Employment Rights Bill (Seventeenth sitting)
(1 day, 13 hours ago)
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The Chair
Would everyone please ensure that all electronic devices are turned off or switched to silent mode? We will now continue line-by-line consideration of the Bill. The grouping and selection list for today’s sittings is available in the room and on the parliamentary website. I remind Members about the rules on the declaration of interests, as set out in the code of conduct.
Sir Ashley Fox (Bridgwater) (Con)
On a point of order, Mr Mundell. It is a pleasure to serve under your chairmanship. I seek your guidance on the status of a document circulated to Members by the Scrutiny Unit. It says it is submitted by a Professor Mitie, but I believe that the document is in fact from Mitie, the organisation, and perhaps we do not know its author. Could I ask that we be told who the author is? It is Professor Somebody Else, I suspect. The document also has tracked changes in it, and I seek your guidance on whether those are comments inserted by the Scrutiny Unit or, perhaps, by the author. It is sometimes difficult to know when documents are circulated at the last minute.
The Chair
Thank you, Sir Ashley, for giving notice of that point of order. The issue you have raised is obviously on the record. It will be raised with the Scrutiny Unit and there will be a report back to the Committee on the outcome of that inquiry.
Clause 72
Enforcement of labour market legislation by Secretary of State
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
I beg to move amendment 84, in clause 72, page 79, line 15, at end insert—
“(4A) Accordingly, in the case of the exercise by an enforcement officer of an enforcement function of the Secretary of State, any reference in an enactment to the Secretary of State in connection with that function is to be read as, or as including, a reference to that officer or any other enforcement officer.”
This amendment ensures that, where an enforcement officer is exercising an enforcement function of the Secretary of State by virtue of clause 72(4), references in legislation to the Secretary of State in connection with that function will include references to enforcement officers, so that the legislation will apply in relation to the enforcement officer as it would apply to the Secretary of State if the Secretary of State were exercising the function.
It is a pleasure to see you in the Chair this morning, Mr Mundell. I start by making the customary reference to my declaration in the Register of Members’ Financial Interests.
Clause 72 is the first in relation to the fair work agency, and it is one of the building blocks of the agency. I will explain the main elements of the clause, as that will help us to understand the amendment. The clause confers an overarching function on the Secretary of State to enforce certain legislation set out in part 1 of schedule 4, which the clause introduces. The clause provides flexibility for the Secretary of State in how to deliver that overarching enforcement function. It enables them to appoint enforcement officers to carry out the function on their behalf, and it provides that enforcement officers will be able to exercise any of the enforcement functions of the Secretary of State and will have the enforcement powers conferred on them as set out in the terms of their appointment by the Secretary of State.
As I said, the Secretary of State has the function of enforcing the legislation set out in part 1 of schedule 4. The legislation contains references to the Secretary of State having functions and powers in connection with the enforcement of the rights set out in that legislation. It is important that those references can be read as references to the enforcement officers the Secretary of State appoints to act on their behalf; otherwise, enforcement officers may not be able to properly exercise the enforcement functions of the Secretary of State. That would make their appointment, and potentially their enforcement activity, less effective.
Government amendment 84 inserts a new subsection after clause 72(4) to ensure that references to the Secretary of State are read as references to enforcement officers where necessary. The practical effect is that the legislation will apply to enforcement officers as it would to the Secretary of State. This is a technical change, but I hope that Members will see that it is necessary.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to see you in the Chair once more, Mr Mundell.
Government amendment 84 looks to us like a drafting correction. We will not rehearse the arguments we have had so many times in the Committee about drafting corrections, but I would be grateful if the Minister could confirm whether the powers in the Bill, which are directly related to the amendment, for enforcement officers to enter and search business premises are any wider in scope than current enforcement powers and, if so, how and why.
Justin Madders
I am grateful to the shadow Minister for not rehearsing the arguments, as we may end up having them every five minutes, given the number of technical amendments we will deal with today. He raises an important question about the enforcement powers and powers of entry. There are a number of clauses that deal with that. My initial understanding is that, generally speaking, we are not seeking to widen the remit of current enforcement powers. I will endeavour to write to him if there are any changes or exceptions to that. It may be something that becomes apparent when we debate the clauses in question.
Amendment 84 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Justin Madders
Clause 72 is important, as it sets out the principles of a major part of the Bill. The UK’s labour market enforcement system is fragmented. The enforcement of core rights such as the minimum wage, domestic agency regulations and the gangmasters licensing scheme is split between three different agencies. That often means that workers do not know where to go when they think they might not have received what they are due. That makes enforcement ineffective. It is not fair for workers or businesses.
Clause 72 is a vital building block in the creation of the fair work agency. It is worth noting from the outset that the FWA will be established as an executive agency of the Department for Business and Trade, which means that it will not have its own distinct identity in legislation. The Bill therefore vests responsibility for enforcement of labour market legislation in the Secretary of State. The Secretary of State intends to discharge those responsibilities through the fair work agency, which will be created in administrative documents.
Clause 72(1) places responsibility for enforcing a set list of labour market legislation on the Secretary of State and introduces part 1 of schedule 4, which sets out the list of relevant labour market legislation that the Secretary of State will be responsible for enforcing. There is a general power in clause 118(3) to make regulations that commence different aspects of the Bill at different points. Exactly when the Secretary of State will take on responsibility for enforcement will depend on the detail of those commencement regulations. However, creating the fair work agency is about more than simply moving things around; the agency will also take on the ability to enforce workers’ right to paid holiday and their entitlement to statutory sick pay.
Clause 72(2) explains that part 5 of the Bill confers powers on the Secretary of State and enforcement officers to carry out the purpose of enforcing the labour market legislation in schedule 4. Clause 72(3) makes it clear that an enforcement officer includes anyone whom the Secretary of State has appointed to carry out enforcement of that legislation on his behalf, and clause 72(5) clarifies that enforcement officers appointed by the Secretary of State have only the powers conferred on them when they are appointed. Practically speaking, that means that whether the Secretary of State or an enforcement officer is carrying out this work, they will have the enforcement and investigatory powers they need to do the job effectively. Those powers are set out in later clauses.
Clause 72(5) is also a particularly important safeguard. As I have already said, the responsibility for enforcing legislation and the powers to carry it out will be vested in the Secretary of State, and the Secretary of State will then confer them on the enforcement officers he appoints. However, the FWA’s remit will also include the serious issue of modern slavery and labour abuse, for which certain specially trained enforcement officers will have extensive police-style powers, as set out in section 114B of the Police and Criminal Evidence Act 1984. Certain officers in the Gangmasters and Labour Abuse Authority are trained to use those powers, which are subject to additional oversight, including by the Independent Office for Police Conduct. The powers should continue to be reserved for tackling the most serious issues handled by the FWA. That is why we have included clause 72(5), through which the Secretary of State will specify what powers enforcement officers will have access to when appointing them. We will ensure that powers are conferred only on officers who are sufficiently qualified to use them and who genuinely need them to do their job.
Sir Ashley Fox
The Minister is talking about granting officials of the state extensive powers currently reserved to police officers. Can he tell us how many additional officials will be granted those additional powers?
Justin Madders
What we are doing is transferring existing powers and responsibilities from the existing agency. There are no new police-style powers being created for these officers; it is simply a transfer over to the fair work agency.
Clause 72 is key to delivering the much-needed upgrade to the enforcement of workers’ rights so that it is more effective and fair for workers and businesses. It brings together enforcement functions currently split between several different enforcement agencies and gives the fair work agency the flexibility to respond to a rapidly changing labour market. I commend the clause to the Committee.
Greg Smith
A lot of the detail is in the clauses that follow this one; as the Minister said, this is very much a building-block clause. Although I totally understand and appreciate the rationale for taking enforcement powers that are currently fragmented across multiple different agencies and consolidating them into one, the devil is always in the detail.
Although it might seem sensible to consolidate the powers that are currently so spread out into one agency, this is very much a centralisation of power. The crux of clause 72 is about directly providing the Secretary of State with the overall function of enforcing labour market legislation. Whenever I see such provisions in any legislation, I cannot help but be reminded of the late, great President Reagan’s famous quote about the nine most terrifying words in the English language:
“I’m from the Government, and I’m here to help.”
As my hon. Friend the Member for Bridgwater suggested in his intervention on the Minister, the serious detail is about the practical workings of the fair work agency as it is set up. What will be the total number of enforcement officers, employees and ancillary staff required—admittedly, some will be brought across from other agencies—to form it? What will be the cost to the taxpayer of putting that together? How many people are we actually talking about? I think that, as opposed to the powers that they will hold, was the crux of my hon. Friend’s intervention.
As I said, we accept the rationale for bringing these powers together under one agency, but whenever such powers are granted to a Secretary of State, no matter what the field, there is always uncertainty and scope for never-ending expansion of the new agency, and of the size of the state, to do what is, in many cases, important enforcement work—I do not doubt that. Given the presumption that the Bill will become an Act of Parliament and that the agency will be set up in the way envisaged in clause 72, it would be good to have clarity about the plan for just how big the agency will be and whether the Secretary of State will put any cap on that from the get-go. How far does the Minister envisage the agency going?
Steve Darling (Torbay) (LD)
It is a pleasure to work under your chairmanship, Mr Mundell. I broadly welcome the bringing together of powers under the fair work agency. I note that the Secretary of State is due to publish an annual report, but I am sure that businesses in Torbay would be interested to know where in the Bill the critical friend is to hold the Secretary of State to account and ensure that they are being light of foot and driving the agenda we all want to see in this area, so I would welcome the Minister’s sharing that.
Michael Wheeler (Worsley and Eccles) (Lab)
As is customary, I draw the Committee’s attention to my declaration in the Register of Members’ Financial Interests. I am a member of the Union of Shop, Distributive and Allied Workers and the GMB.
I warmly welcome this clause and the subsequent clauses, and the establishment of the fair work agency. I remind the Committee of the evidence we heard of the broad support for the agency, including from Helen Dickinson, the chief executive of the British Retail Consortium, who said:
“I think everybody is supportive of and aligned on proposals like a single enforcement body.”––[Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 99, Q95.]
Jamie Cater, the senior policy manager for employment at Make UK, said:
“The important thing for levelling the playing field is the fair work agency, and making sure that we have an approach to enforcement of labour market policy and regulation that is properly resourced and does have that level playing field.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 54, Q53.]
Jim Bligh, the director of corporate affairs for the Food and Drink Federation, said:
“For me, it is about enforcement and having a really strong, well-resourced enforcement agency.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 55, Q53.]
Laurence Turner (Birmingham Northfield) (Lab)
As always, it is a pleasure to serve under your chairship, Mr Mundell. As is customary, I draw attention to my declarations in the Register of Members’ Financial Interests and my membership of the GMB and Unite trade unions. It is a pleasure to follow my hon. Friend the Member for Worsley and Eccles. I will make two brief complementary points.
First, the establishment of a single enforcement body was one of the core recommendations of the Taylor review. We were told over the last two Parliaments that an employment Bill was coming. Now that it is here, it is welcome that that recommendation is being acted on.
Secondly, in the Australian system of industrial relations, the Fair Work Commission is a long-standing and effective enforcement body that has survived multiple changes of governing party, so there are good international comparators to draw on, as well as the support we heard in the evidence sessions. The resourcing questions that have been raised are valid, and I am sure that those of us who come at this from a trade union background and point of view also take a close interest in the resourcing of the fair work agency. I make those two additional points in support of this measure.
Nick Timothy (West Suffolk) (Con)
I want to add my support in principle for the idea of a single labour market regulator. I have written about that in the past in different ways and can claim a small amount of credit for the commissioning of the Taylor review into the gig economy when I was working in 10 Downing Street. These issues are very important to me. Hopefully that will reassure the Minister and Labour Members of my cross-party credentials when that might be necessary.
We can all think of ways in which different kinds of labour market exploitation—non-payment of the national minimum wage or living wage; breaches of terms and conditions, health and safety or holiday rights; and illegal working, among many other examples—can be difficult to address if the laws are tough but the enforcement is poor. Those on both sides of the Committee can agree on that.
I want to add to the questions that have already been raised. I think the Minister said that the idea is that no additional powers will be granted and that this is just a consolidation. My understanding is that the fair work agency will not be a single monolithic agency; it is more about different strands of work being brought under a single leadership. If that is the case, presumably the different agencies that exist will do so until this legal change comes into effect. Presumably, the powers of the officers in each of those agencies differ in certain ways. Will that remain the case under the one body, or will there be interoperability and transfer of officers within the different sections under the single regulator? Or is the idea that the officers across those different entities will all assume the maximum powers that exist at the moment so that they can operate across all the different responsibilities of the new agency? I think that would still mean a net increase in powers across those people. What work has been done in the Department to give us an idea of the numbers we are talking about? If the Minister could answer that and then write to us with some more detail and statistics, I would be grateful.
Justin Madders
It is pleasing to hear generally broad support for this measure. As my hon. Friend the Member for Birmingham Northfield pointed out, and as the hon. Member for West Suffolk will know better than most, this was previously a Conservative party manifesto commitment, and we are pleased to be able to move it forward.
Some detailed operational questions were asked. At this stage, how the agency will work in practice is still being fleshed out. The current understanding in the impact assessment is that this is about the consolidation of existing resources and having a single point of leadership. Members will recall that, in her evidence to the Committee, Margaret Beels, the Director of Labour Market Enforcement, talked about how her role would be much easier if she were able to combine the powers of different agencies.
The shadow Minister asked whether we will require extra staff. That will be part of discussions with the Treasury. As he will know, there is a spending review on the horizon and Departments have been asked to look at savings. Clearly, we hope that the combining of resources will lead to some efficiencies, but there is certainly a view from a number of stakeholders that enforcement is not at the level it ought to be—
Greg Smith
I fully acknowledge and appreciate the Minister’s point about negotiation with the Treasury, but even if we take it as read that it is right to bring powers into a single enforcement agency, there is always a cost to creating anything new, even if it is a consolidation. Surely, the Department for Business and Trade has a cost for that. There is legislation live, in front of us right now, that seeks to create the agency, so surely he must know the broad cost of setting it up and consolidating those powers.
Justin Madders
Yes, the impact assessment sets out the one-off set-up costs. I am sure the shadow Minister can spend the lunch break looking at the detail. In terms of the current enforcement framework, as I say, there is a view that more needs to be done. Of course, we will be adding holiday pay and social security to that, and there is a power to add further areas. We know that generally, when resources are combined, we can deliver more—the sum is greater than the parts.
The Liberal Democrat spokesperson, the hon. Member for Torbay, asked about the critical friend. This Government are always ready to have critical friends—more on the “friend” side than the “critical” side. We will come shortly to a clause about an advisory board, which will have a broad range of stakeholders able to take that role.
Greg Smith
Does the Minister not agree that for any power held by any Secretary of State in any Department, the critical friend is a very simple concept? It is called Parliament—it is all of us.
Justin Madders
Indeed it is, and the usual parliamentary scrutiny will apply, but I was talking specifically about the role of the fair work agency. There will be that role, and no doubt as more detail emerges there will be more parliamentary opportunities to talk about the role and functions of the agency.
My hon. Friends the Members for Worsley and Eccles and for Birmingham Northfield talked about the broad support for the agency’s establishment, as indeed did the hon. Member for West Suffolk. I have a list of all the supportive witnesses at the oral evidence sessions, and it is a broad and impressive cast. It includes the CBI, the British Chambers of Commerce, the British Retail Consortium, the Chartered Institute of Personnel and Development, the Recruitment and Employment Confederation, the Food and Drink Federation, the Co-op, Margaret Beels, and of course all the trade unions. There is support across the board for this single enforcement body.
Mr Peter Bedford (Mid Leicestershire) (Con)
It is a pleasure to serve under your chairmanship, Mr Mundell. There are a few points about the creation of the agency that I would like the Minister to address. I am broadly supportive of synergies and of the rationalisation of public bodies, particularly to ensure that the taxpayer is getting value for money, but have the Government considered the cost of this new body and whether it will result in savings for the taxpayer? Will they consider locating it outside London so that it is more broadly reflective of the country at large?
Justin Madders
As a regional MP—a north-west Member—I am always looking to see where we can get more Government agencies out into the rest of the country. It is probably too early to say, but those kinds of decisions are being looked at.
At the moment, His Majesty’s Revenue and Customs deals with minimum wage enforcement. Moving such a specific task across to another body will take some time, so there may well be a period during which HMRC continues to undertake that work, albeit that it is within the remit of the fair work agency. Such operational details will be discussed and dealt with in due course.
The hon. Member for West Suffolk made a point about the powers of individual officers. Initially, we envisage that officers will move into, effectively, their existing roles. It will be a matter for operational consideration in due course whether it is beneficial to extend people’s remits. It will not be required of anyone without sufficient training and safeguards in place, but as the agency develops, it may well be considered advantageous to broaden the role of enforcement officers. One of the rationales for the body is that there are often several aspects to an employer’s breach of obligations, so we want the fair work agency to be able to tackle these things as a whole. However, that is an operational matter that will be dealt with in due course. I commend the clause to the Committee.
Question put and agreed to.
Clause 72, as amended, accordingly ordered to stand part of the Bill.
Schedule 4
Legislation subject to enforcement under part 5
Justin Madders
I beg to move amendment 169, in schedule 4, page 127, line 29, leave out paragraph 3 and insert—
“3 Section 151(1) of the Social Security Contributions and Benefits Act 1992 (employer’s liability to pay statutory sick pay).
3A Regulations under section 153(5)(b) of that Act (requirement to provide statement about entitlement).”
This amendment clarifies the specific obligations relating to the payment of statutory sick pay which will be enforceable under Part 5 of the Bill.
Justin Madders
As we have discussed, the current enforcement system for workers’ rights is fragmented. By creating the fair work agency, we intend to bring enforcement into one place. We have been clear that we also want the fair work agency to enforce individual rights to statutory sick pay, because we want to upgrade the enforcement of workers’ rights and stand up for the most vulnerable in our workforce, including those who are unable to work owing to sickness. That is why part 1 of schedule 4 to the Bill, as introduced on 10 October 2024, includes part 11 of the Social Security Contributions and Benefits Act 1992—one of the main pieces of legislation setting out the statutory sick pay regime—in the body of relevant labour market legislation. Government amendment 169 further clarifies the obligations concerning the payment of statutory sick pay under the Act and regulations made under it, which will be enforceable under part 5 of the Bill.
However, there is a wider body of statutory sick pay legislation containing details about the entitlements bestowed on workers and the duties of employers. After further work, we noted that some of those provisions needed to be included under the fair work agency. That led us to amendment 170, which will add the following legislation to part 1 of schedule 4: regulations made under section 5 of the Social Security Administration Act 1992, in so far as they relate to statutory sick pay, which deal with claims for, and payment of, benefits; section 14(3) of the Act, which establishes the duty on employers to provide employees with certain information about their sick pay entitlement; and regulations made under section 130 of the Act, in so far as they relate to statutory sick pay. Those provisions will be considered relevant labour market legislation, which makes them part of the Secretary State’s enforcement function. We will proceed with them once the fair work agency is ready to enforce them effectively. Amendments 169 and 170 are therefore necessary for the fair work agency to deliver its remit on statutory sick pay.
Greg Smith
Amendment 169 clarifies the specific obligations relating to the payment of statutory sick pay that are enforceable under part 5. Similarly, amendment 170 will ensure that those additional obligations relating to statutory sick pay that are imposed on employers by the Social Security Administration Act 1992 are enforceable under part 5. This goes back to our old friend, drafting errors being corrected that should really have been sorted out before the Bill was presented to Parliament in the first place.
Justin Madders
We will probably have this conversation a number of times. It is probably a little harsh to say that this was an error, but it would be fair to say that, given the complexity of social security legislation, not every provision was identified when the Bill was first introduced.
Amendment 169 agreed to.
Amendment made: 170, in schedule 4, page 127, line 30, at end insert—
“Social Security Administration Act 1992
3B Regulations under section 5 of the Social Security Administration Act 1992 (regulations about claims for and payments of benefit), so far as relating to statutory sick pay.
3C Section 14(3) of that Act (duty of employers to provide certain information to employees in relation to statutory sick pay).
3D Regulations under section 130 of that Act (duties of employers), so far as relating to statutory sick pay.”—(Justin Madders.)
This amendment ensures that additional obligations relating to statutory sick pay that are imposed on employers by the Social Security Administration Act 1992 are enforceable under Part 5 of the Bill.
Greg Smith
I beg to move amendment 118, in schedule 4, page 128, leave out lines 11 to 16.
This amendment is consequential on NC20 and removes those regulations from the list of legislation subject to enforcement under Part 5 of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 119, in schedule 5, page 130, leave out lines 16 and 17.
This amendment is consequential on NC20 and removes an enforcement authority within the meaning of regulation 28 of those Regulations from the list of persons to whom information may be disclosed under Clause 98 of the Bill.
New clause 20—Revocation of the Working Time Regulations 1998—
“(1) The Working Time Regulations 1998 (S.I. 1998/1833) are revoked.
(2) The following regulations are also revoked—
(a) the Merchant Shipping (Working Time: Inland Waterways) Regulations 2003 (S.I 2003/3049);
(b) the Fishing Vessels (Working Time: Sea-fishermen) Regulations 2004 (S.I. 2004/1713);
(c) the Cross-border Railway Services (Working Time) Regulations 2008 (S.I. 2008/1660);
(d) the Merchant Shipping (Maritime Labour Convention) (Hours of Work) Regulations 2018 (S.I. 2018/58).
