Sewage Disposal in Rivers and Coastal Waters
(2 years, 5 months ago)
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Lord Oates
To move that this House takes note of the impact of the current sewage disposal rates in rivers and coastal waters and the responsibility of water companies to alleviate these impacts.
Lord Oates (LD)
My Lords, in opening this debate I pay tribute to those who have done so much to highlight the scandal of raw sewage discharges into our lakes and rivers and on to our beaches, particularly Feargal Sharkey, whose tireless campaigning, alongside thousands of people up and down our country, has kept the issue in the headlines and the pressure on the water companies and the Government.
I also acknowledge the role of the national and local media in bringing these issues to public attention, the efforts of the noble Duke, the Duke of Wellington, and Peers from across the House, and their leadership on this issue during the debates on the Environment Act and subsequently. Most of all, I pay heartfelt tribute to my late and greatly missed noble friend Lord Chidgey, whose passionate advocacy for the protection of our precious chalk streams was an inspiration to me and to so many others.
I suppose that we cannot blame colleagues if they are somewhat distracted from today’s debate by the farcical Conservative psychodrama playing out up the road in Downing Street. Some may feel that it could not be more appropriate that we are discussing the subject of sewage disposal today. Certainly, it is instructive to note that in the scandal of our polluted waterways also lies the story of a failure of leadership of both government and corporations—a story in which private interests have been put ahead of the public interest, and institutional failure has led to a collapse in public confidence.
The scale of the sewage crisis afflicting our rivers and coastal waterways is staggering to comprehend. In 2021, the water companies were responsible for 368,966 spills, during which raw sewage and untreated wastewater was dumped into aquatic environments for a total of 2,650,290 hours. Even those staggering figures are an underestimate, because over a quarter of storm overflows had no monitors or monitors that were faulty or non-functioning.
This is having a devastating impact on nature. England is home to 85% of the earth’s chalk streams—rare and precious habitats that the Government and water companies should surely recognise they have a particular duty to protect. Instead, they are allowing them to be devastated by raw sewage outflows. My late noble friend Lord Chidgey raised this issue during our scrutiny of the Environment Act, highlighting
“the deterioration of our chalk streams through appalling neglect, to the extent that many see streams’ diverse ecosystems under severe threat to their very survival.”—[Official Report, 13/9/21; col. 1193.]
He talked about his work with organisations across the south-east of England, and from Hertfordshire to the north to Kent in the east and Dorset in the west. These organisations represent thousands of people who are all deeply concerned about the threats to our unique chalk streams.
I am lucky enough to live about a mile away from the Hogsmill river, one of those rare and precious chalk streams in south-west London. On 26 May last year, Judge Francis Sheridan fined Thames Water £4 million for what he described as the “utterly disgusting” pollution caused by Thames Water when untreated sewage was discharged into the Hogsmill river and a local park. The discharge occurred because of a night-time power failure at the local sewage works. Over a period of five hours almost 50 alarms went off, which should have immediately led to an engineer being sent to the treatment works to fix the problem—but every one of those alarms went unchecked and ignored. As a result, 79 million litres of sludge escaped, which took 30 people over a month to clean up and caused huge damage to local wildlife and much distress to the local community,
Although the power failure may not have been the water company’s fault, the lack of investment in back-up generation and the company’s failure to respond to the alarms most certainly was. The judge in this case was no stranger to Thames Water’s record of polluting waterways. Earlier in 2021, he fined it £2.3 million for equipment failures at a sewage treatment plant in Oxfordshire in 2016, which killed thousands of fish and other water life. Four years earlier, Thames Water was prosecuted for illegally allowing huge amounts of untreated sewage to enter the Thames in Buckinghamshire and Oxfordshire in 2013 and 2014. Judge Sheridan found that Thames Water had demonstrated
“a continual failure to report incidents”,
which he described as
“a shocking and disgraceful state of affairs”.
Although the judge imposed a record-breaking £20 million fine, this represented just two weeks of Thames Water’s profits at the time.
Of course, Thames Water is not alone in discharging raw sewage into our rivers and coastal waters. Every water company does it, and indeed much of the huge volume of untreated wastewater and raw sewage that they discharge is done so perfectly legally, despite its devastating impact on the environment. As the summer holidays approach and people head to the beach, parents will be horrified to learn of the level of discharges into our coastal waters. Last year, the water companies were collectively responsible for 24,822 spills into the sea over a period of 161,623 hours, including one spill on to Ilfracombe Wildersmouth beach by South West Water that lasted 1,883 hours, and a spill by United Utilities at Morecambe that lasted a breathtaking 5,352 hours.
Of course, many contributing factors and actors have led to this appalling state of affairs in both coastal and inland waters, but the water companies cannot escape their central share of the blame. Their failure to invest sufficiently in reducing these outflows comes at the same time as having paid eye-watering sums in pay and bonuses to their senior executives. Anglian Water, responsible for 21,351 spills lasting a total of 194,594 hours in 2021, provided a total remuneration package to its chief executive of more than £2 million—nearly 100 times the pay of one of its meter technicians. Northumbrian Water, responsible for 220,560 hours of discharges, provided more modest remuneration—a mere £628,000—but this was still more than 20 times the starting salary of one of its wastewater production operators. Severn Trent, responsible for 461,135 hours of discharges, provided remuneration of more than £2.8 million to its CEO—again, more than 100 times the starting salary of one of its water treatment operatives. Southern Water: 160,984 hours of discharges; remuneration to CEO, more than £1 million. South West Water: 351,875 hours of discharges; remuneration to CEO, £863,000. Thames Water: 163,000 hours of discharges; remuneration to CEO, £1.2 million. United Utilities, responsible for 540,000 hours of discharges, including that 5,000-hour spill at Morecambe: remuneration to CEO, £2.9 million—112 times the pay of one of its process operators. Wessex Water: 151,258 hours of discharges; CEO remuneration, £520,000. Finally, Yorkshire Water: 406,000 hours of discharges; total remuneration for the CEO, more than £1.3 million.
In total, water company executives have paid themselves nearly £27 million in bonuses over the past two years, while pumping sewage into waterways 1,000 times a day. The greed is gobsmacking, the multiples of their salary over that of crucial employees shocking, and the disparity between their renumeration and performance regarding our natural environment utterly staggering. By way of comparison, the chief executive of NHS England is paid somewhere in the region of £260,000 to run an organisation with a turnover in excess of £130 billion. The largest of these water companies, by contrast, has a total annual revenue of around £2 billion. This is of course part of a much wider scandal of excessive corporate pay and ever-increasing pay differentials between top executives and the staff they employ. It is particularly jarring that such rewards are being provided at companies that daily pollute our rivers and marine environment.
At the heart of this scandal is not only a failure of leadership in the private sector, but a failure of government. The institutions charged with enforcing environmental protection go underresourced and targets for improvements are unambitious—and all the while developers continue to have a legal right to connect wastewater to the system, regardless of its constraints, instead of the Government imposing tough requirements on sustainable urban drainage. The Government need to get a grip and they should start by showing a red card to water company bosses and adopting Liberal Democrat plans for a sewage bonus ban, which would stop water company executives being paid a penny in bonuses until our waterways are protected from sewage dumps.
The public have had enough of their rivers, lakes and coastal waters being despoiled by a mixture of government inaction, regulatory failure and corporate irresponsibility and greed. It is well past time for the Government and their agencies to act decisively and bring an end to this sewage scandal.
Baroness Altmann (Con)
My Lords, I thank the noble Lord, Lord Oates, for securing this debate and for the excellent and comprehensive way that he has set the scene, listing the litany of disgraceful discharges and highlighting the prioritising of dividends, profits and shareholder interests above public safety. I have no problem with companies making profits or paying bonuses or high salaries, but not when they do so by behaving irresponsibly. I thank Surfers Against Sewage, River Action and the Rivers Trust for their helpful briefings. I will have some questions for my noble friend at the end, but I just briefly make a few, and I hope important, remarks.
Untreated human sewage is, as the noble Lord, Lord Oates, said, being regularly discharged by water companies into rivers and coastal sea bathing waters—not just routinely but in a way that has been, for far too long, unregulated and not even properly monitored. I am pleased to see the recent changes in legislation, with water companies being required to take their obligations to avoid dumping sewage into our waters far more seriously, and the latest pronouncements from the regulator Ofwat that it will require greater investment in sewage treatment and wastewater treatment.
Noble Lords across the House can be proud of the amendments that we managed to secure in the passage of the Environment Act. I see my noble friend the Duke of Wellington in his place; he was so instrumental in driving forward the cross-party agreements. I thank my noble friend, and I thank the Government for accepting those. It is a great start, but we clearly and urgently need further action to halt this decline in water standards, both for the health of the aquatic ecosystem and, of course, to prevent poor quality water reaching our drinking water.
Indeed, the issue is also a real threat to the health of citizens or visitors who either live near, or swim in—or want to swim in—our rivers or seas. In January 2022, the Environmental Audit Committee said in its report that
“it is vital that the public can trust regulators to ensure … high levels of water quality in rivers”.
The committee also confirmed that placing a new statutory duty on water companies, to secure a progressive reduction in the adverse impact of discharges from their storm overflows, is a positive step. It recommended that the Government should ensure that the Environment Agency set “specific targets and timetables” for water companies’ statutory drainage and sewage management plans, and also said that Ofwat must prioritise long-term investments, such as storm overflows, in its price review process, especially championing the idea of nature-based solutions—quite right too. The actions of many of our water companies are truly shameful and investment is long overdue, with the fines for illegal sewage discharges often seen as an acceptable cost of doing business, rather than a shameful example of corporate behaviour.
I focus on the fact that it is not just human sewage disposal causing problems. A considerable element of the pollution is caused by agricultural sewage, often from factory farms whose effluent contains antibiotic-resistant bacteria, caused by the overuse of antibiotics in these farms’ intensive livestock rearing. Sewage and wastewater affect 36% of water bodies, and urban diffuse pollution affects 18%. Consequently, our rivers are now failing quality tests due to not just human sewage, but agricultural, or some element of industrial, pollution. We need to address both the human and agricultural sewage discharges. Some 26,000 tonnes of phosphorous ends up in UK waters each year, and the Environment Agency found that agricultural run-off was responsible for 40% of the damage to waterways. So even if we reduced or eliminated all the water companies’ sewage discharges, there would still be a significant problem of pollution in our waterways.
