the Environment Agency on three or more occasions to—
(i) maintain efficient and economical water supply,
(ii) improve mains for the flow of clean water,
(iii) provide sewerage systems that are effectually drained,
(iv) comply with the terms of its licence, or
(v) abide by anti-pollution duties in the Environmental Protection Act 1990, Water Resources Act 1991, or the Environmental Permitting (England and Wales) Regulations 2016 (SI 2016/1154);”
(3) After subsection (2), insert—
“(2A) In support of an application made by virtue of subsection (1)(a) in relation to subsection (2)(aa), the Secretary of State must compile and present to the High Court records of—
(a) water pipe leaks,
(b) sewage spilled into waterways, bathing waters, and private properties, and
(c) falling below international standards of effective water management.””

This amendment aims to require the Secretary of State to place a water company into special administration arrangements if they breach certain environmental or other conditions.

Clause 6, page 6, line 26, at end insert “including both on the website, or subsequent public and remotely accessible information display technology, of the undertaking and simultaneously sent to the Authority, which must then provide for timely posting of discharge information from all undertakers in one place that is remotely accessible by the public"

After Clause 12, insert the following new Clause- “Governance structure of water companies After section 10 of the Water Industry Act 1991 insert — "10A Governance structure of undertakers (1) The board of directors of a water or sewerage undertaker, and any parent or holding company, must have – (a) at least one third of its members elected by the employees of the company or group, (b) at least one sixth of its members chosen by local authorities in the water catchment area, in consultation with independent environmental and consumer groups. (2) Employees as a group are entitled to a minimum of one third of the total votes in the general meeting of the company. (3) Bill-payers as a group are entitled to a minimum of one sixth of the total votes in the general meeting of the company. (4) The Secretary of State may by regulations made by statutory instrument increase the proportion of directors in subsection (1) that are elected by employees to one half, and chosen by local authorities to one quarter, and must raise the proportion of votes in the meeting in subsections (2) and (3) accordingly. (5) A statutory instrument containing regulations under subsection (4) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.''''

4

Clause 1, page 2, leave out lines 38 and 39

This amendment ensures that the rules about remuneration do not extend to individuals below board level.

7

Clause 1, page 2, line 42, at end insert—
“(6A) The decision on whether such persons sit on a board, committee or panel is for the relevant undertaker to make.”

This amendment ensures that it is boards of water companies, rather than Ofwat, who decide which forum (boards, committees or panels) best suits their own requirements.

10

Clause 1, page 4, line 25, leave out “2024” and insert “2025”

This amendment ensures that the provisions about performance-related pay do not have retroactive effect.

12

Clause 2, page 4, line 28, leave out “Before section 95” and insert “After section 205”

This amendment moves the provisions about pollution incident reduction plans to a different part of the Water Industry Act 1991, in consequence of the Minister’s subsequent amendments extending Clause 2 to the water supply network.

13

Clause 2, page 4, leave out line 29 and insert—
““Pollution incident reduction plans
205A Duty to prepare and publish plans”

This amendment is consequential on the Minister’s previous amendment.

14

Clause 2, page 4, line 30, leave out “sewerage” and insert “relevant”

This is one of a group of amendments extending Clause 2 so that it covers the water supply network as well as the sewerage network.

15

Clause 2, page 4, line 30, leave out “whose area is wholly or mainly in England”

This is one of a group of amendments extending Clause 2 to Wales.

16

Clause 2, page 4, line 35, leave out “sewerage”

This is one of a group of amendments extending Clause 2 so that it covers the water supply network as well as the sewerage network.

17

Clause 2, page 4, line 37, leave out “sewerage”

This is one of a group of amendments extending Clause 2 so that it covers the water supply network as well as the sewerage network.

18

Clause 2, page 5, line 9, leave out “sewerage”

This is one of a group of amendments extending Clause 2 so that it covers the water supply network as well as the sewerage network.

19

Clause 2, page 5, leave out lines 17 to 19

This amendment removes provision superseded by the Minister’s amendment at page 5, line 38.

20

Clause 2, page 5, line 20, leave out “Secretary of State” and insert “Minister”

This is one of a group of amendments extending Clause 2 to Wales.

21

Clause 2, page 5, line 22, leave out “Secretary of State must consult the Environment Agency” and insert “Minister must consult the appropriate agency”

This is one of a group of amendments extending Clause 2 to Wales.

22

Clause 2, page 5, line 24, leave out “sewerage” and insert “relevant”

This is one of a group of amendments extending Clause 2 so that it covers the water supply network as well as the sewerage network.

23

Clause 2, page 5, line 25, leave out “Environment Agency” and insert “appropriate agency”

This is one of a group of amendments extending Clause 2 to Wales.

24

Clause 2, page 5, line 27, leave out from “The” to “before” in line 28 and insert “appropriate agency must consult the Authority and the Minister”

This is one of a group of amendments extending Clause 2 to Wales.

25

Clause 2, page 5, line 29, at end insert—
“(7A) A pollution incident reduction plan must include, or be published with, a statement by the chief executive of the undertaker that the chief executive has personally approved the plan.”

This amendment requires a pollution incident reduction plan to be approved by the chief executive of the undertaker in question.

27

Clause 2, page 5, line 31, leave out “sewerage” and insert “relevant”

This is one of a group of amendments extending Clause 2 so that it covers the water supply network as well as the sewerage network.

28

Clause 2, page 5, line 33, at end insert—
““appropriate agency” means—
(a) the Environment Agency, in relation to relevant undertakers whose areas are wholly or mainly in England, and
(b) the NRBW, in relation to relevant undertakers whose areas are wholly or mainly in Wales;”

This is one of a group of amendments extending Clause 2 to Wales.

29

Clause 2, page 5, line 33, at end insert—
““chief executive” , in relation to an undertaker, means an employee of the undertaker who, alone or jointly with one or more others, is responsible under the immediate authority of the board of directors for the conduct of the whole of the business of the undertaker;”

This amendment defines “chief executive” for the purpose of the Minister’s amendments at page 5, line 29 and page 6, line 1.

