Water (Special Measures) Bill [HL]

3rd reading
Tuesday 26th November 2024 Lords Chamber

Third Reading

Welsh Legislative Consent sought

15:21

Motion

Moved by

[Baroness Hayman of Ullock]

That the Bill be now read a third time.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, the Deputy First Minister for Wales and Cabinet Secretary for Climate Change and Rural Affairs has recommended that the provisions of the Bill extend to Wales. An initial legislative consent memorandum was laid in the Senedd on the Bill’s introduction. Supplementary legislative consent memorandums will be laid in parallel with any further Bill amendments. The Senedd will hold a vote on legislative consent before the end of the Bill’s passage through Parliament.

Bill read a third time.

15:22

Motion

Moved by

[Baroness Hayman of Ullock]

That the Bill do now pass.

[Baroness Hayman of Ullock (Lab)]

My Lords, I would like to say that it has been a great privilege to be responsible for the passage of the Bill through this House. I thank all noble Lords for their careful scrutiny of its provisions and the constructive suggestions and contributions made at each stage. While we may not have ended up agreeing on everything, I know we agree on the importance of the Bill and the need to drive meaningful improvement in the performance of the water industry as an urgent priority.

The public expect and deserve transformative change across the water sector, and the Bill is a crucial first step towards meaningful reform. The new provisions brought forward by the Bill will strengthen the regulation of water and sewerage companies while giving our regulators the most significant increase in enforcement powers in a decade.

The Bill will ensure that water company executives are held to high standards, reflecting the importance of their role in overseeing the operation of vital water and sewerage services. Crucially, the Bill will increase transparency around water company operations and pollution incidents, ensuring that the public, as well as the regulators, are well equipped to hold water companies to account.

With the passage of the Bill in this House, we have made inroads into turning around the performance of the water industry, and made clear our expectations for water companies in advance of the most ambitious investment period that the water industry has seen.

This Government are committed to working closely with counterparts in Scotland, Wales and Northern Ireland to address the shared challenges facing our water environment. Our waterways and some of our water companies cross our shared borders, so the importance of working together to improve the water environment cannot be underestimated.

Of particular relevance to the Bill are the challenges faced across the privatised water sector in England and Wales. In line with this, my officials have worked constructively with Welsh counterparts throughout the passage of the Bill through this House, so I am also delighted that the UK Government and Welsh Government have together launched the independent commission to fundamentally transform how our water system works. The independent commission will provide the lasting change that England and Wales need to deliver much-needed reforms in the water sector, which I know all Members of this House are eager to see. We look forward to continued and long-term collaboration with the Welsh Government on the Bill and the independent commission.

In conclusion, I thank all noble Lords who have offered their expertise to enhance and strengthen the Bill in this House. The discussions have been truly collaborative. The Government carefully considered the important points raised during the Bill’s passage and, in consequence, tabled the amendments that we discussed on Report. I believe that the provisions of the Bill leave this House even stronger as a result.

Many of the wider points raised by noble Lords will be addressed by the independent commission, which, as we have discussed, will review the entire water sector regulatory system. I look forward to further collaboration with noble Lords during the course of the independent commission, and on future legislation, as we continue to work towards the shared goal of restoring and protecting our precious water environment.

Just before I finish, I record my special thanks to officials, particularly the wonderful Bill team, who worked so hard and gave me exemplary support throughout the passage of the Bill in this House.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank my noble friends Lord Russell, Lady Parminter and Lady Pinnock for standing in for me when I was off with Covid. I am very grateful to them.

The Bill is essential, and it was essential that it began its journey in this Chamber. It is only one piece of the jigsaw that the Government will bring forward to deal with the problems of the water industry, but it is a vital one.

I thank the Minister and her officials for their time in listening to those of us across the Chamber who were concerned about some aspects of the Bill. She was extremely patient and receptive to the arguments we put forward, and we are grateful for the movement that the Government were able to make on the pollution incident reduction plans and the performance-related pay issues. Ofwat has been strengthened by measures in the Bill and it is to be hoped that, overall, the discharges of sewage will reduce quickly and the quality of water in our streams, rivers and lakes will improve as a consequence.

It is now up to the other place to take on the Bill, which has been much improved by the debates and changes made in this Chamber. For our part, we welcome the review of the water industry as a whole and look forward to seeing how the Bill will fit into the overall picture. It has been a pleasure to work with the Minister and her Bill team on this essential piece of legislation.

[Lord Roborough (Con)]

My Lords, the core objectives of the Bill were, of course, supported by all sides of your Lordships’ House. The water and sewerage industry has betrayed consumers, and the regulators have consistently failed to bring these companies to book for many years. It is not so much to ask that we should all be able to enjoy clean and healthy rivers, lakes and beaches. On our Benches, we proposed tough action on the companies and executives responsible, and we are pleased that the Bill now places greater responsibility on the industry to clean itself up, while granting greater powers to regulators to enforce those rules.

This Bill is only a short-term move to impose special measures on the industry while we await the results of the commission, which will report next year. Special measures are, by definition, temporary, and the Government must bring forward the next stage of reform urgently. We look forward to reading and debating those reports and engaging fully with the Government to ensure that the right medium to longer-term reforms are put in place to ensure that all stakeholders’ interests are properly recognised and balanced.

I am most grateful to the Minister for listening to the concerns of the House in constructive engagements in this Chamber and in private meetings with her and her excellent officials. Those engagements were always courteous and helpful in airing the issues around each topic of discussion or debate. The best traditions of the House may be frequently mentioned, but this is a very good example, and, in this case, the Bill is much improved as a result.

The House owes thanks to the Minister for the excellent amendments that the Government brought forward. In particular, the pollution incident reporting plans now have teeth and will be a valuable tool in pushing the industry to do better. I also highlight amendments that place much more weight on using nature-based solutions as an alternative to more traditional investment in infrastructure. These amendments will have a measurable impact on nature recovery efforts in this country.

Although this House amended the Bill to improve accountability on debt levels and financial structuring, thanks in particular to the noble Lord, Lord Cromwell, as well as on the accountability of the Government on the rules being set, it was a little disappointing that the Government would not accept our amendments to protect the consumer in the event of an SAO, nor to enable the Secretary of State to limit water companies’ debt levels when necessary.

Finally, I thank all noble Lords from all Benches of this House who engaged in debates on the Bill and with whom I had many constructive discussions.

[Baroness McIntosh of Pickering (Con)]

My Lords, I add my congratulations to the Minister on securing her first Bill in this new Parliament, and through her I pass on my thanks to the Bill team for their solicitations throughout the procedure. I would like to tease her on one item if I may. We did not manage to carry the amendment on mandatory requirements for sustainable drains, nor the end to the automatic right to connect, but will she consider voluntarily bringing forward a report in six months’ time on where we are in introducing mandatory requirements for sustainable drains for major new developments?

[Baroness Hayman of Ullock (Lab)]

I am very happy to take that back to the department and to discuss whether that is possible.

Bill passed and sent to the Commons.