(3) In consequence of the revocations made by subsection (1) and (2)—
(a) omit the reference to regulation 30 of the Working Time Regulations in Schedule A2 to the Trade Union and Labour Relations (Consolidation) Act 1992 (tribunal jurisdictions to which section 207A applies)
(b) omit section 45A of the Employment Rights Act 1996 (protection from suffering detriment in employment: working time cases);
(c) omit section 101A of the Employment Rights Act 1996 (unfair dismissal: working time cases);
(d) omit section 104(4)(d) of the Employment Rights Act 1996 (assertion of working time rights);
(e) omit section 18(1)(j) of the Employment Tribunals Act 1996 (which refers to regulation 30 of the Working Time Regulations among proceedings to which conciliation is relevant);
(f) omit section 21(1)(h) of the Employment Tribunals Act 1996 (jurisdiction of the Employment Appeals Tribunal in relation to the Working Time Regulations);
(g) omit the reference to regulation 30 of the Working Time Regulations in Schedule 5 to the Employment Act 2002 (tribunal jurisdictions to which section 38 applies);
(h) omit the reference to regulation 28 of the Working Time Regulations in Schedule 1 to the Immigration Act 2006 (person to whom director etc may disclose information);
(i) omit paragraph 141(h) of Schedule 7A to the Government of Wales Act 2006 (specific reserved matters), but this omission does not confer any jurisdiction on the Senedd or Welsh Government.
(4) The power of the Secretary of State to make consequential amendments under section 113(1) must be exercised to make such further consequential amendments as are necessary in consequence of subsections (1) and (2).”
This new clause revokes the Working Time Regulations 1998 together with other Regulations which give effect to the Working Time Directive in UK law, and makes consequential provision.
Amendment 117, in clause 118, page 105, line 20, at end insert—
“(3A) But if the provisions of section [Revocation of the Working Time Regulations 1998] have not been fully brought into force before the end of the period of 12 months beginning with the day on which this Act is passed, that section (so far as not already in force) comes into force at the end of that period.”
This amendment is consequential on NC20 and provides that the revocation must have effect within a year of the passing of this Act.
Greg Smith
I rise to speak to amendments 117, 118 and 119 and new clause 20, which stand in my name and in the name of my hon. Friends on the Committee. I make it clear that they are probing amendments; it will become clear over the next couple of minutes why we seek to probe the Government on the issue.
The amendments would repeal the working time directive within one year of the Bill’s coming into force. Our reason for tabling them is not that we intend to abolish entitlement to holidays, lunch breaks and so on—far from it, and nobody is suggesting that. However, the working time directive has had a troubled history. One example is the difficulties that occurred between the Commission and member states when the Court of Justice of the European Union ruled that employers—all of them public health and emergency services—did not calculate time spent on call as working time, when they should have done. The CJEU consistently declared that practice incompatible with the directive, arguing that inactive time spent at the disposal of the employer must be counted in its entirety as working time. Then, in 2019, the Court ruled:
“Member States must require employers to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured.”
The result of that judgment was never formally brought into British law, but as a result of the European Union (Withdrawal) Act 2018, it became part of retained EU law.
Last year, the Conservative Government legislated to clarify that businesses do not have to keep a record of the daily working hours of their workers if they are able to demonstrate compliance without doing so; to amend the WTR so that irregular hours and part-year workers’ annual leave entitlement is pro-rated to the hours that they work; to introduce an accrual method for calculating holiday entitlement for certain workers; to revoke the covid regulations—it seems odd that we are still saying that—and to introduce rolled-up holiday pay for irregular hours and part-year workers. Consultation requirements under the Transfer of Undertakings (Protection of Employment) Regulations 2006 to allow smaller businesses to consult directly with employees would be another measure. That is just the start of how it might be possible to simplify the working time directive. I would be grateful to hear the Minister’s thoughts on how well the working time regulations are working, and on whether any further changes might be made for the benefit of businesses to enable growth in this country.
Justin Madders
The working time regulations have had a relatively long history in our legal framework. They provide vital rights: a maximum working week of 48 hours, rest breaks of 20 minutes every six hours, rest periods of 11 hours each day and at least 24 hours each week, and 28 days of annual leave each year. The regulations implement the EU working time directive; the then Government deliberately designed them to provide maximum flexibility for both employers and workers. For example, workers can choose to opt out in writing from the 48-hour week maximum. We believe that the regulations have benefited millions of workers and their families over the years. They afford workers a better balance between work and other responsibilities, as well as improvements in health and wellbeing.
A 2014 review by the previous Government of the impact of the working time regulations on the UK labour market found that since 1998 there had been a decline in long-hours working in the UK and a general trend towards shorter working hours, which is probably not a surprise. The findings also suggested that the impact of the regulations was mainly through increased employment of workers doing shorter working weeks, rather than through a reduction in total hours worked. Annual leave entitlements have increased since the introduction of the working time regulations; many workers now enjoy a more generous leave entitlement than is prescribed by law.
Limitations on working hours and entitlement to a minimum number of days’ holiday can contribute to improvements in health and safety. Most employers accept that a minimum holiday entitlement contributes to physical and psychological wellbeing. Reductions in stress and fatigue caused by excess hours can provide many benefits, including less pressure on health services and better performance at work, with fewer accidents. By establishing minimum standards, the working time regulations also support a level playing field that discourages competition that relies on poor working conditions and a race to the bottom.
New clause 20 would revoke the Merchant Shipping (Maritime Labour Convention) (Hours of Work) Regulations 2018, which provide for adequate rest for seafarers and support the management of onboard fatigue and the wellbeing of seafarers. Revoking the regulations would negatively affect the ability of the Maritime and Coastguard Agency to enforce safe and healthy working conditions for seafarers.
The new clause would also revoke the Fishing Vessels (Working Time: Sea-fishermen) Regulations 2004, which require the UK to implement the International Labour Organisation’s work in fishing convention, which underpins the safe operation of vessels. Fishing is one of the most dangerous sectors in the UK, with 50 injuries per 100,000 workers compared with a UK average of 0.4. We believe that the 2004 regulations are critical to ensuring that workers take the appropriate hours of rest to prevent fatigue-related incidents.
The new clause would also revoke the Merchant Shipping (Working Time: Inland Waterways) Regulations 2003. The Maritime and Coastguard Agency is in the process of conducting a post-implementation review of those regulations. The initial responses to the consultation have indicated a generally positive view from stakeholders.
The new clause would also revoke the Cross-border Railway Services (Working Time) Regulations 2008, which provide enhanced rights and worker protections for those engaged in cross-border rail services, such as train crew for Eurostar services through the channel tunnel. The revocation of the regulations would erode those enhanced protections.
The Government believe that the minimum standards in the Working Time Regulations 1998 and other sector-specific working time regulations have supported millions of workers and their families by enabling them to better balance work and other responsibilities. The Government have no plans to revoke the working time regulations or any of the other sector-specific regulations.
I understand what the shadow Minister says about whether we consider the regulations to be beneficial to businesses, but he will know that there was ample time under his Government to undertake those reviews. Indeed, one was undertaken just over a decade ago, as I said. We have no plans to erode workers’ rights in this area; indeed, one of the fair work agency’s main functions will be to enforce rights to holiday pay, which evidence to the Committee suggests are not being enforced properly.
The shadow Minister says that he has no intention of revoking the working time regulations and that his amendment is probing, but I can only speak to what is before the Committee. If he had tabled an amendment seeking a review of the operation of the working time regulations, that might have been more appropriate in the circumstances. This feels to me like a dog-whistle amendment, so I am pleased to hear that he will not be pressing it.
Greg Smith
I am always pleased to delight the Minister in these debates. It was a probing amendment, and I can confirm that we will not be pressing amendments 117 to 119 or new clause 20 to a Division. However, I will briefly comment on the Minister’s response. I entirely respect him for it, but it was a full-throated defence of the status quo.
Something that goes deep within my view of politics, of government and of public administration is there is always room for improvement in pretty much everything. I say that as much about measures passed by previous Conservative Governments as about those passed by current or past Labour Governments. I refuse to accept that something is as good as it possibly can be and is working as well as it possibly can in the interests of businesses and workers alike. There is some disappointment from the official Opposition that the Government do not seem to want to look again.
Justin Madders
Does the shadow Minister not accept that his party undertook this exercise, which is why regulations were introduced last year to amend the working time regulations?
Greg Smith
I fully and totally accept that, but it is our job as the official Opposition, here and now in January 2025, to press the current Government on further measures that could be taken to work in the interests of everybody in our country—workers and businesses alike. Perhaps I accept the Minister’s point; perhaps we could have tabled an amendment to call for a review. Who knows? Perhaps on Report we might. But the fundamental position that I come back to is one that does not just accept the status quo, but is always challenging, always reviewing and always seeking to make things better in the interests of everyone.
When the Minister goes back to the Department and prepares for the remaining stages of the Bill in the main Chamber and in the other place, may I gently urge him to consider in the round, with the Opposition’s support, whether there are tyres to be kicked and measures to be improved in the operation of the working time directive? May I also urge him to ensure—now that we are a sovereign country once more, having left the European Union—that this Parliament can make improvements should it so wish? I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Justin Madders
I beg to move amendment 85, in schedule 4, page 128, line 13, at end insert—
“( ) regulations 13 to 15E (entitlement to annual leave, etc);”
This amendment would enable the Secretary of State to enforce the entitlements to annual leave conferred by the Working Time Regulations 1998.
Government amendment 85 will add to schedule 4 the additional holiday pay and entitlement regulations: regulations 13, 13A, 14, 15, 15A, 15B, 15C, 15D and 15E of the Working Time Regulations 1998. It will enable the fair work agency to take enforcement action in relation to incorrect payment or non-payment of a worker’s holiday pay and incorrect payment or non-payment in lieu of annual leave entitlement, ensuring that a wider range of complaints can be dealt with more effectively. I commend it to the Committee.
Greg Smith
This is another example of a tidying-up exercise that we really should not have to be discussing in Committee. It should have been sorted before the Bill was introduced.
Amendment 85 agreed to.
Question proposed, That the schedule, as amended, be the Fourth schedule to the Bill.
The Chair
With this it will be convenient to discuss new clause 23—Review of the effectiveness of enforcement of labour market legislation—
“(1) The Secretary of State must establish an independent review providing for—
(a) an assessment of the effectiveness of enforcement of, and compliance with, relevant labour market legislation requirements as specified in Part 1 of Schedule 4 of this Act;
(b) an assessment of the performance and effectiveness of following bodies in enforcing labour market legislation—
(i) Gangmasters and Labour Abuse Authority;
(ii) Employment Agencies Standards Inspectorate;
(iii) His Majesty’s Revenue and Customs; and
(iv) Health and Safety Executive; and
(c) recommendations on strengthening labour market legislation enforcement.
(2) The Secretary of State must lay before Parliament a report of the review in subsection (1) not more than 18 months after the day on which this Act is passed and before a new single labour market enforcement body is established.”
This new clause would require the Secretary of State to establish a review of enforcement of labour market legislation and to report findings to Parliament before a new labour market enforcement body is established.
Justin Madders
The UK’s labour market enforcement system is fragmented, as we know. The enforcement of core rights such as the minimum wage, the domestic agency regulations and the gangmaster licensing scheme is split between three different agencies, so workers often do not know where to go when they think they might not have received what they are due. That makes enforcement ineffective.
Clause 72 is a vital building block of the fair work agency. Clause 72(1) will place on the Secretary of State a responsibility to enforce a set list of labour market legislation. It introduces part 1 of schedule 4, which sets out the list of relevant labour market legislation that the Secretary of State will be responsible for enforcing— the national minimum wage, domestic agency regulations, the gangmasters licensing scheme, parts 1 and 2 of the Modern Slavery Act 2015 and the administration of the unpaid employment tribunal award penalty scheme.
Creating the fair work agency is about more than simply moving things around. That is why we have also taken steps to enforce workers’ rights to paid holiday and statutory sick pay. We tabled two sets of amendments to part 1 of schedule 4 to ensure that the fair work agency delivers the policy intent in relation to enforcing holiday pay and statutory sick pay. As we have discussed, our amendment on holiday pay will ensure that the FWA can take action in relation to incorrect payment or non-payment of a worker’s holiday pay and incorrect payment or non-payment in lieu of annual leave entitlement; our amendment on statutory sick pay will ensure that all relevant statutory sick pay provisions that contain entitlements for workers or impose duties on employers are in scope of enforcement.
Part 2 of schedule 4 grants the Secretary of State a delegated power to make affirmative regulations to add new legislation to part 1 of the schedule. The Secretary of State can use the power to bring in scope legislation that relates to the rights of employees and workers, the treatment of employees and workers and requirements on employers, and legislation on trade unions and labour relations. It is a broad power but a necessary one: if we are to deliver the policy intent of genuinely upgrading enforcement, the fair work agency needs to be able to respond to changes in the labour market. We believe that a power to make affirmative regulations, which Parliament will of course have to approve, will ensure proper parliamentary scrutiny for any further changes.
New clause 23 is well intentioned, but it is unnecessary and would be counterproductive. It would impose a lengthy and redundant review process that largely duplicated the statutory duties that are already undertaken by the director of labour market enforcement. She already oversees the enforcement landscape and provides an annual strategy and annual report on the effectiveness of the activities of the bodies that will make up the fair work agency. New clause 23 would do nothing to add to those mechanisms. In fact, it would slow down the creation of the fair work agency.
I turn to clause 75—
Justin Madders
Okay. I have nothing further to say, except that the shadow Minister’s new clause 23 is a duplication of existing requirements that would add nothing to the process.
Greg Smith
I hear what the Minister says about slowing things down, but it would be remiss of me not to comment that if the Government had perhaps taken their time a bit on the drafting of the Bill, we would not be spending so much time in this Committee considering the absolute deluge of Government amendments that tidy things up that should have been right in the first place. Sometimes it is best not to rush things. Sometimes it is better not to dive in head first and just go for the first thing available, but to be cautious, to review and to fully understand all the implications that new legislation such as this will have in the real world.
That is what new clause 23, which stands in my name and those of my hon. Friends, seeks to double-check. It seeks to ensure that the Government are getting this right—not in our interests or those of anyone in the House of Commons, but in the interests of businesses and workers in the real world, trying to get on with their daily lives, get their jobs done and get their businesses growing and providing the growth and prosperity that we all want to see in the country.
As I have said previously, we do not have a problem in principle with the establishment of a new body to oversee the enforcement of labour market legislation. I have made that clear, and hon. Friends who have spoken have made it crystal clear. But we also made a challenge in the previous debate, and that is what new clause 23 is all about. It is about ensuring that we fully understand the scope, cost and effectiveness of this new body.
Any new body, be it a Government body or in the private sector—although the creation of new bodies in the public sector tends to be slower and often cost more than the private sector would manage—will take time and resources, and we would like to be reassured that this is a good use of time and resources. I repeat that our instinct is that it probably is. Our instinct is that it does seem to make sense, but we can never rely on instinct or on that which might look good on paper as the absolute cast-iron test. It is about the real evidence.
Laurence Turner
We heard from the hon. Gentleman earlier in the main Chamber about sustainable aviation fuel; I wonder whether he might share with us the shadow ministerial equivalent that he seems to have discovered, because we are covering a huge amount of ground. I just say this to him. We did have the Taylor review, which looked at these matters, including the functioning of the individual enforcement agencies, so I am just wondering: does he think that something has changed, in terms of their effectiveness, since then? We have already had an assessment of the nature that he is calling for.
Greg Smith
Yes, Mr Mundell. I am genuinely struggling to find the connection between my questions in transport orals this morning on sustainable aviation fuel and this Bill. I will gladly offer to have a coffee with the hon. Member for Birmingham Northfield to discuss my passionate view on synthetic fuel in the future, but it really is not relevant to this Bill.
I accept the hon. Gentleman’s latter point, about previous reviews, but new clause 23 is specifically looking at the creation of this new body and is about ensuring that that is the right thing to do and that the cost of it will actually bring the benefit that the Minister and other Government Members have explained that they believe it will. It is incumbent on all of us, whether we sit on the Government or Opposition Benches or for the smaller parties, that we challenge everything put in front of us. Any culture in any organisation that does not challenge what is put in front of it is often weaker for it. That is what new clause 23 is seeking to do.
Inherent in that, notwithstanding the Taylor review, is the aim to ask and double-check whether the rationale takes into account how effectively labour market legislation is currently being enforced and understand what research this Government—not former Governments, but this one—have undertaken on what will be done more effectively or efficiently with the creation of this new body. We would like the Government to assess how effectively the labour market legislation that will be enforced by the new body is currently working in that fragmented sense that the Minister spoke about earlier, and how effective the enforcement of it is, before setting up any new quango.
Generally speaking, new quangos fill me with dread and fear, but this one may be worth while. However, we need the evidence. Will the Minister expand on how matters will change for businesses through the new labour market enforcement authority? What will feel different for them and what changes might they need to make as they prepare for it? New clause 23 tries to get to the heart of that.
Steve Darling
I know from my surgeries and casework in Torbay that discrimination is sadly alive and well. I ask the Minister to reflect on some of the evidence from the Equality and Human Rights Commission, which talked about the provision leading to fragmentation and the possibility of some of its standard work falling between two stools. What reassurances can the Minister give that the good work will proceed appropriately either through the fair work agency, or in a partnership approach with the Equality and Human Rights Commission?
Sir Ashley Fox
I want to speak in support of new clause 23 and to ask the Minister whether he is familiar with Parkinson’s law. It states that the number of workers in any public administration will tend to grow over time, regardless of the quantity of work done. The corollary is that work expands to fill the time available for its completion.
Although Conservative Members are in favour of the creation of the fair work agency, there is a risk that, over time, it will seek to have more staff and more power, will consume a great deal more of taxpayers’ money and resources, and will impose more on employers’ time, without great result. That is why a review is necessary. We want to ensure that any new authority is lean and efficient. We also want the Government to take the same approach to regulations.
Unfortunately, the Bill is a hefty document. It will impose £5 billion-worth of costs on employers, which will probably result in fewer people being employed, higher inflation and lower growth. It is therefore perfectly reasonable for the Opposition to ask the Government to reflect after 18 months and ascertain whether they can find anything in this weighty tome that they could do better or more efficiently.
The working time directive is immensely complicated and imposes burdensome record keeping on employers. In the past, it has resulted in retained firefighters in rural areas having to count the time when they sit at home, not doing anything, as working time. It has been a difficult and troublesome measure, and perhaps my party should have done more to simplify it when we were in office, but that is not an excuse for the Government to say, “Because you didn’t do enough, we intend to do nothing.” It is reasonable for us to ask the Government, at the end of 18 months, to take another look and see whether they can do anything to reduce the burden on businesses.
Justin Madders
I am beginning to wonder whether the Opposition’s support for the fair work agency is as strong as I thought. They now appear to want to make sure that creating it is the right thing do, despite its featuring regularly in Conservative manifestos and despite the support of the breadth of stakeholders who gave evidence to the Committee. The current Director of Labour Market Enforcement made it clear in her evidence to the Committee that the creation of the fair work agency would make her role much easier and more effective. She spoke about the recommendations in her most recent report:
“The ones that relate to having a better joined-up approach, to greater efficiency and to better sharing of information among bodies are the things that I think the fair work agency will do a lot better.” ––[Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 153, Q159.]
I think that almost half of the recommendations from her most recent report contained an element of that.
The Chair
For clarity, the question on new clause 23 will be put at a subsequent point in the proceedings.
Question put and agreed to.
Schedule 4, as amended, accordingly agreed to.
Clause 73
Enforcement functions of Secretary of State
Question proposed, That the clause stand part of the Bill.
Justin Madders
Clause 73 specifies which functions are considered enforcement functions of the Secretary of State for the purposes of part 5 of the Bill. It defines enforcement functions widely and then carves out certain functions that are not enforcement functions.
Clause 73(1) specifies that the enforcement functions of the Secretary of State include the following: any functions granted under part 5 of the Bill; functions in the relevant labour market legislation that they are responsible for enforcing; and any other functions that they perform to support enforcing labour market legislation.
Clause 73(2) goes on to set out exceptions. It lists specific functions that are not enforcement functions for the purposes of part 5 of the Bill. These are generally functions that relate to the arrangements for state enforcement of labour market legislation, and the overall governance of the fair work agency. These overarching governance functions include: appointing officers under clause 72; delegating functions under clause 74; setting up the advisory board under clause 75; publishing the annual reports and enforcement strategies under clauses 76 and 77; providing for transfer schemes to move staff into the Department under part 1 of schedule 7; and powers to make subordinate legislation.
The effect of clause 73 becomes clear when it is read in conjunction with clause 72. First, the enforcement functions that are listed in clause 73(1) can be performed by enforcement officers appointed under clause 72. Under clause 72(4), the powers of an enforcement officer include the power to exercise any enforcement function. Those powers can be limited further by the terms of the appointment of those officers.
Clause 74 gives the Secretary of State flexibility about how they carry out the functions of labour market enforcement. It provides the option to delegate functions to another public authority. Clause 74(1) gives the Secretary of State the power to make arrangements with the public authority so that it can exercise the delegable function. It also enables the Secretary of State to make arrangements to appoint a public authority’s staff as enforcement officers. The Secretary of State can delegate the enforcement functions listed in clause 73(1), all of which have been highlighted already. Those functions relate to arrangements for state enforcement of labour market legislation or the overall governance of the fair work agency. The Secretary State can also delegate powers relating to the licensing of gangmasters under sections 7 or 11 of the Gangmasters (Licensing) Act 2004. The arrangements the Secretary of State makes with public authorities can also include an agreement to make payments in respect of the performance of any function by either the public authority or their staff.