30

Clause 2, page 5, line 36, at end insert—
““the Minister” means—
(a) the Secretary of State, in relation to relevant undertakers whose areas are wholly or mainly in England, and
(b) the Welsh Ministers, in relation to relevant undertakers whose areas are wholly or mainly in Wales;”

This is one of a group of amendments extending Clause 2 to Wales.

31

Clause 2, page 5, leave out lines 37 and 38 and insert—
““system” , in relation to a relevant undertaker, means—
(a) in the case of a water undertaker, its supply system within the meaning of Chapter 1A of Part 2 (see section 17B);
(b) in the case of a sewerage undertaker, its sewerage system within the meaning of that Chapter (see section 17BA(7)).
(10) In the case of a relevant undertaker that is both a water undertaker and a sewerage undertaker, the duty in subsection (1) is to be discharged in respect of both of its systems in a single plan.”

This is one of a group of amendments extending Clause 2 so that it covers the water supply network as well as the sewerage network.

32

Clause 2, page 5, line 38, at end insert—
“94EAA Implementation reports
(1) A relevant undertaker must, together with each pollution incident reduction plan that it publishes (except the first), publish an implementation report.
(2) An implementation report is a report containing the undertaker’s assessment of—
(a) the extent to which it succeeded in implementing the planned measures during the preceding calendar year, and
(b) to the extent that it failed to implement those measures during that year—
(i) the reasons for that failure, and
(ii) how the undertaker intends to avoid repeating that failure in respect of any measures in its current plan that are the same as, or similar to, those in respect of which the failure occurred.
(3) In subsection (2), “the planned measures”, in relation to an undertaker and a calendar year, means the measures set out in its previous pollution incident reduction plans so far as they were (according to those plans) likely to be implemented in that year.
(4) Subsections (6), (7) and (7A) of section 94EA apply in relation to implementation reports as they apply in relation to pollution incident reduction plans.”

This amendment requires water and sewerage undertakers to publish annual reports on their implementation of previous pollution incident reduction plans.

33

Clause 2, page 5, leave out lines 40 and 41 and insert—
“(1) The duties of a relevant undertaker under sections
94EA(1)
and
94EAA(1)
are enforceable by the appropriate agency.”

This amendment is consequential on the Minister’s amendments extending Clause so that it covers the water supply network, the Minister’s amendment at page 5, line 38, and the Minister’s amendments extending Clause 2 to Wales.

34

Clause 2, page 6, leave out lines 1 to 3 and insert—
“(2) If a relevant undertaker fails to comply with its duty under section
94EA(1)
or
94EAA(1)
—
(a) the undertaker commits an offence, and
(b) the chief executive of the undertaker commits an offence, subject to subsection (2A).
(2A) It is a defence for the chief executive to prove that they took all reasonable steps to avoid the failure.
(2B) A person who commits an offence under this section is liable, on summary conviction or conviction on indictment, to a fine.”

This amendment makes the chief executive of an undertaker liable if the undertaker fails to comply with the new duties about pollution incident reduction plans, unless the chief executive has taken all reasonable steps to ensure compliance.

35

Clause 2, page 6, line 4, leave out “The offence under subsection (2)” and insert “An offence under this section”

This amendment is consequential on the Minister’s previous amendment.

36

Clause 2, page 6, line 5, leave out “Environment Agency” and insert “appropriate agency”

This amendment is consequential on the Minister’s amendments extending Clause 2 to Wales.

37

Clause 2, page 6, line 6, at end insert—
“(4) Where, in deciding how to exercise its functions in relation to a relevant undertaker, the appropriate agency has regard to the record of the undertaker in complying with its legal obligations concerning pollution, it must also have regard to the record of the undertaker in implementing measures set out in its pollution incident reduction plans.”

This amendment requires the Environment Agency and the Natural Resources Body for Wales to have regard to the record of undertakers in implementing their pollution incident reduction plans when deciding how to exercise regulatory functions.

38

Clause 2, page 6, line 6, at end insert—
“(4) In this section, “appropriate agency” and “chief executive” have the meanings given by section
94EA(9)
.”

This amendment is consequential on the Minister’s amendments extending Clause 2 to Wales and the Minister’s amendment at page 6, line 1.

42

After Clause 3, insert the following new Clause—
“Nature-based solutions
In section 94A(3) of the Water Industry Act 1991 (matters to be addressed in drainage and sewerage management plans), after paragraph (e) insert—
“(ea) the use that is to be made of nature-based solutions, technologies and facilities within the undertaker’s drainage system and sewerage system,”.”

This amendment requires a sewerage undertaker’s drainage and sewerage management plan to explain the intended contribution of nature-based solutions, technologies and facilities.

48

Before Clause 8, insert the following new Clause—
“Requirement for Ofwat to have regard to climate change etc
In section 2 of the Water Industry Act 1991—
(a) after subsection (4) insert—
“(4A) In exercising or performing any such power or duty in accordance with those provisions, the Authority must also have regard to the need to contribute towards achieving compliance by the Secretary of State with the relevant environmental target duties, where the Authority considers that exercise or performance to be relevant to the making of such a contribution.
(4B) The “relevant environmental target duties” means—
(a) the duty in section 1 of the Climate Change Act 2008 (UK net zero emissions target), and
(b) so far as the exercise or performance concerned relates to appointment areas wholly or mainly in England, the duty in section 5 of the Environment Act 2021 (other environmental targets);
and for that purpose an “appointment area” is an area for which an appointment is held under Chapter 1 of Part 2.”;
(b) in each of subsections (6A), (6B) and (7), for “(4)” substitute “(4A)”.”

This new Clause requires Ofwat to have regard to the need to contribute to the achievement of Secretary of State’s targets on climate change and other environmental matters where relevant to its functions.

50

Clause 10, page 14, leave out lines 7 to 9

This amendment ensures that compliant companies in the sector are not required to render financial assistance to recover SAO losses caused by another company under special administration.

60

Clause 13, page 19, line 18, at end insert “, so far as relating to undertakers whose areas are wholly or mainly in England;”

This amendment is consequential on the Minister’s amendments extending Clause 2 to Wales.

61

Clause 13, page 19, line 20, at end insert—
“(d) section (Nature-based solutions), so far as relating to undertakers whose areas are wholly or mainly in England;”

This amendment provides for the commencement by regulations in England of the Minister’s new Clause after Clause 3.