I have three questions for my noble friend. First, will the Government set an overall target for restoration of water quality in our rivers to include both human and other elements of sewage and other pollution? Will the Government accept the need to ban flushable wet wipes, which all the water companies agree are a considerable problem in causing some of these overflows? Finally, will the Government strengthen the proposed target of just a 40% reduction in agricultural pollution of our rivers by 2037?
The Deputy Speaker (Lord Brougham and Vaux) (Con)
My Lords, the noble Lord, Lord Campbell-Savours, will be contributing remotely. I invite him to speak.
Lord Campbell-Savours (Lab) [V]
My Lords, those last three questions from the noble Baroness are very relevant to this debate, and I hope the Minister is able to answer her in the normal way.
I thank the noble Lord, Lord Oates, for introducing this important debate. For me, it is particularly interesting, as for much of my life I have lived in Keswick in the Lake District, an area greatly damaged by environmental events and climate change. I recount the story of when, as a boy, I would stand as part of a crowd on the deck side counting the salmon leaping as they fought their way up and over the waterfall on the River Greta in Fitz Park in Keswick. I have not seen salmon there for years. I recall that it was the same on the River Cocker in Cockermouth and on the Derwent as it flows into Workington. I put it all down to climate change and environmental damage, again including flooding.
Over the years, I have found myself repeatedly in conflict with the water industry, in particular with the former North West Water, primarily over that flooding but also with the Environment Agency over algae blooms. As a local MP, I secured improvements to Keswick sewage works, which was contaminating Bassenthwaite Lake, but problems remain in the Lake District with algae blooms proliferating in a number of areas, including lakes.
The water industry carries a workforce which employs some of the finest and most experienced environmentalists in the land, but its expenditure programmes rarely reflect the real concerns that stand behind many of the decisions it has to take if it is to comply with public expectation. The problem is not only one of resource in terms of investment programmes; for me, the real problem is the lack of transparency over the selective and inadequate monitoring of sewage outfalls. I recognise that the Environment Act 2021 lays down stricter monitoring requirements on the publishing of accurate data on overflows, but I am troubled by the timeframe set out in the current consultation.
Let me quote from the Library article. Under “Timebound targets included”, it states:
“By 2050, water companies can only discharge from a storm overflow where they can demonstrate there is ‘no local adverse ecological impact’ … This target must be achieved for most … storm overflows spilling in or close to high priority sites. These sites include sites of special scientific interest, special areas of conservation … eutrophic sensitive areas and chalk streams.”
I ask: why 2050? That is nearly 30 years away. The document continues—I am quoting again from “targets”:
“By 2045, all ecological harmful discharges in or close to high priority sites must be eliminated.”
The Lake District is a very high priority site. Again, I simply cannot understand the delay. Why not speed up the whole process in environmentally sensitive areas such as the national parks?
A cynic would argue that the Government are ducking and weaving over sewage discharge problems because they fear damaging water company profits and, I suppose, ultimately pension funds. How else can they justify the 8,500-hour leak at the Sedbergh plant, the Budds Farm treatment plant leak and the Embleton leak in my former constituency? They are but a few from a long list to which the noble Lord, Lord Oates, very wisely referred in some detail and which are a product of a combination of water company profit protection and slack management, both accidental and on occasions deliberate.
For the purposes of attending Parliament, I live in Maidenhead in a flat on the towpath overlooking the Thames. I am ever conscious of damage to the riverbed arising out of effluent discharge from what I am told are storm overflows upstream. It is not unknown for those who swim in the river to contract respiratory conditions or infections out of—whatever you want to call it; I shall not use the term—effluent contamination.
The Daily Mail’s consumer correspondent, Sean Poulter, recently reported a hitherto little reported incident where Southern Water was fined £90 million for deliberately pouring sewage into the sea off the Kent and Hampshire coast. We also have reports of norovirus contamination of oyster beds, again blamed on sewage pollution. I am told that one company has paid a staggering £290 million in penalties since 2010, but, more worryingly, Southern Water is alleged to have paid £126 million in penalties and payments following a series of failures in treatment operations and, more importantly, for deliberately manipulating performance data. I am told that there is a whole list of companies which have similarly been subject to discharge failure penalties.
The scandal of illegal underreporting by licensed facilities requires scrutiny by government. The Environment Agency is reported to have clear evidence of massive underreporting of outfall failure. In almost every case, someone, somewhere, will have taken a decision to breach licensing approvals, and they will know they are breaking the law. My own view, perhaps a desperate one, is: prosecute the water company executives—they are responsible for these decisions—and threaten them with custodial sentences. They should be prosecuted where it can be shown beyond reasonable doubt that they have authorised illegal sewage discharges and agreed either the falsification of data or a decision to hide adverse data on discharge levels.
Levies or fines on water companies do not work, as they place the burden of penalty for malpractice on the back of both shareholders, who without institutional support are powerless at annual general meetings, and water companies themselves. If you want action and progress, go for the directors. The reporting failures will cease immediately. Deceit will be replaced by proposals for action. The threat of prosecution will concentrate minds. It will lead to a new emphasis on transparency, greater accountability and a far more informed public debate on the way forward.
Baroness Ludford (LD)
My Lords, it is a pleasure to follow the noble Lord, Lord Campbell-Savours. Amid this discussion of an unpleasant subject, it is pleasurable to have in my mind the image of leaping salmon, which slightly cheers me up.
I do not have the expertise of others such as my noble friend Lord Oates, whom I thank for this debate, but I want to speak about the Thames Tideway tunnel and my modest role in it. I have had just two things named after me in my political career. One is Sarah s law, a statutory instrument in 2008 whereby I was able to leave this House for a while—to be disqualified in fact, like a traitor or a bankrupt, since that was the only route before the facility of resignation was introduced—to allow me to re-stand for the European Parliament in 2009, but that is history.
The other is “Sarah’s tunnel”, which is what is now the Thames Tideway tunnel, which as your Lordships will all know is a major new 25-kilometre sewer being built along the north bank of the Thames—I think the original target date was 2020, which of course has slipped. Its purpose is to capture raw sewage instead of overflows, as now, pouring into the river from some 36 so-called CSOs, or combined sewage overflows, on the Thames and the River Lea.
I cannot remember whether the term “Sarah’s tunnel” was coined by a journalist or Thames Water. It must be said that Thames Water found that to be a quite convenient term when it wanted to wheel me out as a shield when local residents were up in arms about the disruption of construction works—including, I recall, in the Southwark constituency of my then right honourable friend Simon Hughes MP. They pointed at me and said, “She’s the one who’s got to answer for this; not us”, which was a bit much.
I take a large degree of pride in my role in ensuring that the Thames, at least, will finally be cleared up. A large discharge in 2004 killed a lot of fish, which floated on the surface of the Thames and rowers had to plough through them, which they naturally found very distasteful. A petition was then collected and, as a Member of the European Parliament for London, I had the privilege of presenting this to the European Parliament Committee on Petitions. The usefulness of this mechanism is that the European Commission—the enforcer of EU law—had to respond to such a petition. Suffice it to say that that helped lead to the so-called infringement procedure, which culminated, though only many years later in 2012, in a judgment by the European Court of Justice which found the UK in breach of EU law on sewage treatment. I will come back to this court judgment.
That EU law is the snappily named urban wastewater treatment directive. In fact, this was passed more than 30 years ago, in 1991, and came into force, after the usual grace period for member states to comply, in 1998 for larger towns and cities and in 2005 for everywhere. So for nearly 20 years, it has been illegal to discharge raw sewage anywhere, including in the UK—as far as I know, this is either still retained EU law, subject to correction, or is being spilled over to the Environment Act. This directive marked a shift from legislation aimed at end-use standards—testing pollution levels in a river, for instance—to a stricter law regulating water quality at the source, whether domestic or industrial.
I admit that my knowledge of this subject acquired as a constituency MEP has not kept up with the times. My specialisation has always been in justice, home affairs, human rights, and equalities, so I am not knowledgeable about environmental and pollution matters, and my knowledge runs out in about 2012, the date of the judgment by the ECJ. I know that the European Commission has run a consultation on a review, and I think it will respond to the consultation later this year. However, both then and now, domestic regulators have been asleep on the job. I saw recently that Ofwat described the current situation of polluted rivers and seas as “shocking” a few weeks ago. Where on earth has it been for decades? I also know that the Environment Agency funding has fallen 70% in real terms in a decade, so enforcement is much undermined. In that case, the only real enforcement has been by the European Commission, which I will quote shortly.
As we know, the combined system of rainwater and sewage was state of the art—beginning with Bazalgette in the mid-19th century. Of course, this means that if both rainwater and sewage flows increase, so does the combined flow into the sewers. However, we need to keep up with that; we cannot have a static approach and say, “Well, it was okay 50 years ago, so we won’t provide any more investment or make any more changes.”
I wanted to speak today mainly to warn against the term “storm overflows”. The Government and water companies love us to use this expression, because it suggests that discharges are somehow exceptional—only when there is a kind of storm which produces the type of flooding that we have seen in the last few years in Shropshire, Worcestershire, Yorkshire and Lancashire. They want us to have that image in our minds, so that we say, “Oh well, how can they be expected to plan and invest for that sort of exceptional event?” I was tipped off about this by a staff member—who shall for ever remain anonymous—in one of the regulators.
That brings me to the 2012 judgment of the European Court of Justice. I was amused to note that the representation of the United Kingdom Government was led by one “D Anderson QC”—and I hope that he does not mind, in his absence, if I say that I assume that this QC was the noble Lord, Lord Anderson of Ipswich. Of course, I am not reproaching him for acting for the UK Government; he would have been acting on the cab rank principle, in the same way that the noble Lord, Lord Pannick, is acting for the Government on the Rwanda scheme.
This case was finally brought by the European Commission after years of argy-bargy with the UK Government. The Commission said that, under the directive, member states
“are obliged to ensure that a collecting system is designed and built so as to collect all the urban waste water generated”
by the town it serves. It continues:
“The capacity of the collecting system must therefore be able to take into account natural climatic conditions (dry weather, wet weather, even stormy weather) as well as seasonal variations … The directive must be interpreted as providing for an absolute obligation to avoid spills from storm water overflows save for exceptional circumstances.”