Clause 74(5) means that delegating an enforcement function does not strip the Secretary of State of responsibility or control in enforcing labour market legislation. The Secretary of State can still carry out functions even when they have arranged for another public authority to do that on their behalf.
The Bill is about bringing enforcement and employment legislation into one place in order to make enforcement more effective and efficient by ensuring the better use of resources. It is about creating the right powers to carry out investigations and take enforcement action where necessary. However, it does not set out a specific approach to implementing that more joined-up enforcement, because operational flexibility will be the key to the success of the fair work agency. The clause helps to provide that flexibility by enabling the Secretary of State to delegate certain functions to other public authorities or to make arrangements for staff of other bodies to be appointed as enforcement officers. Both clauses are integral to the effective functioning of the fair work agency in the future.
Greg Smith
On the face of it, the clauses are not problematic: they are quite clear, and it is important that those things that are considered as enforcement functions are clearly defined. That is all well and good—until we get to clause 74(5), which states:
“Arrangements under this section do not prevent the Secretary of State from performing a function to which the arrangements relate.”
Therefore, a body with certain powers—admittedly in the Secretary of State’s name—is created; essentially, a quango is put in place, and people are given the clear job of carrying out the enforcement functions in the Bill. However, if the Secretary of State is not prevented from performing one of those functions, what is the mechanism by which they can overrule the quango they themselves set up to perform them? Of course, the ultimate buck must stop with the Secretary of State, but it is a pretty established convention that where a quango is set up and has powers delegated to it—I think of Natural England within the Department for Environment, Food and Rural Affairs and many other quangos—it is very rare for a Secretary of State to intervene, overrule and perhaps come to a different conclusion from that quango.
We will not oppose the clauses, but I would be grateful if the Minister could reflect on the circumstances in which he believes clause 74(5) would come into effect, to make clear the procedures a Secretary of State would need to follow to bring that subsection into effect.
Steve Darling
I broadly welcome the proposals in the clauses, and I look forward to the Minister’s explanation of the issues outlined by the shadow Minister.
Justin Madders
I hear what the shadow Minister says. He is possibly over-egging the pudding or taking us on a ride on the ghost train in terms of what clause 74(5) means. It simply means that if the Secretary of State delegates powers to another body, they are still the responsible person for the overall operation. This is not about overruling different bodies; it is about where the final responsibility lies. I hope I have put the hon. Gentleman’s mind at rest to some extent.
Question put and agreed to.
Clause 73 accordingly ordered to stand part of the Bill.
Clause 74 ordered to stand part of the Bill.
Clause 75
Advisory Board
Question proposed, That the clause stand part of the Bill.
Justin Madders
I know you have been eagerly awaiting this clause, Mr Mundell. It concerns an important part of the fair work agency, and something that the Liberal Democrat spokesperson touched on earlier. The agency has a big job on its hands to restore trust among workers that they will get the rights that they are entitled to and that Parliament has laid down. It also important that the agency is trusted by businesses, and that they know they will be treated fairly and that if they follow the law, they will not be undercut by those who seek to avoid it. That is an important job for the fair work agency and it is important that we get it right. It must reflect the concerns of businesses and workers.
The Low Pay Commission has served the country well since the last Labour Government created it to advise on the national minimum wage. That is because it is a social partnership, comprising equal voices of workers, businesses and independent experts, and can reflect the perspectives of all those bodies when making recommendations. We want the FWA to replicate that success.
The clause requires the Secretary of State to create an advisory board for the fair work agency. Subsection (2) specifies that the board must consist of at least nine members appointed by the Secretary of State. Subsection (3) provides that board members must hold and vacate their position in accordance with the terms and conditions of their appointment. Subsection (4) provides for the advisory board to have a social partnership model, requiring equal representation of businesses, trade unions and independent experts.
We know this is a complex area that is constantly changing, but we believe that the model and approach that has proved so successful with the Low Pay Commission should be replicated here. I therefore commend the clause to the Committee.
Greg Smith
I hear what the Minister says in his explanation of the clause. Often, advisory boards are perfectly good and useful bodies, but I return to my earlier point that where a power rests with a Secretary of State, the accountable body to which any Secretary of State must submit themselves is the House of Commons, where they are a Member, or the House of Lords, in the rare case that they sit in the other place. Parliament is the advisory body—the critical friend—that the Secretary of State should submit themselves to.
However, accepting that an advisory board is going to be established, I want to ask the Minister about its make-up. While the Bill seems to be quite clear, there are some gaps, and some unanswered questions that the public, businesses, employees and the trade union movement will no doubt wish to have answered.
Probably the clearest definition in clause 75(4) is that in paragraph (a):
“persons appearing to the Secretary of State to represent the interests of trade unions”.
I think we can all understand that that means representatives of the trade union movement.
Greg Smith
There is my first question, prompted by my hon. Friend: does that include right hon. and hon. Members of Parliament who themselves are members of trade unions? Could that be the case?
We are less clear on paragraphs (b) and (c). Paragraph (b) states:
“persons appearing to the Secretary of State to represent the interests of employers”.
That is a far less easily defined body of people. On the one hand, I can hear some potentially arguing that that is the representative bodies that gave evidence to the Committee, such as the Confederation of British Industry and the Institute of Directors. That would be a legitimate answer, until somebody came forward and made a compelling case that, as an individual employer, they should be considered to sit on the board.
Greg Smith
I will be delighted to in one second, when I have finished my train of thought.
Can someone be classed as independent if they are an academic or a university professor, perhaps with considerable knowledge of and expertise in employment law and matters relating to the Bill—someone we should all respect—but also a member of a trade union? Does their membership of a trade union count towards whether they are independent? Would that be at odds with paragraph (a)?
Michael Wheeler
I apologise for interrupting the egging of the pudding—we were definitely in the “over” area of the egging. Does the shadow Minister accept that despite what we have heard, and despite the picture that he is trying to create, this model works? It is not novel; we have the Low Pay Commission. It is an established fact. Despite the many layers and convolutions that we see being built in front of us, we are actually considering something quite straightforward here.
Greg Smith
I am grateful to the hon. Gentleman for his intervention and for what appears to be his support for the British egg industry. I encourage him to eat as many British eggs as possible and to support our farmers.
Greg Smith
I always bow to your advice, Mr Mundell. I will try to save the Minister the embarrassment of having that recorded in Hansard.
Let me try to return to my point. While I accept that advisory boards of Government Departments often follow this formula, we have a particular definitional problem with this one. The problem is whether, in the example I gave before the intervention of the hon. Member for Worsley and Eccles, the independence of a seemingly independent expert—most reasonable people would say a university academic, professor, doctor or whoever would normally fall into that category—would be influenced if they were a member of a trade union, and whether in that case their membership of the board would be compliant with the provision for an “equal number” of independent experts and those representing the trade union movement on the board.
This is an important problem for the Minister to acknowledge. He must be very clear to the Committee whether the word “independent” in paragraph (c) would disallow anyone who is a member of a trade union from being a member of the board under paragraph (c), for fear of contradicting paragraph (a).
Alex McIntyre (Gloucester) (Lab)
I refer the Committee to my membership of the GMB and Community unions. The shadow Minister is keen for us all to stress our trade union membership, and we do so at the start of every sitting. He makes the point about trade union membership potentially impacting independent experts, but he will be aware that many university professors are funded by private limited companies to support their research, just as some Opposition Members are supported by private limited companies and employers for campaign purposes, none of which is declared in this Committee. Would he not say that might impact those professors’ independence too? Would that not need to be declared to ensure that the numbers are balanced?
Greg Smith
I understand the hon. Gentleman’s point. I believe in freedom; I have no problem with any hon. or right hon. Government Member being a member of a trade union. The point here is clarity and transparency. We have a Bill in black and white in front of us that refers to equal numbers but fails to define whether a member of a trade union could sit as an independent expert or would have to be categorised under subsection (4)(a) as representing the interests of trade unions. This is a matter of information on which the Committee and the general public deserve to have clarity before we allow this clause to become part of primary legislation in our country. As in all walks of life, there will be points of debate on that. I want to hear from the Minister’s own mouth whether he deems it to contradict the “equal number” provision. We could dance on the head of a pin all day, but when we are seeking to pass legislation, clarity is very important, and I look to the Minister to give it.
Steve Darling
I am concerned about the heavy weather that colleagues on the Opposition Benches are making of this. For me, this measure is about driving a positive culture in employment, and the board’s balance is entirely appropriate. I welcome the clause.
Sir Ashley Fox
I have a number of concerns about the establishment of the advisory board for the enforcement of labour market rules. I do not believe that such an advisory board is necessary and I am convinced that its creation would represent an expensive and bureaucratic exercise that would be redundant at best and a tool to disguise the Government’s intentions behind a veil of unnecessary consultation at worst. Let me explain why.
Let us first address the central issue: the need for advice. It is not as if there is a shortage of expert opinions on labour market matters; far from it. If the Secretary of State is seeking guidance from trade unions, he need look no further than the extensive and loud representation of trade union interests on the Benches behind him. There seems to be no shortage of trade union representatives in key positions, be it MPs with close ties to the unions or those with—
Michael Wheeler
Does the hon. Member accept that there is a difference between “member of” and “represents” when it comes to trade unions?
Sir Ashley Fox
Yes, I do. Indeed, “funded by” trade unions is another distinction. The point I am making is that this advice is available for free. There is no need for the Secretary of State to commission a board and pay representatives of trade unions to give him advice. The notion that three members of trade unions are needed on the advisory board seems, to put it bluntly, quite redundant. The Secretary of State can obtain that advice from any number of trade unions, their experts, or any of the MPs that sit on the Government Benches, who will all freely give it. Let us not forget that there are already plenty of independent experts contributing to various public bodies and providing high-level advice to the Government—there is certainly no shortage of them dotted throughout Whitehall.
If the Government require business perspectives, they certainly need not search too far for that advice either. If they wanted to, they could listen to the CBI or, if they preferred, to the Federation of Small Businesses, which provide ample insights and recommendations on policy matters relating to labour and employment. Those bodies represent businesses large and small, and have extensive networks of experts available to advise on any issues regarding the labour market. The problem—I suspect the Federation of Small Businesses would agree—is that the Secretary of State does not listen to them, so what difference would it make if he were to put one of them on a board of nine or 12? Do we need more voices from the same sectors giving advice?
Who might we see the Secretary of State appoint to this board? I am sure Sir Brendan Barber would get a look in, or perhaps Baroness Frances O’Grady. I wonder what Len McCluskey is up to these days—I am sure he has vast experience in employment rights matters.
Sir Ashley Fox
Mr Mundell, you are as fortunate as Mr McCluskey.
I am sure that those are just the independent experts that the Secretary of State will be considering appointing to this board. This highlights another crucial point: the Government designation of independent experts is incredibly vague. The Government define “independent expert” as anyone who is neither a trade union representative nor an employer representative. There is no requirement in the Bill for someone to have any particular expertise; they just must not fall into one of those two categories. Nowhere does it say that that expert cannot be a member of a trade union; nowhere does it say that they cannot be a former leader of a trade union; nowhere does it detail what qualifications or experience these experts are expected to bring. Let us not forget that these experts will be paid substantial sums of money—potentially hundreds of pounds per day—and the Government want us to take it on trust that they will be appointing the best people for the job.
As is often the case with such bodies, it is not a risk, but a total certainty that the advisory board will be appointed disproportionately to represent one end of the political spectrum. I suspect the Government will make every effort to ensure that those appointed align with the views they already hold—or, if we have a board of nine, that at least eight of them are firmly in the camp of the Labour party. The most likely outcome in my view is that this board will be packed with individuals whose perspectives on labour markets are perfectly aligned with Government policy and with the trade unions that this Government represent. It might be more straightforward for the Government simply to ask the TUC for instructions on how to go ahead, rather than to go through this cumbersome and expensive process. It would certainly cost the taxpayer less, and I would argue it would be more honest too. The fact is that this board’s purpose seems more to provide a cover for a Government agenda that is already in place than to genuinely provide diverse input. It looks like an expensive way to present the façade of consultation without delivering anything meaningful at all.
If the idea of this surplus of readily available advice was not bad enough, we have not started to talk about the cost of setting up this quango and the board. Having served on two public bodies, I know that advisory bodies are expensive and time-consuming ventures that require significant administrative resources in terms of staff, time and finance. Not only do the members of those bodies need to be compensated—perhaps the Minister will advise us whether they will be paid £300 a day, or £400 or £500 a day—but there is also the cost of setting up the selection process, conducting interviews and managing the day-to-day operation of the body. We are talking about at least nine members being appointed—probably more—which will consume considerable amounts of civil service time and taxpayers’ money. The selection process alone will involve a long list of procedures: advertising positions, longlisting, shortlisting, interviewing, and ultimately appointing the individuals—all, inevitably, to end up with the appointment of the nine people that the Secretary of State wanted to appoint in the first place.
What will this board ultimately do? It will advise the Secretary of State on drafting a strategy. We all know how these things go: the result will be a glossy document full of attractive photographs, distributed widely to people who will never read it, and it will have little or no practical impact on the ground. It will be yet more time and money wasted by this Government. We do not need more reports or strategies; we do not need an advisory board. Labour market rules are already there and they need to be enforced. The person responsible politically is the Secretary of State. He should take responsibility for the political decisions he makes in enforcing those laws, and not hide behind an advisory body.
Ordered, That the debate be now adjourned.—(Anna McMorrin.)
Tobacco and Vapes Bill (Third sitting)
(1 day, 13 hours ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
Good morning, ladies and gentlemen. To those to whom I have not already had the opportunity to say so, happy new year.
Let me first set out a few housekeeping arrangements. Please switch off all electronic devices. We do not want phones ringing; I hope mine is off. No food and drink is permitted during sittings, apart from water. If anybody needs anything else, will they please leave the room and obtain it from the usual places? If Members have speaking notes, they are always useful to Hansard, particularly if they refer to a name or a business in a constituency or anything like that. That just about deals with that bit of it.
We are about to begin line-by-line consideration of the Bill.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
On a point of order, Sir Roger. Good morning; it is a pleasure to serve under your chairmanship. I rise on a point of order about the groupings for our discussions today. They are normally provided in good time, but at about 9 o’clock last night my team were provided with two versions that differed slightly: one from the Government and another from the Clerk. That did not give adequate time for the groupings to be properly considered. As you know, Sir Roger, this Bill is really important to me, but it is also important to the House and to our constituents. It aims to revolutionise their health and wellbeing. It is really very important that we get it right.
Another set of groupings has now been provided this morning. It was not delivered until about 9.30 am, and it is different from both the sets delivered last night. I think only the Minister, the Government Whip and I are the only Committee members who were MPs before July last year. I seek your guidance, Sir Roger, on how we can ensure, particularly for new Members, that there is proper time to scrutinise and appraise each clause and each group properly before the debate.
The Chair
Exceptionally, this is a matter for the Chair—normally, points of order have nothing to do with the Chair at all.
First, I have a note prepared by the Clerks, which I will read because it is relevant to part of what has been said. The Clerks in the Public Bill Office work on behalf of the Chairs—my colleagues and me—to prepare a provisional selection and grouping of amendments. It is very important that that is accurate. For those who have not served on a Bill Committee, I will come on to why that is done, which may help further downstream to explain the process of line-by-line scrutiny.
This is a very big Bill. A significant number of amendments have been tabled. Not entirely unusually, the Committee took oral evidence on Tuesday. Inevitably, such situations generate the late but timely—in the sense of being within the time limit—tabling of amendments.
Where the Clerks have to preside over the oral evidence sessions as well as trying to do all the rest of the work, it inevitably places a great strain on the system. It is no criticism whatever of the Clerks, who are formidable in the work that they do, that this has pushed it right up against the wire.
I know that the Government and, I believe, the Government solicitors and the Opposition received notice of the provisional selections fairly late last night. That is regrettable. It is always the case in such Committees that wherever possible all members, particularly the Government Minister and the Opposition Front-Bench spokesman, should get material in as timely a fashion as possible. That is a given, but there are exceptional circumstances, and these were exceptional circumstances.
I can only apologise on my own behalf—because my colleagues and I are ultimately responsible for the selection—for the fact that the grouping was late. I appreciate that that has created some difficulties, although not insuperable ones. If anything arising from that requires attention, we will deal with it as we go along, because part of our job is to be as flexible as we reasonably can.
I will seek advice on the hon. Lady’s second question about the groupings.
Dr Johnson
Further to that point of order, Sir Roger. There is a second point that I want to raise; I have given notice to the Chair. Because of the aforementioned delay in getting the groupings, I have not had time to scrutinise all the clauses of this very big Bill, as you have described it, but it strikes me as unusual that amendments 75 and 76 have been linked with clause 1.
In my experience, it is unusual to discuss amendments to one clause while considering another. My amendments 75 and 76 would amend clause 69 on page 36. Clause 69 is essentially a relative of clause 2, in so far as it tries to make things equivalent across the United Kingdom. I therefore wonder whether as Chair you might agree that amendments 75 and 76 would instead be best considered at the same time as clause 2.
The Chair
I thank the hon. Lady; that is very helpful. I fully understand what she is saying. This is an arcane process and it is an art, not a science. Personally, I am more than willing to consider grouping amendments 75 and 76 under clause 2 rather than clause 1. Because the selection list has been published, that requires the leave of the Committee. If the Committee is happy to do so, I am minded to accept the suggestion.
As I hear no objections, the hon. Lady has won her case. Amendments 75 and 76 will therefore be taken under clause 2 with amendments 58 and 59.
Dr Johnson
It is a point for the Chair, and it is procedural. I have not seen this sort of thing happen before. Normally, we agree the groupings and then they just flow.
I have not had the opportunity to go through all the pages and pages of the Bill and see whether there are other issues like the one with amendments 75 and 76. Will there be a further opportunity to amend the sequencing as we go?
The Chair
There will be a further opportunity to raise a point of order. It will be up to whoever is in the Chair at the time to decide whether to take the kind of action that, on the Clerk’s sound advice, I have just taken. I appreciate that this is a complex Bill and we may well find that one or two amendments are more comfortably located under other clauses. If that is so, sensibly and flexibly, we will endeavour to accommodate that.
The Parliamentary Under-Secretary of State for Health and Social Care (Andrew Gwynne)
On a point of order, Sir Roger. The loop system in this room does not appear to be working, at least not for my hearing aid. I do not know whether somebody can get it switched on or, if not, whether Members could please amplify when they speak.
The Chair
That request, I understand, has been remitted. We will do the best we can. Will hon. Members be kind enough to ensure that they speak clearly for the sake of the Minister and anybody else in a similar position? Exceptionally, I am more than prepared to make sure that the person speaking is addressing the Minister rather than the Chair, as would normally be the case, because sometimes in these circumstances it helps to see somebody’s lips. Again, I can only apologise that the system ain’t perfect.
I am well aware that there are hon. Members present who have not taken part in the Bill Committee process before. First, on code of dress, it is fine if anybody wishes to take their jacket off. You have the permission of the Chair to do so. You are supposed to seek the consent of the Chair before doing so; you have that consent.
Hon. Members who wish to intervene may do so in the same way as on the Floor of the House. It is up to the Member who has the Floor whether to give way, but it is customary in Committee. Unlike on the Floor of the House, it is not uncommon for a Member to seek to intervene more than once on the same subject for further clarification, if necessary. That is a given. I trust that Members are aware that—again, unlike on the Floor of the House—they are permitted to speak more than once during the debate on each grouping.
That brings me on to the groupings, about which we have had quite a lot of discussion already. This is an arcane process. Groupings on amendments and new clauses are tabled out of sequence, but in recognition of the subject matter under discussion. You will find that there are groupings with a lead amendment, which is the only one that will initially be moved. It is not uncommon for hon. Members to say, “Hang on a minute, I want to move that other amendment.” The answer to that is, “Later.” You move the amendment when we reach the appropriate point in the Bill; amendments are not necessarily moved immediately. If anybody wishes to press an amendment that is listed, but that is not immediately called as the lead amendment, will they please let the Chair know? It is not our job to try to prevent you from causing a Division if you choose to do so, but we do need to know. Otherwise, it may not get called.
Government amendments and some new clauses will be called in sequence as we work through the Bill. Although they may be debated this morning, they might not be called to be voted on—divided on—for two or three weeks. If you are in any doubt, ask. That goes for anything else as well. This is a difficult process to master. Whoever is in the Chair will be more than willing, if we do not know the answer, to take advice—the Clerk always does know—and make sure that you get the answers you want. In other words, if in doubt, ask. Do not sit there floundering.
That was intended to be helpful. I do not know whether it was or not. We will now commence line-by-line scrutiny of the Bill.
Clause 1
Sale of tobacco etc
The Chair
We begin with the group led by amendment 17. The hon. Member for Epsom and Ewell (Helen Maguire), who tabled all the amendments in the group, is not a member of the Committee and therefore cannot move them. Is there anybody present who has taken ownership of the amendments and wishes to move the lead amendment on behalf of the hon. Member?
Dr Johnson
I beg to move amendment 17, in clause 1, page 1, line 5, leave out
“born on or after 1 January 2009”
and insert
“under the age of 25”.
This amendment makes it an offence to sell tobacco products, herbal smoking products and cigarette papers to a person under the age of 25, rather than to people born on or after 1 January 2009.
The Chair
With this it will be convenient to discuss the following:
Amendment 18, in clause 1, page 1, line 13, leave out
“shown on that document was before 1 January 2009”
and insert
“showed that the purchaser was not under the age of 25”.
This amendment is linked to Amendment 17.
