South West Water: Performance
(1 year, 8 months ago)
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Simon Jupp (East Devon) (Con)
I beg to move,
That this House has considered the performance of South West Water.
It is a pleasure to serve under your chairmanship, Sir George. I am delighted to have re-secured this important debate; colleagues will know that it was postponed from 8 February because of the President of Ukraine’s visit to Parliament. The debate is an opportunity for colleagues from across the south-west to debate the quality of our local water company and hold it to the highest possible standards.
I put pen to paper ahead of this debate after a stroll along Sidmouth beach on Sunday. The water was glistening in the sunshine as I wandered from where I live near the Byes along the River Sid to the seafront and around to Jacob’s Ladder. We must do all we can to protect our rivers and coastline, and it is in that spirit that I secured the debate, because all is not well in our waters.
Excess rainwater and sewage are ending up in our rivers and the sea from storm overflow discharges from combined sewer overflows, or CSOs. Those mechanisms are meant to be emergency safety valves to stop sewage backing up into our homes and streets but, to put it simply, the infrastructure cannot cope with the growing population and heavier storms. Our sewage systems are old, many of them dating back to Victorian times, and water companies have been relying on storm overflows far too often, without adequately addressing the issues behind their continued use. South West Water needs to invest more in infrastructure to protect the public from poor water quality, rather than protecting its company bonuses.
In recent years, a spotlight has been shone on storm overflows and CSOs. Water tourism is booming across our region, including windsurfing in places such as Exmouth and Sidmouth in my constituency. However, there is another reason why people have finally started talking about the issue: the Conservative Government have put in place a plan to improve our water, giving us all an opportunity to hold water companies to account.
Last summer, the Government published their storm overflows discharge reduction plan, which requires water companies to deliver their largest ever environmental infrastructure investment—£56 billion in total. For that, I pay tribute to my right hon. Friend the Member for Camborne and Redruth (George Eustice) and my hon. Friend the Member for Taunton Deane (Rebecca Pow). We have a plan in place, and I and other colleagues present will not be shy in holding South West Water to the highest standards.
Of course, in a perfect world, we would stop sewage spills completely and immediately. Sadly, that is virtually impossible in the short term; because of the pressure on our water infrastructure, we would risk the collapse of the entire water network, and the eye-watering costs involved mean we would need not just a magic money tree, but a whole forest. The people of East Devon are already facing the challenge of high inflation driven by Putin’s war in Ukraine. Energy bills are impacting the cost of living across the south-west, including in my constituency, and fuel and food prices have shot up over the past year.
The Government cannot in good conscience legislate to let water bills reach astronomical levels—they are already high enough, especially in the south-west—but some of our political opponents seem to think otherwise. The Liberal Democrats have accused Conservative MPs of voting to pollute our waters and seas. That is frankly ridiculous. Why would any of us vote to put sewage in the sea? I live by the sea in Sidmouth, and I love where I live. I am calling on South West Water to invest in infrastructure in our town and across East Devon.
Anthony Mangnall (Totnes) (Con)
It is not only ridiculous; it is incorrect. The legislation we have passed is the first ever to address this issue, and it is leading to meaningful action. Let us be clear: it is incorrect to suggest that any Member of Parliament voted to allow sewage to flow into our rivers or on to our coastline.
Simon Jupp
My hon. Friend is absolutely right. I am proud that the Conservative Government introduced the Environment Act 2021. It is a landmark piece of legislation that provides a domestic framework for environmental protections following our departure from the EU. It places statutory obligations on water companies to upgrade our Victorian sewerage infrastructure, and my Conservative colleagues and I fully supported the Bill so that it could become law. Let us not forget that this is the first Government in history to crack down on sewage discharges.
Political argument and debate have been pushed aside for taunts and jibes by people who really should know better. Claims have been misinterpreted and twisted in often vicious ways with, I am afraid to say, dark consequences. Those present will know that that has led to colleagues facing threats and abuse in the street and on social media. I was really upset to hear that one hon. Member recently received faeces through their letterbox as a result of this politics. That is unacceptable, and any Member here today who repeats those claims should be ashamed of themselves.
We all want healthy seas and rivers, clean bathing waters and thriving coastal environments and marine species, but previous Governments have ducked and dived on the issue for far too long—including, dare I say it, the Liberal Democrats when they were in coalition. Brushing aside attempts to muddy the water, a key reason that this issue receives so much more publicity now is that we finally have the data to hold our water company to account. In 2016, the proportion of storm overflows monitored across the network was 5%. By the end of the year—or perhaps sooner—that figure will reach 100%. We are getting a fuller picture of when and for how long each storm overflow operates.
I urge the Minister to ensure that water companies—not just those in the south-west, but across the country—maintain those monitors and fix any faults immediately. We deserve the full picture all year round. If they do not do so, the Environment Agency should step in with enforcement action—and if it needs resource, so be it. New data is shining a spotlight on the performance of water companies. We have stronger legislation, an ambitious timeframe with an eye on the cost of living, and a revolutionary level of data.