That is what water companies tell us all the time: “Oh, it’s exceptional.” Clearly, however, with climate change what was once exceptional is now routine. In this case, the Commission pointed out that
“the more an overflow spills, particularly during periods when there is only moderate rainfall, the more likely it is that the overflow’s operation is not in compliance”
with the directive under EU law. This is what that staff member in the regulator said to me: “Don’t be misled by the term ‘storm overflows’.” This is happening once a week into the Thames, purely when there is “moderate rainfall”. The staff member told me not to be fobbed off, and I suggest to noble colleagues that we continue not to be fobbed off.
The Commission continued by saying that the directive required
“waste water treatment plants … designed, constructed, operated and maintained to ensure sufficient performance under all normal local climatic conditions.”
That is the warning that I want to repeat today. The Commission went on to say that
“failure to treat urban waste water cannot be accepted under usual climatic and seasonal conditions, as otherwise Directive 91/271 would be rendered meaningless.”
This is the point: water companies come along and say, “Oh, it is all exceptional, so we cannot possibly be expected to invest in this.” But they are failing to invest for normal climatic conditions.
The court found against the UK, because it said that it is not exceptional that these discharges are happening. It also went on to say
“in accordance with settled case-law, a Member State may not plead practical or administrative difficulties in order to justify non-compliance … The same holds true of financial difficulties”.
So the Government and the water companies cannot say that there is a disproportionate cost; they have undertaken to stop these discharges and so they must. Indeed, in its judgment, the court found that there were
“60 waste water discharges from”—
it did not use the term “so-called” here, but I will add it—
“storm water overflows in London per year, even in periods of moderate rainfall”.
That is the situation we are facing.
Against the background of that 2012 judgment, I admit that I do not understand the system of permits for the discharge of raw, untreated sewage—this is my ignorance. Why are water companies being given permission to make these discharges? I do not see how this is legal under the directive I have mentioned, since this normalises the routine absence of treatment in unexceptional weather conditions.
I end by thanking my noble friend Lord Oates again for this debate, which has allowed me to go down memory lane. If I have achieved one thing, I hope it has been to put noble Lords on guard about the phrase “storm overflows”.
The Lord Bishop of St Albans
My Lords, I too thank the noble Lord, Lord Oates, for achieving this important debate. Many of the horrifying facts and statistics have been laid out with great clarity before your Lordships’ House.
I live in the city of St Albans, which is built next to the ancient Roman city of Verulamium. We have a 17-mile chalk stream which runs through the city called the River Ver, based on its Roman name; it flows eventually into the River Colne. We have a thriving local group of activists, the Ver Valley Society, which was set up and continues to work with great vigour to protect this really important chalk stream—it is really a stream rather than a river.
In 2021, the sewage treatment works at the top of the river spilled for 2,646 hours—just over 100 hundred days, so nearly a third of the year. Not only was that appallingly bad for this unique ecosystem—chalk streams and chalk rivers are mainly found here in this country—it was also bad because of the residual nitrate in the aquifer and it has led to a very poor state of the chalk stream. Insects at the bottom of the food chain are not as plentiful as they once were. Likewise, aquatic plant life is also suffering. It is unacceptable for this lovely, delightful small river, that many of us walk along regularly for leisure, that goes through our park, to be treated so badly.
When preparing for this debate, I was dismayed to learn that, according to the Rivers Trust, only 14% of England’s rivers are deemed to be in good ecological health and every one of them fails to meet chemical standards. Our chalk streams, of which there are only 200 kilometres in the world, are vital and we owe it to our present generation and to future generations to protect them.
This problem of overflow of untreated sewage has been going on for decades. I do not lay all the blame at the door of our present Government; it has gone on much longer than that. Indeed, I offer the Government a degree of credit in the programme that they are setting up to tackle it. It has been sorely neglected for generations and we really need to see much more radical and much faster action if we are to protect these important focuses of the habitat. My question is on the sheer lack of ambition in these targets. Are we really going to have to wait until 2050 to see 80% of total discharges eliminated? Given the existing poor health of our river systems, we need to move much more rapidly.
I am not going to get into the politics of the privatisation of water companies but it is deeply worrying that it looks as if our companies are not taking this with sufficient seriousness. Nine water companies recorded £2.8 billion in profits despite over 400,000 dumps of sewage in 2020. How can that be acceptable? There is a fundamental question of time, of course. We have to give them a period to get it sorted out. But unless we have really ambitious targets, nobody is going to move. It is quite clear from what has been happening that lack of enforcement and lack of targets are allowing our water companies to continue doing what they are doing.
We are talking not just about our chalk streams. I think somebody referred earlier to the Lake District and Lake Windermere, where last year there were reports of increasing algae feeding on the phosphates coming out of the local sewage treatment plant and so on. And it is not just sewage run-off. It is also to do with toxic loads of plastic tyres, heavy metals and silt. We had Questions earlier today about household waste being dumped and so on. Indeed, other problems have been referred to of chemicals coming from medicines and other treatments given to animals which are now affecting the health of organisms and ecosystems in our streams and rivers.
Part of the concern is with the farming industry. As someone who is particularly involved in that, I am aware that it is a problem. The noble Lord, Lord Benyon, who will respond to this debate, knows that there are some quick win-wins here with all the latest best practice in farming. I am proud to say much of it happens in Hertfordshire: I go and visit some of our farmers. We are now using computer systems. We are having precision drilling, which cuts down on the amount of grain you need hugely but also precision use of nitrates and fertilisers can really decrease amounts. This is a win-win when the costs are going up. One of the questions I want to ask the Minister is: what discussions are taking place with the NFU to try to roll out best practice which will both help the industry and make a tangible and significant improvement to this problem?
I also agree with the noble Lord, Lord Campbell-Savours, who pointed out compellingly that fines are not the answer—although I hope they will go on being imposed. It sounds to me as if they are simply being factored into the accounts because it is cheaper to pay fines than to do the fundamental work. For goodness’ sake, we now have to have an incentive which means that the money going into this has to be put into the long-term solutions. It must come back to a radical look at the bonuses paid to executives. I am not sufficiently close to the industry to know whether it is feasible to prosecute them. I certainly think that, if there are no bonuses paid until there are dramatic improvements each year, that will wake up a number of people in the industry.
Our river systems face an ecological crisis from multiple angles, all of which need to be tackled. Preventing sewage run-off is key to ensuring the safety of rivers such as the River Ver in St Albans, and my hope is that as we address that our biodiversity will be maintained—indeed, increased—and returned to what it was in the past and that we can really see a more confident future for our waterways in this country.
The Earl of Caithness (Con)
My Lords, I am grateful to the noble Lord, Lord Oates, for procuring this debate. I totally agree with him that the discharge of sewage into our rivers is a disgrace in the 21st century; it should not be happening. It was not the intention when we privatised water, and I declare my interest as the Minister for Water at the time. I say to the right reverend Prelate that I am sorry that we are in the state that we are but I assure him that the investment in water, clean drinking water and pipe renewal has increased incredibly because of privatisation, and I dread to think what the situation would be if it were still in the hands of the taxpayer and we did not have access to that private finance.
I am a little surprised by the timing of this debate because a lot has happened in the last two years and it seemed to me that the noble Lord, Lord Oates, was really speaking about the situation two years ago. He mentioned the Environment Act, and I did not come here to defend water companies or the Government, but I think it is time to put a little perspective into this. The Environment Act was improved hugely in your Lordships’ House; I was glad to be part of the group that secured that change. The noble Lord, Lord Oates, did not talk about the Storm Overflows Taskforce that has been set up. He did not mention that, under the Environment Act, by 1 September the Government have to produce a storm overflows discharge reduction plan, so I would have welcomed this debate after the Summer Recess—after 1 September. I need to ask my noble friend: are the Government on time to produce this report by 1 September? In that report, we will be looking for a step change in how the money will be spent and the progress that will be made, and a much tighter timetable. I agree with everything the noble Lord, Lord Oates, said about this, but until we get this report on 1 September, it will be very difficult meaningfully to challenge the Government. All eyes will be on my noble friend for that report.
To dump sewage into water is a complete waste of an asset. Sewage is an asset; it contains phosphate, nitrates and organic matter. As we know, phosphate is a mined commodity and most of its deposits are in Russia, so it will be even more scarce. Sewage is a resource that should be utilised and put back on the land. There should be absolutely no need for any sewage to be discharged into waters in future.
The future is the key question. It cannot be done immediately; it is horrendously expensive. We discussed this during the Environment Bill and got quotes of hundreds of billions of pounds under one option and under £100 billion in another. A step change in the programme needs to be made to improve the situation. I once again have to thank our Victorian engineers for providing a sewerage system that still works, partly, in the 21st century. The way they did it is remarkable and we owe them a debt of gratitude.
The Motion refers only to sewage disposal, but there is a much wider issue: the whole issue of water needs to be looked at in context. I therefore turn to farmers. There is a big opportunity under the new environmental land management schemes to get farmers to work in clusters to improve a whole river system. Along with some other Peers, I was fortunate to have a briefing from the Minister yesterday on what will happen with ELMS. He gave the example of the Ridgeway, a walkway crossing lots of local authority areas. I suggest that, equally, there should be clusters of farmers not only in the catchment area but working together along the whole river. Unless farmers work together, we will not get the changes we want.
I also ask my noble friend about the role of the Environment Agency. I was very impressed yesterday when a lot of emphasis was given by the Minister and his officials to the necessity for Defra to work with farmers and gain their trust. Can the same be said of the Environment Agency? I have not found many farmers who trust it, yet they are an integral part of how we will manage wastewater. What was the role of the Environment Agency in the construction of the chicken farms along the Wye, where there has been so much pollution? Was it involved in that? Did it give an opinion on what the effect of the discharge of all this poultry manure would be? If it was not involved, ought we not tackle the planning system to make certain that it is?
This needs to be tackled holistically. It is no good just blaming water companies; it must be tackled at source by independent regulators such as the Environment Agency and farmers need to be more responsible. As your Lordships know, I am a great supporter of what farmers do. They will produce good food in the best way they can, but they have been directed by politicians to farm in a certain way. At long last, we might be getting into a much better system of farming for the future. There is hardly a farmer I know who does not want to work more closely with nature than they have been able to in the past months. Can my noble friend tell me about that and the Environment Agency? Will he instruct it to work as closely with farmers as Defra is, to try to gain some trust from them?