Amendment 22, in clause 5, page 3, line 8, leave out
“born on or after 1 January 2009”
and insert
“under the age of 25”.
This amendment is linked to Amendment 17.
Amendment 23, in clause 6, page 3, line 30, leave out
“born on or after 1 January 2009”
and insert
“under the age of 25”.
This amendment is linked to Amendment 17.
Amendment 24, in clause 6, page 3, line 32, leave out
“a anwyd ar neu ar ôl 1 Ionawr 2009”
and insert “dan 25 oed”.
This amendment is linked to Amendment 17.
Amendment 44, in schedule 5, page 132, line 2, leave out
“a anwyd ar neu ar ôl 1 Ionawr 2009”
and insert “dan 25 oed”.
This amendment is linked to Amendment 17.
Amendment 48, in schedule 5, page 132, line 7, leave out from “berson” to end of line 8 and insert “dan 25 oed (“B”)”.
This amendment is linked to Amendment 17.
Amendment 45, in schedule 5, page 132, line 12, leave out from “person” to end of line and insert “dan 25 oed”.
This amendment is linked to Amendment 17.
Amendment 46, in schedule 5, page 132, line 38, leave out from “rhoi” to “a” in line 39 and insert
“yn 25 oed neu drosodd”.
This amendment is linked to Amendment 17.
Amendment 47, in schedule 5, page 133, line 2, leave out from “person” to end of line 3 and insert “dan 25 oed”.
This amendment is linked to Amendment 17.
Amendment 39, in schedule 5, page 133, line 16, leave out
“born on or after 1 January 2009”
and insert
“under the age of 25”.
This amendment is linked to Amendment 17.
Amendment 40, in schedule 5, page 133, line 21, leave out
“born on or after 1 January 2009”
and insert
“under the age of 25”.
This amendment is linked to Amendment 17.
Amendment 41, in schedule 5, page 133, line 26, leave out
“born on or after 1 January 2009”
and insert
“under the age of 25”.
This amendment is linked to Amendment 17.
Amendment 42, in schedule 5, page 134, line 9, leave out
“born before 1 January 2009”
and insert
“over the age of 25”.
This amendment is linked to Amendment 17.
Amendment 43, in schedule 5, page 134, line 14, leave out
“born on or after 1 January 2009”
and insert
“under the age of 25”.
This amendment is linked to Amendment 17.
Amendment 25, in clause 50, page 25, line 30, leave out
“born on or after 1 January 2009”
and insert
“under the age of 25”.
This amendment is linked to Amendment 17.
Amendment 26, in clause 50, page 25, line 33, leave out from “substitute” to end of line 34 and insert
“under the age of 25 (‘the customer’) to be aged 25 or over”.
This amendment is linked to Amendment 17.
Amendment 27, in clause 50, page 25, line 37, leave out
“born on or after 1 January 2009”
and insert “under 25”.
This amendment is linked to Amendment 17.
Amendment 28, in clause 50, page 26, line 1, leave out subsection (3).
This amendment is linked to Amendment 17.
Amendment 29, in clause 50, page 26, line 28, leave out from “substitute” to end of line 29 and insert
“under the age of 25”.
This amendment is linked to Amendment 17.
Amendment 30, in clause 50, page 26, line 30, leave out from “substitute” to end of line 31 and insert “under 25”.
This amendment is linked to Amendment 17.
Amendment 31, in clause 50, page 26, line 33, leave out from “substitute” to end of line and insert “under 25.”.
This amendment is linked to Amendment 17.
Amendment 32, in clause 68, page 35, line 28, leave out
“born on or after 1 January 2009”
and insert
“under the age of 25”.
This amendment is linked to Amendment 17.
Amendment 33, in clause 68, page 35, line 37, leave out
“shown on that document was before 1 January 2009”
and insert
“showed that the purchaser was not under the age of 25”.
This amendment is linked to Amendment 17.
Amendment 38, in clause 72, page 37, line 28, leave out
“born on or after 1 January 2009”
and insert
“under the age of 25”.
This amendment is linked to Amendment 17.
Amendment 49, in title, line 2, leave out
“born on or after 1 January 2009”
and insert
“under the age of 25”.
This amendment is linked to Amendment 17.
Dr Johnson
The amendments do not stand in my name, and they are not amendments with which I agree, but they relate to a very important part of the Second Reading debate that goes to the heart of the principles behind the Bill. I have moved the lead amendment so that the debate can be heard in full and so that hon. Members can establish for themselves whether they wish to support the amendments.
I will refer to these amendments as the Maguire amendments, if that helps, as they were all tabled by the hon. Member for Epsom and Ewell, who is not on the Committee. It is, of course, the Whips who choose who goes on the Committee—[Interruption.] Sorry, can you hear me?
Dr Johnson
Thank you. I am aware that the Whips choose who gets to go on Committees. Sometimes that is a blessing; sometimes it can be less welcome, particularly if it is a long Committee that goes on for months. For someone who is passionate about a cause, but is not aligned with the Whips’ view and is not chosen for a Committee, it can be frustrating not to have something discussed that they believe important. We are all here to represent our constituents and to think carefully about the legislation in front of us. Although the amendments were tabled by a Member who is not a member of my party, and I do not actually agree with them, I want to ensure that they get a proper hearing.
Amendments 17 and 18 would amend clause 1, which will introduce a prohibition on selling tobacco products, herbal smoking products and cigarette papers to any individual born on or after 1 January 2009. The Government’s intent is to create a tobacco-free generation by progressively restricting access to tobacco-related products for younger age groups as they age. This is a measure that was first discussed in the Khan report and was brought forward in the previous Tobacco and Vapes Bill, which was introduced by the Conservative Government under my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), who wanted to ensure that we eliminate smoking as far as possible, for people’s health, but that we would not impose a criminal penalty on people who already smoke and thereby criminalise an addiction that is so difficult to give up. That is the reason for the rolling sale.
Under clause 1, sellers will be required to verify the buyer’s age using acceptable identity documents, which are listed as being passports, UK or EU driving licences or proof-of-age identity cards, known as PASS cards. If the seller relies on valid-looking ID showing that the buyer was born before 1 January 2009, or if they can demonstrate that they took all reasonable steps to avoid an offence, they have a legal defence against prosecution. Violating the clause is an offence punishable by a fine of up to level 4 on the standard scale; I am sure we will come on to what that means later. It is currently capped at £2,500.
This measure is part of a broader strategy to combat smoking by reducing access among younger generations and curbing the initiation of tobacco use. By enforcing strict age verification and imposing financial penalties, the clause aims progressively to eliminate tobacco use, contributing to long-term public health improvements.
New clause 17 would leave out
“born on or after 1 January 2009”
and insert in its place
“under the age of 25”.
That would make it an offence to sell tobacco products, herbal smoking products and cigarette papers to a person under the age of 25, rather than to a person born on or after 1 January 2009.
The Chair
Order. For the sake of clarity, we are referring to amendment 17, not new clause 17.
Dr Johnson
Thank you, Sir Roger. I am very grateful for your guidance. I think spending much of the night trying to get to grips with the various drafts has left me a little tired. I appreciate the difference. As you said, the process is somewhat confusing, but at least we are moving through it steadily.
Amendment 17 would significantly alter the scope of clause 1 by replacing the birth date-specific restriction of 1 January 2009. Instead of targeting individuals born on or after that date, the new provision would make it an offence to sell tobacco products, herbal smoking products or cigarette papers to anyone under the age of 25. That modification would shift the focus from creating a tobacco-free generation to implementing a uniform age limit similar to the one that we have already.
Jack Rankin (Windsor) (Con)
My hon. Friend knows that we disagree on the principle of clause 1, and my objection is primarily to creating two tiers of adults. One of the benefits of the Bill, as it is currently written, is that it is at least a time-limited measure. In other words, when that generation dies out, every adult will be one tier again. With amendment 17, however, we will effectively have two tiers of adults forever, so a 19-year-old will always—or until we change the law again—be able to drink but will not be able to smoke, and that will be set in stone. Does my hon. Friend agree that, even if she thinks we should create two tiers of adults for public health purposes, we should try to delimit that as much as possible, and therefore the principle of the amendment should not be accepted by this Committee?
The Chair
Order. Another thing colleagues might notice is that that was quite a long intervention. Customarily in Committee, as opposed to on the Floor of the House, it is not unusual for a Chair to allow a fairly long intervention, because quite often that obviates the need for a speech later. Be aware of that flexibility.
Dr Johnson
Once again, Sir Roger, I am very grateful for your guidance to the Committee. I was explaining the change in amendment 17, and my hon. Friend, like the very wise chap that he is, brings something forward that I had not really considered, despite my attention to this Bill over some time—and Members will be very much aware it is something that I have taken a long interest in.
My hon. Friend is absolutely right: some people argue that the Bill creates two tiers of adults—some who are allowed to smoke and some who are not. In fact, that is exactly what it does. Eventually, of course, people get older and older. I saw that the oldest person in the world sadly passed on in the last week or so, and she was 116. I am not quite sure about the age of the current oldest person in the world, but I suspect their age is similar. Therefore, I suspect that it will take quite a long time before my hon. Friend’s ideal of all adults being treated the same is once again achieved. I suspect that I will certainly be long gone before it does, and I anticipate that the rules we are proposing will last the rest of our lifetimes here today.
This modification shifts the approach from creating a tobacco-free generation to implementing a uniform age limit that applies universally, regardless of the buyer’s birth year. That simplifies enforcement because sellers would need only to confirm whether a buyer is under 25, and they would not need to do the mental arithmetic in their head that says, “Okay, that is their birthday, but how old would that make them?” The Minister, in his questions on Tuesday, raised the point repeatedly with one of our witnesses about whether it is simpler to have a date of birth or an age. My understanding is that a lot of tills nowadays will give a prompt to the person working behind the till to say, “If you are born before or after this date, that is where the 18 cut-off is.”
Dr Johnson
I thank the hon. Gentleman for the promotion—I shall mention it the Chief Whip and see how that goes!
Sadik Al-Hassan
My training and experience as a pharmacist over two decades involved working with systems such as tills that teach people how to ask for age verification. Does the hon. Lady agree that the Minister is spot on and that actually this is a moot point, because the software, support and training is already there across the country, including in independent shops, and age verification is quite easy to do?
Dr Johnson
I think it is straightforward to have an age and a date of birth to check. It could become more confusing if we ended up with a range of age-restricted products and the age for each of them was different, as that would require people to look at a whole spreadsheet of dates of birth.
Sadik Al-Hassan
Software systems I have worked with already have the facility to differentiate by product, including for razor blades and alcohol products. That already exists across retail and in a variety of retail premises.
Dr Johnson
The hon. Gentleman’s intervention highlights the fact that in Parliament we benefit from the experience of so many different people. Each of us comes to this place with our own history, backstory and experience of working in a whole range of different professions and jobs. That is one of the reasons why we go through these Bills line by line. It may seem to some extent slow and plodding to go through things so methodically, but that means that each person can, as he has, bring their experience forward and explain the ways that tills and such things work, which is really beneficial. I thank him for that intervention.
Jack Rankin
I slightly disagree with the hon. Member for North Somerset. It seems to me that over time, we have been getting more consistent in our understanding of what an adult is. Obviously, I am quite a young man, but when I turned 16, I could buy a lottery ticket, I could get married without my parents’ permission and I could join the Army. I could then learn to drive at 17. Many of those have been regularised in the last few years, so the age for buying lottery tickets is now 18 and one cannot get married before 18 either. That is part of ensuring consistency about what an adult is.
It may well be true that pharmacies have such technology, and I understand why, but most cigarettes are bought in small newsagents and I would not necessarily expect them to have the same technology. We should be supporting consistency in what an adult is—that is the direction in which legislation has been moving—and not creating added complexity.
Dr Johnson
I thank my hon. Friend for his helpful intervention. I do not know whether any Member present has worked in a small corner shop and could tell us whether they have the same level of technology. Perhaps the Minister or his officials know whether the same level of technology is used in shops across the board. I am afraid that I do not know the answer to that.
Gregory Stafford (Farnham and Bordon) (Con)
On that point, will my hon. Friend give way?
Dr Johnson
Yes; if my hon. Friend knows the answer, I would be delighted to hear it.
Gregory Stafford
I do not know the answer to that question, although I suspect that many such shops do not. Although I agree with my hon. Friend about the thrust of the Bill, something that does concern me comes not from the retailer point of view but the consumer point of view. At the moment—please do not disabuse me of this view—when I go and buy a bottle of wine or a pint of beer, I am very rarely, if ever, IDed. But I accept that if, on the rare occasion that I am IDed, I do not have a form of identification, it is not the biggest problem in the world. Most of the time, however, people can see that I am over the age of 25 or over the age of 18, so it does not happen.
If the Bill were to go forward in its current form, every smoker would essentially have to carry a form of ID all the time. Some, especially the older generation, might not have a suitable form of identification and some—if they are, like me, a civil libertarian—might not want to carry ID, so how do we get around that point in the Bill to ensure that we do not end up having ID cards for older people by the back door?
Dr Johnson
My hon. Friend makes an important point. Some people are averse to carrying ID—it is not something that bothers me personally, but I am aware that for some people it is a sticking point. In a previous debate before the election, the former Member for Norwich North, Chloe Smith, made the point that not all adults will be affected by this legislation, but only a relatively narrow band of them.
The last time I was carded for ID, I was 38. I was not buying the typical basket of a 17-year-old; I was buying flowers—orchids—and a bottle of champagne for someone’s housewarming, as well as some strawberries, because she had phoned to ask me to get some when I was on the way, as she was running out at the housewarming party. I was IDed, so I was not able to buy the champagne for her, because the supermarket would not let me. That was disappointing for both of us, but I accepted the fact that if ID could not be shown and they genuinely believed that I looked under 25, that was the law and it had to be accepted. That is not universally the case, and I am aware—as we heard in evidence—that retailers can sometimes receive significant verbal and occasionally violent abuse when they ask for ID in that way.
Andrew Gwynne
The shadow Minister is having a good morning, having not had a particularly great evening last night. With no disrespect to the hon. Member for Windsor, who made this point in his intervention, by the time that the age of sale is legally his age, we hope that smoking prevalence in that age group will be next to zero, and therefore it will not be an issue.
Dr Johnson
I thank the Minister for his intervention, although I am not sure what he is implying about the age of my hon. Friend the Member for Windsor—
Dr Johnson
Wisdom or age, but I shall be cautious not to answer too closely.
Dr Danny Chambers (Winchester) (LD)
I accept the view that having to provide ID will be inconvenient and frustrating for some people, but all the expert witnesses on Tuesday pointed out that many smokers do not wish the younger generation to continue smoking. I think that most of them would probably be of that view that the slight infringement of their civil liberties in having to carry ID is a small price to pay for the knowledge that they are preventing smoking from being taken up.
Dr Johnson
The hon. Gentleman is right that the measures have broad support. Certainly, the pollsters who have investigated people’s views of this legislation—that proposed by the previous Government and the legislation as it is now, with some tweaks to it—have found the public to be overwhelmingly positive. We legislate because we are elected by those people. On the basis of their opinions and given that policing in this country is done by consent—
Jack Rankin
On the civil liberties point, I disagree with my hon. Friend entirely, as she well knows. The point about civil liberties is that they need protecting not when the majority agree, but when the majority do not agree. The hon. Member for Winchester made the point that all the experts agreed. We listened to a cohort of experts who were from a variety of fields, but they were also all in some way paid for by the state and had some vested interest in the Bill—they were not retailers, consumers and so on— [Interruption.] We had one person out of 15. It was really not a well-balanced affair at all, so I disagree with that point.
Dr Johnson
I think that comes back to the issue of choice. The chief medical officer said that the only choice we make is the choice to have that first hit of nicotine; after that, our choice is taken from us by the profound addiction that we experience. One of the challenges with stopping smoking is that people get powerful cravings. Despite their overwhelming desire to stop, the cravings drive people to have a cigarette that they do not really want or would rather not have because of their addiction.
Tristan Osborne (Chatham and Aylesford) (Lab)
May I de-aggregate the two separate, distinct points about the age that will be defined on a driving licence or passport versus the concept of having ID?
On the first point, most identity documents will contain a defined birth date, which makes it easier for a retailer or sales individual to check the date. They do not contain an age, per se, but they have the date of birth, which creates an easier means of assessment.
The second point about having ID is a separate, distinct issue. In some countries in Europe, they put identity cards on the back of credit or debit cards, for instance. The question of how we would define that identity is a separate element or, perhaps, a separate amendment to the clause that may expand the list of identity that would be bona fide, but we nevertheless use the concept of identity already in many cases to purchase products.
If we are against identity cards or any form of identity, how are we supposed to look at any product with regard to sales, including ones that we might be challenged on, such as when the shadow Minister was purchasing her orchid in a venue? We accept the premise of identity when we sell any licensed product at the present time, so we are merely extending the same premise.
Dr Johnson
I thank the hon. Gentleman for his thoughtful contribution. I should be clear that I do not have an issue with carrying my driver’s licence or ID with me, although I am aware that some people genuinely do. If he wants to intervene again, I would be interested to hear whether that means that he is comfortable with voter ID, because his party, prior to the general election—I appreciate that he would not have voted on it, because he was not—
Dr Johnson
I merely make the point that ID is used for purposes other than to buy cigarettes and tobacco, Sir Roger.
I want to return to a point raised in an earlier intervention about the group of people who would be asked to carry ID. If somebody’s birthday is, like mine, in 1977, it is sadly unlikely that anyone will think that I was born in or after 2009. The cohort affected will be those born around 2006 or 2012. I do not see this as an ID for old people through the back door, because, as I view it, there will be a cohort of people within five or even 10 years on either side of the 2009 boundary who will find themselves required to carry ID if they wish to smoke. If they do not wish to smoke or use any tobacco, cigarettes or smoking products, they will not be affected.
Jim Dickson
Sorry. Does the hon. Lady accept that the changes that have resulted in significant decreases in smoking prevalence over the last 20 years have all been about imposing additional burdens on those who wish to smoke, such as on where they can smoke and how they can buy the products, which are now in lockable cupboards rather than out on display in shops? Asking someone who wishes to smoke to carry ID is an increased burden—a very small one, but an increased burden none the less—and it is all part of the policy family that has enabled us to reduce smoking prevalence from between 25% and 30% 20 or 30 years ago to 12% now, and that will hopefully help us reduce it to 5% or 0% in the future.
Dr Johnson
It is certainly the case, as I am sure we will come to when we discuss clause 1 itself in more detail, that where tobacco control measures have been brought in—on place, price, display or age group—they have led to a fall in smoking, which is a welcome and intended outcome.
I have been lumbered with a lot of interventions and I did not get to answer one point in full, which was on the issue of adult consistency. Amendment 17 would create two groups of adults—those aged between 18 and 25, who would be unable to smoke or use tobacco products, and those over 25, who would. The previous Government sought to say, “This is when you become an adult—when you turn 18. Before that, you are a child, and we will use child protection and safeguarding measures, so you cannot get married or buy a lottery ticket.” We sought to create consistency across the board, because consistency helps people to understand what the law is, which makes it easier for them to follow it and give a greater level of consent to it.
Let me turn back to the amendments. I cannot speak directly for the hon. Member for Epsom and Ewell, who tabled the amendments, but one of the reasons that has been given to me for increasing the age to 25 is that people normally begin smoking when they are young. Most people begin before they are 16, and many more before they are 21. That means that in principle, if we raised the age to 25, we would find that people did not start smoking in any great numbers, because their brain and their thinking process would be more mature, so they would be less likely to start. It is also the case that if someone starts smoking at a younger age, they are more vulnerable to the addictive properties of nicotine, as we heard in the impact assessment and in medical evidence.
Tristan Osborne
One of the challenges with introducing an age restriction of 25 is that a 19-year-old can smoke today, but that rule would suddenly take away a right that they previously had. However, the proposal on the table is for a sliding scale, whereby they will never have had the right to smoke. We are not taking away a right that someone might have had previously. Does the hon. Lady accept that there is a slight difference between having an age restriction of 25 and a sliding increase in age?
Dr Johnson
The hon. Gentleman is exactly right, in my personal view, to say that. As we heard before, the previous Government wanted to ensure that in bringing forward a Bill, they were not going to criminalise people with an addiction to a product that they could not quit, and therefore leave them in a situation where they could no longer buy the product they needed to feed that addiction. Obviously, we want them to stop, but we do not want to make them stop by making them criminals. So, yes, I would be concerned that sticking in a sudden increase to 25 would mean that any smokers legally accessing tobacco products between the ages of 18 and 25 would find themselves somewhat stuck. That is not something I would wish to see.
Gregory Stafford
As a point of clarification, what the proposals in the Bill, and indeed the amendment, deal with is the selling of tobacco products, not the consumption. So when we are talking people not being able to smoke, they would be able to, but a retailer would not be able to sell them tobacco products. I say that just so we are clear what we are talking about.
Dr Johnson
Under this clause, it is true that somebody would not be able to purchase tobacco, but clause 2 means that somebody cannot purchase tobacco on behalf of somebody else. It would not be possible legally for somebody under the age of 25, if the clause was amended, or somebody born after 1 January 2009, if it was not, to buy tobacco, but it would also be illegal for them to use it because, under clause 2, which provides for proxy purchase, the person who gave the younger individual tobacco would themselves have broken the law.
Euan Stainbank (Falkirk) (Lab)
Can we acknowledge that youth initiation often starts before the age of 18? Moving the age to 25, as this amendment proposes, would not automatically shift the dial on when youth initiation starts by seven years. The Bill permanently demarcates a smoke-free generation that we are specifically targeting.