62

Clause 13, page 19, line 20, at end insert—
“(d) section (Requirement for Ofwat to have regard to climate change etc), so far as relating to powers or duties exercised or performed in relation to appointment areas (within the meaning of the subsection (4B) inserted by the section) wholly or mainly in England.”

This amendment provides for the commencement by regulations in England of the Minister’s new Clause before Clause 8.

63

Clause 13, page 19, line 24, at end insert—
“(aa) section 2 (pollution incident reduction plans), so far as relating to undertakers whose areas are wholly or mainly in Wales;”

This amendment is consequential on the Minister’s amendments extending Clause 2 to Wales.

64

Clause 13, page 19, line 26, at end insert—
“(c) section (Nature-based solutions), so far as relating to undertakers whose areas are wholly or mainly in Wales;”

This amendment provides for the commencement by regulations in Wales of the Minister’s new Clause after Clause 3.

65

Clause 13, page 19, line 26, at end insert—
“(c) section (Requirement for Ofwat to have regard to climate change etc), so far as relating to powers or duties exercised or performed in relation to appointment areas (within the meaning of the subsection (4B) inserted by the section) wholly or mainly in Wales.”

This amendment provides for the commencement by regulations in Wales of the Minister’s new Clause before Clause 8.

Lord Roborough gives notice of his intention to oppose the Question that Clause 11 stand part of the Bill.

75A

After Clause 6, insert the following new Clause—
“Water companies: removal of enforcement undertakings
In section 50 of the Regulatory Enforcement and Sanctions Act 2008 (enforcement undertakings), after subsection (5) insert—
“(6) A regulator may not accept an enforcement undertaking from a person appointed under the Water Industry Act 1991 as water undertaker or sewerage undertaker for any area of England and Wales.””

This amendment is intended to probe the use of “enforcement undertakings” and whether they are undermining water companies being held to account for wrongdoing.

34A

Clause 2, page 5, line 12, at end insert—
“(da) the measures the undertaker intends to take or continue for the purpose of eradicating pollution incidents discharging into waterways within National Parks and the Broads by 2030,”

This amendment requires undertakers to include plans to eradicate pollution incidents within National Parks.

Lord Roborough gives notice of his intention to oppose the Question that Clause 10 stand part of the Bill.

103

After Clause 12, insert the following new Clause—
“Report on differences between provisions of this Act in England and equivalent provisions in Northern Ireland
The Secretary of State must, within 12 months of the day on which this Act is passed, lay before Parliament a report assessing any differences between the provisions made by this Act for the reduction of water pollution incidents in England and equivalent provisions for the management of such incidents in Northern Ireland.”

104

After Clause 12, insert the following new Clause—
“Nature recovery
In the Water Industry Act 1991, after section 17FB insert—
“Licence conditions about nature recovery
17FC Nature recovery
(1) It is a condition of all licences granted under section 17A (water supply licences) that relevant undertakers must give due consideration to nature-based solutions targeted at reducing flood risk, improving water quality and benefiting nature restoration in their catchment area.
(2) The Authority must not take any action that discourages or prevents a relevant undertaker from making an investment in accordance with subsection (1).””

This amendment would make it a condition of all water companies’ licences to consider nature-based solutions to flood risk, improving water quality and benefiting nature restoration in their catchment area, and prevent the regulator from discouraging or stopping such investments.

105

Clause 13, page 19, line 16, at beginning insert “subject to subsection (5A),”

This amendment, together with another in the name of Lord Sandhurst, would prevent section 4 from coming into effect until the Secretary of State has laid a justice impact test regarding the Act before Parliament.

106

Clause 13, page 19, line 21, at end insert—
“(5A) Section 4 (impeding investigations: sentencing and liability) cannot come into force until the Secretary of State has laid a justice impact test before Parliament which includes an assessment of the number of people that are expected to receive a custodial sentence due to an offence created by this Act in the—
(a) first year after the day on which it is passed, and
(b) five years after the day on which it is passed.”

This amendment would prevent section 4 from coming into effect until the Secretary of State has laid a justice impact test regarding the Act before Parliament.

69

Clause 6, page 10, line 28, leave out subsection (7)

This amendment would ensure a relevant undertaker (water company) will be able to appeal the decision of the Authority to impose an automatic fine on the grounds that exceptional circumstances apply.

70

Clause 6, page 10, line 35, at end insert—
“(8A) All fines imposed on the undertaker or its employees under this section by—
(a) the Secretary of State,
(b) the Welsh Ministers, or
(c) another relevant authority
must be gathered together and once per annum be used to reduce all customers’ bills by an equal amount per customer.
(8B) Any reduction applied under subsection (8A) must be separately disclosed within the customer’s statement of account.”

82

After Clause 7, insert the following new Clause—
“Governance structure of the Authority
After section 1A of the Water Industry Act 1991 (Water Services Regulation Authority), insert—
“1B Governance structure of the Authority
(1) The board of directors of the Authority regulating water companies must have—
(a) at least 25% of its members elected by its employees,
(b) at least 25% of its members chosen by local authorities in the water catchment area, in consultation with independent environmental and consumer groups.
(2) Every employee and bill-payer has the right to be entered on the register of the Authority.
(3) Employees as a group are entitled to a minimum of 25% of the total votes in the general meeting of the Authority.
(4) Bill-payers as a group are entitled to a minimum of 25% of the total votes in the general meeting of the Authority and, relative to one another, each employee and bill-payer has one vote.
(5) Every employee and bill-payer is entitled to cast a binding vote on remuneration of all directors.””

84

After Clause 9, insert the following new Clause—
“Removal of Regulators’ Code and statutory growth duty in respect of regulation of water and sewerage undertakers
(1) The Schedule to the Legislative and Regulatory Reform (Regulatory Functions) Order 2007 (S.I. 2007/3544) is amended as follows—
(a) in Part 1, after “Environment Agency” insert “except in so far as those functions relate to a water or sewerage undertaker appointed under the Water Industry Act 1991”;
(b) in Part 2, omit “Water Industry Act 1991”.
(2) Part 1 of the Schedule to the Economic Growth (Regulatory Functions) Order 2017 (S.I. 2017/267) is amended as follows—
(a) after “Environment Agency” insert “except in so far as those functions relate to a water or sewerage undertaker appointed under the Water Industry Act 1991”;
(b) omit from “Water Services Regulation Authority” to the end of Part 1.”