Colleagues have gathered here today to discuss the performance of South West Water in particular. I do not need to remind them that the company is currently rated one star for environmental performance by the Environment Agency; it is the joint worst in England. I know that colleagues of all political colours here today are disappointed and frustrated by that. Our communities in Devon, Cornwall and parts of Dorset and Somerset deserve so much better.
As politicians, we must do what we can to hold the leadership of South West Water to account. I have met the company many times since my election as the MP for East Devon in 2019. It is always keen to talk, and for that I praise it. Some colleagues will remember our meeting with the chief executive in Westminster in December, which I chaired. We were told that South West Water’s overflows halved from 2021 to 2022 across the bathing season. That was positive news, and not before time, but last summer was particularly dry—the Environment Agency declared an official drought across our whole region—so it may be that mother nature had the most influence on that reduction.
South West Water must be clear and transparent about its progress on its plans to reduce storm overflow discharges. It is launching an updated website with better and more timely information, which is welcome, but it did not take that decision off its own back. The Government’s storm overflows discharge reduction plan stipulates that water companies should publish information in near real time. That is further evidence that it is Conservative policies put in place by this Government that have introduced the framework that demands that water companies buck up their ideas.
However, it is not just in the corridors of Westminster that the companies have their feet held to the fire. I am pleased to be working alongside stakeholders in East Devon, including Sidmouth Town Council and many others, and I continue to press South West Water urgently to fix specific local problems as and when they crop up. I secured compensation for residents in Clyst St Mary in my constituency after foul flooding overtook the entire place, despite South West Water at first refusing to pay compensation. That was not company policy, but it certainly should be now.
Engagement between politicians and South West Water is an important first step. Under powers granted by the Environment Act, the water regulators can launch criminal and civil investigations into sewage spills. Ofwat can fine companies up to 10% of their annual turnover, which is potentially hundreds of millions of pounds, and the proceeds will now be channelled directly into work to improve water quality. That is another major step, which I very much welcome and I know that colleagues will too.
It is important to note that, as a result of those policies put in place by a Conservative Government, South West Water was fined £13 million last year alone because of missed targets. Although such financial penalties are indicative of the company’s poor performance to date, they prove that the regulator now has some teeth.
Kevin Foster (Torbay) (Con)
My hon. Friend has rightly outlined that one of the reasons we can have this debate and there is so much focus on this issue is that monitoring has increased so significantly. This situation has not just started in the last few years; it has been happening for decades, if not since the 19th century. It is just that we now know what is going on.
Simon Jupp
My hon. Friend makes a very good point.
I know that colleagues are awaiting the outcome of Ofwat’s investigation into water company sewage treatment works and Ofwat’s separate enforcement case against South West Water. However, we do not need an investigation to tell us that awarding massive bonuses and handing out lucrative payouts to shareholders at the same time as releasing sewage 42,000 times into our waters is grotesque. The south-west deserves so much better, and water companies such as South West Water must demonstrate a link between their performance and their generous bonuses, through Ofwat’s licencing conditions.
Given South West Water’s low environmental performance score, I am sad to say that I struggle to see why bonuses even exist within the company. We pay the highest sewerage bills in the country; our money should not be used to reward failure. The Government subsidise water bills in our region by £50 per household every year. Despite huge pressures on our public finances, that Government support will continue thanks to Conservative lobbying. However, the support is discretionary on public finances. That is why I have called on South West Water to commit to funding the support itself should it ever be withdrawn by the Government. I am sad to report that South West Water has so far refused to make such a commitment.
Colleagues will be aware that the Government recently accepted an amendment to the UK Infrastructure Bank Bill that sought to ensure that water companies set out costed and time-limited plans to reduce discharges before they receive funding from taxpayers. The Government listened to the arguments that were made and agreed. We are not playing politics with pollution; we are making sure that water companies clean up their act.
As we can see from this debate, this is clearly a cross-party issue, and I am pleased that the Government are working on it with all parties. We have the legislation, the investment plan and the means to hold water companies to account. We need South West Water to continue to step up, to invest and improve our sewage infrastructure, and to stop the sewage discharges.
I am proud that this Conservative Government have launched the toughest ever crackdown on sewage spills. Under the Environment Act, water companies are forced to embark on huge investment to update our Victorian sewage infrastructure. As I say, we are enforcing that with bigger fines of up to 10% of a company’s annual turnover, with the money raised ringfenced to improve water quality.
As I have said in this debate many times, we are holding South West Water to account. Many of us in the Chamber are working with local councillors and campaign groups to deliver better services for our constituents, improving our bathing waters, protecting our natural environment and maintaining the vibrancy of our coastal communities.
I look forward to hearing colleagues’ contributions as we debate the performance of South West Water. For me personally, its performance to date can be summed up in one word: shameful.
Richard Foord (Tiverton and Honiton) (LD)
It is a pleasure to serve under your chairmanship, Sir George, and I congratulate the hon. Member for East Devon (Simon Jupp) on his contribution.
Like other Members, I received an email ahead of the debate from Pennon Group, which owns South West Water. It reads:
“We wanted to provide you with the most recent information so that you are able to have an informed debate”.