Dr Johnson
When Parliament brings in any law of any kind, most people will follow it—the vast majority of the public are law-abiding citizens who want to know what the law is and obey it. However, whatever law we bring in, there will always be people who will disobey it. Even if cigarettes were completely banned, people would buy them. Many products—cocaine and heroin, for example—are banned, but some people still access and purchase them, so the Bill would not eliminate the issue completely.
Perhaps I could answer the hon. Gentleman with a couple of statistics. According to the Government impact assessment, 66% of smokers begin smoking before they are 18, and 83% before they are 20. Yet the research shows that three quarters of those smokers, were they to have their time again, would prefer never to have started smoking.
The hon. Gentleman may be aware that the age of sale for cigarettes was previously 16 and that a previous Government made it 18 instead. The effect was reviewed by scientists at University College London in 2010, and we saw a fall in smoking in all age groups. That is in line with what we have seen across a lot of the western world: smoking rates have declined. Actually, if we look at the difference between the younger and the older people, that fall was 11% in those in the 18 to 24 age group, but 30% in those aged 16 to 17. That meant that the age group targeted by the ban was much more likely not to start smoking. That is the start of the smoke-free generation, and we hope that a similar pattern will be seen and roll forwards.
Sarah Bool (South Northamptonshire) (Con)
On that point, according to Cancer Research, about nine in 10 people start smoking before the age of 21. Surely, if we increase that to 25, by default we are preventing more people from starting by that point. Going back to enforcement, I think that 25 is more of an age by which we have caught the youth and stopped them from starting.
Dr Johnson
I understand that opinion, and I guess that is what is behind amendment 17, which was proposed by the hon. Member for Epsom and Ewell. The evidence—certainly that which we heard on Tuesday from the chief medical officer and others—suggests that raising the age as far as 25 will help, and the Government’s impact assessment says they considered that option; they thought it would help to reduce smoking levels, and I think that that is true. However, it does bring the risk of either creating a great delay in bringing these measures in, because we want to wait until all current 18-year-old smokers are 25, or criminalising people who are currently legal smokers. If we still ended up with people starting smoking at 25, we would have not created that smoke-free generation, because we would not have brought those rates of smoking down as close to zero as possible. Given the harms caused by smoking—I am sure we will go through them in the debate on clause 1—it is important that we do all we can to reduce the number of smokers.
Jim Dickson
On the point made the hon. Member for South Northamptonshire, a common maxim applied to our public policy on harmful substances is that we permit. Even having a permission to smoke and buy cigarettes after the age of 25 means that society is effectively saying that that is fine to do, albeit harmful. We do not do that with very many other harmful substances, so it would seem odd to do it with cigarettes.
Dr Johnson
I think this comes down to the libertarian argument. Someone can be an adult either because they are over the age of 25, as per amendment 17, or because they are born before 1 January 2009, as per clause 1, unamended by amendment 17. Essentially, whichever type of adult someone is, we would normally say, “If you are an adult, you make an informed choice about which substances to take and what risks you want to take with your life.” But two thirds of people who take cigarettes will die as a result.
There are other substances that we do ban, and there is a scale. There is the libertarian who would have us make all drugs—whether cannabis, cocaine or heroin—free for everyone to use and to buy as they choose. That is not a position I subscribe to, but it is a position that some subscribe to. There are also those who would go further and ban many more substances, such as certain foods that are particularly sweet or fatty but otherwise enjoyable. There is a spectrum, and I think—society probably agrees—that the judgment is that tobacco is very harmful to those who consume it, and potentially to those around them, in a way that does not offer them any significant benefit. I am a doctor, and when we prescribe medication, we look at the risk balance between the benefits of the substance that we are giving somebody and its potential harm. However, with smoking, as far as I can tell, there are no real benefits, other than an emptier pocket—because an individual has spent so much money—worse lungs and worse health.
Sarah Bool
Just to play devil’s advocate, there will be some who will say that they have a cigar from time to time, and that will be caught by this legislation. Cigars are not used in the same way as cigarettes, and they are not seen to be as highly addictive. People do not chain smoke cigars. Is it fair in that instance to remove their liberty to smoke a cigar? I am just pointing that out as a non-smoker.
Dr Johnson
I will come back to that point when we get to the debate on clause 1 and tobacco products. It is an important point, but I am aware of the Chair’s tolerance, and the discussion at the moment is on amendment 17.
On the rise in age of sale, I talked about research that UCL did in 2010. Further research done in 2020 looked at the effect of raising the age of sale from 16 to 18 and found that the rates of ever smoking—people who had ever had a cigarette—had declined more among those aged 16 to 17 than among those aged 18 to 24. That supports the position that if access is restricted for younger people, they are less likely to smoke, which goes back to the point that most people are law-abiding citizens and wish to follow the rules. Restricting sale also emphasises the dangers to people in their own minds, which is a point we will come back to in the discussion on vapes.
Let me move on to amendment 18, which is linked to amendment 17. It would leave out the words
“shown on that document was before 1 January 2009”
in clause 1 and insert the words
“showed that the purchaser was not under the age of 25”.
This is a technical point to allow the ID to reflect the principle of who is allowed to purchase tobacco. It is a broad shift. In the view of the proposer, transitioning from a birth date-specific restriction to a general age-based restriction simplifies compliance for sellers by focusing on the current age. In my view, it actually makes it more complicated, because there is more mathematics to do in one’s head. If one is fortunate enough to work in a pharmacy, as the hon. Member for North Somerset discussed, it requires two dates in the computer, which is more difficult than one.
Sarah Bool
I understand the point about the potential complexities, but there is a risk on enforcement that whenever anyone goes to buy cigarettes in the future, they will have to have some form of ID. That creates a distortion: someone could just be assumed to be over the age of 25, whereas under the Bill they will always have to be checked.
Dr Johnson
My hon. Friend is making a point about ID for purchasing things. It is reasonable to ask people to have ID when they go and collect a parcel, to make sure that they are getting a parcel for the right address. In my view, it is reasonable—I do not think my hon. Friend voted for it, but I suspect she would support the idea—to provide ID in order to vote to maintain our democratic process. Having ID to buy an age-restricted product does not seem overly burdensome. I accept that it makes it more difficult for people below that age, because it provides a hurdle for them to overcome, in terms of potentially accessing some sort of fake ID. Most people want to obey the law, and that is an extra step in breaking the law that they would have to take, which they would not wish to do. I think we may have to agree to disagree on this point.
Amendment 22 would amend clause 5, substituting the words
“born on or after 1 January 2009”
with the phrase
“under the age of 25”.
That is consistent with the changes that would be made by amendment 17 to clause 1. Amendment 23 would make a similar amendment to clause 6, again changing the date. The other amendments in this group are amendments 24, 44 and 48, which is in Welsh—I trust that it says the same thing, but since I do not speak any Welsh, I cannot be clear on that. This group also includes amendments 46, 47 and 39 to 43. Again, they all seek to change the thrust of the Bill away from a rolling smoke-free generation to a fixed age of 25.
The Chair
Before we proceed, I shall not be in the Chair this afternoon, but I would be grateful if the shadow Minister could indicate whether she wishes to press amendment 18 as well as amendment 17, whether it is only amendment 17, or whether she may decide in due course not to press either. That is a matter for later, but it would be helpful to know if she wishes to press either.
Dr Johnson
It was my intention to ensure that the debate, even if it is on issues I do not support, got a hearing and that Members of the House who wished to contribute were able to do so. The purpose was to allow the amendments to be debated. I do not intend to push any of them to a vote.
Jack Rankin
I would like to support those amendments, if that changes anything, Sir Roger.
The Chair
We will have a debate first. The hon. Gentleman is in a position to push the amendment to a Division if he chooses to do so, but not yet.
The only other thing I need to know before I call the Government Whip, which I assume is my next move, is to say that, ordinarily, when I am in the Chair, we have a thing called a clause stand part debate at the end of each clause—on the question that the clause, as amended, if it is amended, stand part of the Bill. I have always taken a fairly relaxed view: you can have a debate on clause stand part or you can debate clause stand part during all the amendments, but you cannot do both; you cannot have two bites of that cherry and just say the same thing all over again.
Ordinarily, under these circumstances, my impression already would be that by the time we have been through all these amendments, there would be no need for a clause stand part debate. I would then move straight to putting the question that the clause stand part of the Bill, but—I am afraid it is a big “but”—in this instance, the clause stand part debate is linked with two new clauses and two more stand part debates, so we will have to have it at the end. I would urge—and I expect that my colleague who takes over in the Chair this afternoon will wish to observe this—that we do not repeat the arguments that have been made on clause 1 stand part during the bigger debate at the end. I hope that is clear. If not, Members should, again, seek advice.
Ordered, That the debate be now adjourned.—(Taiwo Owatemi.)
Water (Special Measures) Bill [ Lords ] (First sitting)
Thursday 9th January 2025
(1 day, 13 hours ago)
Public Bill CommitteesRead Full debate Water (Special Measures) Bill [HL] 2024-26 View all Water (Special Measures) Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 9 January 2025 - (9 Jan 2025)
The Committee divided: - Ayes: 2 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 11 / Noes: 5 - Question accordingly agreed to.
The Committee divided: - Ayes: 11 / Noes: 5 - Question accordingly agreed to.
The Chair
I have a few preliminary announcements to make. Members should send their speaking notes by email to hansardnotes@parliament.uk. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings. Today, we will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication. In view of the time available, I hope we can take those matters formally and without debate. I call the Minister to move the programme motion standing in her name, which was discussed yesterday by the Programming Sub-Committee for the Bill.
Ordered,
That—
1. the Committee shall (in addition to its first meeting at 11.30 am on Thursday 9 January) meet—
(a) at 2.00 pm on Thursday 9 January;
(b) at 9.25 am and 2.00 pm on Tuesday 14 January;
(c) at 11.30 am and 2.00 pm on Thursday 16 January;
2. the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 16 January. —(Emma Hardy.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Emma Hardy.)
The Chair
We shall now begin line-by-line consideration of the Bill. The selection and grouping list for today’s sittings is available in the room. It shows how the clauses and selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or similar issue. Please note that decisions on amendments do not take place in the order in which they are debated, but in the order in which they appear on the amendment paper. The selection and grouping list show the order of debates. The decision on each amendment, and on whether each clause should stand part of the Bill, is taken when we come to the relevant clause.
A Member who has put their name to the leading amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments within that group. A Member may speak more than once in a single debate. At the end of a debate on a group of amendments, I shall call the Member who moved the leading amendment again. Before they sit down, they will need to indicate if they wish to withdraw the amendment or seek a decision. If any Member wishes to press any other amendment in a group to a vote, they will need to let me know in advance. I am sure that is clear to everyone.
Clause 1
Rules about remuneration and governance
Tim Farron (Westmorland and Lonsdale) (LD)
I beg to move amendment 22, in clause 1, page 1, line 11, at end insert—
“(1A) The Authority must use its power under subsection (1) to issue rules which require—
(a) the interests of customers, and
(b) the environment,
to be listed as primary objectives in a relevant undertaker’s Articles of Association.”
The Chair
With this it will be convenient to discuss the following:
Amendment 18, in clause 1, page 2, line 3, at end insert—
“(ca) requiring the management board of a relevant undertaker to include at least one representative of each of the following—
(i) groups for the benefit and interests of consumers;
(ii) groups for the benefit and interests of residents of the areas in which the undertaker is operational;
(iii) experts in water and sewerage policy and management; and
(iv) environmental interest groups.”
Government amendment 1.
Amendment 19, in clause 1, page 2, line 8, at end insert—
“(e) preventing a relevant undertaker from employing any individual who has been employed by the Authority in the preceding three years.”
Government amendment 2.
Amendment 21, in clause 1, page 4, line 35, leave out from “force” to the end of line 40.
Clause stand part.
Tim Farron
Happy new year to all colleagues. It is good to be in this place and it is a great pleasure to serve under your guidance as Chair, Mr Vickers. I put on the record my thanks to the Minister for her engagement, and to the Committee Clerks and the Minister’s team for being immensely constructive throughout this process.
My hon. Friend the Member for Witney will speak to amendment 22, and I will make remarks on amendment 18, which, with your permission, Mr Vickers, I will press to a vote if the Government are not minded to accept it. I will also voice my concerns about amendment 2 and I give notice that we will vote against it.
Among the challenges that we face is the complete and utterly justified lack of trust in the water sector—water companies in particular, but also the regulatory framework. Amendment 18 was tabled to ensure that some of the people appointed to the boards of water companies, whatever their structure otherwise, have a connection to the benefit and interests of the consumers within the region; will benefit the residents within the areas in which the undertaker—the water company—is operational; and are experts and campaigners on environmental and sewage policy matters.
I am sure that Members on both sides of the House have people in their communities equivalent to the ones I will briefly mention. People from groups such as the Clean River Kent campaign, the Eden Rivers Trust, the South Cumbria Rivers Trust and the Save Windermere campaign, in addition to citizen scientists and others who represent local interests and have great expertise, ought to be on the boards of the outfits that run our waterways in future, and that should be in the Bill.
The amendment would bring the expertise and accountability that we are seriously lacking, and it would build trust, which our water companies are also lacking. We think that the case for it is self-evident, because those bodies and others around the country self-evidently have the expertise, authority and tenacity to add huge value and to ensure that our water companies deliver for the communities they are meant to serve, not just their shareholders.
Government amendment 1 seeks to undo an amendment added by my hon. Friends in the other place. Our concern is that if the Government insist on it and we do not have a much tighter timescale, that will basically undermine the regulation and leave it open-ended so that we cannot be certain that we would be able to enforce the things that the Bill seeks to do in a timely fashion. To ensure that the Bill does what it is supposed to do, we should not cut the water companies any slack.
Charlie Maynard (Witney) (LD)
I rise to explain amendment 22. On 11 July, the Environment Secretary issued a press release on the reform of the water industry that stated:
“Water companies will place customers and the environment at the heart of their objectives. Companies have agreed to change their ‘Articles of Association’—the rules governing each company—to make the interests of customers and the environment a primary objective.”
However, that commitment is not currently in the Bill. The amendment simply seeks to bring that commitment into this legislation.
Dr Neil Hudson (Epping Forest) (Con)
It is a great privilege to serve under your chairmanship, Mr Vickers.
On behalf of His Majesty’s Opposition, I rise to challenge the Government on their plans in Government amendments 1 and 2. Before I go into the detail, I will make some general comments about the clause that are pertinent to the amendments.
The Opposition worry that the Bill, rather than taking original and new measures to tackle these issues, is purely an attempt to copy and paste the work done by our previous Conservative Government. In fact, many of the measures have already been copied from previous measures that we introduced in government.
Helena Dollimore (Hastings and Rye) (Lab/Co-op)
In the Environment, Food and Rural Affairs Committee, we took evidence from the chief executive of Ofwat, who was clear that the bonus that the boss of Southern Water, Lawrence Gosden, received this year would not have been paid had the previous Conservative Government brought the measures in this Bill before the House. The Conservatives had 14 years to change the rules, but they failed to do so.
Dr Hudson
With the greatest respect, I sat on the Environment, Food and Rural Affairs Committee in the previous Parliament, and we took evidence from the chief executive of Ofwat on some of the key measures that the Conservative Government brought forward. Our Government gave Ofwat teeth and powers, and we need to make sure it uses them.
As detailed in the explanatory notes, Ofwat already has wide powers to set the conditions of water company appointments and licences. The Conservatives worked hard to strengthen its ability and power to do that since this issue came to the fore in order to drive the regulatory change that was vitally needed to tackle the scale of the crisis that came to light.
I again remind Members on both sides of the House that when Labour left office in 2010, only 7% of storm overflows were monitored; when we Conservatives left office, 100% of outflows were monitored. We found the scale of the sewage problem and were the first party to start to address it. The Conservative Government’s Environment Act 2021 gave Ofwat the power to consider, when deliberating about dividends, the environmental performance of a company and its credit rating, whereby Ofwat could stop the paying of dividends if it felt that the firm faced financial risks as a result of its actions.
Charlie Maynard
The hon. Gentleman said that 100% of outflows are monitored, but I am afraid that is not correct. In fact, 100% of the 14,000 storm outflows are monitored—he did not mention storm—but 7,000 emergency overflows are not currently monitored. On the other aspect that he just mentioned, Ofwat was entirely devoid of looking at the balance sheets of the companies under the Conservatives’ watch. That is the root of all our trouble, and it would be beneficial to acknowledge that.
Dr Hudson
If the hon. Gentleman checks Hansard, he will see that in my speech on Second Reading and just now I said “storm overflows”. I gently remind the third-party spokesman that in the coalition Government the Liberal Democrats had a Water Minister who did absolutely nothing on this issue.
Dr Hudson
I was referring to the hon. Gentleman’s colleague.
It is therefore worrying that although the previous Administration went to great lengths to ensure that water companies were financially resilient, this Government are doing quite the opposite with Government amendment 1. That amendment, which will leave out lines 4 to 8 of clause 1, would amend the requirement for rules made by Ofwat under the clause to specifically include rules on financial reporting. That could not more clearly delineate the Conservative approach that the Labour party so derided—it promised the British people that it would do things differently—from the actual approach that Labour has taken in power.
Government amendment 1 undermines not only the hard efforts of the previous Conservative Government in taking the issue seriously, but the efforts of the cross-party consensus that secured the commitment to having financial reporting rules made by Ofwat in the Bill. That cross-party coalition, which included my Conservative colleagues in the other place, forced the Government to ensure that the original commitment would be in place in the Bill. Labour voted against the commitment and is simply seeking to overturn a clear cross-party consensus for Ofwat to be given powers to set rules on financial reporting.
Ensuring that Ofwat can view a water company’s financial structuring will help it to scrutinise and have an understanding of how the company is operating. It will also ensure that the consumers who have been let down by the water industry for far too long are protected. With close financial monitoring, water companies will face the necessary scrutiny to reduce the risk that ordinary consumers are left without a supplier. Financial mismanagement poses great risks, so every sinew must be strained to prevent it; financial reporting is key to ensuring that that takes place. The financial resilience of the water companies is not a hypothetical issue, but a paramount concern right now.
As recently as November, Ofwat’s monitoring financial responsibility report identified 10 companies that needed an increased level of monitoring and/or engagement concerning financial resilience. Seven of those companies were placed in the elevated concern category, meaning that some concerns or potential concerns with their financial resilience have been identified. Three companies were placed in the highest category of action required, meaning that action must be taken or is being taken to strengthen the company’s challenges with financial resilience, and therefore they need to publish additional information and report on improvements at a more senior level with Ofwat.
Catherine Fookes (Monmouthshire) (Lab)
Does the hon. Gentleman agree that his Government had 14 years to reform Ofwat, during which time they did absolutely nothing?
Dr Hudson
I respectfully disagree with the hon. Member. We passed the Environment Act 2021, we gave Ofwat and the Environment Agency more teeth and, as I have said, we were the first party to start measuring and collecting the data that meant we could act on this issue. Moving forward, we are trying to ensure that Ofwat and the Environment Agency use the teeth given to them by the previous Conservative Government to make our waters better. To suggest with Government amendment 1 that Ofwat should not be concerned with financial resilience rules quite simply sends the wrong message to the public, so I urge the Government to reconsider. The Opposition will seek to push Government amendment 1 to a vote.
Catherine Fookes
It is a pleasure to serve under your chairship, Mr Vickers. I take the opportunity to welcome the measures in the Bill, particularly those in clause 1, and to thank the Minister for her really swift work. We know all too well the damage that has been done by water companies and agricultural pollution across the UK. That damage has only been exacerbated by years of Conservative failure, allowing for record levels of illegal sewage dumping in our rivers, lakes and seas.
In my constituency of Monmouthshire, we have the majestic rivers the Wye, the Usk and the Monnow. Armies of citizen scientists, co-ordinated by the wonderful Save the River Usk group in Usk with Angela Jones, have been monitoring the river over the past few years. Sadly, it is getting worse and worse. The levels of phosphate pollution in the River Usk are the worst in all the nine Welsh rivers that are special areas of conservation—SACs.
This Labour Government have only been in office for six months, yet we are already taking more action to tackle the scourge of sewage than the Conservative party did—indeed, more than the Conservative party and the Liberal Democrat party did—when they were in government. Instead of obfuscation and delay, we are getting serious action to end the disgraceful behaviour that we have been discussing. That is especially evident in clause 1, which seeks to ban bonuses for water bosses unless high standards of protecting the environment are met. Water bosses must also involve consumers in decision making. In addition, the clause ensures that failing water bosses will no longer be able to be water bosses. This action is essential if we are to hold water company bosses to account and ensure that they act in the best interests of the public and the environment, rather than in the interests of their own pockets.
I am pleased that in Wales we have the not-for-profit water company Dŵr Cymru. Sadly, however, that status has not stopped the company from leaking sewage. In 2023, we had 2,383 sewage dumping incidents in Monmouthshire, which is 2,383 too many. In 2022, chief executive Peter Perry took home £332,000 and a further £232,000 in bonuses, while in the latest financial year Ofwat had to step in and stop the company from paying out £163,000 of bonuses from customers’ money.
I am sure that I am not alone in recognising the injustice of such bosses’ being paid hundreds of thousands of pounds in bonuses while polluting our environment. It is clear to me that significant Government action and regulation is needed, and the clause delivers it. It finally ensures that the polluter pays. I support it wholeheartedly.
Jerome Mayhew (Broadland and Fakenham) (Con)
I am pleased to see you in your place, Mr Vickers.