Another group of people who need educating and admonishing is us. We are the polluters—the people who, as my noble friend Lady Altmann said, put wet wipes in lavatories and throw things away that we should not—who help block up the water companies’ pipes, which causes some of the discharges. We waste far too much water. There needs to be a big education programme for us as individuals to realise what damage we are doing, because a lot of us are totally unaware of it.
I move to the question raised earlier of developers having the right to connect to existing sewerage systems—I am sure my noble friend Lady McIntosh will pick up on this, as we were on the same side on this during the Environment Bill. If the existing sewerage system is overloaded and there is a demand for new houses, with planning permission granted, we will get storm overflow systems. We have a real problem. If we do not discharge it into rivers or the sea, what will we do with it until we get a better system? The answer is that it will be put on to our streets and cause far worse pollution. We need to look at this much more holistically and stop the problem in all areas as well as giving the water companies the incentive and drive to produce answers at their end on a much quicker timetable.
My final point, looking at this holistically, is on our aquifers. Much of the problem we have in our rivers is due to them being so low, particularly our chalk streams. This is because the aquifers are being depleted. Until we can start refurbishing our aquifers to get them back to where they should be, we will always have a problem in our rivers. With less flow, you have less sedimentation and get smaller fish, less biodiversity in the river and more stormwater problems. One of the effects of climate change is that we will have many more localised storms: one area of the river might be perfectly fine, but if the river is at a low level, if you get a massive storm in another area, downstream you will have a stormwater problem.
We need to get our river flows up; that will be a huge task for my noble friend but I hope that, as part of the environment plan, the Government will look at this and take action so that we take less out of the aquifers and more out of the river as it gets towards the sea. In that way, we will benefit nature and the environment throughout the river and stop some of this quite unnecessary disposal of sewage into the water and seas.
Lord Sikka (Lab)
My Lords, I thank the noble Lord, Lord Oates, for this vital debate. It is a pleasure to follow so many other knowledgeable speakers.
The water industry has been a serial offender for far too long. On 1 March 2018, the then Environment Secretary, Michael Gove, said that
“water companies … have not been acting … in the public interest”
and
“have been playing the system for the benefit of wealthy managers and owners, at the expense of consumers and the environment.”
He added that the water companies have,
“shielded themselves from scrutiny, hidden behind complex financial structures, avoided paying taxes, have rewarded the already well-off, kept charges higher than they needed to be and allowed leaks, pollution and other failures to persist for far too long.”
The privatisation of water has been a disaster. It is now a monopoly owned mostly by organisations from overseas, including the super-rich, banks, hedge funds, private equity, foreign Governments and businesses based in tax havens who have little or no experience of the daily hazards inflicted by the industry upon the people in this country.
The water companies have collected over £60 billion in dividends since 1989. In addition, untold billions have been sucked out through intra-group transactions and interest payments on loans from affiliates. Hopefully, the Minister will be able to tell us exactly how much has been taken out by the water companies. As an accountant, I struggle to understand their accounts—I hope the Minister has advisers who can help him to unravel these things. If the industry was in public ownership, all the money that has been extracted could have been used to build better infrastructure, but the Government’s fetish about privatisation has landed us with all these problems.
Since 1989, water bills have increased by 40% above the rate of inflation. People have to pay them because there is no alternative. You cannot switch to an alternative supplier of these services, and the regulators simply wring their hands—they are very ineffective. As Michael Gove reminded us, since privatisation there has been no investment in new nationally significant supply infrastructure, such as major reservoirs. That is how bad privatisation has been. London and big cities now face a threat to their drinking water supply, as has been documented in the newspapers this week. Around 3 billion litres are lost every day due to leaks, which is further evidence that the companies are out of control and do not take their public duties very seriously.
Last year, water companies discharged raw sewage into English rivers 372,533 times, while the water companies covering England released untreated sewage for a combined total of 2.7 million hours. The Government’s storm overflows discharge reduction plan will seek to eliminate 40% of raw sewage overflows into rivers by 2040—that is not good enough. It is complacent and will wilfully inflict health hazards on people. In January 2022, the House of Commons Environmental Audit Committee Report said that,
“A ‘chemical cocktail’ of sewage, agricultural waste, and plastic is polluting the waters of many of the country’s rivers. Water companies appear to be dumping untreated or partially treated sewage in rivers on a regular basis, often breaching the terms of permits that on paper only allow them to do this in exceptional circumstances.”
Water companies, regulators and Ministers have defended the practice of allowing leaks into rivers and seas by claiming that it is better to allow the sewage to leak into waterways because otherwise it would back up into streets and homes. This is an indictment of the lack of investment and the way in which the Government and regulators indulge the water companies. Water companies have pocketed billions of pounds from sewage charges levied on customers but have not delivered the required service. This is organised fraud on a gigantic scale for which no corporate executive is called to account. The discharges kill fish and threaten biodiversity and marine life. The pollution may eventually find its way into the food chain—polio has already returned to the UK.
There are widespread illegal sewage discharges from treatment plants. On 12 May 2022, the Environment Agency said that
“Our initial analysis of the information collected to date has confirmed that there may have been widespread and serious non-compliance with the relevant regulations.”
Still, no executive is prosecuted, and there is no clawback of any executive bonus or pay. The Government continue to be complacent. Water companies face no action. There is a lack of any pressure points. Even when companies admit that they have not complied with the rules and regulations, they are still permitted to extract monopoly rents because people have nowhere else to go—they have to pay. We have no alternative infrastructure anywhere. The fines levied are puny and, so far, they have failed to bring about a desirable positive change. In a monopoly, they are simply passed on to the customers and that is why we end up paying higher and higher charges.
Profits form a key part of the executive key performance indicators in companies, and executive pay is linked to these indicators, which include profits. It is very easy for water companies to increase their profits by letting the leaks continue, which means they spend less on repair and maintenance, or by dumping raw sewage into rivers—that increases profits too. The Government continue to tell us that water companies are making huge profits, but they are doing so because they are not carrying out their obligations. Looking at profits alone does not tell us anything about the quality of their performance.
Last year, nine water industry CEOs received more than £15 million in pay and bonuses—bonuses for what? Polluting rivers? In the past, Ministers have said that shareholders can constrain these things. Well, their shareholders are abroad; are they really bothered about what goes on in this country? Many are just subsidiaries and affiliates of giant investment funds and other corporations; they have no incentive whatever to reduce these bonuses. So, the executives get fat cat pay while the public get health hazards, leaks and higher bills.
The Government can create pressure points to force companies to deliver, and I invite the Minister to consider at least the following five modest reforms. First, the directors of companies engaging in unlawful practices need to be made personally liable for the consequences. The spectre of personal liability should check predatory practices. At the very least, their bonuses and salaries should be clawed back because they have obtained them in fraudulent way.
Secondly, no dividends should be paid until the regulator certifies that water companies have met their statutory and regulatory duties.
Thirdly, customers should have direct representation on water company boards and a statutory right to vote on executive pay. With such arrangements, it is extremely unlikely that customers facing escalating charges, leaking pipes and polluted rivers would vote for a bonus or even a salary increase for any executive. Governments often talk about democracy in society. This is democratising these monopolies. Let them face the democracy of the customers.
Fourthly, the regulator itself should have direct representation of customers on its board. I am not talking about some toothless customer panels, but people actually sitting on the board and questioning the executives of the regulatory bodies about their failure to act.
Fifthly, the general public should be permitted to take legal action against negligent companies. After all, these companies are wilfully neglecting their public duty. Therefore, the public should have a right to take legal action against these companies and the regulators.
These are just some proposals for starters. As we are getting a new occupant at No. 10, maybe they will resonate with the new leader of the Conservative Party.
Lord Stoneham of Droxford (LD)
My Lords, I declare my interest as a warden of the St Clair’s Meadow Nature Reserve for the Hampshire and Isle of Wight Wildlife Trust, a land trust beside the River Meon, between Winchester and Portsmouth. Like the Minister, I have the privilege of living beside a chalk stream in the South Downs National Park.
Before I start, I thank two interns who have been working with me this week: Molly Waite from Itchen College in Southampton and Ben Franklin from Peter Symonds College in Winchester and now at Exeter University. I also thank two local campaigners in the Winchester area: Councillor Margot Power and Danny Chambers, who have helped me with some of the research that I have been doing in that area. It is not a day to thank or congratulate Ministers, but I would like to say to the Minister how much I appreciate his interest in rivers and the fact that he has a particular interest in the heritage and wildlife of chalk streams. It is good to have him replying to the debate today and we look forward to his remarks. I did not start by thanking my noble friend Lord Oates for organising this debate, because I had a part in arranging it. I apologise to the noble Earl, Lord Caithness, if we got our timing wrong, but I do not think we have. There are a number of working groups in this area at the moment and it is important to have this debate.
One reason I quoted the names of some of the local people who helped me with the remarks I will be making is that, although the water companies are obviously very important, I certainly agree with the noble Earl, Lord Caithness, that the local approach to this very important as well and I will say why. I am a social democrat and very different from the noble Lord, Lord Sikka, in my approach: I believe in private enterprise co-operating with Government and agencies to get effective progress in this area.
I start with a number of important principles. First, we need a long-term strategy. Every Government always think they can deliver things in the period of one Parliament. It is always impossible and never delivered. Therefore, we have to have considerable investment as part of a long-term strategy. I believe it has to be a bottom-up strategy, combined with a firm handle from the Government and the regulatory agencies. The statutory framework and a strong watchdog and regulator are clearly very important in this area. When I started living in my part of Hampshire, the Portsmouth water company was locally owned, locally run and all the people on the board were local. It was felt that they had a genuine commitment to the area. I do not disparage the work of Portsmouth Water now, but I feel that local commitment is missing, given what it was. That has been very common throughout the country. I accept that privatisation was important, to a degree, in bringing in new investment resources, but we have lost something. That local connection and commitment are important.
I ask the Minister: are the Government sufficiently concerned? I am very concerned that a lot of our utilities are owned overseas now—a lot of the water companies are. I would like to be reassured that the Government, if they felt it was necessary, would be prepared to use the competition rules to prevent overseas companies taking over some of these water companies. A degree of local ownership, local knowledge and local commitment is very important.