Although that could be thought of as an act of kindness on the part of the water company and Pennon Group, I for one would rather be informed by what my constituents are writing to tell me about than by what a lobbyist suggests I should think. I will be informed by constituents and bill payers.
Since my election last June, the comments and complaints have flooded in. We have heard that South West Water has permitted sewage to flood out on to our beaches and into our rivers. I am pleased that the Minister is present, because I want her and South West Water representatives to hear about some of my constituents’ experiences.
Just this month, an Axminster constituent wrote to me:
“I’d like to know why our water bills are going up when SWW are performing so badly and why it’s okay for the CEO to get such massive bonuses. We don’t get to choose our water supply like we do for other utilities and SWW has been given a free pass to rip us off. We’ve been told for years our bills are high because of ageing pipes and the size of our coastline, so why did the CEO of SWW get such a large bonus when we have such high bills?”
A second constituent wrote to me in January, after the cold snap, to explain how their access to water had been disrupted by burst water pipes. The constituent, who is from Seaton, wrote:
“I simply have to write to express my disappointment and disgust over the lack of care and co-operation shown by South West Water. If SWW are serious about customer care and ‘saving every drop’ then SWW would be making more of an effort to actually monitor those leaks which are reported to them but they are not responsible for. As a paying customer all we ever seem to get from the SWW leak team is ‘It’s not our problem.’ Surely you have a duty of care for your paying customers?”
Those are just samples of the correspondence that I have received from constituents, as I am able to bring only a few examples to bear today, but I will add one more. In December, a constituent from Beer wrote:
“Why is it that South West Water is able to charge rates that provide for update and maintenance of the sewers and drains and yet only spend 37% of their allocated budget on doing this? Is it because Pennon used some of this budget to return over £1 billion to shareholders last year? When will the government get to grips with the individuals running the water companies and pass legislation to stop the destruction of the environment from the continual discharge of untreated sewage, even in dry conditions?”
All this shows the huge discontent among our constituents, who have simply lost faith in South West Water’s ability to properly deal with the situation at hand. We are seeing sewage dumped in our rivers and on our beaches over thousands of hours, putting at risk not only the health of the public but our wildlife and biodiversity. The scale of the problem should not be understated. People feel that they are being ripped off by a company that continues to hike bills but pays out huge bonuses and large shareholder dividends while it fails to perform even its most basic functions effectively. It is clear that the company is not being run for the benefit of south-west communities and that the current regulator, Ofwat, lacks the teeth to properly police its actions.
We heard from the hon. Member for East Devon that the regulator has some teeth. If that is true, the Government permit them to be kept in a glass on the bedside table. The company is not being run for the benefit of our constituents. My message to South West Water is simple: fix the problems, focus on delivering a quality service for our constituents, and do not pat yourselves on the back for a job done so shoddily.
Anthony Mangnall (Totnes) (Con)
I congratulate my hon. Friend the Member for East Devon (Simon Jupp) on leading the charge for Devon MPs by raising this matter with South West Water and Ministers. He has ensured that we are up to date about what is going on and what needs to be done to address this issue.
I start from a position that so many of us share across the south-west and, indeed, the whole country: we suffer under an antiquated, Victorian-era system that needs to be modernised and improved quickly. We need to encourage our water companies to offer us not just words and reports, but meaningful action on the ground. It is with huge disappointment that I follow the hon. Member for Tiverton and Honiton (Richard Foord), who did not offer a single suggestion as to what water companies can actually do.
Anthony Mangnall
The hon. Gentleman has had his chance to give his speech.
In the course of my remarks, I will point out some of the flaws, but also some of the things we expect water companies to be doing in our constituencies. I hope South West Water and all other water companies will be listening to the debate, because today we can set the standards. Today we can set out our knowledge of what is being done across the country, and ensure that the standards are in place, and that the fines and action are taking place.
Where is South West Water to date? It is absolutely right that it has met its mains repairs and unplanned outage performance commitment levels; it is absolutely brilliant to hear that it was the top performer for internal sewer flooding performance; and it is quite welcome to hear that its sewer collapse performance and prevention was better than its commitment. Those are all welcome steps, but it is not just about recognising successes: it is about seeing the failures, talking about them and seeking to address them, and it is absolutely right that we talk about those failures today.
The first failure is that water supply interruption performance targets were not met. South West Water also did not meet the deadband score for the compliance risk index, which measures the risk of companies not meeting the requirement of drinking water quality regulations. Perhaps most egregious of all, South West Water’s pollution incidents performance was the second poorest in the country. The company has a customer satisfaction rating that is 78.4% poorer than the median of other water companies—it is ranked with one star. If we are concerned by the actions South West Water is taking, we should also be concerned about how it is viewed by the public. We must ensure there improved confidence in water companies to address and tackle the issue with meaningful results to ensure we see improved water systems, cleaner waterways, enhanced monitoring, and meaningful action from the ground up to enhance wildlife biodiversity.