I am not going to speak to the Government amendments; I merely repeat the very good arguments put forward by my hon. Friend the Member for Epping Forest. At this stage, however, I will just express a couple of concerns that I have about amendment 18, tabled by the Liberal Democrats.
I understand the rationale or the intention behind amendment 18; we all want the water companies to pay closer attention to the interests of their consumers. I note in passing that they already have a statutory duty—a consumer-focused statutory duty—but the actions taken by the Conservative Government over the past 14 years to ask questions about the state of sewage discharges and to get information about them, so as to take effective action to bring them to an end, bring with them an additional need.
The hon. Member for Westmorland and Lonsdale highlighted a loss of trust in the water undertakers, and I agree with him on that. There has been a significant loss of trust as their poor behaviour, which was uncovered by the Conservative Administration, has been met with considerable outrage—justifiable outrage—by the Government and by members of the public.
However, I fear that there will be some significant unintended consequences associated with the drafting of amendment 18, relating to the legal obligations of a board member. The hon. Member for Westmorland and Lonsdale referred to those new positions being on the boards of companies. There are legal obligations that apply to all board members and I question whether the representatives of consumers and of the voluntary organisations that have been so active in this area over the past few years would really want to be exposed to the legal obligations of being a member of the board of a plc, because those obligations are significant and onerous.
Charlie Maynard
It is fairly standard on boards today to have directors and officers insurance; indeed, all board members have it. What is the problem with the new people also having D&O insurance?
Jerome Mayhew
I am grateful for that intervention. However, it seems an odd way to proceed if it is recognised that there is a risk to voluntary members who join boards, exposing them to personal obligations, such as a fiduciary duty of care. There is also a legal duty of loyalty to the organisation, which such volunteers might find quite difficult to stomach. There is a duty of obedience to the organisation as well. It seems odd at this drafting stage to say, “We recognise that there is a risk, but don’t worry: you can take out insurance and you’ll probably be okay.” It seems odd to introduce an amendment in an imperfect form, rather than perfecting it.
Charlie Maynard
First, it is up to each individual to sign up or not; they do so of their own free will. Secondly, this is standard insurance which almost all boards have in the UK and internationally nowadays, which protects board members. It would not be specifically for those board members; it would be for all board members. To say that that is a concern, and that we should not make this provision on those grounds, seems odd.
Jerome Mayhew
I have expressed my concerns. It would be perfectly possible to achieve the object, which I share, of improving the voice of the customer in water companies, or of improving the implementation of the existing obligation on water companies to take account of the consumer interest. I do not think that the current drafting is the best that we can do. I raise these concerns so that they may be properly considered.
Helena Dollimore
I thank the Minister for all her work in introducing this Bill so quickly in the new Parliament. It is a Bill that my constituents in Hastings and Rye desperately need. As I have said many times in this House, our constituency of Hastings, Rye and the villages has suffered hugely at the hands of Southern Water. Litres of raw sewage has been pumped into the sea. Our town centre has been flooded twice, leaving homes and businesses under sewage water, and our taps have run dry twice in less than a year. We in Hastings and Rye felt the impact of 14 years of Conservative failure to crack down on water companies’ bad behaviour.
David Reed (Exmouth and Exeter East) (Con)
I agree with many of the hon. Lady’s points. Many of our constituents are feeling the same effects, but does she not agree that the reason why the Bill has been introduced so quickly in this Parliament with so few new ideas in it is that most of the work was done by the previous Government?
Helena Dollimore
I think Opposition Members are slightly confused about the record of the Government of the past 14 years, of which both the Liberal Democrats and the Conservatives were a part at different points. My constituents in Hastings, Rye and the villages would find the hon. Gentleman’s assertion that the last Government fixed the crisis in our water companies very bizarre indeed. I draw his attention to the powers that this Government are introducing to ban bosses’ bonuses when they fail our constituents. The last Government left thousands of outlets unmonitored, and when there were monitors, they were reporting to the water companies themselves. What this Government are doing differently is not allowing the water companies to mark their own homework; we are saying that monitors should report directly to Government, not the water companies.
Jerome Mayhew
The hon. Lady says that it was the last Government who allowed the water companies—the undertakers—to mark their own homework. Does she not recall that it was actually the Labour Government in 2008 who specifically changed the rules to allow water companies to do just that in relation to their environmental performance?
Helena Dollimore
I am yet to hear an apology from the Conservatives for their failure to put monitors on any outlet in my constituency, their failure to make those monitors report to Government at all, and their failure to address the severity of the sewage scandal that has caused so much disruption for my constituents, for local businesses and for so many people up and down this country.
I pay tribute to campaigners in so many of our constituencies. Many are in the Public Gallery and they have done so much work exposing this scandal for what it is. We would not be discussing the scale of this scandal were it not for their hard work. In my constituency, Clean Water Action Group campaigners go out regularly of their own accord and out of their own pockets to test the water to expose what Southern Water is doing in our community. I pay tribute to them.
What we are discussing today is a measure to ban bosses’ bonuses, because it is so important that we do not see what we have seen over the last 14 years of Conservative Government—the continued failure to prevent Southern Water from rewarding bosses with bonuses. Laurence Gosden, the chief executive of Southern Water, received a bonus last year when we had seen repeated failure in Hastings and Rye under Southern Water’s watch. As I said earlier, the chief executive of Ofwat confirmed to the Select Committee that had the measures in the Bill been put in place last year by the Conservative Government, the bonus would not have been paid. Laurence Gosden only received that bonus because of the failure of the Conservatives to act when they had 14 years to do so.
Helena Dollimore
I will make some progress, because I know that we need to make progress in the debate.
In conclusion, I thank the Minister for her work on bringing the Bill before the House so quickly. I know that this is just the start of the change that we need to deliver on our water companies. This Government are acting where the previous Conservative and coalition Governments failed, and are working to clean up our water system.
Charlie Maynard
I have a question for you, Mr Vickers. This is my first Bill Committee and I am trying to understand how everything works. There are six amendments to clause 1, and our task is to do line-by-line scrutiny. My ambition is to understand why the Government support or reject each of those amendments. At the moment, in our debate of clause 1, we are swimming quite happily between those amendments. I would love your advice, Mr Vickers, as to how we work to understand what the story is on each amendment in turn, because I am not clear on that.
The Chair
There will be an opportunity to force any amendment to a Division, if the hon. Member wishes. We are attempting line-by-line scrutiny—I think it is more like a debate on Second Reading, but that is by the way. Does that answer your question? The Minister will respond.
Charlie Maynard
Perhaps, since I am standing, I will make the other two points I want to make.
We have touched on Government amendment 2 already, but I think it is important. I was very pleased to see the wording coming in about bonuses. Proposed new section 35B(3) of the Water Industry Act 1991 says:
“Rules made for the purposes of imposing the prohibition mentioned in subsection (2)(a) (“the pay prohibition”)”.
That is the ban on bonuses. While the explanatory statement says that it is to prevent the need for a statutory instrument—which the Liberal Democrats support and seek to do in further amendments—the impact of the Government’s change is also to remove the requirement for the rules to be published by Ofwat within six months. That we find very odd.
I take it in good faith that the Government are keen to have the measures implemented, so we do not understand why they would take the timeline out. The Government want to ensure that it happens, but as currently stated, they are removing the timeline. Taking it on good faith that Ofwat will publish the rules is less strong than keeping in that commitment to six months.
I will correct the hon. Member for Epping Forest on our amendment 21. Our amendment relates to the same aspect of the Bill as Government amendment 2. However, we want to retain the need for Ofwat to publish the rules on bonuses within six months but remove the option for that to be kicked into the long grass by requiring the Secretary of State to lay a statutory instrument to bring them into effect. By taking out that provision, we remove that risk. That is the purpose.
Andrew Pakes (Peterborough) (Lab)
As a new Member, it is a privilege to serve on a Bill Committee under your chairmanship, Mr Vickers—I hope I will get all of it right. I felt particularly moved to speak on these amendments and clause 1, given some of the earlier comments. I was a bit worried that we had been transported by the Opposition back to a previous Conservative age, because we seem to be being told that water customers have never had it so good—as one of their predecessors said—because of all the action that was taken.
There has been a lot of talk about teeth. I ask the Minister to confirm that the Bill is about the dentistry that is needed to put more teeth into the water sector. When she responds, will she identify whether the clauses that the Government have tabled help to address some of the very real anger that my constituents feel about the way they have been ghosted and treated by the big water companies and the behaviour of some of the senior leadership? Representing a seat with Anglian Water, which I think applies to some other Members present, I place it on the record that there is real frustration at the performance and actions of such a large company when at the same time as more than 3,000 hours of sewage were being dumped into rivers around my area, the fens and John Clare county, we saw the Anglian Water chief executive receiving £1.3 million in a package of pay and bonuses, despite that poor performance. The anger and the desire and drive of this Government, but also the public, to see action is palpable, so I very much welcome the Bill and I seek clarity on that. It is absolutely right, as the Government have outlined, that we have a fast Bill to get these teeth and this emergency dental treatment delivered quickly, so that we can come back and put the braces on for the rest of the water sector—[Laughter.] I think I am running out of places where that analogy can go; it is getting very dangerous.
When we get the Cunliffe report and others, we will look at some of the bigger issues for the water sector, but I am very concerned by that £1.3 million. I serve as a member of the Environment, Food and Rural Affairs Committee and I share the concerns expressed by my hon. Friend the Member for Hastings and Rye that when we directly asked Ofwat whether it had the dental tools to challenge and put the surgery on to the water companies, Ofwat was very clear that it did not. I specifically asked the chief executive and leadership of Ofwat about another bête noire of the debate, which is Thames Water. Up until March 2024, in those three months, the chief executive gave themself a £195,000 bonus. Since 2020, we have seen £41 million given to water company chief executives in bonuses and incentives, so can the Minister reassure this Committee that the clauses that the Government have put forward will help to restore trust and put in place initial measures so that we can get on with this, end the delay, take action and start to put right the problems that the Government have inherited, and then look at the wider issues when we get the report later in the year?
Tim Farron
I will just have a quick canter through three things that I should have talked about earlier. My apologies, Mr Vickers, and thank you for your indulgence. I will speak to amendments 21 and 19 and new clause 26 briefly.
I reiterate the comments by my hon. Friend the Member for Witney about amendment 21. I have great respect for the hon. Member for Epping Forest, but I think he has misunderstood. As my hon. Friend said, our amendment seeks to ensure that we do not run the risk of kicking into the long grass the taking of action against bonuses by sticking that provision anywhere other than in the Bill. We were not planning to divide on it, but we will be happy to be the ones voting in favour of immediate action rather than kicking it into the long grass, if that is what he wishes to do.
I do not want to bore anybody about the coalition, but it has been mentioned—give me 20 seconds on it, Mr Vickers. The privatisation of the water industry was where all this went wrong. All the parties that have been in government in the 35 years since then share some responsibility. Just for the record, it is worth stating that DEFRA had no Liberal Democrat Minister in it at all for the majority of the coalition period. For 18 months, my great friend Dan Rogerson served in that position. That was the time during the coalition, by the way, in which we undid some of the foolish capital costs that were made at the beginning of the coalition. It is the opposite of the truth to say that we did nothing; we actually did the only thing that did happen during that time. It is also worth bearing in mind—people might remember—that we were in the EU then and properly regulated, and things were different. That is the end of that defence.
Dr Hudson
His recollection is perhaps different from many people and the public at large regarding the Liberal Democrat record on water. His party seemed to jump on this bandwagon once the Conservatives were the party that actually started measuring the scale of the problem.
Returning to amendment 21, the hon. Gentleman has the word “Democrat” in the name of his party. I do not know why they are so scared of having democratic and ministerial accountability by having a very simple clause in the Bill that would provide for a statutory instrument being laid so that the Secretary of State for DEFRA would have some accountability for that. I take on board the point about the first part of paragraph 5 in terms of the first six months of the Bill, but with the amendment would remove two thirds of that clause, which was put in with cross-party consensus in the other place. I am surprised that they are scared of democratic accountability.
Tim Farron
Well, that is bizarre. With total respect for the hon. Gentleman, he completely misunderstands. We are seeking to put this on the face of the Bill and not kick it off to a statutory instrument. That seems the opposite of anti-democratic—or, indeed, democratic.
Let us move on to the other issues I would like to briefly mention. New clause 26, which is in this group—
Tim Farron
In that case, I will speak to amendment 19, which is about revolving doors. Amendment 19 seeks to prevent a revolving door between water companies and the regulator. In July 2023, the chief executive of Ofwat stepped down to very swiftly pick up the role of interim chief executive of Thames Water. An analysis by The Observer in 2023 found 27 former Ofwat directors, managers and consultants working in the industry they helped to regulate until shortly beforehand, with about half of them in very senior posts.
Some work that the Liberal Democrats did in the last 18 months found that the director for regulatory strategy at the country’s largest water firm, Thames Water, was previously an Ofwat employee. Meanwhile, a senior principal at Ofwat moved directly from Thames Water, where they worked on market development. We also found links between Ofwat and Southern Water, Northumbrian Water and South West Water, including directors who work on regulation. The amendment tries to prevent that revolving door, which clearly brings in a potential conflict of interest. It also builds the quite justified absence of trust. I can feel an intervention brewing—go for it.
Jerome Mayhew
I am not against the principle of this—in fact, I am strongly in favour of it—but I have some practical questions. I wonder whether this would bump up against individuals’ human rights and restraint of trade arguments in the courts. I must confess that I was previously a barrister. That was a long time ago, so I have dangerously little knowledge now, but it was certainly the case that the courts would habitually not enforce a restraint of trade clause on a contractual basis that was in excess of 12 months. I know that this would be legislation, but to have such a wide-ranging blanket prohibition for such a long period against all employees, irrespective of the role they undertook and the role that they might in future undertake with a water company, might be challenged successfully under human rights legislation. I wonder whether the hon. Gentleman has considered that in his drafting.
The Chair
I remind Members that interventions should be short—much shorter than the last two. I have been very generous.
Tim Farron
I appreciate that, Mr Vickers. I am very grateful for the helpful and constructive intervention the hon. Gentleman just made. Look, this is not an amendment we are seeking to press to a vote, but it is an issue that is clearly very serious in terms of the quality and safety of regulation. We are perfectly happy for the Government to use all the legal might they have available to find a way of amending the Bill on Report to deal with the issue in a way that builds confidence and prevents obvious conflicts of interest.
Tom Hayes (Bournemouth East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Vickers. This is an important topic and Committee, but before I talk about that, I wish gently to remind the hon. Member for Epping Forest that the Conservative party was in power for 14 years. I know the general election defeat was historic—quite enormous—but I do not think the bump to the head should have caused such an enormous loss of memory about what was achieved, or not achieved, over the past 14 years. Residents of Bournemouth East are incandescent about the state of water infrastructure and the sewage that they are enduring as a seaside town. It is no surprise that as a consequence, when I was campaigning in the general election and knocking on doors since, people raised this hot topic with me.
Dan Aldridge (Weston-super-Mare) (Lab)
As a fellow Member from a coastal town, I echo my hon. Friend’s point about the anger and frustration on the doors from residents in Weston-super-Mare. Over the past decade the quality of water on the three main beaches has got worse and worse, and the bathing water at all three is now classified as poor. The anxiety among every sector of the community is really high, and political point scoring aside, the situation is dire. This week raw sewage was spilled on Uphill beach because of the crumbling infrastructure. I urge the Government—I am pleased we have grasped the nettle—to take on the big challenges.
Tom Hayes
I thank my hon. Friend for his important intervention. It is great to see him championing his constituency, and it goes to show why Labour won in so many seaside and coastal towns. The people of those towns and cities trusted Labour to bring forward a Bill such as this as quickly as we have done, and this is just the start of change. As we have heard, more legislation will come forward, but so that we do not delay and wait for the full package, the Minister is bringing forward this action rapidly to respond to the urgent case that is being made on doorsteps all around our country, particularly in our seaside towns.
I have constituents who are livid about the fact that while infrastructure has crumbled, no investment has gone in, and money has gone out the door in bonuses and shareholder payment dividends, bills are rising. That is not just water bills—bills on a whole host of things contribute to the significant cost of living crisis that so many in our country have felt. I welcome the efforts of this Government, and I congratulate the Minister on all the hard work that she and her officials have been undertaking. I very much look forward to seeing further development of our programme of investment.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)
It is a pleasure to serve under your chairmanship, Mr Vickers, and if I may I will start by wishing everyone a happy new year. I thank members of the Committee for the engagement with the Bill they have shown, and I also thank all the environmental groups, everyone who submitted evidence, and Members in the other place for the work they did on the Bill.
I am pleased to be back debating this vital piece of legislation. As I set out on Second Reading, the Bill will drive meaningful improvements in the performance and culture of the water industry as part of wider efforts to ensure that water companies deliver for both customers and the environment and, as has been mentioned in the debate so far, act on the real anger and mistrust we feel towards our water sector at the moment.
However, the Bill is one part of the Government’s ambitious and long-term approach to fundamentally transforming the water sector. As Members will be aware, in October 2024 the Government announced an independent commission, which will be the largest review of the water sector since privatisation. The commission has a broad scope and will consult experts in areas such as the environment, public health, engineering and economics, as well as customers and investors. It will look closely at financial resilience as one of its key areas—I know we all care about that.
I reassure members of the Committee on the timeline; the commission will report to the Government by quarter 2 of 2025. The UK Government and the Welsh Government will then respond and consult on proposals that they intend to take forward, and we expect those to form the basis of future legislation.
Emma Hardy
We expect the commission to report to the Government in June. I reassure the hon. Member that when I respond at the end of every session, I will go through each and every amendment in turn.
I turn to Government amendments 1 and 2 to clause 1. The Government have carefully considered all non-Government amendments made in the other place and how they fit within the wider plans for reform of the water sector, including the amendments tabled by Lord Roborough and Lord Cromwell. I thank them, and indeed the other place, for their careful consideration of the Bill, particularly for the constructive way in which they worked with the Government during the Bill’s passage through the Lords. That collaborative approach enabled the Bill to be strengthened, for example, through the introduction of new requirements relating to the implementation of measures in pollution incident reduction plans. However, the Government have determined that the amendments from Lord Roborough and Lord Cromwell are not necessary and should be removed from the Bill.
Government amendment 1 concerns financial reporting. During the Bill’s passage through the other place, it was amended in such a way that required rules made by Ofwat under clause 1 to include reporting requirements on company finances. The Government strongly agree with the need to ensure water company finances are closely monitored, especially given the current financial issues experienced by some companies. However, having considered the Lords amendment in detail and having had further discussions with Lord Cromwell about the intent behind his amendment, we feel that it is duplicative of existing processes as well as conditions in water company licences.
Ofwat already has processes in place to monitor where a company may be heading towards financial difficulties. It is already a condition of water company licences that companies are required in their annual report to publish by a set date financial performance metrics, including interest on their borrowing, financial flows and analysis of their debt. Based on those reports, Ofwat sets out its observations on financial resilience across the sector in its “Monitoring financial resilience” report. Ofwat is also alive to the potential for financial engineering to occur outside of regulated companies and is thoroughly monitoring the financial position of all water companies. The Lords amendment would therefore duplicate existing requirements, with the potential to create confusion in what is already a complex regulatory landscape. This is important: we also retain concern about the potential for the Lords amendment to pre-empt forthcoming reforms following the independent commission led by Sir Jon Cunliffe. On that basis, the Government have tabled Government amendment 1 to remove Lord Cromwell’s amendment from the Bill.
Helena Dollimore
During the debate, we have heard a lot of words from the Opposition parties, but we had very little action during their 14 years in Government. We on the Government Benches have raised clear examples pointed out by Ofwat where it has not had the necessary tools to ban bonuses when it wanted to do so with Southern Water. While we are on that topic, I express my surprise that the hon. Member for Waveney Valley has not turned up to this sitting of the Committee.
Emma Hardy
I have to say that it is slightly disappointing that we do not have a full contingent for such an important Bill Committee, which matters so much to people up and down the country. There could be personal reasons, so let us reserve judgment, but it is a little surprising to me too.
Dr Hudson
The Minister said that she worries that the amendment from Lord Cromwell would duplicate things. Actually, it is quite a simple amendment that achieved a lot of cross-party support in the other place. If it duplicates things, a bit of repetition is not a bad thing to ensure annual financial reporting by water companies. It would not create confusion: repeating this important matter on the face of the Bill would just create clarity, so we urge the Government to reconsider.
The Chair
Just for the record, I am advised by the Clerk that Adrian Ramsay has sent his apologies, as he is ill.
Emma Hardy
I am pleased that we have that on the record. This is an important Bill, and I encourage everyone to attend.
I believe, first, that the Lords amendment is duplicative of the work that Ofwat is already doing and, secondly, that it will pre-empt any forthcoming reforms from the water commission.
David Reed
We have heard repeatedly that this is just the start of the legislative process to bring our water companies back to heel. Will the Minister please explain what she thinks the Bill lacks and what she hopes to do in the future to strengthen and add to it?
Emma Hardy
The hon. Gentleman tempts me to look into the future before we have had the water commission. To clarify—just so there is no misunderstanding—the commission will not amend this Bill but will produce another piece of legislation that looks at everything.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
The review will be very wide ranging. We are talking in great detail about the regulators’ powers, and there are four regulators. I assume—I think the Government have made this clear—that the review will look at how water is regulated, right down to how many regulators there are and how they operate, so that is completely up for grabs. We are prejudging what may be in that review, but that will be for Sir Jon to work out for himself. I feel like this is something that may be covered in the review, but will the Minister please confirm that regulation is all up for grabs?
Emma Hardy
My hon. Friend is absolutely right. Information will be coming out shortly about how each and every Member across the House can contribute to that review.