This amendment aims to remove the Environment Agency and Ofwat from the scope of the Regulators’ Code and the statutory growth duty, only when dealing with water companies.

85

After Clause 9, insert the following new Clause—
“Giving the Authority a primary duty to protect the environment
(1) Section 2 of the Water Industry Act 1991 (general duties with respect to water industry) is amended as follows.
(2) After subsection (2A)(a), insert—
“(aa) to further the environmental objective;”
(3) After subsection (2D), insert—
“(2DZA) The environmental objective mentioned in subsection (2A)(aa) above is—
(a) to protect the environment;
(b) to ensure compliance by persons engaged in commercial activities concerned with the provision of water and sewerage services with all relevant legal obligations on—
(i) sewage collection, treatment and disposal,
(ii) the abstraction of water resources, and
(iii) the conservation of biodiversity, and
(c) to contribute to meeting all relevant targets set out under the Environment Act 2021.””

This amendment aims to place a clear and unambiguous environmental duty on Ofwat.

94

After Clause 12, insert the following new Clause—
“Citizen science
(1) The Secretary of State must take steps to engage citizens regarding the monitoring of water and sewerage undertakers, as part of its regulatory efforts.
(2) This engagement must include the production of toolkits and data sharing.
(3) The Secretary of State must also consider funding citizen science projects regarding the monitoring of water and sewerage undertakers.”

This amendment would require the Secretary of State to take steps to facilitate citizen science regarding the monitoring of water companies.

95

After Clause 12, insert the following new Clause—
“Duty to consult with the Welsh Ministers on water pollution incident reduction
The Secretary of State must, within three months of the day on which this Act is passed, consult with the Welsh Ministers on the different approaches to water pollution incident reduction in Wales compared to England and lay before Parliament a report assessing any differences between the steps taken by relevant authorities in Wales to effect the reduction of water pollution incidents in Wales and equivalent steps for the management of such incidents in England.”

96

After Clause 12, insert the following new Clause—
“Report on differences between provisions of this Act in England and equivalent provisions in Scotland
The Secretary of State must, within 12 months of the day on which this Act is passed, lay before Parliament a report assessing any differences between the provisions made by this Act for the reduction of water pollution incidents in England and equivalent provisions for the management of such incidents in Scotland.”

97

After Clause 12, insert the following new Clause—
“Prohibition on bail-out of water company shareholders and creditors
(1) The Secretary of State and His Majesty’s Treasury must not directly or indirectly discharge, assume, or guarantee any debts of legal entities in any water company group subject to proceedings under section 24 of the Water Industry Act 1991 (special administration orders made on special petitions), except in accordance with subsection (2).
(2) The special administrator of a water company may reduce the debts owed by the regulated entity to its creditors by between 50 and 100 per cent, taking into account the persistence of pollution, the breaches of terms of appointment, the level of returns on capital while pollution or breaches occurred, and the priority given to returns on capital over principal duties.
(3) The prohibition set out in subsection (1) and the reduction of debts set out in subsection (2) must not include pension, wage and other obligations owed to employees, excluding any past or current member of a board of directors, within the water company group.”

This amendment aims to allow 50-100% of debts to be cancelled in the event of special administration proceedings, taking into account the seriousness of environmental breaches, excessive returns on capital, costs that creditors have already imposed on the public, and any risk-taking.

98

After Clause 12, insert the following new Clause—
“Public ownership of water companies
After section 17 of the Water Industry Act 1991 insert—
“17ZA Public ownership of undertakers
(1) The Secretary of State may by regulations made by statutory instrument make provision for the transfer of ownership of undertakers to public ownership.
(2) Regulations under this section may include provisions for—
(a) the process of transferring private water companies to public ownership;
(b) the circumstances in which water companies will be transferred to public ownership;
(c) the establishment of new public bodies to manage water services;
(d) compensation arrangements for current shareholders and bondholders;
(e) transition arrangements for employees, contracts, and ongoing operations;
(f) governance structures for publicly-owned water services, including provisions for local democratic control and accountability.
(3) Before making regulations under this section, the Secretary of State must conduct a public consultation on the proposed transfer to public ownership.
(4) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.””

99

After Clause 12, insert the following new Clause—
“Special administration for breach of environmental and other obligations
(1) Section 24 of the Water Industry Act 1991 (special administration orders made on special petitions) is amended as follows.
(2) After subsection (2)(a), insert—
“(aa) that there have been failures resulting in enforcement action from the Authority or the Environment Agency on three or more occasions to—
(i) maintain efficient and economical water supply,
(ii) improve mains for the flow of clean water,
(iii) provide sewerage systems that are effectually drained,
(iv) comply with the terms of its licence, or
(v) abide by anti-pollution duties in the Environmental Protection Act 1990, Water Resources Act 1991, or the Environmental Permitting (England and Wales) Regulations 2016;”
(3) After subsection (2), insert—
“(2A) In support of an application made by virtue of subsection (1)(a) in relation to subsection (2)(aa), the Secretary of State must compile and present to the High Court records of—
(a) water pipe leaks,
(b) sewage spilled into waterways, bathing waters, and private properties, and
(c) falling below international standards of effective water management.””

This amendment aims to require the Secretary of State to place a water company into special administration arrangements if they breach certain environmental or other conditions.

100

After Clause 12, insert the following new Clause—
“Governance structure of water companies
After section 10 of the Water Industry Act 1991 insert—
“10A Governance structure of undertakers
(1) The board of directors of a water or sewerage undertaker, and any parent or holding company, must have—
(a) at least one third of its members elected by the employees of the company or group,
(b) at least one sixth of its members chosen by local authorities in the water catchment area, in consultation with independent environmental and consumer groups.
(2) Employees as a group are entitled to a minimum of one third of the total votes in a general meeting of the company.
(3) Bill-payers as a group are entitled to a minimum of one sixth of the total votes in the general meeting of the company.
(4) The Secretary of State may by regulations made by statutory instrument increase the proportion of directors in subsection (1) that are elected by employees to one half, and chosen by local authorities to one quarter, and must raise the proportion of votes in the meeting in subsections (2) and (3) accordingly.
(5) A statutory instrument containing regulations under subsection (4) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””

This amendment aims to require representatives of employees and the public to sit on the boards of water companies.