According to the email we received from South West Water, which by all means is not the only source of information sent to Members of Parliament ahead of the debate—in fact, there was a great deal more—we should reflect on the fact that South West Water has delivered on 80% of its 44 operational delivery metrics and is now looking towards 100% monitoring, but although it talks about bathing water status, it does not necessarily go far enough on our rivers. The company talks far more about keeping our beaches clean, when many of us who are wild water swimmers, such as myself, like to swim in rivers all year round and are deeply concerned about the monitoring systems that are in place.
South West Water has invested billions of pounds over the last two decades to protect and enhance the rivers and coastal waters of the region, but the problem is that people do not recognise it; they do not see it or know it, and too often they do not feel it. That is one reason that I am taking matters into my own hands in my constituency in south Devon. Not only have I met representatives of South West Water and had conversations with them about their new WaterFit programme, which is due to go live in the coming weeks, with a new website specifically designed to give up-to-date, real-time, understandable and digestible information to members of the public about the quality of our water; I will also be getting representatives of South West Water to come to Brixham on 30 March and to Totnes on 27 April to discuss their plans to ensure that action is being taken, so that people can have some confidence and understanding about what needs to be done.
It is clear that a pollution incident reduction plan is working in respective constituencies across the south-west, but we must be able to show that there is an increasingly downwards trend in pollution. My hon. Friend the Member for East Devon was right to say that last year was a dry year, and therefore we must take the data with which we are presented with a pinch of salt, but let us use this opportunity to speed up the way in which our water companies deliver their projects.
I have three suggestions as to where we might go. The first is about where we are building. There is a shortage of houses across the south-west. There are a huge number of development projects across our countryside and rural areas attached to towns, but all too often we are building staggering amounts of houses but are not taking into account the infrastructure. When the infrastructure is not taken into account, hundreds of new homes flood our sewerage networks, meaning that they can no longer cope so pollute our waterways and beaches as a result. It must be a stand-alone policy that for any development plan to go forwards, the infrastructure must already be in place, rather than leaving it to chance.
Secondly, it is absolutely right that Ofwat should be able to issue sizeable fines, but all too often the fines take too long to implement, and there is a certain level of opaqueness around where they end up. It must be clear and certain that fines from water companies are put back into ensuring that waterways, beaches and coastlines are clean, and that the process happens in a speedy manner.
Richard Foord
The hon. Member suggests that some solutions should be offered by other parties. I will give him one: scrapping Ofwat. It has been found to be a toothless regulator, which the Government have permitted to be toothless. The hon. Member should advise the Government to get a regulator with teeth.
Anthony Mangnall
There was no question there. If the hon. Gentleman could not be bothered to put that point in his speech, that is hardly my problem.
Let us use the body that we have in place, and ensure that that leads to meaningful action; that can happen. If the fines we want to see water companies pay for failure of duty can be issued, we can restore confidence in the network by seeing that money go back into the system. We need the regulator to be enforced with teeth for meaningful action. Scrapping it and then looking for a replacement, which is inevitably what will happen, will not lead to any better levels of responsibility from water companies.
In my constituency, I have seen £5.3 million invested in our waterways. It is clear that more money will be needed and invested. We need to ensure that monitoring is 100% all year round, and that we keep an eye on that. Some of us swim all year round, so we want to see that the monitoring is in place. I am acutely aware of campaigns across my area—from the Friends of the River Dart groups to those on our beaches such as Surfers Against Sewage—to ensure that bathing water status is protected.
This is an important issue on which the Government have taken meaningful action. We must be clear about the progress we have made to date. We cannot click our fingers and ensure that things happen immediately, because this takes time. Not only would it be impossible to click our fingers and say to a water company that it must do everything immediately; it will lead to serious implications for the existing network, with flow back to people’s houses.
We must be clear about that. The steps that we have set to 2030, 2035 and 2050 are the right steps. They are measurable, with report indicators to come back to Government to justify their actions. Through those mechanisms, we can hold the water companies to account to ensure they are delivering on time, at speed and at price —and that they are not pushing that back to consumers.
We all want to protect our coastlines, which is why the Environment Act 2021, the Agriculture Act 2020 and the Fisheries Act 2020 contain enforceable legislation to ensure that we look after our waterways, enhance biodiversity, and keep this a green and pleasant land to live upon.
Anne Marie Morris (Newton Abbot) (Con)
I thank my hon. Friend the Member for East Devon (Simon Jupp) for this timely debate. It is clear from the contributions across parties that we all feel strongly that this issue must be gripped and grasped.
The water industry is fairly heavily regulated. It has Ofwat, the economic regulator; the Environment Agency, the environmental regulator; and the Drinking Water Inspectorate, the drinking water regulator. The key is to make those regulators work effectively together, and to understand the underlying problems. As has been explained, finding a problem and imposing a penalty is not enough. We have to ensure that the problem itself is rectified.
South West Water did not perform well under Ofwat. The December 2022 report, which my hon. Friend the Member for East Devon referred to, set out that South West Water had fallen below its commitment level in five separate areas: customer satisfaction; the number and duration of water supply interruptions; water quality; the second highest number of pollution incidents in the country; and treatment work compliance, resulting in the £13.3 million fine.
