South West Water: Environmental Performance
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)
Mr Hollobone, it is a pleasure to have you in the Chair today to preside over this important debate about one of our water companies, South West Water.
Like my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger), I am disappointed at the overall environmental performance of South West Water and the impacts that that is having on the local environment. I have been regularly meeting the chief executive officers of companies identified as lagging in their performance commitments, including the CEO of South West Water. I expect to hear of the progress it has made this year and its plans on how it will continue to improve.
There are some promising signs of improvement since the previous debate on this topic in this Chamber, back in February, although I do not believe that my hon. Friend attended that. South West Water has been upgraded from one star in 2021 to two stars in 2022, according to the Environment Agency’s environmental performance assessment. Of course, this is a very long way to go to get the outcomes that customers, regulators and the Government expect.
South West Water has consistently been one of the worst-performing companies for high levels of total pollution incidents and, despite recent improvement, it was still significantly above the industry average for total pollution incidents in 2022. It must take urgent steps to further reduce these pollution incidents, and I expect to see sustained and continued improvement. I have spoken to it about this many times.
I am also aware of the concerns raised about South West Water’s use of combined sewer overflows and the impact that has on coastal communities. South West Water has made good progress on monitoring storm overflows, has met its deadline for 100% coverage by the end of the year, and has achieved a 30% decrease in the number of spills from storm overflows. I am pleased to say that I received an update just this week, from right across the water industry, to say that 96% of overflows are now monitored, with the remainder on track to hit our target of 100% by our deadline at the end of this year.
I welcome the shadow Minister, the hon. Member for Chesterfield (Mr Perkins), to his place. I do not think that this is our first meeting together. I have to point out, though, that under Labour, only 7% of overflows were monitored. It was this Government who introduced the monitoring, and that is why we have a picture of what is happening. It was actually the Labour party that allowed water companies to self-monitor. That was alluded to, I think, by my hon. Friend the Member for Bridgwater and West Somerset, and we must not forget that.
On 29 August, I called the CEO of South West Water regarding Harlyn bay, the most beautiful bay in Cornwall, following reports of discharges from storm sewage overflows and reports of increases in sickness among bathers and surfers. The Environment Agency is investigating that. Clearly, action can be taken only if we have the evidence and if there is an issue. There is a permit system and there are exemptions for extreme weather—we know why that is in place—but I have asked the CEO to ensure that, should pollution be identified, signage is put on the beach so that it is made very clear to bathers and surfers alike. They have taken up my point.
Rebecca Pow
I will carry on for a moment.
On storm overflows and discharges in the south-west, Ofwat announced, as part of a £2.2 billion accelerated infrastructure package that this Government triggered, that South West Water will accelerate £70 million of investment to deliver 15 storm overflow improvement schemes in the Falmouth and Sidmouth catchments. That will ensure that they meet the new bathing water and shellfish requirements and will significantly improve standards to protect public health at some of the south-west’s most important sites. Further investment to meet our strict targets will be required as part of the draft water company business plans for the next price control period. Those are being looked at right now. They will be published shortly and scrutinised by the regulator to ensure that we get the infrastructure and efficiency we need, balancing the need for improvement with managing people’s bills.
No Government have ever done as much as this Government are doing to tackle storm overflows. In 2013, the Government set out expectations that water companies must monitor the vast majority of those combined sewer overflows, as I referenced earlier. It is that monitoring that has meant that regulators understand the scale of combined sewer overflow discharges and can take stronger action within the existing legal framework.
In 2022, the Government launched the storm overflows discharge reduction plan. Our strict targets will see the toughest ever crackdown on sewage spills and will require water companies to deliver the largest infrastructure project in water company history—that is, £56 billion by 2050. As my hon. Friend the Member for Bridgwater and West Somerset may be aware, there has been a court case and I am pleased to say that last week the High Court found that our plan went beyond legal requirements. We have been consulting on expanding our sewage overflows plan further to cover coasts, estuaries and marine protected sites—something I have particularly pushed for. We have announced our intention to make the plan’s target a legal requirement under that all-important Environment Act 2021, which I was so proud to take through Parliament. It is a game-changing piece of legislation; there is no doubt about that.