Government amendment 2 seeks to remove the amendment that requires rules made by Ofwat under clause 1 to be brought into force by statutory instrument within six months of the Act’s coming into force. Alongside my amendment, I will also address amendment 21—I thank the hon. Member for Westmorland and Lonsdale for tabling it—which is largely in line with the intention behind mine.
Although the Government understand the need to ensure the rules relating to remuneration and governance are subject to efficient scrutiny, this additional process risks compromising Ofwat’s independence, which must be protected. The necessary secondary legislation would be prepared by the Government, and therefore would represent significant Government interference in the independent regulatory process. That kind of interference has the potential to have adverse effects on investor confidence. The consultation requirement in clause 1 already provides the Secretary of State and other interested parties with the opportunity to raise major concerns with the regulator on the content of the rules. We are confident that Ofwat will continue to work constructively with the Government and other stakeholders to determine a robust and appropriate set of rules.
Emma Hardy
I will finish what I am saying. I might answer the hon. Gentleman’s question in my upcoming remarks—who knows?
The additional requirement for the rules to be confirmed for affirmative resolution statutory instruments could also risk delaying the introduction of the first set of rules. That is counter to the other aspects of Lord Roborough’s amendment, which requires Ofwat to publish the first set of rules within six months of Royal Assent. I reiterate that the Government expect Ofwat to have the rules in place as soon as possible. Indeed, Ofwat has already concluded its initial policy consultation on the rules, demonstrating its commitment to meeting the Government’s expectations. I highlight the fact that Ofwat today submitted to the Committee written evidence of its statutory consultation on the proposed timelines for introduction of the rules, demonstrating its commitment to getting this done as quickly as possible. I urge all hon. Members to have a look at that evidence.
Charlie Maynard
I will just express disappointment. The Bill currently sets a deadline of six months, which is not exactly a moment in time; six months is a long time to get something done. I respect what the new Government are doing by trying to go after the bonuses and hold people to account, but to take a step back and say, “Actually, we are going to weaken the Bill”, which is what amendment 2 is doing—the Government are taking out the deadline—is retrograde and a real mistake.
Emma Hardy
I strongly disagree that this amendment weakens the Bill or is retrograde. Instead, it is doing things effectively. If we were to put a six-month deadline in the Bill and rush to get the rules done in that period of time and there were complications, we would risk leaving a loophole that could be exploited by companies that have exploited loopholes for an incredibly long time and become rather apt at doing so. With respect, I would rather do it properly.
Dr Hudson
The Minister says that she would like to do this properly. We all agree around this House on the scale of the problem, the public outrage at some of the things that have happened with water companies and the fact that we are trying to address and improve our water quality. I am therefore curious why both the Government and the third party are shying away from giving the Secretary of State and the Department the democratic powers and accountability to pass statutory instruments, which, as we all know, can be done very quickly. We have talked about dental analogies. I am an equine vet; I have rasped many teeth in my time. It would help ministerial oversight to see that the dental work is being done properly.
Emma Hardy
I am desperately searching for a dental analogy. I have already outlined to the hon. Gentleman that we tabled this amendment to protect the independence of Ofwat, protect investor confidence and ensure that rules under clause 1 are effective and in place as soon as possible. It is therefore necessary to remove Lord Roborough’s amendment. I again urge hon. Members to look at the written evidence supplied by Ofwat today. On that basis, and considering the arguments I have put forward for removing the six-month deadline for the rules to be published, I ask the hon. Member for Westmorland and Lonsdale not to press amendment 21.
Turning to amendment 22, also tabled by the hon. Member for Westmorland and Lonsdale, public trust in the water sector has been severely damaged and the number of serious pollution incidents is increasing. At the same time, companies are paying out millions in bonuses. I therefore fully support the intention behind the amendment and agree on the importance of ensuring that customers and the environment are put at the heart of companies’ objectives. That is why the Secretary of State announced immediate action to improve the performance of the water industry in his first week in office. That included an agreement that companies would update their articles of association to make the interests of customers and the environment a primary objective. I am pleased to inform the House that a number of companies have already made that change, and DEFRA is working to ensure that all companies implement it as soon as possible.
This is a Government of service, focused on improving people’s lives, and it is important that consumer interests are represented at the heart of decision making. That is why, under clause 1 of the Bill, Ofwat must make rules requiring consumer involvement in corporate decision making. Companies will be required to put in place arrangements to involve consumers in decisions that have a material effect on consumer interests. I trust therefore that the hon. Member for Westmorland and Lonsdale is reassured by the steps being taken by Government and he feels able to withdraw amendment 22.
David Reed
There is a lot of additional work being pushed towards Ofwat. Could the Minister confirm whether Ofwat has the internal capacity to meet that workload? If not, is there a ringfenced budget in DEFRA to allow Ofwat to employ more people?
Emma Hardy
I thank the hon. Gentleman for his helpful question. Yes, we obviously have regular conversations with Ofwat to ensure that it is capable of delivering everything here. There is an impact assessment on the table in the room, if the hon. Member would like to look at exactly how that all works out.
Amendment 18, also tabled by the hon. Member for Westmorland and Lonsdale, speaks to the representation of customer views and those of wider groups. The Government are clear on the importance of elevating the voice of consumers in water company governance and decision making. That is why—as I have mentioned—under the Bill, Ofwat will set rules requiring water companies to have arrangements in place for including consumers in company decision making.
In October last year, Ofwat published a public consultation on the rules on remuneration and governance and how they will apply. The proposed options put forward by Ofwat include giving a non-executive director the responsibility for oversight of consumer interests on the board and providing opportunities for consumer panel representatives to meet with the CEO on a regular basis. Furthermore, companies already have a range of environmental obligations that they should be meeting, and experts in water and sewage policy should already be considering those obligations to inform board-level decision making. I trust the hon. Member for Westmorland and Lonsdale is therefore reassured by the Government and Ofwat’s approach and is content that amendment 18 is not needed.
I will now take a little time to discuss clause 1 itself and the importance of it standing part of the Bill. As hon. Members know, clause 1 provides Ofwat with new powers to set rules on pay and governance in the water sector and requires that Ofwat make rules on four topics. I have already spoken about one of these, consumer representation. The legislation also provides Ofwat with new powers to issue rules on remuneration and governance, and requires that Ofwat set rules that make the payment of bonuses contingent on companies achieving high environmental standards. As the independent regulator, it is more appropriate for Ofwat to determine the performance metrics to be applied when setting the rules for performance-related pay.
In addition, Ofwat must also make rules covering the fitness and propriety of chief executives and directors. That means that it will be required to set standards of fitness and propriety that chief executives and directors must meet in order to be appointed by water companies or stay in post. People holding those senior roles will be held accountable against those standards and, if they fail to meet them, companies may need to take corrective action or ultimately remove executives from post if necessary. Ofwat’s initial policy consultation outlined some proposed standards of fitness and propriety that included ensuring that individuals have sufficient knowledge of the duties of water companies, are financially sound and have not been the subject of regulatory investigation. Collectively, those rules on remuneration and governance will help to drive meaningful improvements in the performance and culture of the water industry and form a central part of the Bill.
To pick up on the point made by my hon. Friend the Member for Hastings and Rye about whether the rules go further than the previous Government’s, the short answer is yes. The legislation will provide Ofwat with legal powers to ban bonuses, whereas currently it can only set expectations, and it will require Ofwat to set rules prohibiting the payment of bonuses in certain circumstances. Executives will no longer be able to take home eye-watering bonuses where companies fail to meet standards on environmental performance, financial resilience, customer outcomes or criminal liability. We will go further by requiring Ofwat to set rules requiring water companies to ensure that directors and executives meet the highest standards of fitness and propriety, and that customers are involved in company decision making that impacts consumers.
Finally, turning to amendment 19, also tabled by the hon. Member for Westmorland and Lonsdale, I would like to reassure the hon. Member that both the Government and Ofwat take the handling of actual or potential conflicts of interest very seriously. Ofwat employees are already bound by a range of robust rules and processes that support the management of conflicts of interest, including when leaving the organisation. Failure to comply can result in disciplinary action. That includes the civil service business appointment rules, duties of confidentiality and the Official Secrets Acts.
Tim Farron
The underlying issue here is a cultural one—I do not think I am alleging corruption. For example, one can look at fines outstanding. Ofwat set fines for, I think, four water companies; at the last check just before Christmas, many months later on, not a penny of the fines had actually been collected. There is a sense of a lack of urgency and a lack of understanding of the anger felt towards the water industry. When we have this revolving door, there may be no corruption at all, but there is a kind of watering down—no pun intended—of the culture of being a watchdog. There is a level of compliance, and it is apparent.
Emma Hardy
I understand the hon. Gentleman’s intention, which fits within the bigger picture of how we change the culture and improve trust in the industry. On these specific points, there is already legislation in place. However, I take his wider point that there is no trust and a lot of anger, and we need to do something around the culture of how these organisations work.
Given that existing measures are already place and Ofwat’s forthcoming fit and proper person rules should encompass conflicts of interest, the amendment is unnecessary. I ask the hon. Member to withdraw it. I hope that hon. Members will support the Government’s amendments and that all members of the Committee are satisfied that clause 1 should stand part.
Tim Farron
We would be content not to press any of the amendments bar amendment 18, which we will seek to push to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 18, in clause 1, page 2, line 3, at end insert—
“(ca) requiring the management board of a relevant undertaker to include at least one representative of each of the following—
(i) groups for the benefit and interests of consumers;
(ii) groups for the benefit and interests of residents of the areas in which the undertaker is operational;
(iii) experts in water and sewerage policy and management; and
(iv) environmental interest groups.”.—(Tim Farron.)
Question put, That the amendment be made.
Tim Farron
I beg to move amendment 23, in clause 2, page 5, line 9, after “occurrence” insert “and impact”.
The Chair
With this it will be convenient to discuss the following:
Amendment 9, in clause 2, page 5, line 10, at end insert—
“(2A) A pollution incident reduction plan must, in particular, state how the undertaker intends to reduce the occurrence of pollution incidents in national parks that are attributable to its system.”
Amendment 25, in clause 2, page 5, line 27, after “occurrence” insert “and impact”.
Amendment 24, in clause 2, page 5, line 29, at end insert—
“(ea) the use the undertaker plans to make of nature-based solutions for reducing the occurrence and impact of pollution incidents,”.
Amendment 6, in clause 2, page 7, line 14, at end insert—
“(5) An implementation report must be published on the relevant undertaker’s website in a form which is publicly accessible.”
Clause stand part.
Tim Farron
I will speak to amendments 23 and 25 first, as they are connected, then amendment 24, and then amendments 9 and 6, which were tabled by those on the Conservative Front Bench. I think amendments 9 and 6 are both fine and helpful, and we would be supportive of them.
In amendments 23 and 25, tabled in my name and that of my hon. Friend the Member for Witney, we are referring to impact. There is reference in the Bill to an incident reduction plan, to reduce occurrences and to have reports about occurrences. Our concern is about much more than occurrences; it is about impacts. We know, for example, that a spillage into the River Kent, River Eden, Windermere or Coniston may last a certain amount of time, but we do not know about the volume. We may have a trickle over a day or a deluge over a half-hour period.
It is important to understand the impact not only on marine life, fish stocks and biodiversity, but on things such as leisure activities. As an occasional wild swimmer myself, and as somebody who knows a lot of anglers, canoeists and sailors in my constituency, it seems wrong that we should not put front and centre, not just a greater awareness of and action on incidents, but a look at the impact—the measured impacts on biodiversity, wildlife, livestock, farmers and the tourism economy in places like the Lakes, which is the biggest visitor destination in the country after London. I would be very grateful if amendments 23 and 25 were taken on board by the Government.
Amendment 24 relates to nature-based solutions and looks at incident reduction plans. As the Chartered Institution of Water and Environmental Management put it:
“Nature-based solutions…can help address many of the water sector’s challenges while also providing significant benefits for people and planet, such as water quality improvement, flood risk reduction, carbon sequestration, climate resilience, nutrient neutrality, biodiversity enhancement, community engagement, and public health and wellbeing.”
Indeed, nature-based solutions are also a vital source of funding and income for farmers. Examples include natural flood management techniques, such as wetland restoration, tree planting across catchments of areas of unproductive land—not of productive agricultural land, I hasten to add—and building resilience to flooding; the construction of treatment wetlands and reed beds to treat waste water and improve water quality; the creation and restoration of ponds and pondscapes; climate mitigation and adaptation; and the building of resilience to drought.
Finally, the multiple benefits delivered by working with nature also create opportunities for blended finance by drawing in private investors or gaining income from buyers and ecosystem services. That further increases taxpayer value for money at a time when the delivery burden on the water industry, and therefore customer bills, is at a record high. Investment in nature-based solutions will help to ensure that water industry spending supports the delivery of the maximum environmental and social benefits.
Amendments 23, 24 and 25 are about assessing the damaging impact of pollution incidents in our lakes, coastal areas and rivers in my communities and across the country. Through amendment 24, they also try to provide practical solutions that will help to address those issues. They are meant to be helpful amendments and I hope that the Government will take them on board.
Dr Hudson
I rise to speak about amendments 6 and 9, proposed by His Majesty’s Opposition. I hope that they are self-explanatory amendments that are quite simply about the core concept of accountability, which was at the heart of the previous Government’s mission to improve our water system. We must remember that at the heart of every failure that damages our waterways, it is the Great British public—those who rely on our waterways as consumers and as members of communities served by them—who are let down and denied the rights to pollution-free water systems to which they are entitled.
Amendment 6, which would require water companies to publish their implementation reports accessibly online, gives the public a tangible and visible sign by which water companies can be held to account for the promises they make and the actions they say they will take. It is a vital step in trying to restore the trust that water companies may be seen to have lost in recent years with the public through their inadequate actions to deal with this issue, as people have seen and as hon. Members have articulated today on both sides of the House. It is very much about having not just words and promises but explicit standards to judge water companies by, and it would form a kind of contract between the companies and their consumers, who would then know what to expect from their individual company.
His Majesty’s Opposition have no objections to the principle of clause 2 and its requirement that water companies publish an implementation report, nor in the specific details that companies would be expected to produce in proposed new section 205B of the Water Industry Act 1991. In fact, we welcome the Government’s willingness to listen to the concerns from Conservative peers, including Lord Roborough, and peers from other parties in the other place to strengthen clause 2, including the requirement for implementation reports to be drafted by water companies in the first place and ensuring that the requirements for pollution incident reduction plans also include water supply system-related incidents, not just sewage-related incidents.
However, we believe that amendment 6 would go even further to strengthen that proposal and advance the accountability that we all want water companies to have. Requiring implementation reports to be published online in an accessible way sets out an explicit and clear definition to water companies of how they are expected to publish any such plans, as the clause requires, and demonstrates how water companies must comply with the law in unequivocal terms.
In stressing accessibility, amendment 6 would end the ambiguity that can sometimes exist for the public, which means that it is often too easy for companies to hide away behind protocol and procedure. By making such information available to consumers, we would ensure that there could be no hiding in murky waters on this vital issue and the concrete commitments to improving our waterways.
Water companies can also benefit from the chance to make reflections on their progress available in full sight of the public. In all walks of life, sometimes people’s efforts to make good on promises cannot come to full fruition for reasons beyond their control. If genuine reasons arise for not meeting targets, there can be full transparency for the public as to why, so they can understand more about the nature of the industry and the issues involved in protecting the quality of our water system. In other words, full transparency is in everyone’s interests.
A 2023 review commissioned by Ofwat about the importance of open data was clear that open data provide great benefits in a range of areas when it comes to the water industry. In terms of the environment, it highlighted that open data from sewage overflow monitoring were beneficial to the creation of the predictive analytics tools used in Wessex Water’s intelligent sewers competition, which helped to identify sewage blockages much earlier than they otherwise would have been. That demonstrates an explicit link between the work of recent years to require data monitoring in the water industry, such as on storm overflows—I reiterate that 100% are monitored thanks to the work of the previous Conservative Government—and improvements in the water industry’s tackling of pollution. That is in addition to the improved accountability and the responsibility that data publication places on water companies to get the issue right.
The report highlighted, however, that at the time there was a trend towards companies sharing data with their key partners, rather than making information completely and clearly available for unrestricted public access. The report therefore explicitly recommended that companies in the water sector should look at the data they had been sharing only with specific groups and partners, and take steps to make available those data where they can.
Amendment 6 would solve the problem of information reports before it could even arise—upstream—by unequivocally stating that water companies must publish implementation reports on their websites that would be accessible to all members of the public, not just those with the time and influence to ask for such data. We talked about citizen science: this will give those data to the people to analyse and hold water companies to account. The Conservatives will therefore be pressing amendment 6 to a Division.
I am conscious of time, Mr Vickers. Are you going to call stumps in about 20 seconds?
Dr Hudson
On that note, I will move on to amendment 9, which would make it a requirement for pollution incident reduction plans to include how an undertaker intends to reduce the occurrence of pollution incidents in national parks attributable to their water system. The Opposition tabled the amendment to strengthen the existing plans that the Government have put forward, so that no stone is left unturned in ensuring environmental protections from our water companies. The amendment ensures that water companies make it clear how they will work to reduce pollution incidents in national parks in a system that a water company operates in.
National parks are an area that the previous Conservative Government took great efforts to protect in their legislative programme on protected landscapes. We worked to encourage water companies to invest in peat restoration, and allowed teams at national parks to bid for investment that improved their water environments. The history of recent work on national parks goes beyond just the most recent Government, with the Glover review being published in July 2019. In a response to that review, the Conservatives highlighted their commitment to national parks and water quality, such as through developing the natural capital and ecosystem assessment, which combined data science, citizen science and earth observation technology to inform water quality improvements as a priority target; and ensured that capital and natural capital reporting were embedded into the management plans of protected landscapes.
Jerome Mayhew
I will speak primarily in support of amendment 6. I pay tribute to the former Member for Ludlow, the right hon. Philip Dunne, who throughout the previous Parliament was the Chair of the Environmental Audit Committee, on which I sat. The EAC’s work on water quality and the seminal report that we produced started this huge public interest in water quality and led to the legislative changes in the Environment Act 2021, among other things.
One of the key lessons we learned from the work that we did on the EAC was the need for transparency of data and information, which can unlock the power of citizen science. We visited the citizen scientists working on the River Windrush, who had difficulty analysing the data that was then publicly available but very hard to find to work out whether storm overflows were being used in the way the water companies were describing. Their very detailed, hard-to-do work exposed the shocking misuse of storm overflows.
As those citizen scientists understood, an event duration monitor is a very simple piece of equipment: it is either on or off. It is set on the outflow of the storm overflow tank. When it detects flow on that channel, it turns on, and when that flow ceases, it turns off. What it does not do, as the hon. Member for Westmorland and Lonsdale rightly pointed out, is measure volume. It also does not measure what is passing. It says that something is passing or not passing, but it does not measure volume or quality. That leads me to support amendment 6, tabled by the loyal Opposition, and to question not the intention behind the Liberal Democrat amendments—amendments 24 and 25 and those to clause 3, which I suspect we will talk a bit more about—but the effectiveness of having new machines that measure volume, in addition to whether it is on and off, but not quality.
A better solution may be the one that the Environmental Audit Committee recommended all those years ago—I stand to be corrected, but I think we wrote that report in 2021. It called for the upstream and downstream monitoring of water quality, typically in the outflow river, so that in addition to a signal that there has been an event, there is close to real-time reporting of the comparative water quality upstream and downstream of a discharge outlet. That would simplify the technical requirements of having to install a whole load of new equipment, which other amendments from the Liberal Democrats anticipate, at an unknown cost and implementation speed. Instead, it would look at the actual real-time impact on a particular water body.
Amendment 6 would require the publishing of the information on the undertaker’s website. I am surprised that that was not part of the Bill in the first place and, given that it was not, that the Government have not adopted the amendment. All it does is to apply consistency to the legislative programme. Section 81(2) and (3) of the Environment Act 2021—I know the Minister is familiar with it, but just in case she is not—require the publishing of event duration monitor data within an hour and in a format that is readily accessible by the general public. The loyal Opposition’s amendment is simply trying to ensure consistency between what we already require for EDMs on undertakers’ websites and this area.
Ordered, That the debate be now adjourned.—(Jeff Smith.)
Water (Special Measures) Bill [ Lords ] (Second sitting)
Thursday 9th January 2025
(1 day, 13 hours ago)
Public Bill CommitteesRead Full debate Water (Special Measures) Bill [HL] 2024-26 View all Water (Special Measures) Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 9 January 2025 - (9 Jan 2025)
The Committee divided: - Ayes: 5 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 11 - Question accordingly negatived.
The Chair
With this it will be convenient to consider the following:
Amendment 9, in clause 2, page 5, line 10, at end insert—
“(2A) A pollution incident reduction plan must, in particular, state how the undertaker intends to reduce the occurrence of pollution incidents in national parks that are attributable to its system.”
Amendment 25, in clause 2, page 5, line 27, after “occurrence” insert “and impact”.
Amendment 24, in clause 2, page 5, line 29, at end insert—
“(ea) the use the undertaker plans to make of nature-based solutions for reducing the occurrence and impact of pollution incidents,”.
Amendment 6, in clause 2, page 7, line 14, at end insert—
“(5) An implementation report must be published on the relevant undertaker’s website in a form which is publicly accessible.”
Clause stand part.
The Chair
No one was trying to catch my eye before we broke for lunch, so I call the Minister to respond.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)
Before I start my response to this group, I just want to note that there has been considerable discussion on the monitoring of the volume of discharges during this debate. In the interests of time, I will respond to those points when we debate amendment 13 next week, if that is agreeable to everyone. I thank hon. Members for tabling the amendments relating to pollution incident reduction plans.