101

After Clause 12, insert the following new Clause—
“Authorisation of dividends
After section 35A of the Water Industry Act 1991 insert—
“Authorisation of dividends
(1) The Authority shall approve any payment of dividends before they are paid by an undertaker.
(2) The Authority must not approve a payment under subsection (1) unless the undertaker has published complete details of its distributable reserves, and demonstrated that its operations have generated sufficient surplus cash to cover the payment after meeting its day-to-day expenses, liabilities and planned investment.
(3) The Authority must not approve a payment under subsection (1) without the consent of the employees and customers of the water company.””

This amendment aims to give the Authority the power to curb excessive dividends and empower stakeholders to object to dividend payments.

102

After Clause 12, insert the following new Clause—
“Special administration: criminal convictions
In section 24 of the Water Industry Act 1991 (special administration orders made on special petitions), after subsection (2)(e) insert—
“(f) that the company has been the recipient of two or more criminal convictions in a five-year period.””

This amendment aims to exert pressure on companies to operate within the law by preventing water companies with numerous criminal convictions from remaining in business.

29

After Clause 1, insert the following new Clause—
“Prohibition of possible conflicts of interest
(1) The Water Industry Act 1991 is amended as follows.
(2) After section 35D (inserted by section 1 of this Act), insert—
“35E Prohibition of possible conflicts of interest
(1) An employee, director or advisor of the Authority, or the Secretary of State, may not—
(a) take any employment, directorship, commercial opportunity, or other significant transactional relationship with any regulated water company, or connected party, or
(b) accept gifts of any amount,
that could produce the appearance of a conflict of interest.
(2) A connected party under subsection (1)(a) includes a shareholder, significant creditor, or other entity with a significant transactional relationship with a regulated water company.””

The amendment seeks to enhance independence of the regulator.

33

[Withdrawn]
Clause 2, page 5, line 12, at end insert—
“(da) the measures the undertaker intends to take or continue for the purpose of eradicating pollution incidents discharging into waterways within National Parks and the Broads by 2030,”

This amendment requires undertakers to include plans to eradicate pollution incidents within National Parks.

4

Clause 1, page 1, line 14, leave out “persons holding senior roles” and insert “all executive and non-executive members of the board of directors”

This amendment seeks to confirm that all members of the board are held to account, in a way consistent with company law, and to remove any ambiguity in the Bill about what constitutes a senior role.

45

Clause 3, page 6, line 18, at end insert—
“(e) whether emerging contaminants were present, including but not limited to per- and poly-fluoroalkyl substances and microplastics, in the discharge.”

5

Clause 1, page 1, line 15, leave out “performance-related pay” and insert “total remuneration”

The amendment seeks to strengthen the Bill by focusing on total remuneration, regardless of the form.

48

Clause 3, page 6, line 26, at end insert—
“(c) be published on the undertaker’s website.”

50

Clause 3, page 6, leave out lines 32 to 35

51

Clause 3, page 8, line 6, at end insert—
“141H Emergency overflow permit restriction
An environmental permit to allow an emergency overflow may not be granted to a sewerage undertaker solely for the reason of an electrical power failure at sewage disposal works.”

This amendment seeks to prevent the granting of permits which allow emergency overflows in the case of electrical power failures at sewage disposal works.

52

Clause 3, page 8, line 6, at end insert—
“141H Monitoring of river health after emergency overflows
(1) Where there is a discharge from an emergency overflow of a sewerage undertaker into inland waters, the undertaker must regularly assess the environmental health of that inland water within 500 metres downstream of the overflow.
(2) The methods used to make assessments under subsection (1) must include the use of fish counters or other methods of accurately monitoring the fish population.
(3) The undertaker must prepare a report on the results of these assessments on a quarterly basis and submit this report to the Authority.
(4) The undertaker must publish this report within 30 days after it has submitted it to the Authority.
(5) The information must—
(a) be in a form which allows the public to readily understand it,
(b) be published in a way which makes it readily accessible to the public, and
(c) be published on the undertaker’s website.”

58

After Clause 3, insert the following new Clause—
“Monitoring quality of water potentially affected by discharges
(1) Section 141DB of the Water Industry Act 1991 (monitoring quality of water potentially affected by discharges from storm overflows and sewage disposal works) is amended as follows.
(2) In subsection (1) for “A sewerage undertaker whose area is wholly or mainly in England” substitute “The Environment Agency”.
(3) For subsection (2) substitute—
“(2) The assets referred to in subsection (1) are—
(a) any storm overflow operated by a sewerage undertaker, and
(b) any sewage disposal works comprised in the sewerage system of a sewerage undertaker,
where the storm overflow or works discharge into a watercourse.”
(4) For subsections (4) to (7) substitute—
“(4) The Environment Agency must publish online the data obtained as a result of the monitoring under subsection (1) in as close to real time as is practicable.””

59

After Clause 3, insert the following new Clause—
“Environmental permits: monitoring requirements: sewerage undertakers
(1) The Environmental Permitting Regulations 2016 are amended as follows.
(2) In regulation 34 (Review of environmental permits and inspection of regulated facilities), after subsection (1) insert—
“(1A) By 31 December 2027 the regulator must amend or modify any existing environmental permit that relates to the discharge of treated effluent, storm sewage or emergency sewage by a sewerage undertaker to include conditions that—
(a) ensure the independent, continuous volumetric and qualitative monitoring of all discharges, such qualitative monitoring to be as against such determinants as the regulator shall deem necessary;
(b) require the real time online publication of all data generated by the monitoring under paragraph (a); and
(c) detail the method of assessment of compliance with the permit as against the monitoring under paragraph (a).””

60

Clause 4, page 8, line 29, leave out “2 years” and insert “12 months”

This amendment will prevent those convicted of an offence under this section from being sentenced to a custodial sentence of more than 12 months.

61

Clause 4, page 8, line 37, leave out “or connivance”

This amendment will prevent the relevant officers from being guilty of an offence for “connivance”.