We also required water companies to produce action plans explaining how they will improve every storm overflow in England. South West Water will not be able to escape this; they have to do that, too. Those are on officials’ desks being worked through, and they will be published shortly. I hope that my hon. Friend realises that a great amount is under way by this Government.
Rebecca Pow
I will do my final paragraph on this subject and then I will give way. In April 2023, the Government published their “Plan for Water”, which is a comprehensive strategy to transform our water environment, dealing with supply, demand and pollution, and pulling everything together to deal with the needs of society for water in future.
Richard Foord
I heard the Minister say a moment ago that enforcement action can only take place where there is evidence. Is it the case that the Minister does not have sufficient evidence for enforcement action to take place against South West Water?
Rebecca Pow
I thank the hon. Gentleman for that question. One cannot take a court case without sufficient evidence; that is absolutely critical to any court case. I will come on to that, the actions that the Environment Agency is taking and its enforcement powers in a minute, but first I must refer to what some of the other parties think would be the right thing to do.
The Labour party has been calling for mandatory monitoring when we have already delivered it, as well as automatic fines that would make sanctions weaker and a plan to tackle sewage that simply is not credible. When it comes to talking about water, the Liberal Democrats do not have a plan. They seem to think that we can flip a switch and fix it overnight. Even if we could flip a switch, it would mean sewage backing up into people’s homes and businesses and widespread mains waterpipe bursts across the country. We are the only party that has a credible plan to tackle this problem, backed by more investment, stronger regulation and tougher enforcement. That will all be applied to South West Water as appropriate.
I will touch on water security, because that has been a significant issue in the south-west. I am well aware that South West Water customers in Cornwall and Devon have been under hosepipe bans for extended periods of time—since last year, in some cases. I am pleased that South West Water will lift the hosepipe bans next week. I have personally visited South West Water to look at the issues: I have been to the reservoirs referenced, looked at how their size is being increased and how the issue is being tackled to address the whole water-resilient supply. We are working with South West Water, and it is working on emergency plans for situations of drought.
Where performance does not improve, the Government and regulators will not hesitate to hold water companies, including South West Water, to account. Back in 2015, the Environment Agency brought 59 prosecutions against water companies, securing fines of £150 million. As the House will be aware, South West Water has recently been fined £2.1 million in criminal charges relating to offences between 15 July 2016 and 20 August 2020. In response to the point made by the hon. Member for Tiverton and Honiton (Richard Foord), of course the EA had the evidence and data. That is how it could take that strong action.
The subject of enforcement was raised. The EA had its budget for enforcement expanded by £2.2 million a year to tackle enforcement, and Ofwat received a further £11.3 million uplift for enforcement. This is an absolute priority. Furthermore, following its categorisation as a lagging company in 2022, South West Water was required by Ofwat to publish an action plan setting out how it will improve its performance. It was published in 2023 and updated earlier this month, and I will be tracking its progress. Enforcement is being taken really seriously, and I am sure the House is aware that this is actually the largest criminal and civil investigation, investigating 2,200 sewage treatment works. It is being undertaken right now by the Environment Agency and Ofwat into water company permit compliance.
I must quickly allude to that BBC report. I was a news reporter, and I prided myself on my data and sources. They obviously did their report, but it would need to stand up in court if the EA chose to prosecute any of the cases raised by the BBC. If it stands up in court and the information is there, of course the EA will take action if it finds non-compliance. Huge amounts of data were analysed, and it must be thoroughly analysed by the EA in order to go to court, but more openness and transparency are very much needed in the water industry. That is being worked on.
We continue to take action to strengthen the regulator’s powers to better hold water companies to account, and we are in the process of removing the cap on civil penalties for environmental regulators to drive compliance. I share concerns about dividends and executive pay—they must reflect performance. Ofwat has recently strengthened its ability to take enforcement action against water companies that do not link dividend payments with their performance, using its powers under the Environment Act 2021. In June, Ofwat made it clear that customers will no longer fund executive bonus payments that have not been sufficiently justified. I know that my hon. Friend the Member for Bridgwater and West Somerset will be interested in that.
Motion lapsed (Standing Order No. 10(6)).