As I was saying, the local angle is important. I believe partnerships—the combining of councils, conservation groups and local pressure groups—in the catchment area of the rivers is very important if we want progress. I also mention the local press here. My local paper, the Hampshire Chronicle, has been running a campaign on river pollution in our chalk streams. That is very important and if it is galvanised by local voluntary groups and local people, it improves information and puts pressure on all the agencies to take the vital action required. I support the catchment area focus, and I will deal with that in a moment because that is very important to keep the pressure on for change and improvements.
Information is absolutely critical. We cannot monitor things and cannot get change unless we see what these companies are doing, what their performance is in individual rivers and how they are trying to improve them. We do not just need information on sewerage bills, we also want it on extraction. I find it very difficult: I would love to know what the extraction figures are for the river that goes past my property. I know roughly where they are taking it from, but I never seem able to get my hands on the figures. It would be very good if each catchment area tried to bring all this information together. It would help public knowledge and it would help public pressure, which is probably one of the reasons that it does not happen. We need the measurement of nitrates and phosphates in our water and the public need to be aware of it. Too many of our treatment works do not have upper limits on the nitrate levels that they are creating. That sort of information is very important.
I will give a couple of examples from the Winchester area where I live. It was interesting to have the information from St Albans, but in my area—the Winchester district—in 2021, there were 250 spillages, totalling 3,500 hours of sewage going into chalk streams. That is effectively a third of a year. It is an improvement on the year before, when there was something like 7,000 hours of sewage leakage, but then the weather was better in 2021.
I have looked at 15 treatment plants in this area. Looking at the detailed figures published for the last two years, most of the problems are at two treatment works: Durley on the Hamble and Wickham on the Meon. Wickham is, fortunately, quite low down on the river. There were 1,708 hours of spillages in Durley and 846 hours in Wickham. The year before it was 1,386 hours. Over half the problem in our area is at those two treatment works. I am very suspicious of people saying that we cannot tackle this because it will cost £300 billion or whatever it is. If I was involved in this business, I would concentrate on where the main problems are. Clearly, the treatment works in Durley and Wickham in my area are the places I would start. I would put that on the agenda, which is why today’s debate is timely. Please put it on the agenda for the government task force looking at this when it reports on 1 September.
Sewage is important but it is not totally overriding. We have already had, in the debate, the issue of extractions and lowering water levels; I think we need much more information on that. We need more measuring of nitrates and phosphates in the water. Currently, there is a campaign in Alresford in my area, on a tributary of the Itchen, where there is a problem with phosphates. It is the centre of the watercress industry and it has been discovered that no limits are being set by the Environment Agency on the treatment plants in Alresford. What is happening in the local rivers just leads to a growth of algae and weeds. The amount of silt in the rivers increases, and you get a clogging up of river flows as well as a restriction of light, which affects the invertebrate wildlife in the rivers. That all contributes to a diminution of the natural life of those river areas.
I believe in the catchment area strategy, because that focusing on individual rivers raises public awareness. We need to do far more of this in schools, local media and local communities. In my own area, I sometimes wonder whether people appreciate the great heritage they have in their midst. I am appalled at the litter that is left on the roads and left by people walking along the river, which can do great damage to the wildlife if it is not picked up. Fortunately, there are people like me who go around doing that, but it is extraordinary that local people are so selfish in leaving that debris, which can only diminish the wildlife in our rivers.
Work needs to be focused locally. There are lots of bodies that want to be involved, whether it is conservation groups, fishing groups, farmers or the local authorities. We need to bring together information on the local catchment areas, which will raise public awareness and hold the bodies responsible to account. We need the commitment of farmers, fishing groups and others, even householders with cesspits in the river valleys. They all need to be co-operating and making sure they are contributing to the improvement of our environment. I would like to see our chalk stream areas declared environmental heritage areas—slightly selfishly, because I live in one—as they are that important.
In the last debate we had on chalk streams, in November, both the Minister and I combined to create the association of Viscount Grey, who was the Foreign Secretary during the First World War and had a cottage on the Itchen, and ex-President Theodore Roosevelt, who joined him on a walk along the River Itchen in about 1911. Those two individuals made a record of the wildlife they saw when they went on that walk. Your Lordships would be shocked if you compared the list with what you find today. They were just looking at the bird life, but if you looked at the invertebrates in the river and saw the lack of flies and insects along the riverbanks, you would be quite shocked. That is why the debate is timely and why we need a strategy for all rivers, but particularly chalk streams, which deals with these problems, and it should have the highest priority.
Baroness McIntosh of Pickering (Con)
I am delighted to follow the noble Lord, who we do not hear from very often. I add my congratulations to the noble Lord, Lord Oates, on calling the debate today, and join with him in a heartfelt tribute to the late Lord Chidgey. I remember not just his work on chalk streams but his knowledge of and work on international development in South Africa and other areas. I also declare my interests as on the register. I am vice-president of the Association of Drainage Authorities and I will be taking up the chairmanship of the project advisory board of a study of bioresources in England, which I will come on to in a moment.
In responding to some of the points raised in what has been an excellent debate covering many of the issues, it is important to note that of course, the current sewage disposal rates into rivers are unacceptable. However, they are unacceptable for a number of reasons, and there is a range of people with responsibilities. In particular, I want to highlight the responsibilities that the Government and developers have. I welcome my noble friend the Minister to his place—we are fortunate that he has his current responsibilities; long may that continue.
My concern is that the Government are wedded to a programme of building 300,000 houses a year, often in inappropriate places such as areas prone to flooding or that take excess surface water. That water, in turn, is then displaced into existing developments or rivers, as we have heard in the debate.
Then, we have the issue of combined sewers. Surface water flooding is a relatively recent problem, alongside the much older problem of fluvial, pluvial, coastal and more regular forms of flooding. It was first identified by Sir Michael Pitt in his review following the dreadful floods in 2007, the damage resulting from which I am very familiar with, as the then MP for Vale of York. His recommendations were spot on but sadly, many of them have still not been implemented. He called for more natural forms of flood prevention such as Slowing the Flow—the Pickering pilot scheme which is preventing the flooding of the town of Pickering and downstream communities. He was in favour of creating more sustainable drains and ensuring that they were maintained, and he insisted that we should stop connecting surface water to public sewers—probably the single most disgusting practice, which is still perpetrated. He also recommended ending the automatic right to connect the wastewater—that is, sewage—coming out of these new houses to pipes that are certainly not fit for purpose. I add that water companies should be made statutory consultees on all future major developments, and as noble Lords have said, we must stop unflushables such as wet wipes, fat, oil and grease blocking sewerage systems.
The problem with building 300,000 houses a year is that the wastewater—the sewage coming out of those houses—simply cannot connect to antiquated, ill-fitting pipes built in Victorian and Edwardian times, which means that raw sewage is spilling into combined sewer overflows that then run into rivers, on to roads and even into people’s homes, causing public health issues.
Will my noble friend use his good offices after today to ensure that finally, Schedule 3 to the Flood and Water Management Act 2010 will enter into force, end the automatic right to connect from these houses and set up a proper sustainable drainage system? It is unbelievable that 12 years on from passing that legislation, it has still not been brought into effect. Will my noble friend also allow the next price review that is currently being considered, which will take effect from 2024-29, enabling water companies to raise money and invest in and introduce the necessary innovation measures, which I will set out in a moment?
I would like to share with your Lordships what is happening and the work being undertaken by the Chartered Institution of Water and Environmental Management, which is looking to develop a long-term strategy for bioresources in England. Essentially, without putting too fine a point on it, this is treating the sludge—the solids after the liquids have been taken out of the sewage. I will be chairing a project advisory board, so no doubt, I will become quite an expert in this area. I am delighted to say that among those who will be involved are Defra, BEIS, Energy UK, the Environment Agency, the Institute of Air Quality Management, the National Farmers’ Union, the Country Land and Business Association, the CLA, the British Retail Consortium, the Anaerobic Digestion and Bioresources Association, the Rivers Trust, the renewable energy association, water companies as individuals, Water UK and a host of others. I am delighted to be associated with that project.
I make a plea to my noble friend today: we need input from Defra at not just a technical level but a more senior management level, working alongside the Environment Agency and Ofwat to deliver this strategy in order to ensure that finally, we are aligning the investment being made with the regulatory framework. To date, that has not been achieved.
I am working with a number of Members next door, including Philip Dunne, on a cross-party basis, through Westminster Sustainable Business Forum, on Bricks and Water 3—the third report looking to reduce all forms of flooding. I hope that that will help to inform how the planning regime can be amended through the forthcoming levelling-up Bill. Much can be achieved through building regulations, but it is extremely important that we look at the planning regime as well. I look forward to engaging with that Bill in due course.
To conclude, I urge my noble friend to take away from the House today a number of actions that could immediately be taken: modernising and updating the drainage legislation; increasing nature-based solutions such as Slowing the Flow, which works so successfully; ending the automatic right to connect; stopping enabling housing developers to allow surface water to connect into the public sewers; and creating sustainable drainage systems and making one body responsible for maintaining them. We need to educate water customers to change their behaviour on unflushables, including wet wipes, and to reduce their use of fats, oils and grease that create fat balls, or fatbergs, which cause sewage blockages. Even a simple label on a package saying “Not fit to flush” would work. As I have said, I hope that this could be achieved through amendments to the levelling-up Bill in due course.
Will my noble friend look favourably on removing the automatic right for housing developers to connect surface water to public sewers and eliminate from the system in homes the unflushables I have mentioned? These two single measures alone would reduce the ability for blockages to form and reduce surface water which leads to storm overflow spills such as the ones we have heard about from, among others, the noble Baroness, Lady Ludford. I fully supported the amendment brought forward by the noble Duke, the Duke of Wellington, in this place and my honourable friend Philip Dunne in the other place, but that on its own in the Environment Act is not sufficient. I put to your Lordships today that we cannot continue to have inadequate pipes allowing sewage overflows to immediately go into the rivers upstream and causing tremendous environmental damage—often coming on to public highways but also causing a public health issue by entering existing developments.
I am delighted to have had the opportunity to debate these issues today, but I think there will be opportunities in the forthcoming legislation to bring forward real change in this regard.