21

Clause 1, page 2, line 41, leave out from “of” to second “of” in line 42 and insert “consumer and environmental interests to be members of panels”

This amendment seeks to remove reference to boards or committees (which may represent sectional interests) and improve panels through the appointment of specialist consumer and environmental representation.

62

Clause 4, page 9, line 5, leave out paragraph (c)

This amendment prevents the definition of “relevant officer” from including those who merely purport to be officers of a water company.

23

Clause 1, page 2, line 42, at end insert—
“(6A) The chief executive of a relevant undertaker must have regular meetings with any such panels.”

This amendment seeks to ensure that the chief executive of a relevant undertaker must have regular meetings with any consumer and environmental panels.

63

Clause 4, page 9, line 6, at end insert—
“(5K) The water undertaker or sewerage undertaker must provide relevant officers under subsection (5J) with mandatory training on subsection (3E) and how it relates to their powers and duties described in subsection (3D).”

This amendment seeks to ensure that relevant officers receive training from the undertaker on the penalties for offences related to impeding investigation by environmental regulators, as well as how these offences relate to their powers and duties as undertakers.

64

Clause 4, page 9, line 6, at end insert—
“(5K) The water undertaker or sewerage undertaker must publish clear guidance for employees on offences under this section and provide all employees with annual mandatory training on these offences.”

This amendment seeks to ensure that the undertaker must make employees aware of offences relating to impeding investigation by environmental regulators and provide employees with regular training on these offences.

65

Clause 4, page 9, line 7, leave out subsection (2)

This amendment would prevent an individual guilty of impeding an investigation by the drinking water inspector from receiving a custodial sentence.

25

Clause 1, page 3, line 40, at end insert—
“(3A) Rules issued under section 35B must be made by regulations made by statutory instrument, and may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This amendment aims to ensure rules made by the Authority can be scrutinised by Parliament.

67

Clause 5, page 9, line 43, at end insert—
“(4A) Where the relevant offence is—
(a) triable summarily (whether or not it is also triable on indictment), and
(b) punishable on summary conviction by a fine (whether or not it is also punishable by a term of imprisonment),
the amount of the variable monetary penalty may not exceed the maximum amount of that fine.”

This amendment would limit the level of any fine under this section to the levels set out in the 2008 Act.

19

Clause 1, page 2, line 39, at end insert—
“(5A) Rules made for the purposes of determining standards of fitness and propriety mentioned in subsection (2)(b) must include criteria that help the undertaker to assess—
(a) whether persons have the knowledge, skills and experience to perform the specific role that they are intended to perform;
(b) whether, in assessing a candidate for a position within the management body of the undertaker, the management body as a collective possesses adequate knowledge, skills and experience to understand the undertaker’s activities;
(c) how relevant and important any matters which suggest a person might not be fit and proper are;
(d) whether appointed persons on temporary absence continue to meet the standards of fitness and propriety.
(5B) The criteria in subsection (5A) are to be treated as guidance and may be applied in general terms when the undertaker is determining a person’s fitness and propriety.”

66

Clause 4, page 9, line 16, leave out “2 years” and insert “12 months”

This amendment will prevent those convicted of an offence under this section from being sentenced to a custodial sentence of more than 12 months.

27

Clause 1, page 4, line 25, at end insert—
“(5) The first rules issued under section 35B of the Water Industry Act 1991 (as inserted by subsection (3)) must be published by the Authority within six months of this Act coming into force and provided to the Secretary of State and do not take effect until the Secretary of State has laid regulations made by statutory instrument to bring them into effect.
(6) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

86

Clause 10, page 13, leave out lines 38 to 40

This amendment ensures that compliant companies in the sector are not required to render financial assistance to recover losses.

88

After Clause 12, insert the following new Clause—
“Duty to comply with water main requisition
In section 41 of the Water Industry Act 1991 (duty to comply with water main requisition), after subsection (4) insert—
“(4A) The duty to provide water under this section shall not apply to provision for a proposed new development where the water undertaker has notified the developer and the planning authority that—
(a) it does not have sufficient water resources available, or
(b) it believes that the provision of water to the new proposed development would be likely to lead to unacceptable damage being caused to a protected site.””

90

After Clause 12, insert the following new Clause—
“Water resources management plans: general duty
After section 37C of the Water Industry Act 1991 (water resources management plans: provision of information), insert the following new section—
“37CA Water resources management plans: general duty
(1) It shall be the duty of every water undertaker to carry out the long-term measures for water resources provision included in any of its water resources management plans.
(2) A water undertaker shall publish interim reports every six months on all projects and schemes listed in any of its water resources management plans.
(3) The duties of a water undertaker under this section shall be enforceable under section 18 (orders for securing compliance with certain provisions)—
(a) by the Secretary of State, or
(b) with the consent of or in accordance with a general authorisation given by the Secretary of State, by the Director.””

93

After Clause 12, insert the following new Clause—
“Review: water re-use and existing regulations
(1) Within twelve months of the day on which this Act is passed, the Secretary of State must publish a review of the impact of existing regulations related to water wholesomeness on water companies’ ability to encourage water re-use.
(2) A report on the findings of the review must be laid before Parliament.”

This amendment reviews the effect of existing regulations on water wholesomeness as it is currently excluded from the responsibility of water companies to encourage water efficiency measures such as use of grey water, reuse of water from a shower and other such water efficiency measures as they are not covered by the definition of wholesome water.

34

Clause 2, page 5, line 12, after “incidents” insert “including natural flood prevention solutions”

This amendment, and another in the name of Baroness McIntosh of Pickering, would require consideration of opportunities to retain water through natural solutions to prevent sewage mixing in combined sewers with excess rainfall, causing pollution incidents.

38

Clause 2, page 5, line 29, at end insert—
“(7A) Before preparing a pollution incident reduction plan, a sewerage undertaker must consult with farmers, local authorities and others to identify natural flood prevention solutions to prevent pollution incidents.”

This amendment, and another in the name of Baroness McIntosh of Pickering, would require consideration of opportunities to retain water through natural solutions to prevent sewage mixing in combined sewers with excess rainfall, causing pollution incidents.