Given that Ofwat set other targets, one asks why those have not been met and acknowledged. There is an allowance for investing in improvements, and South West Water had the second lowest investment. Given that it has some of the biggest problems, why is it the second lowest spender? It spent only 46% of its allowance—why? It is incumbent on South West Water to explain that to us. I certainly hope Ofwat will dig a little deeper into the reasons and look at what we might do differently to ensure the right level of investment. As has been said, the Environment Agency, the second regulator, looked at six metrics, and South West Water got only one star—the lowest rating—on environmental performance.
My hon. Friends have already set out what the Government have rightly done to shine a light on the problems and inadequacies, and to put in place a remedy, but we need more than just fines. We need to unpick how we will drive forward the change that is needed and understand better the cause of the problem. We regularly blame the low settlement figure on privatisation, given the geography of the south-west, but other than the continuing Government contribution to our water charges, for which I am extremely grateful, I am not aware of any work that has been done to look at the underspend. Is that argument justified, and how can that investment be put back? South West Water may well say that it cannot be done, but until we know what the figure is, we cannot assess its responsibility since privatisation and identify where more help needs to come from the Government. Ultimately, although our water is in private hands, it is a public good. It may be that the Minister can help me by providing some figures on that.
The second thing we clearly have to look at post privatisation is the role of the shareholder. Do we feel that, in this case, the shareholders have been complacent? What happened to corporate governance? What happened to the obligation to be concerned about businesses’ impact on their environment? What happened to their social responsibility? It seems very strange that there is a tick in the box in South West Water’s accounts, yet there are these incredible shortfalls.
Anne Marie Morris
I will not.
We then have to ask whether the three regulators were asleep on the job. Why is it only now that the Conservative Government have shone a light on the problem that they have suddenly woken up and begun to take steps? Further work needs to be done.
Are there some peculiarities about the geography of the south-west—its size, our farming communities, which inevitably lead to a degree of run-off, and the housing developments? As has already been explained, the challenge is that our water company has no ability to say, “No, the system we currently have cannot accommodate this new housing.” We know that there is pressure for housing and that we need that housing, so where should the responsibility lie for making the right investment so that the water and sewage system is fit for purpose? It seems that there needs to be a much greater investment obligation on the developer; it should be obligated to work with the water company to ensure that that investment can be made in the context of the existing infrastructure.
South West Water has clearly recognised that much more needs to be done. Like my hon. Friends the Members for Totnes (Anthony Mangnall) and for East Devon, I have had regular meetings with South West Water. We are at the point where South West Water is listening and, as my hon. Friend the Member for East Devon made clear, the level of investment has gone up significantly. The question is: is it enough? We ought to look closely at the numbers—the investment that has been put in, how that falls short of what could have been put in as agreed with the regulator, the rewards for shareholders and the bonuses for executives. Does it feel right? Does it pass the smell test? Right now, the jury is out.
Anne Marie Morris
I am afraid not. Remember that one of the key shortfalls was the lack of communication. South West Water’s communication has definitely improved. The WaterFit app, which my hon. Friend the Member for Totnes referred to, will be one of the first in the country, and it would be a good start. I understand that there is also now a programme for interaction with schools, and young people are asked for their views about the right way to improve water quality. All that is very good, but communication has to be converted into action. We need to look at where we go from here. South West Water is a private company, but it is for public good.
Anne Marie Morris
I am afraid not. When we looked at some of the shortfalls in the railways, the Government stepped in, because they recognised that the sector was not working. I give credit to the Conservative Government for going above and beyond anything that had been done before. Is there yet another step that needs to be taken to ensure that the public get the quality of water they need and deserve, given its significant impact? It is what we, as human beings, are mostly made of, and it is a key driver of our health and wellbeing. It matters fundamentally. This issue has been of great interest to the Minister, and she is to be credited for the work she has done. Does she think the Government could look at going further, alongside what they could do by working further with the three regulators, to improve water quality in the south-west?
Ruth Jones (Newport West) (Lab)
It is a pleasure to serve under your chairmanship once more, Sir George. I am grateful for the opportunity to speak in the debate. I congratulate the hon. Member for East Devon (Simon Jupp) on securing it and for raising such important issues in his opening remarks. I also congratulate the hon. Member for Tiverton and Honiton (Richard Foord) on raising important points, and I welcome him as a new friend to the Opposition Benches.
In a nutshell, we have a water crisis in this country. People up and down England are simply and rightly sick and tired of the impact that sewage discharges continue to have on our streams, rivers, seas and local economies. They are sick and tired of leaks, burst pipes and poor-quality water. It is clear to all of us that Ministers need to get a grip of this crisis—sooner rather than later.
Today, we have had the opportunity to look at and address the evidently poor performance of South West Water. Colleagues will know that Ofwat—the regulator—and the Environment Agency publish annual reports measuring water companies’ performance against their performance level commitments and environmental obligations. In their most recent reports covering performance in 2021, both regulators gave South West Water their lowest performance rating. As we have already heard, that is a matter of huge concern for the hon. Member for East Devon. It is also of concern to my right hon. Friend the Member for Exeter (Mr Bradshaw) and my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard). They who would have liked to have been here but, due to prior commitments, they are unable to attend.