Baroness Jones of Moulsecoomb (GP)
My Lords, it has been a good debate, with some divergent views. I congratulate the noble Lord, Lord Oates, and apparently the noble Lord, Lord Stoneham, for bringing this here. I disagree with the noble Earl, Lord Caithness, who thinks that this is the wrong time to have this debate. We should have this debate every single week, all the time that we are sitting, until the Government actually respond to the fact that we have given a devastating analysis of what is happening. They have to respond to this. They should do what we say—that is what I think. Perhaps the next Government will understand a little better the expertise that your Lordships’ House brings to debates like this. However, I liked the noble Earl’s idea about sewage being an asset. I genuinely had not thought of that before, but other countries use sewage—sometimes raw sewage—as an asset. Perhaps we should think along those lines too.
What irritates me is that we have a Victorian sewage system but do not have a Victorian road system, though both were developed at a similar time. That is because the road system is updated every year: when a new development is built, a new road network is built to go with it. However, there is no such event for the sewage system when we have new developments. There has been continuous investment in roads, but there has been very spasmodic investment in sewage treatment. Obviously, road and rail tend to grow with population, but not as much as they would if we had Green voices in government—I stress that to the other political parties here.
It is now households that are expected to pay for our sewage system, and I do not see how that is workable. I cannot remember which noble Lord it was, but somebody talked about greed, and that is at the root of the problem we have. I disagree completely that privatisation is ever a good thing; I just cannot see it. Again and again, we see that rapacious companies and shareholders damage the companies they are running, so why on earth would we privatise any more? They make big profits and do not plough them back, which is why we have the problems we do at the moment. So I am definitely in the society of admirers of the noble Lord, Lord Sikka. I loved his solutions, and I hope that they have gone properly into Hansard so that the Government can take them up at the next opportunity, whenever that is. Perhaps it will be after the next election.
There are two overall solutions to this: either we take the water companies back into public ownership, or the Government use some of these ideas—for example, about not paying out shareholders until investment plans have delivered the changes that are needed. As I am sure everybody in your Lordships’ House does, I want clean rivers and clear water flowing and encouraging the fragile and very precious ecology of all our chalk streams. I want water that is healthy enough for children, adults, local wildlife and even dogs to be able to paddle or swim in. I want to be able to swim in the Thames without getting gastroenteritis, which is what happened to me last time. I do not think that these are big expectations. We think of clean water as a basic human right, just as clean air ought to be. If our water system is in a bad state, the rest of the environment is in a bad state as well.
I want to focus on one aspect of the potential side-effects on human health. The noble Baroness, Lady Altmann, mentioned this, and I think somebody else did as well. Apart from the obvious health threats from raw sewage in our waterways, it also encourages the spread of antibiotic-resistant organisms and antibiotic pollution, which is incredibly serious. When they release this sewage, the water companies are not only increasing the amount of resistant bacteria in our environment but guaranteeing that they will stay there, because the untreated sewage is laden with antibiotics that allow bacteria to survive.
We need clean water as a human right, just as we need clean air. I have wanted this, along with many others, for the last 30 years, and I am shocked that the Environment Agency has only just realised what a state our rivers are in. I do not understand where it suddenly got this idea from. But if you think about the amount of public outcry there has been about the raw sewage dumped all over our landscapes, you might begin to understand that perhaps the Environment Agency is waking up. I would argue that the monitoring system has completely failed to deliver clean water and clean air because the Environment Agency is not fit for purpose, and neither is Defra. They all need to be scrapped and replaced with something more robust—something that actually holds these organisations and companies to account.
As for Ofwat, it has prioritised short-term consumer interests while losing sight of the longer-term and much bigger picture. I am glad that Ofwat and the Minister have new enforcement powers. The Ministers’ power of direction makes it their personal responsibility for setting the pace of change, and any delays are really down to the Government not driving things forward. Your Lordships’ House has done our best here. We can be very proud of pushing this agenda—for example, the amendments from the noble Duke, the Duke of Wellington, which were huge fun to be associated with. Even when he watered them down, I was still very happy to give my support to them.
Without systematic change and rigorous monitoring, the investment programme will not deliver change. It will continue to be a screen behind which senior managers get larger bonuses, as ever, for delivering larger profits. This is a really bad system. Is the Minister happy with water companies raising water bills, or borrowing large amounts of money that will be loaded on to future water bills, while shareholders get their usual dividend payments? Essentially, is he happy that these organisations keep paying out when they are not actually spending money on investing in the infrastructure? Do the Government think it is fair that ordinary people pay extra while the shareholders get their usual cut of the profits? I just do not understand how this makes economic sense. Will the Government consider delivering a moratorium on shareholder payments until long-term investment is delivered? This has been a devastating analysis. I do not understand how anybody could listen to this debate and not feel that we have got things drastically wrong.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I congratulate my noble friend Lord Oates on securing this debate and on his excellent and informative introduction. I share his tribute to the work of our late noble friend Lord Chidgey.
The problems of wastewater and sewage are well known, as are a number of the remedies available, all of which cost money and are likely to cause inconvenience. My noble friend Lord Oates gave us some frightening statistics. Last week, we debated the inadequacies of the government paper on the five environmental principles. All these principles in some way or another can be applied to the problem of sewage discharge into our waterways and coastal areas.
Local authorities and water companies have a part to play, along with developers, farmers, householders and the Environment Agency. Environment Agency data indicates that the water industry is responsible for 24% of rivers not achieving good ecological status. Some 4% can be attributed to sewage spills from storm overflows. Agriculture is responsible for 36% of failures. Urban development and transport are responsible for 11%, and other sectors are culpable for the remaining 29%; this includes local and national government, and mining and quarrying.
When developers put in their planning applications for housing it should be an integral part of the application that SUDS—sustainable drainage systems—are implemented and form part of the planning application requirements. The Environment Agency must contribute but it often remains silent.
Since the 1960s, modern sewer installations have required two pipes to keep sewage and rainwater collected from homes and businesses in built-up areas separate. However, as most sewer systems are combined, this has meant that the separated rainwater pipe is still connected to the combined sewage system. There are around 100,000 kilometres of combined sewers in England. My noble friend Lady Ludford is correct that it is illegal to discharge raw sewage into waterways, but it still happens.
The automatic right for housing developers to connect surface water to the public sewer should be removed immediately. This is archaic, and surface water should never, in this day and age, be connected to foul sewers.
Every year, 11 billion wet wipes are wrongly flushed into sewers, where they congeal into fatbergs, reducing sewer capacity and increasing the likelihood of sewage discharges from storm overflows. The public have a part to play, along with the manufacturers of plastic unflushable products. Plastic in wet wipes should be banned and the labelling on these products should indicate in very large letters that they contain plastic and cannot be flushed. Currently, the labelling on flushability is very small and often consists of a tiny representation of a toilet with a line through it. One has to look very hard to find this symbol.
Water companies spend £100 million every year on finding, removing and cleaning up pollution caused by unflushables. An ambitious package of measures to reduce plastic pollution caused by unflushables is needed quickly. The noble Baronesses, Lady Altmann and Lady McIntosh, referred to this.
There is, of course, the issue of farming effluent being discharged into waterways. The well-publicised case of poultry manure being discharged into the River Wye is well known and remains totally unacceptable. There will be other, less well-publicised cases of slurry entering smaller local watercourses, causing unpleasant spells and unwanted pollution, often resulting in the death of fish and other wildlife. The farming community has its part to play in ensuring that our watercourses are clean, healthy and free from pollutants.
In many cases, the presence of nitrates and phosphates in the water has caused the Government to issue an edict that no new homes may be built until the issue of nutrients has been effectively dealt with. This is a particular concern in Somerset, where the land on the Levels is blighted by this issue. At a time when the Government are seeking to build desperately needed new homes, putting a blanket ban on housebuilding is particularly onerous for the local authorities affected, which are unable to build the homes their communities need. They lose income through the loss of the new homes bonus, at a time when budgets are stretched to their limits.
The Environment Agency grants overflow discharge permits to water companies, which should be monitored and managed. The EA can issue enforcement orders if conditions are breached. There is also the threat of Ofwat imposing financial penalties up to 10% of the turnover in a relevant year for the culprit authority. Southern Water had a hefty fine to pay as a result of its illegal discharges; the noble Lord, Lord Campbell-Savours, referred to this. Both Ofwat and the Environment Agency are clearly not using their enforcement powers to the full. The right reverend Prelate the Bishop of St Albans referred to this.
The 25-year environment plan introduced in 2018 clearly set out five environmental principles, with the goal of achieving clean and plentiful water within a generation. Four years have passed since 2018. Significant steps therefore need to be taken to achieve that goal.
The Government have stipulated that water companies will invest £7.1 billion in environmental improvements between 2020 and 2025, including £3.1 billion on storm overflow improvements. This is a significant sum of money, and we are already two years into this five-year timeframe. Can the Minister say how much progress has been made and how much of the money has so far been spent on improvements?
The Storm Overflows Taskforce has been set up, as the noble Earl, Lord Caithness, said. It produced a report in November 2021 calling for the complete separation of wastewater and stormwater systems nationally. This would allegedly cost between £350 billion and £600 billion, and would be highly disruptive and complex. Some of these costs could be met by reducing bonuses for water company CEOs and shareholders.
Separation of wastewater and surface water was proposed in the 1960s, and here we are today, with huge sums of money attached to something that should have been completed years ago. Of course, it will be highly disruptive, but so is flooding of surface water, bringing with it raw sewage into the homes of those affected. It will cost money, but that must be found.
During the passage of the Environment Bill, the noble Duke, the Duke of Wellington, worked tirelessly to ensure that it had sufficient measures to tackle discharges from storm overflows. Significant clauses and assurances were removed in the other place, and a new clause introducing a duty for companies to secure a progressive reduction in harms caused by discharges and giving the Secretary of State and Ofwat enforcement powers was substituted. Can the Minister say whether Ofwat has so far used any of its enforcement powers since the Environment Act passed into law?
The water industry has done much to improve chemical levels, such as cutting phosphorus from sewage treatment works by 66% between 1995 and 2020. By 2027 it will have cut that by nearly 90%. This investment cost the water companies £1 billion—that is a drop in the ocean.
Water UK, which represents all water and sewage companies in England, Wales, Scotland and Northern Ireland, is calling for a new rivers Act. I support it. Such an Act would increase the rollout of nature-based solutions, end the automatic right to connect, and enable consumer behaviour on unflushables to change. I would also add a limit to water company CEOs’ bonuses.