41

Clause 2, page 6, line 6, at end insert—
“(4) Within 10 days of the end of a sewerage undertaker’s financial year end, the undertaker must report to the Authority its performance against this plan.
(5) Within a further 20 days the Authority must approve or seek amendment to this performance report.
(6) The sewerage undertaker’s annual report and accounts must include a summary of its performance against this plan as well as the Authority’s statement on the report.
(7) The plan, the annual performance report and the Authority’s statement must be published on the sewerage undertaker’s website annually.”

This amendment requires water companies to report progress against their pollution incident reduction plans annually and include this report in their annual report as well as publishing it on their website.

1

Before Clause 1, insert the following new Clause—
“Purpose
(1) The purpose of this Act is to put in place measures to address river pollution by water companies and water and sewerage companies.
(2) The Secretary of State and, as the case may be, the Water Services Regulation Authority must have regard to the purpose set out in subsection (1) in implementing the provisions of this Act, and in doing so must also have regard to—
(a) the need to meet the biodiversity targets set under sections 1 (environmental targets) and 3 (environmental targets: species abundance) of the Environment Act 2021, and
(b) the current or predicted impacts of climate change identified in the most recent report under section 56 of the Climate Change Act 2008 (report on impact of climate change).”

42

Clause 2, page 6, line 6, at end insert—
“(4) The sewerage undertaker must complete a quarterly self-assessment of its performance against this plan and lay it before the Authority within 10 days of the end of each quarter. Once the Authority has accepted the self-assessment, the sewerage undertaker must publish it on its website.”

This amendment requires water companies to produce a quarterly self-assessment of their progress against their pollution incident reduction plans and publish these reports.

3

Clause 1, page 1, line 11, at end insert—
“(1A) While meeting its obligations under subsection (2), the Authority must only exercise the power in subsection (1)(a) to the extent that it considers it necessary to prevent a relevant undertaker from giving renumeration in a way which conflicts with section 2 of the Water Industry Act 1991 (General duties with respect to water industry).
(1B) When exercising its powers under subsection (1)(a) to make rules, the Authority must have regard to the need for a relevant undertaker to—
(a) attract the investment required for its capital programme, and
(b) attract, motivate and retain persons holding senior roles.”

This amendment clarifies that Ofwat’s powers under this clause cannot be exercised in a way which conflicts with its general duties with respect to the water industry and emphasises that the industry’s capital and human resources needs are critically important.

44

Clause 3, page 6, line 18, at end insert—
“(e) the volume and type of discharge,
(f) an explanation of why the discharge happened,
(g) how the discharge is being mitigated and a recurrence prevented.”

46

Clause 3, page 6, line 21, at end insert—
“(2A) Where information in subsection (1)(e) to (g) is not available within an hour of the discharge ending, a timeline for provision of the information on subsection (1)(e) to (g) must be published at the same time as that for subsection (1)(d).”

49

Clause 3, page 6, line 26, insert—
“(3A) The information must be published on the website of the undertaker and simultaneously sent to the Authority, which must then provide for timely posting of discharge information from all undertakers in one readily accessible place on its own website.”

This amendment would ensure that certain information is more readily accessible, including in a single and coordinated location for the public and civil society to access in as near to real time as practicable.

10

Clause 1, page 2, line 3, at end insert—
“(d) requiring a relevant undertaker to assess and report regularly to the Authority on actual or planned financial structuring of the undertaker, including debt levels, coverage of the associated commercial strategy and any associated risks.”

The amendment requires that financial engineering becomes a regular focus area for timely reporting in order to assist in regulators’ understanding and alert them in good time to risks or distortions.

13

Clause 1, page 2, line 12, after “appropriate” insert “including in respect of the financial structuring or restructuring of the undertaker’s finances where these enable rewards to investors or employees of the undertaker rather than investing on the behalf of consumers and the sustainability of the undertaking”

The amendment enables the Authority to set out standards and guardrails with regard to structuring – for example debt levels or transfers to parent companies – and the transparent reporting of these to prevent unsustainable financial practices.

14

Clause 1, page 2, leave out lines 17 to 19

This amendment prevents the new rules from overriding existing employment contracts.

15

Clause 1, page 2, leave out lines 20 to 22

This amendment prevents the new rules from overriding retroactive deprivation performance-related pay.

55

After Clause 3, insert the following new Clause—
“Environmental duties with respect to national parks
After section 4 of the Water Industry Act 1991 insert—
“4A Environmental duties with respect to national parks
(1) Where a relevant undertaker operates, or has any effect, on land within national parks or the Broads, that undertaker must—
(a) secure and maintain ‘high ecological status’ in the water in these areas by 2028;
(b) further the conservation and enhancement of wildlife and natural beauty;
(c) improve every storm overflow that discharges within these areas by 2028;
(d) reduce the load of total phosphorus discharged into freshwaters within these areas from relevant discharges by 2028 to at least 90% lower than the baseline as defined in Regulation 13(1) of the Waste Water Targets set under the Environment Targets (Water) (England) Regulations 2023.
(2) A relevant undertaker must be put into special administration, and not be eligible for a further licence, if it fails to—
(a) demonstrate adequate progress each year;
(b) meet the targets in subsection (1).
(3) Within one year of the day on which the Water (Special Measures) Act 2024 is passed, the Secretary of State must lay a report on the undertakers’ implementation of the environmental duties in subsections (1) and (2) before Parliament.
(4) Following the first report being published under subsection (3), a progress report on implementation must be included in the annual environment improvement plan, issued under section 8 of the Environment Act 2021.
(5) The Secretary of State must by regulations make provision requiring an undertaker to achieve bespoke objectives for specific iconic and the most culturally and ecologically significant waterways, including, where appropriate, complete removal of sewage discharge from the undertaker’s infrastructure.
(6) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(7) In this section—
“the Broads” has the same meaning as in the Norfolk and Suffolk Broads Act 1988;
“land” includes rivers, lakes, streams, estuarine and other waterways;
“High Ecological Status” means the classification of water bodies defined in Regulation 6 of The Water Environment (Water Framework Directive) (England and Wales) Regulations 2017.””

This amendment would require water companies to adhere to and deliver stronger environmental objectives and duties within National Parks and the Broads, so as to protect waters across National Parks from sewage. The amendment would give the Secretary of State regulation-making power to extend protections to specific bodies of water, such as Lake Windermere.