South West Water was also criticised for a lack of capital investment, as has been mentioned. Across the water sector, poor planning, a lack of investment and neglect of our vital infrastructure has left us with a system that leaks more than a trillion tonnes of water every year and spills raw sewage into our natural environment hundreds of thousands of times a year. As a result of Ofwat’s assessment, South West Water will be required to pay a fine of £13.3 million in the form of lower bills for consumers. The repeated and unacceptable failures of water companies are devastating whole regions in England, our coastlines, and the livelihoods and health and wellbeing of our people.
Richard Foord
Let me show the scale at which this affects the region. Does the hon. Lady know that there are more than 350,000 hours of dumping in South West Water’s areas, including on to our prestigious blue-flag beaches, three of which are among the 10 most affected beaches in Devon?
Ruth Jones
I did know those figures, but I am grateful that the hon. Gentleman has put them on the record so that I do not have to.
Last week, we had an urgent question in the House from the right hon. Member for Romsey and Southampton North (Caroline Nokes). Again, we had Ministers making empty promises and the same old tired excuses. The failure of Ministers to act means that the water companies know that they can laugh all the way to the bank. Why? Simply because the Government are not stepping up to show the required leadership. All the while, local people are suffering, whether that is because they cannot enjoy their local beauty spots or take a walk down the river, or because of the effect on the coastal businesses that are reliant on seasonal tourism to provide jobs, opportunities and livelihoods.
Anthony Mangnall
I can think of 56 billion reasons that show that the Government have acted on this issue: they have required £56 billion of investment from our water companies. I will not be the first to defend water companies, but does the hon. Lady not think that goes further and faster than the action any other Government have taken in the last 20 years, let alone the last 50 years?
Ruth Jones
I gently say to the hon. Gentleman that there has been 13 years of Tory government.
Ruth Jones
I am just saying to him that it has been 13 years, and what have we seen? We have not seen the improvement we need, which is why we are scrutinising the situation. That is our job and we will be doing that diligently.
Local people are on the frontline. They are the folk who have to manage the effects of Tory Ministers’ inaction, which is important because water shortages are exacerbating over-stressed and polluted water suppliers. The system is creaking at the seams with over 1,235 Olympic-sized swimming pools-worth of water leaks last year alone. Plugging the leaks will require £20 billion of investment and Ministers must make the water companies, including South West Water, act now.
The hon. Member for East Devon talked about what the Environment Agency can do and its need for more resources. I am glad that he has recognised that need because a lack of resources has left the Environment Agency unable properly to scrutinise the practices of water companies. I hope the Minister will to touch on how she thinks the scrutiny of their practices can be improved.
It is unforgivable that rivers in England are essentially being used as open sewers. Not one river is in a healthy condition, with none meeting good chemical standards and only 14% meeting good ecological standards. That is the record of 13 years of Tory government. The people of the south-west deserve action but, more than that, they need and deserve clean water. The Minister’s Department is full of brilliant civil servants, but, with a lack of ministerial direction, no progress has been made on delivering good ecological status in 75% of English water bodies by 2027.
I am grateful to the hon. Member for East Devon for bringing this matter to the House and I say to him that, in the Labour party, he has an ally in calling for action and real change. Under a Labour Government, we will see the water companies held accountable and services improved. We are watching, and we are waiting for action. If the Tory Ministers will not act, they need to get out of the way, because we will.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)
It is a pleasure to serve under your leadership today, Sir George. Of course, I would like to begin by thanking my hon. Friend the Member for East Devon (Simon Jupp) for bringing the subject of the performance of South West Water to us today. I know that many colleagues have been waiting to express their views, and we have heard them very clearly from Members today. There are others, I know, who could not make it, but who would very much reiterate some of the things that we have heard. I also must thank my hon. Friend for approaching the issue in an incredibly measured way. It is very serious, so I thank him for that.
As hon. Friends and Members will know, I make absolutely no secret about my disappointment with the poor performance of South West Water and the impact that it has had on the environment. It is very serious, and I met with the CEOs of all of our lagging water companies—basically those with poor performance—back in December, and had a specific meeting with the chief executive officer of South West Water in January. I have made it very clear that we need to see rapid improvement in their performance. We have all the data, whether it is about pollution incidents, storm sewage overflows, leakage, and so forth, so, rest assured, I am in really regular contact over this issue, and I do think we are making some progress.
The data is stark. South West Water has been one of the worst-performing water companies due to its high levels of total pollution incidents, which were, as has been pointed out, significantly above the industry average for total pollution incidents in 2021. It is completely unacceptable in this day and age, and I have made it very clear that urgent steps must be taken to tackle that.
I did want to say, though, that, actually, there are some positive actions being taken by South West Water, and indeed all of our water companies. We need them to be effective, and doing the job they are there for, to provide clean and plentiful water. I must say that I welcome South West Water’s steps to deliver its WaterFit project. That is a £45 million shareholder investment launched in April 2022 to reduce storm overflow discharges, alongside its existing £330 million investment in waste water.