The new Act would introduce a move towards a more outcomes-based approach to environmental regulation, as outlined in the White Paper Water 2050, enabling the adoption of a much longer-term approach. The Water Industry National Environment Programme is one of the sources of private sector finance in environmental improvement, totalling £5.2 billion between 2020 and 2025. This must be reformed to move away from concrete, end-of-pipe solutions targeting traces of specific chemicals, which may not be causing real problems in rivers. We instead need to see fuller assessments of river catchments which include carbon and biodiversity.
Every river should have a single investment plan backed by government and regulators, local authorities, farmers, water companies and local communities, as my noble friend Lord Stoneham said. Only then by working together will the problem be tackled. All partners need to be brought together, with funding, to work towards the same goals.
As I mentioned, the planning system has a part to play, by removing the automatic right for housing developers to connect surface water to the public sewer in lieu of more sustainable drainage systems. This should be a mandatory requirement, not something that can be ignored. No further connections of surface water to sewers should take place. Powers should be given to water and sewerage companies to remove misconnected surface water drains from the foul sewer. Only if these measures are implemented will we see an improvement in the quality of the water in our rivers, streams and coastal areas. As can be seen from comments made today, everybody is extremely worried about this issue. The law is there but it is not being implemented. It is time that this was taken seriously and that all involved played their part. This includes the vastly overpaid CEOs of water companies, who should be held to account, not for the level of their profits but for the harm that they have caused.
Baroness Hayman of Ullock (Lab)
My Lords, this has been a really good debate. I congratulate the noble Lord, Lord Oates, on securing it. I also join him in paying tribute to Feargal Sharkey, who has done so much to raise this issue. I also pay tribute to Lord Chidgey, who is greatly missed in this House.
While we have been enjoying rather dry weather recently, and water companies’ attention may be on supply issues, that should not diminish the importance of continuing to talk about how we deal with challenges around storm overflows and other forms of sewage release. The right reverend Prelate the Bishop of St Albans, who is not in his place, gave an appalling example of sewage releases into the River Ver. That kind of behaviour from water companies is not acceptable.
How we treat sewage was also brought into focus recently by the extremely worrying news that traces of the polio virus were found in an east London sewage works. Any release of sewage has potential public health implications, but this incident is particularly concerning. The noble Baroness, Lady Jones, and others, talked about antibiotics being in water and the serious health concerns around that. As she said, this is about having good, clean, healthy water.
I want to think about the progress on tackling this issue. It was four years ago this month that the Environment Bill was first announced. This weekend will mark eight months since the final version of that legislation achieved Royal Assent. As other noble Lords have mentioned, during the passage of the Environment Act, concerned Members of Parliament and Peers of all political persuasions pushed the Government to take clear, decisive action to reduce sewage pollution and improve the UK’s water quality. This is a cross-party issue.
I again pay tribute, as others have done, to the noble Duke, the Duke of Wellington, for his persistence during the Environment Bill, and to other colleagues who supported him. It was due to that that the Government made concessions in this area. As the noble Baroness, Lady Altmann, said, it was good to see that changes were made to that legislation to improve what is happening with sewage discharges and our water quality, but Ministers’ ambition was not high enough—not for us or for a number of other organisations. We have been told by Ministers that eradicating storm overflows entirely—this is one of the things that the noble Duke got so frustrated about—was simply too expensive and that any further attempts to force the water companies’ hands would produce little by way of result but would ultimately penalise bill payers. Of course that is not what we want to see.
While we clearly do not deny the right of private companies to make a profit, it is hard for water companies to plead poverty. The noble Lord, Lord Oates, mentioned the salaries and bonuses given to people at the top of water companies, and my noble friend Lord Sikka talked about the huge sums of money involved. When we think about the huge sums of money going to people heading water companies, we also need to think about what is happening with dividends to shareholders. The University of Greenwich has done some analysis which showed that between 2010 and 2021 dividends worth £19 billion were paid to shareholders in water and sewerage businesses operating in England. Is that the best use of water companies’ money?
At the same time, if you compare current investment in wastewater management with the level seen in the 1990s, all but two companies are spending less, with the net impact being a reduction of £526 million every single year. The same is true of capital investment in long-term solutions. The noble Lord, Lord Stoneham, said that it is important that we have long-term solutions and I agree. Companies were investing £1 billion a year less in 2021, compared to 1991. Perhaps we could accept these trends if the underlying problems were being resolved but the sheer volume of dumped sewage—as we have heard, there were more than 370,000 incidents last year—is almost beyond comprehension and, as the noble Lord, Lord Oates, said, every water company does this.
The current system is not working so we have to consider why. The answer seems to lie in what can be described only as the half-hearted efforts of Defra Ministers and key figures at Ofwat and the Environment Agency. I am sure the Minister would not include himself in that, so can he explain why it is taking so long to sort this out properly? Despite the Environment Bill dating back to 2018, it was not until 31 March this year that Defra launched a consultation on the subject and now, as others have said, we must wait until 2050 to reach an 80% reduction in discharges.
My noble friend Lord Campbell-Savours talked about the impact of pollution on rivers and lakes in Cumbria, which I have also seen first-hand. I thoroughly support him when he says, “For goodness’ sake, can’t the Government speed up on this?” I draw attention to the remarks of the noble Baroness, Lady McIntosh of Pickering, about flooding and the impact of new developments. This is important. We have to work across government. Planning is an integral part of solving this problem. The noble Baroness, Lady Bakewell, talked about SUDS and foul sewers and connections to new developments. What work is being done across government to look at exactly how this can be solved, particularly around planning and new developments?
Farming has been mentioned by a number of noble Lords; the noble Earl, Lord Caithness, in particular made some pertinent points around this. I would be interested to hear the Minister report on what work is being done with farmers and the Environment Agency to reduce river pollution on farms.
However, with the current events in Westminster, I suspect that tackling sewage pollution is not the Government’s number one priority—although there is clearly a bit of a clean-up taking place at the moment. Whoever ends up running the country needs to get a grip on these issues because there are huge costs not only to local communities but to our wildlife and increasingly fragile natural environment.
This debate has provided an important opportunity to take stock. I will listen carefully to the Minister’s response but he should perhaps think about taking forward the suggestion from the noble Earl, Lord Caithness, that this issue should also be debated in the autumn. Then might be a good time to look at whether any of the promised progress has been made—because progress is what we need.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
My Lords, I refer noble Lords to my entry in the register. I congratulate the noble Lord, Lord Oates, on securing this debate and thank noble Lords for their contributions.
The noble Lord, Lord Oates, was absolutely right to mention the late Lord Chidgey. I remember having a very good debate about chalk streams with him in this Chamber just before he died. He saw my passion for them and raised me his. He was a great fighter for river health in this place.
My wife refers to my local river as my mid-life crisis; I suppose it is better than a fast car or soaring political ambition. I share noble Lords’ indignation and frustration that our rivers are not of the quality they should be and not in the state they should be in. That 14% figure is shaming. It is a high bar to reach. One wonders how many rivers there were in the past. One fact we must always remember is that we have been putting sewage, in one form or another, into our rivers for decades—centuries, even—but it has gotten out of hand and must stop.
The noble Baroness, Lady Ludford, talked about her eponymous sewer: “Sarah’s sewer”. In my former life as the Water Minister, I remember being shown “Prescott’s sluice” in the East End of London. I am not sure that I want to have a sluice named after me; the noble Lord, Lord Prescott, who was here earlier, may be able to tell me whether it was named after him. I am trying to think of alliteration; perhaps my sewer should have been called “Dick’s drain” because, when I arrived as Water Minister in 2010, everyone was opposed to it. The chairman of Ofwat took me on to Westminster Bridge, pointed to the river and said, “It won’t be a different colour if you spend billions on a new sewer. It will look just the same but will have cost water customers an enormous amount of money”. It was opposed right across politics. The noble Baroness is right that her former colleague, Simon Hughes—the former MP for Bermondsey—fiercely opposed it. The noble Lord, Lord Berkeley, and many others used to come and see me about it. Indeed, like a student going in front of a don, I had to go right to the top of the Government to tell Oliver Letwin why his fears were not to be realised. I am glad that I now see it under construction and that this iconic river, in one of the great cities of the world, will be cleaner as a result.
A healthy water environment is fundamental to a thriving economy, to abundant biodiversity and of course to public enjoyment of our beautiful rivers, lakes and bathing waters. The noble Lord, Lord Stoneham, made the very good point that this is not subject to the four-year or five-year electoral horizons that most politicians look to; we want to see generational and multidecadal change. The Government’s 25-year environmental plan includes a commitment to restore three-quarters of our water bodies to close to their natural state, but we know that we need to do more to meet this rightly high bar. That is why we are going further and faster than any Government in protecting and enhancing the health of our rivers and seas. This has included ground-breaking action to massively reduce the harm caused by storm overflows.
The noble Lord mentioned the importance of civic society. Politicians can hold Governments to account but the public can too. A huge breadth of civil society groups stand up for their rivers, and I remember from when we ran a campaign called Love your River how important it is to give people their sense of place.
Like the noble Baroness, Lady Jones, I can admire the noble Lord, Lord Sikka, but I can disagree with his points. He talked about privatised ownership being some sort of fetish. Actually, I would say that £150 billion of investment in our water sector would not have been reached by any degree if it had still been in public ownership. The owners of those companies would have had to get in the queue behind the health service, pensions, the police, hospitals and so on. Renationalisation would require a future Government to buy out the pension funds that pay perhaps his and perhaps my pension, and perhaps the pensions of many people on low incomes. The cost of buying Thames Water was estimated a year or two ago—my figures might be out of date—at £12 billion. To buy out the entire water sector would be a terrible shame. It would be the wrong thing for investment.
Lord Sikka (Lab)
The numbers that the Minister quotes have little or no substance. If water companies had to meet their statutory obligations, the chances are that their income streams would actually be negative. They would be begging the Government to buy them out; we would not have to pay them anything.
Lord Benyon (Con)
I do not agree with that. I also believe it is good that international sovereign wealth funds want to invest in our regulated utility sector, but it has to be a regulated sector that cracks the whip when it needs to—that is, when those companies do not do what they are required to.