56

After Clause 3, insert the following new Clause—
“Review of environmental permits
(1) The Environmental Permitting (England and Wales) Regulations 2016 are amended as follows.
(2) In Regulation 34, remove (1) and insert—
“(1A) The regulator must review environmental permits held by a person appointed under the Water Industry Act 1991 as water undertaker or sewerage undertaker for any area of England and Wales at least once every five years in order to ensure those permits—
(a) contain conditions to incorporate all relevant legal obligations on such persons with respect to sewage treatment and disposal including but not limited to those specified in the Water Industry Act 1991, and
(b) contribute to achieving all relevant targets set out under the Environment Act 2021.””

This amendment would require the Environment Agency to review environment permits applying to water and sewage companies every five years, rather than “periodically” as regulations currently dictate.

16

Clause 1, page 2, line 22, at end insert—
“(3A) The Authority must arrange quarterly meetings attended by its own representatives, civil society organisations, the Environment Agency and water companies, and must ensure that—
(a) the meeting provides regular, recorded feedback from civil society to regulators and water companies on water and water-related environment issues,
(b) the meetings feed into priorities and timelines for specific action,
(c) it reviews progress against actions agreed at previous meetings,
(d) it circulates the Agenda in advance, and Minutes of each meeting, including actions agreed, are on the Authority’s website within 10 calendar days of each meeting, and
(e) it provides up-to-date contact details of a named contact responsible for the meetings.”

This amendment will oblige regulators and water companies to engage formally with civil society and to record transparently feedback, agreed actions and performance outcomes.

57

After Clause 3, insert the following new Clause—
“Reporting of impact on pollution
(1) The Secretary of State must publish an assessment of the expected impact of the Act on the overall level of pollution caused by the activities of sewerage undertakers within 3 months of the Act coming into force.
(2) The Secretary of State must publish an assessment of the actual impact of the Act on the overall level of pollution caused by the activities of sewerage undertakers within 3 years of the Act coming into force.”

This amendment requires the Government to publish their expectations of the impact of the Act on pollution and the actual impact of the Act 3 years after it comes into force.

17

Clause 1, page 2, line 24, after “payment,” insert “share award, restricted stock award, share option award,”

18

Clause 1, page 2, leave out lines 38 and 39

This amendment ensures that the rules about remuneration do not extend to individuals below board level.

22

Clause 1, page 2, line 42, at end insert—
“(6A) The decision on whether such persons sit on a board, committee or panel is for the relevant undertaker to make.”

This amendment ensures that it is boards of water companies, rather than Ofwat, who decide which forum (boards, committees or panels) best suits their own requirements.

26

Clause 1, page 4, line 25, leave out “2024” and insert “2025”

This amendment ensures that the provisions about performance-related pay do not have retroactive effect.

Clause 2, page 5, line 12, after “incidents” insert “including pollution incidents discharging into waterways within National Parks and the Broads by by 2030"

71

Clause 6, page 11, line 9, at end insert—
“(11) Section 5(6) also applies for the purposes of this section.”

This amendment provides that Clause 6 applies to water supply and sewerage licensees only in relation to their licensed activities.

75

After Clause 6, insert the following new Clause—
“Overflows: sanction exception
In section 19 of the Water Industry Act 1991 (exemptions to duty to enforce), after subsection (1)(a) insert—
“(aza) that the contravention arose from waste materials being deposited into the water system by consumers;””

This amendment is intended to probe whether provision additional to section 19(1)(aa) of the Water Industry Act 1991 is needed to exempt water companies from sanctions where an emergency overflow results from cooking fat, wet wipes etc.

76

Clause 7, page 11, line 25, leave out from “if” to end of line 28 and insert “—
(a) it is held by a water undertaker or sewerage undertaker, or
(b) it is held by a water supply licensee or sewerage licensee, within the meaning of the Water Industry Act 1991, for the purposes of the activities to which its water supply licence or sewerage licence relates;”

This amendment provides that Clause 7 applies to water supply and sewerage licensees only in relation to their licensed activities.

77

Clause 7, page 11, line 29, leave out “a reference to such licences includes those” and insert “regulations under this section may apply to water industry licences”

This amendment is consequential on the Minister’s previous amendment.

83

Clause 8, page 12, line 32, at end insert—
“but, in relation to water supply licensees and sewerage licensees, includes those functions only so far as performed in respect of the activities to which their licences relate.””

This amendment provides that Clause 8 applies to water supply and sewerage licensees only in relation to their licensed activities.

89

After Clause 12, insert the following new Clause—
“Form and contents of licences
(1) The Water Resources Act 1991 is amended as follows.
(2) In section 46 (form and contents of licences), after subsection (7) insert—
“(8) All licences granted to water undertakers for the abstraction of water from surface or groundwater sources must include a condition requiring the continuous measurement or monitoring of volumes abstracted.
(9) The information required under subsection (8) must be made publicly available at all times and should be published online in real time.
(10) For those licences which precede the coming into force of subsections (8) and (9), the measures in those subsections will be required when the licence comes under review or by 31 December 2027, whichever is the earlier.”
(3) In section 197 (provision of information about water flow etc.), after subsection (2) insert—
“(2A) It shall be the duty of every water undertaker to publish in real time the flow and abstraction volume data for every abstraction licence that relates to abstractions from rivers.””

91

After Clause 12, insert the following new Clause—
“Climate change and nature duty
After section 2(2A) of the Water Industry Act 1991 (general duties with respect to the water industry) insert—
“(2AA) In exercising and performing the powers and duties mentioned in subsection (1) above, the Secretary of State or, as the case may be, the Authority must take all reasonable steps to contribute to—
(a) the achievement of biodiversity targets set under sections 1 to 3 of the Environment Act 2021,
(b) the achievement of targets set under Part 1 of the Climate Change Act 2008 (carbon target and budgeting), and
(c) adapting to current or predicted impacts of climate change identified in the most recent report under section 56 of the Climate Change Act 2008 (report on impact of climate change).””

This amendment would give Ofwat a new climate change and nature duty requiring it to take all reasonable steps to contribute to the achievement of the Climate Change Act 2008 and Environment Act 2021 targets in exercising its functions regulating water companies.