I recognise, also, its success in putting in 100% of its event-duration monitors to track storm sewage discharges in the south west. That is something that we have asked all water companies to put in, but it is ahead of the game, so we will know exactly what is happening. Data is all, in this situation.
I would also say that it is all very well for Members of the Labour party to stand up there, and be seen to be more righteous than others, but, in fact, their record on putting in any kind of monitoring was virtually non-existent. Some 5% of monitoring for storm sewage overflows went in place in 2016, started by this Government. It is 90% covered now, and it will be at 100% by the end of this year, so we will really be able to see what is going on, and then action can be taken.
Ruth Jones
I thank the Minister for giving way. While we all agree that data is crucial, there is the “So what?”—never mind the Ofwat—question. With all the data, what are the Government doing about it? It is action, not data, that we need.
Rebecca Pow
I thank the hon. Lady for that. I was going to mention it later, but what I was going to say was that it is a shame that the Labour party does not actually look at what is going on. It has been referred to by all of our colleagues. In the water industry we have the most significant project and spend that has ever taken place, directed by this Government, to tackle this whole issue once and for all. I am happy to share the very extensive list of things that are taking place and that will set us absolutely on the track we need to be on.
Also, however, I am a little concerned that we do not want to mislead the public. There are some wonderful bathing waters around the south-west and I, too, love swimming off the coast there. Last year, 93% of our bathing waters, which are mostly off the coast, were classed as good and excellent. That is an excellent record, and it has only improved under this Government. We should not forget that. Obviously, we have to make them all perfect, but this Government have a good record.
To go back to the Labour party, it is all very well for Labour Members to spout on about what they would do and what we are not doing, but the EU took the Labour Government to court over the state of water and they still failed to act. We need to look back at others’ records—we are the Government putting things right.
South West Water has now committed to reducing its average number of discharges through overflows to 20 per year by 2025. That is definitely a step in the right direction, but the public clearly want to ensure that that happens, and we will be on its case. I have also been assured that by continuing on its current trajectory, the company will deliver the absolute lowest number of pollution incidents in the sector by the end of this year. Innovative solutions are being brought forward to include drought resilience in the south-west, which has also been touched on. That is clearly very important.
To be clear, we need our water companies to improve in the way that we need them to, and to be successful, because we want them to stand as successful businesses that people want to invest in. We need that huge investment in the industry, so we want to see the companies operating correctly. That is why we have all the strict measures and Ofwat as the competent regulator, which I will get on to in a minute. Where performance does not improve, the Government and the regulators will not hesitate to hold water companies to account, including South West Water.
The Environment Agency is focusing on South West Water permit compliance. It is prioritising high-spilling storm overflows for investigation. South West Water has now installed the event-duration monitoring I mentioned on all its sites, bar six or seven complicated ones, which will be under way. Since 2015, the Environment Agency has brought 56 prosecutions against the water companies more broadly, securing fines of more than £142 million. As the House is aware, following South West Water’s guilty pleas, on 29 March it will be sentenced for 13 criminal offences that took place between 15 July 2016 and August 2020. It is certainly being held to account.
Ofwat, as the economic regulator of the water industry, will play its role in holding companies to account for not meeting their commitments. Rightly, since South West Water has been shown to be such a poor-performing company, Ofwat required it to present its improvement plan setting out steps to improve performance. As touched on today, South West Water will have to return £13.3 million to customers as a result of not meeting water performance commitments, including those on pollution incidents.
The hon. Member for Tiverton and Honiton (Richard Foord) made a blatant comment along the lines of, “Let’s get rid of Ofwat”, but that is too simplistic. As was said by my hon. Friend the Member for Newton Abbot (Anne Marie Morris), we need to ensure that the regulator, too, is functioning absolutely to its right capacity. Given that, in our strategic policy statement last summer, we put the environment at the top of the agenda, Ofwat has to ensure that clean and plentiful water is provided, and to demonstrate that that is not have an adverse impact on the environment. Customer service is obviously right up there as well.
In 2019, Ofwat asked companies to link executive pay to delivery for customers—yes, we might have thought that that was there already, but it is now. Similarly, Ofwat is exploring ideas and other options relating to dividends and pay. That includes changes to companies’ licences or ensuring that fines for misdemeanours come out of dividends and do not impact customers. I think that is what my hon. Friend was getting at. This is all on the radar, and she is absolutely right that it has to be fully functioning.
Anthony Mangnall
I apologise for interrupting the Minister because she is making an excellent speech, but it is worth making this clear for anyone watching from across the south-west. Last year Ofwat and the EA launched what is, I think, the largest criminal inquiry into water companies. Will the Minister reassure me and all our constituents that when fines are issued, they will be clearly presented to the public, people will know exactly where the fines are going, and there will be an uplift in the quantity of those fines?
Rebecca Pow
I thank my hon. Friend for his intervention. That was coming later in my speech, but I will touch on it now because customers are rightly asking those questions. We are determined to improve the water environment, and that is why we announced at the end of November that we would channel future revenues from fines and penalties handed out to water companies that pollute rivers and the sea into projects that will improve the water environment. That seems to be extremely popular, and it is the right thing to do. We will announce further details later in the year. We are also consulting on raising the whole bar to a fine of £250 million and, for the EA, civil sanctions. As has been said, Ofwat already has the power to charge a water company 10% of its turnover, and the EA has unlimited fine powers through the criminal courts for taking action, so strong powers are already there; they just need to be used.