The noble Lord, Lord Oates, asked the House to take note of the impacts of current sewage disposal rates in UK rivers, and further noted the responsibility of water companies to alleviate these impacts. There are two main types of sewage discharges into the water environment by water companies: treated and untreated. Discharges of treated wastewater into our waterways are one of the most significant pressures on the water environment. Treated sewage is the biggest source of phosphorus within the water environment, and excess phosphorus is the most common reason a water body fails to meet good status. Water companies are required to reduce phosphorus loads into the water environment from treated sewage by 50% by 2027. We have recently consulted on a proposal for an Environment Act target to deliver even more progress and deliver an 80% reduction by 2037.
However, it is the untreated discharges that are understandably generating the most public interest. Discharges from storm overflows not only impact the ecology of the receiving water body but can also impact public health where water bodies are used for recreational activities. We have been clear that the current use of overflows is completely unacceptable. They were only ever meant to be an emergency measure but now they are seemingly part of doing business; anecdotally, it seems that only centimetres of rain can trigger them, and that is simply not good enough. We have made it crystal clear to water companies that they must massively reduce sewage discharges from storm overflows as a priority. If we do not see the change we expect, we will not hesitate to take further action.
Baroness Ludford (LD)
I am grateful to the Minister and sorry that I missed the first minute of his response. Following the theme of my speech, can I ask that another term be used instead of “storm overflows”? It is the biggest excuse that the water companies rely on. It sounds like, “It’s an act of God; it’s a storm; we couldn’t have anticipated this”. If another term could be found it would help to shift the debate.
Lord Benyon (Con)
The noble Baroness may well be right. I agree that there probably needs to be a change. Just behind us, the River Thames is subject to storm overflows that we are hoping to relieve with the Thames Tideway tunnel. With just a few millimetres of rain that one could not call a storm, many other towns, cities and rivers are similarly affected. We have made it clear that the companies must massively reduce sewage discharges from storm overflows as a priority.
My noble friend Lady McIntosh raised a number of good points. I applaud the Slowing The Flow project that she mentioned in the constituency that she used to represent. Importantly, she went on to talk about flooding. There is an easy line that campaigners and politicians use: “We should never build in flood plains”. We are in a flood plain here, in York and in most of our cities. Are we honestly saying that we should never build in those communities? We need to build flood-resistant buildings and to remember the impact that buildings can have on a creaking—sometimes Edwardian or Victorian—sewage system. That is why it is vital to link the pieces together.
We are the first Government to instruct water companies in legislation to massively reduce the use of storm overflows. Earlier this year, the Government published a new set of strategic priorities for the industry’s financial regulator, Ofwat. This set out for the first time the direction from government that water companies must take steps to
“significantly reduce the frequency and volume of sewage discharges from storm overflows”,
and that the regulator should ensure funding should be approved for them to do so. The Government have also committed to undertake a review of the case for implementing Schedule 3 to the Flood and Water Management Act 2010—a case close to my noble friend’s heart. Schedule 3 was designed to set standards for the construction of sustainable drainage systems on new developments, and to make any surface water drainage connections to foul sewers of those developments conditional on the approval of the sustainable drainage systems. This, therefore, can also seek to address the right to connect, which has been of concern to many colleagues here and elsewhere who have mentioned it.
A number of noble Lords mentioned wet wipes. The Storm Overflows Taskforce is considering wet wipes as a contributing factor to overflows and treatment works. The noble Baroness, Lady Bakewell, talked about the importance of stopping wet wipes getting into our sewage system. We have a call for evidence that will explore a possible ban on all wet wipes containing plastic. We continue to encourage water companies and wet wipe manufacturers to raise concerns with the consumers and try to get this situation changed.
The review of sustainable drainage systems in planning policy and other developments towards reducing new burdens on the sewage system from surface water drainage from new developments really matter. My noble friend Lady Altmann mentioned nature-based solutions. These need to be understood. When I first raised them with Ofwat a decade ago, it did not like them because they could not be measured. There has been a sea-change and now nature-based solutions are much more palatable to the regulator and all concerned.
In addition to the actions that the Government are taking, we are setting out clear requirements on water companies to put in place the mechanisms to hold them to account for delivering reductions in the use of storm overflows. Last year, our Environment Act brought in a raft of new duties on water companies, which are now legally required to secure a progressive reduction in the adverse impact of discharges from storm overflows. The Act also included a duty on the Government to produce a statutory plan by September this year to reduce discharges from storm overflows and report to Parliament on progress.
On 31 March, we published a consultation on the storm overflows discharge reduction plan, which will revolutionise how water companies tackle the number of discharges of untreated sewage. Water companies will face strict limits on when they can use storm overflows and must completely eliminate the harm that any sewage discharge causes to the environment. This will be the largest programme to tackle storm sewage discharges in history.
In the consultation, the Government proposed several specific targets for water companies to achieve. One example that addresses some of the points raised is that, by 2035, the environmental impacts of 75% of overflows affecting our most important protected sites will have been eliminated. These are the most important protected sites; they are used for bathing and are valuable ecosystems that are deteriorating and need to be addressed. By 2035, there will be 70% fewer discharges into bathing waters.
The Government will also publish a report setting out the actions that would be needed to eliminate discharges from storm overflows in England. We will be very clear about the costs that this would place on consumers and their bills. Under the Environment Act, water companies are now required to produce comprehensive statutory drainage and sewerage management plans, which will set out how they will manage and develop their drainage and sewerage systems over a minimum 25-year planning horizon. They must include how storm overflows will be addressed.
The right reverend Prelate the Bishop of St Albans asked some pertinent questions. The water industry was privatised in 1989, with the aim of attracting much-needed investment into the sector through private capital markets, rather than by relying on core government funding. Since privatisation, water companies have delivered £160 billion of investment, including £30 billion invested in the environment. This is equivalent to around £5 billion of investment annually. The privatised model continues to attract investment, and, for the period from 2020 to 2025, water companies have invested £51 billion, including over £7 billion of investment in the environment. This will reduce pollution incidents by 30% and deliver improvements to more than 12,000 kilometres of rivers.
The right reverend Prelate talked about the importance of joining up the pollution in our rivers with our farming policy, and he is absolutely right. I was in his diocese recently at the Groundswell event, which showed how farmers can weaponise their soil to protect rivers and the environment. He will be pleased to see the Government’s riparian tree-planting proposals, which will protect river systems by planting more trees on the edge of water.
My noble friend Lord Caithness was absolutely right to raise catchments; we need to think about this landscape to protect water bodies and, of course, aquifers. I am such a geek that I check the Pang Valley Flood Forum’s data whenever it rains to see the impact on my local river. I refer noble Lords to the evidence given to the EFRA Select Committee by the Government’s preferred candidate to take over the Environment Agency, Alan Lovell, who comes from a farming family and understands the impact, both beneficial and damaging, that farming can have on waterways and rivers. We hope that noble Lords will appreciate this appointment and the other work that we are doing with public bodies to make sure that this remains a priority.
The Environment Act also includes a power for the Government to direct water companies in relation to the actions in these drainage and sewerage management plans. The Act includes duties to massively improve the monitoring and transparency of the use of storm overflows. Water companies will be required to publish spill data in near real time and monitor the water quality impacts, upstream and downstream, of all storm overflows. Water companies and the Environment Agency will be required to publish summary data on storm overflow operation on an annual basis.
The Government have been clear to water companies that we will not hesitate to take enforcement action if they are failing to meet their obligations. I say to the noble Lord, Lord Sikka, that the fines get unloaded not on customers but on shareholders. The noble Lord is shaking his head, but this is true: it is a rule that we have imposed.
Since 2015 the EA has brought 49 prosecutions against water companies, securing fines of over £137 million. On 9 July last year, Southern Water was handed a record £90 million fine after pleading guilty to thousands of illegal discharges of sewage which polluted rivers and coastal waters in Kent, Hampshire and Sussex. The fine has been paid solely from the company’s operating profits, rather than added to customer bills.
We are holding the industry to account on a scale never done before. Ofwat and the Environment Agency have launched the largest investigations into all water and wastewater companies in England and Wales in the light of information suggesting that water companies in England may not be complying with their permits, resulting in excess sewage spills into the environment, even in dry periods.
Before coming to this role I was on the board of River Action, which seeks to address the issues around the River Wye, and across many other rivers. These combine the problems of sewage in the rivers and phosphates from farming and make sure that we are holding relevant people to account, so I have some form on this.
In conclusion, the frequency of discharges from storm overflows is wholly unacceptable. I have set out the Government’s ambitious agenda to deliver huge reductions in the use of storm overflows for the first time ever. This includes: reviewing the case for implementing Schedule 3 to the Flood and Water Management Act; a direction from government to Ofwat in the strategic policy statement setting out that water companies must take steps to
“significantly reduce the frequency and volume of sewage discharges from storm overflows”,
and that the regulator should ensure funding be approved for them to do so. Further measures include: statutory drainage and sewerage management plans, with powers of direction; a storm overflows discharge reduction plan, with clear, specific and ambitious targets; and statutory requirements for improved monitoring of sewage discharges.
It is time for water companies to step up and deliver on their promises. We have all set out our expectations that they must do better, as have the public. The Government recognise that healthy and well-managed waters are a cornerstone of our economy and our well-being. We are committed to collectively addressing all of these issues alongside our action on storm overflows to deliver on our pledge to hand over our planet to the next generation in a better condition than when we inherited it.
Lord Oates (LD)
My Lords, I thank all noble Lords who have taken part in this very informative debate, and I thank the Minister for his response and his evident passion for this issue. Personally, I think this debate came at a good time, but for those who disagree, such as the noble Earl, Lord Caithness, I unreservedly lay the blame for the timing at the feet of my Chief Whip.
I also want to pay tribute to the noble Duke, the Duke of Wellington. I was very pleased, to be one of the signatories to his amendment to the Environment Bill. I fully recognise that there are many factors beyond the responsibilities of the water companies, but they are central to this.
As a liberal, I have a firm belief in markets and competition driving innovation and public benefit, and I come at these issues from a different point of view from that of the noble Lord, Lord Sikka. But in the water industry there is no market and no competition, there is monopoly, and as a liberal I am totally against those who exploit monopolies to gouge the public and enrich themselves, particularly when they are doing so at the expense of our precious natural environment.
Ownership is a bit of a distraction. The issue is appropriate and tough regulation, a sewage bonus ban on the water companies, and, if necessary, a cap on excessive CEO pay until their statutory duties are met. I ask the Minister to revisit this issue of bonuses and remuneration and to get all the water companies to start taking their responsibilities seriously so that we can end this sewage scandal.