Contrary to what the shadow Minister and the hon. Member for Tiverton and Honiton say, this Government are taking crucial steps to improve the whole water landscape, particularly the transparency of storm overflow operations, and to require water companies to make major investments in this area. Last week the Secretary of State asked water companies to get back to her with clear plans for every storm sewage overflow and the upgrades, starting with the ones in bathing water areas and those near our highly protected nature sites, because it is of critical importance that we do not pollute those waters.
I have mentioned that monitors are going in, which will mean we have 100% cover by the end of the year. As my hon. Friend the Member for East Devon said, we want those monitors to go in, and water companies will have to show clear plans of where they are going and when they are in. The monitors are for what we call event duration. The first ones will show how long the overflows are used, so we will have that data, and there is a requirement to publish near-real-time information about how often they operate, so we will have all that clear information. Water companies will also be required to put in monitors to monitor the water quality both above and below storm sewage overflows. That will determine what is in the water, which is information we need. We will consult on that shortly. You will see, Sir George, the picture I am building of a comprehensive list of work.
I want to be absolutely clear, particularly to the hon. Member for Tiverton and Honiton, that, as several colleagues have said, nobody in this Government voted to legalise sewage discharges into water courses. In fact, the Government put forward a raft of new laws to reduce the use of storm sewage overflows through our landmark Environment Act 2021. I hope we will get over the misinformation that has been spread, which has genuinely not helped anyone at all.
Independent fact-checkers have shown that a lot of the Liberal Democrat information that has been put out there has been incorrect and has not been credible. In fact, the plans that the Liberal Democrats suggest would not have stopped or banned sewage discharges; would cost up to £20,000 per household, which is absolutely unrealistic; and would take 1,000 years to raise the billions of pounds that they say is needed. I hope I have been clear that that is not credible.
The Government have put in place sensible, costed plans to tackle the issue, including in respect of storm sewage overflows, and we have introduced powers that allow us to direct underperforming water companies. We have in place a really comprehensive package. The improvement of water quality remains an absolute Government priority, and that is backed up by the comprehensive package we have announced.
Richard Foord
If the Government are so very keen on holding water companies’ feet to the fire, why did it require a Liberal Democrat amendment to the UK Infrastructure Bank Bill for the development of costed, time-limited plans to be a condition for the lending of Government funding to water companies for investment in infrastructure?
Rebecca Pow
That is a bit of a red herring, because all the things I have just outlined involve costed plans and the monitoring of plans. Water companies will now have to produce drainage and sewage management plans. Previously, they had to produce only drainage plans, but now they have to produce sewage plans, so we will know what comprehensive infrastructure is required.
My hon. Friend the Member for Totnes (Anthony Mangnall) touched on the important issue of housing. We must ensure that the development that we all need and the housing that people want are linked up correctly to our water system. A lot of work has been going on in that respect, and I am sure that my hon. Friend welcomes the fact that what we call sustainable urban drainage systems, or SUDS, will now be mandatory. The right to connect surface water to public sewers will be conditional on companies putting in sustainable urban drainage systems. That will help to separate the storm water so that it does not go down our sewage pipes. That has been talked about for a long time—it was one of my pet subjects when I was a Back Bencher—so I am delighted that the Government are making it a reality.
The hon. Member for Tiverton and Honiton read out lots of gruelling letters from his constituents, but it is quite interesting that South West Water has just introduced a scheme called WaterShare+. One in 14 households in the south-west have become shareholders in South West Water, so they will be able to play an active part in holding their water company to account and making sure it is a socially responsible business. I believe South West Water is taking note of what comes its way from its customers. It needs to put it right, and I genuinely hope it will.
All water companies must clean up their act, and the Government have demonstrated that we have the most comprehensive plan in the history of the water industry to make that happen. We will work with the water companies and Ofwat to make sure that happens, but will not hesitate to take action using all the powers now available if we do not see the improvement that we need.
Simon Jupp
I thank the Minister for her laser-like focus on water quality in the south-west. Her efforts are very much appreciated, and it is good to know that the Conservative Government are sorting out solutions, not criticising from the sidelines.
The hon. Member for Tiverton and Honiton (Richard Foord) echoed concerns that I have heard from constituents in Sidmouth, West Hill, Ottery St Mary, Budleigh Salterton and Exmouth. My hon. Friend the Member for Totnes (Anthony Mangnall) outlined the steps he is taking to work with his communities to ensure that South West Water is held to account. Importantly, my hon. Friend the Member for Newton Abbot (Anne Marie Morris) highlighted the need to back up fines with investment to solve the problems that cause the fines in the first place. The hon. Member for Newport West (Ruth Jones) rightly made a plea for plugging the many leaks across the south-west. I know that South West Water is listening to this debate; it should know that we are watching closely.
Question put and agreed to.
Resolved,
That this House has considered the performance of South West Water.