On amendments 23 and 25, tabled by the hon. Member for Westmorland and Lonsdale, we agree that companies should seek to reduce the impact of pollution incidents in their pollution incident reduction plans. That, of course, is the core purpose of the plans. That is why the clause requires water companies to set out the measures they will take to reduce the frequency and seriousness of the pollution incidents and their causes. The impact of a pollution incident on people and the environment will be taken into account when the undertaker determines how serious it is, as required in the pollution incident reduction plan. In fact, it would be impossible to determine whether something was serious without looking at the impact the pollution was having. These amendments are therefore not needed, and I ask the hon. Member not to press them.
I thank the hon. Member for Epping Forest for tabling amendment 9. The Government agree that national parks form a vital part of our environmental heritage and must be protected. For that reason, the Government have committed to strengthening the statutory purpose of national landscapes and national parks to give them a clear mandate to recover nature. We will also strengthen through new regulation the role that public bodies, including water companies, must play in delivering better outcomes for nature, water, climate and access to nature in these special places.
Ofwat made significant funding available to water companies in the price review for 2024 to support work to reduce pollution in national parks. As an example, Ofwat approved four storm overflow schemes related to improvements in the Windermere catchment, with potential to include 12 additional schemes via the large scheme gated process. We do not believe it is necessary to include a specific reference to national parks in clause 2. All sites, including national parks, are already in scope of the duty. Creating a statutory hierarchy of priority sites risks deprioritising other important areas such as bathing and shellfish waters. For those reasons, the Government will not support the amendment.
I thank the hon. Member for Westmorland and Lonsdale for tabling amendment 24. The Government agree that nature-based solutions are an essential tool for tackling the root cause of sewage pollution, while also delivering significant ecological benefits. That is why, in line with the Government’s strategic policy statement, Ofwat has allowed companies to increase the use of nature-based solutions with £3 billion-worth of green schemes in water companies’ final determinations for price review ’24. Although the benefits of nature-based solutions are clear, we believe their use is better supported through drainage and sewerage management plans than through pollution incident reduction plans.
Pollution incident reduction plans are intended to set out the steps that companies intend to take to reduce the frequency and severity of pollution incidents. These issues are often best addressed by monitoring and maintenance measures such as burst pipe detection, checking pumps and re-lining sewers. Drainage and sewerage management plans are intended to address the resilience of the whole sewerage network over a long period of time. That is why the Government have introduced a duty through the Bill for sewerage undertakers to consider nature-based solutions in their drainage and sewerage management plans. That will ensure that nature-based solutions are considered at the very start of the investment planning, increasing their development and potential future delivery. The amendment is therefore not needed, and I ask the hon. Member not to press it.
Regarding amendment 6, which was tabled by the hon. Member for Epping Forest, I agree that improving transparency and accountability is key to the success of pollution incident reduction plans. That is why clause 2 already requires water companies to publish the implementation report alongside the pollution incident reduction plan. Details of where and how to publish the plan and the implementation report, and in which format, may change over the years as technology and best practice evolve, so that is best addressed in the guidance that the Environment Agency is producing about how to fulfil the duty.
Jerome Mayhew (Broadland and Fakenham) (Con)
I am grateful to the Minister for giving way; she is being generous with her time. The problem with the position she is taking now is that it is at variance with the Government’s position and with section 81 of the Environment Act 2021. If she is right about the efficacy of leaving it to the Environment Agency to publish such information, buried in its website or its regulations, should she not also amend section 81 of the Environment Act so as to have consistency?
Emma Hardy
I understand the point that the hon. Gentleman is making, which is that people need to have access, clearly and simply, to as much information as possible. My point is that if we put such details into law in the Bill, the way in which we want people to access such information may change—technology or best practice may evolve—and we will have to resort to altering legislation using statutory instruments. That is why I think it is better that we look to the guidance produced by the Environment Agency as the best way to present that information, while continually evaluating how we do so. I completely understand the essence of what the hon. Gentleman is saying, however, because we all want information to be transparent and clear for everyone, and certainly not buried on a website.
To conclude, I will briefly speak to why clause 2 should stand part of the Bill. The occurrence of pollution incidents is unacceptably high and has not reduced in the last four years. Water companies must reduce pollution incidents as a matter of urgency. Currently, sewage companies in England produce pollution incident reduction plans on a non-statutory basis. These plans vary in standard, content and frequency, and that makes them hard to scrutinise. It is particularly difficult to identify the progress that companies have made on the actions that they committed to in these plans. More transparency and greater accountability are needed.
That is why the clause will require both water supply companies and sewerage companies in England and Wales to publish annual pollution incident reduction plans to address matters such as the seriousness of pollution incidents and their causes. These plans will need to set out the actions that the water companies intend to take to reduce pollution incidents, and an assessment of the impact that those actions will have.
In addition, the Secretary of State will be able to direct water companies to include other matters in the plans as needed. Moreover, companies will be required to produce an accompanying implementation report detailing the progress they have made with the measures to which they committed in the previous year. Companies must clearly explain the reason for any failure to implement their plans and set out the steps they are taking to avoid similar failure in the future. This will create a high level of transparency, enabling the public and regulators to hold water companies accountable for making the improvements that they have committed to.
Chief executives will be personally liable for the production of these plans and must approve them before publication. If a company fails to publish a compliant plan and implementation report by the deadline each year, the company or the chief executive could be prosecuted for the offence. That could result in a fine and a criminal record. This emphasises that taking action to minimise pollution incidents should be at the core of the chief executive’s role.
We believe that this provision will ensure that the right people, with the right incentives, lead water companies through the changes necessary to drive down pollution incidents. Furthermore, regulators will be required to take companies’ compliance records in relation to implementation reports into account when carrying out their enforcement duties.
I hope that all hon. Members agree with me about the importance of clause 2, and I commend it to the Committee.
Tim Farron (Westmorland and Lonsdale) (LD)
There are no further comments from us, and we do not seek to press to a vote any of the amendments that we have tabled. We are concerned that there is not enough detail in the Bill about the impact of pollution incidents on the wider environment, much as I am grateful to the Minister for many of the comments she has made. All the same, we will not seek to trouble the Committee with a vote at this stage, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Neil Hudson (Epping Forest) (Con)
In the interests of promoting transparency and clarity, we would still like to press our amendment 6 to a vote. To bolster, support and protect the precious integrity of our national parks, we would like to do the same with amendment 9.
Amendment proposed: 9, in clause 2, page 5, line 10, at end insert—
“(2A) A pollution incident reduction plan must, in particular, state how the undertaker intends to reduce the occurrence of pollution incidents in national parks that are attributable to its system.”— (Dr Hudson.)
Question put, That the amendment be made.
Tim Farron
I beg to move amendment 13, in clause 3, page 8, line 10, at end insert—
“(e) the volume of discharge.”
The Chair
With this it will be convenient to discuss the following:
Amendment 14, in clause 3, page 8, line 13, leave out “subsection (1)(d)” and insert “subsections (1)(d) and (e)”.
Amendment 3, in clause 3, page 8, line 18, at end insert—
“(c) be published on the home page of the undertaker’s website.”
This amendment would ensure that information regarding a discharge from an emergency overflow must be published on the home page of the undertaker’s website.
Amendment 15, in clause 3, page 8, line 18, at end insert—
“(c) be uploaded and updated automatically, where possible; and
(d) be made available on the undertaker’s website alongside searchable and comparable historic data.”
Amendment 16, in clause 3, page 8, line 18, at end insert—
“(3A) The undertaker must ensure that, within 12 months of the passing of this Act, appropriate monitors are installed to collect the information required by subsection (1).”
Tim Farron
With your permission, Mr Vickers, I will allow my hon. Friend the Member for Witney to speak to the bulk of these amendments. I will focus on amendment 17, which requests that we insert into the Bill a position of Minister with responsibility for issues relating to the coast. That is something that the all-party group for coastal communities, chaired by the hon. Member for East Thanet (Ms Billington), is fully in favour of.
Coastal communities face a unique set of environmental and economic challenges, which are spread across Departments. It is therefore common sense to have a Minister to bring them together under one portfolio and champion those communities in Government. The specific needs of coastal communities were raised in the annual report of the chief medical officer, Chris Whitty, in 2021, and we particularly highlight those communities. In my own part of the world, we have the Lancashire over the sands part of my constituency and south-west Westmorland, but there are also coastal communities in places such as North Norfolk, Devon, Cornwall and elsewhere. As I said, there is cross-party support, through the APPG for coastal communities, for this proposal.
Let me make a quick reference to my own constituency. Among the challenges that the communities around Morecambe bay face is the pollution of the environment around them. In 2023 alone, one treatment works in Grange-over-Sands pumped sewage into the Kent estuary channel on 79 occasions for 73 hours. Across the water in Arnside, another pumped 42 times for 147 hours.
Darren Paffey (Southampton Itchen) (Lab)
It is a pleasure to serve under your chairmanship, Mr Vickers. I rise to speak in support of clause 3, which deals with defining emergency overflows and reporting requirements. Like my hon. Friend the Member for Hastings and Rye, I have the great fortune to live on the south coast and the great misfortune of being in the area where Southern Water is a local provider.
The Chair
Order. We are debating amendment 13 specifically, so please restrict your comments to that. I call Charlie Maynard.
Charlie Maynard (Witney) (LD)
Amendment 13 is about volume. It would add volume to the list in clause 3, which includes
“the location of the emergency overflow…when the discharge began…when the discharge ended.”
The Liberal Democrats seek to add the volume of discharge to that list, and that is common sense. As many Members have said, we want to know how much sewage is coming out, and we are looking for help from all Members to get the amendment into the Bill. If we are serious about solving the problems in our rivers, we need to know how much sewage is coming down.
Jerome Mayhew
I am grateful to the hon. Member for giving way and for the conversation that we had over the lunch recess. One challenge with the measuring of volume is what we are measuring the volume of. The industry estimates that 97%-plus of volume from a storm event is water—it is just rainwater. How do these amendments address the measurement of what is being passed, and is this something on which we could co-operate?
Charlie Maynard
Let us talk about the spectrum of information here. We have got the number of spills, where we have no idea how long those spills went on. We then have EDMs—event duration monitors—which count the number of hours of pollution. There is then the volume of flow, and then various iterations around measuring dissolved oxygen, or whatever it might be. I do not want the perfect to be the enemy of the good. We need to make progress. Thames Water is installing flow monitors all over its network, upstream of its sewage treatment works, but not downstream. That is because it is scared of actually having to count and have in the public domain the volume of sewage that it is dumping.
As my hon. Friend the Member for Eastbourne (Josh Babarinde) said, “If you have a coke bottle of sewage, and you don’t know how diluted it is, you still don’t want it in your bath.” Of course we want to know how diluted it is—that would be nice—but if we are serious about addressing these problems, we need to know how much is coming out of those overflows.
To quantify what has been going on over the last few years—I give the previous Government some credit—some 14,000 monitors have been installed in the last seven years, which is good news. The figure was less than 1,000, and 15,000 have now been installed on the storm overflows, but another 7,000 do not have monitors. Amendment 16 talks about where those locations are. We can have overflows at a sewage treatment works, at a pumping station or on the sewer network. I believe that everyone on this Committee wants to capture wherever that overflow is, which is what the amendment would do.
I will try to quantify some of the numbers, and I will talk about my favourite, Thames Water. Right now, Thames Water has 30 event duration monitors at inlet storm overflows at waste water treatment works. It has 183 EDMs on storm tanks at waste water treatment works and 137 EDMs at storm discharge overflows at pumping stations, and it has 320 storm overflows on the sewer network—not in a pumping station or at a treatment works. We are trying to capture all those areas, because we need to know what is going on. If we do not know what is going on, we cannot fix it.
Amendment 13 is on the volume of discharge. Amendment 14 concerns the same count, so I will not go into it in more detail. Amendment 15 relates to reporting on discharge from overflows and would add to existing stipulations about the form in which the information must be published. I will read it out: the information must
“be uploaded and updated automatically”.
Let us get rid of human involvement. We are in 2025—all this stuff can, and should, be automated.
Professor Peter Hammond has done some great research, and I am incredibly grateful to Windrush Against Sewage Pollution, which has been one of the drivers of information and campaigning in this space. Well done to Peter, Ash, Vaughan and Geoff; I give them many thanks. Peter spotted that when Thames Water monitors its sewage, it does so at the wrong times of day, when the level of sewage is at its lowest. We want to automate that so that it is monitored all the time. That means less human interaction and lower costs, and it is much more achievable.
There is a map that shows whether sewage has been dumped in the last 48 hours, is being dumped currently or has not been dumped in the last 48 hours—Thames Water was actually one of the first to put that in the public domain—but it does not give the historical information. We need the historical information in there and it needs to be downloadable, so that any citizen scientist can come along, pull the data off and act on it. Without amendment 15, we do not have that. These are very nuts-and-bolts, practical things that we want to head along.
Helena Dollimore (Hastings and Rye) (Lab/Co-op)
On the questions that the hon. Gentleman is asking around the type of monitors we have on sewage outlets, is he aware that the Environmental Audit Committee looked at this very issue in the last Parliament? It recommended the approach currently being taken by the Bill, which is to look at monitors upstream and downstream that look at the water quality. The Committee regarded that as the best way to assess this issue.
Charlie Maynard
I am very happy with looking at monitors upstream and downstream. That is fine, but I want them all to be in, and I want them done quicker. In the last seven years, 14,000 monitors were put in. As per the House of Commons Library briefing on clause 3, we are currently being signed up to a much slower installation of monitors—it does not matter if they are EDMs or flow meters. The briefing states:
“The reporting duty on discharges from emergency overflows would be phased in, with water companies expected to achieve 50% monitoring coverage by the end of the next price review in 2030 and 100% by 2035, the end of the following price review.”
Why would we go slower? That is a lot slower than what has been done over the last seven years. We should be moving much faster.
I find it rather depressing that I suspect this information came out of the Department for Environment, Food and Rural Affairs. Why is there this desire to slow the whole thing down if possible? We have a huge problem, so why are we not moving faster to deal with it? Frankly—I am not looking at the crew opposite—the DEFRA mindset is profoundly depressing. That’s that.
Amendment 16 covers the installation rate. What we are trying to do there is get the rate much faster. We have asked for 12 months, and I will try to quantify this; I have a business background. How much do flow monitors cost? How much they cost matters. Flow monitors are £500 to £2,000 per unit. We have 15,000 across the country, so we are talking £85 million or whatever it might be. That is if we have £2,000 as the unit cost. If we take the higher level of the unit cost and say that each of them will cost £2,000 to install, it is quite a lot of money. We did it much cheaper in west Oxfordshire and Witney. Well done to the Witney flood mitigation group. It got 10 installed for a fraction of that, so that is doable. Let us just talk £84 million. Does that sound like a lot of money? Frankly, it does not to me, and I will try to quantify that. The £84 million is between 10 or so water companies. Thames Water alone has £17 billion of debt. We are talking about £84 million. It is a fractional number, and if we are serious about fixing our problems, we have to go there.
Dr Hudson
It is a great pleasure to speak to amendment 3, in the name of my hon. Friend the Member for Beaconsfield (Joy Morrissey). Today, there is a recurrent theme—transparency and clarity. We want cleaner waters and we want the data collection to be transparent and available to people so that they can actually monitor and analyse. The spirit of this amendment is, again, transparency and clarity.
Amendment 3 would, as the text suggests, make it a statutory requirement for water companies to publish the information that they have on discharges from emergency overflows on the home page of their website. Some water companies already go some way to discussing overflows of different kinds, including what they are and why they occur, but this amendment from my hon. Friend would go further by setting a clearer guideline for how transparent water companies must expect to be for every specific incidence of an emergency overflow that may occur.
We of course know that emergency overflows are those that occur particularly when technical faults or blockages in the water system arise and require overflows to help with their resolution, as opposed to storm overflows, where the system is overwhelmed by excess surface water or groundwater entering the network. The work of the previous Conservative Government tackled the issue of storm overflows—unlike any Government who had preceded them—including by, as I have said, getting 100% of reporting and monitoring of storm overflows, which was at 7% back in 2010. That was in addition to fast-tracking £180 million of investment from water companies to prevent 8,000 sewage spills in 2024, and introducing requirements for further investment, over 25 years, of upwards of £60 billion.
Moving forward, however, we need to ensure that emergency overflows are treated with a similar parity of attention. We do not want the hypothetical situation to arise whereby the problem of storm overflows, which have had so much attention in recent years, is simply shifted to emergency overflows, and technical fault is used as an unnecessary justification for emergency overflows to occur. By requiring emergency overflow information to be published on the home page of each and every water company’s website, this risk is potentially alleviated.
Although the Government may argue that the risk is alleviated by clause 3 in and of itself, this amendment goes further in its specificity about the publication of data relating to emergency overflows. By requiring the home page to be used for publication of emergency overflow data, the requirement in clause 3 that the information be published in a way that makes it readily accessible to the public would be given a definition that the Bill in its current form lacks. In other words, amendment 3 would provide explicit clarity in the Bill for water companies about the requirements for publication of emergency overflow information, without the risk of dispute down the line about whether an individual company has complied with the measure’s requirements.
On that basis, I encourage the Government to support the amendment, as it clearly does not seek to frustrate their intentions to be stringent with the water companies about duties on emergency overflows. The amendment merely strengthens the existing conditions in the clause by providing further clarity and specificity. We urge the Government to consider it.
Jerome Mayhew
I will start with the Liberal Democrat amendment to add volume measurers to storm outflows. I hope I made it clear in my earlier intervention that I am sympathetic to the amendment’s objective, but I have questions about whether the route that the Liberal Democrats have gone down is the right one. Legislating for another piece of kit—volume-measuring equipment, alongside the EDM—yes, would go some way to solving the problem, but it would not solve the real problem, which is that we need to know when a discharge is happening, the volume of the discharge, the level of sewage as opposed to water in that discharge, and the consequential impact on the watercourse into which it is being discharged.
I was grateful for the intervention of the hon. Member for Hastings and Rye, who referred to the water report of the Environmental Audit Committee, of which I was one of the authors. We took a lot of evidence on the issue and we had a trip to Oxfordshire, to the River Windrush. We met the leading citizen scientists in the area and took evidence from them there and in our more formal evidence sessions in this place. The hon. Lady was right that the outcome of the combination of evidence we received was that the most appropriate form of technical solution was a measurer of water quality upstream and downstream, and for that water quality measurement to be published timeously. For that reason, section 81 of the Environment Act 2021 requires automatic publishing within 60 minutes of an event happening.
That leads me to a question. The hon. Member for Witney referred to Thames Water choosing when to measure, but with respect to him, the clause is about emergency overflows, not about standard monitoring, and under the existing legislation, Thames Water or any other water undertaker has no option as to when it measures—the EDM is triggered by the emergency event. It also has no option as to when it can publish, because it has to be within 60 minutes of the event being notified.
Charlie Maynard
Yes, of course, the EDMs are automatic; I was talking about the spot monitoring by individuals.
Jerome Mayhew
With respect, that is a separate point, because we are talking about amendments to clause 3, which is about emergency overflows. I accept the point. As with so many of our discussions this morning and this afternoon, we are all trying to get the right outcome, but this is line-by-line consideration of the Bill, which is rather boring and technical, but it is where we try to tease out some of the drafting issues and what can be improved. I am not sure that the problem that the hon. Gentleman is seeking to resolve sits naturally in this clause.
Moving on to amendment 15, again I highlight my fear that, given that the clause relates to emergency overflows, the amendment leads to a legal duplication of section 81 of the Environment Act. I do not want to do the Minister’s job for her, but from my perspective, that is a reason why we should look carefully at amendment 15 before we accept it. Of course, when I say that I do not want to do the Minister’s job for her, that is only pro tem—in the future, I definitely want to do this job for her.
The Liberal Democrats have not yet spoken in favour of amendment 16, so I will leave that until such time as they decide to. The hon. Member for Witney can come back to it.
Finally, on amendment 17, which the hon. Member for Westmorland and Lonsdale—
Charlie Maynard
Mr Vickers, may I revert to amendment 16? I am sorry; I thought I had mentioned it. I will read it out:
“The undertaker must ensure that, within 12 months of the passing of this Act, appropriate monitors are installed to collect the information required”.
That point is 12 months, so that is holding people’s feet to the fire, but we have a massive problem. This is totally doable in terms of timeline. If the Government came back and said, “No, we want 36 months, not 12 months,” then fine, I have no problem with that, but I have talked about being depressed by the desire to slow things down, and about the House of Commons Library data on giving another 10 years to install these monitors. Why are we going slow? We all say to the public that we are really serious about it; let us be serious. I thought that I had covered amendment 16, but there it is again.
Jerome Mayhew
I now rise to talk about amendment 16. My primary objection here is the overarching one: I am not convinced that this is the right technical approach, for the reasons set out in the report of the Environmental Audit Committee, and also in the Environment Act 2021. However, if I am wrong on that, I am happy to support this amendment as a probing amendment and look forward to the answer that the Minister gives; but if it were to be taken to a vote, without further information about the practicality of being able to obtain the required tens of thousands of these machines, install them and have them operational and reporting in a 12-month period, I am not sure that I, as a responsible legislator, could support amendment 16. I would need further information on whether that was a practical option.
Emma Hardy
I thank all hon. Members for their thoughts on this set of amendments. I would also like to pay tribute to all of the citizen scientists—in fact, many Members have paid tribute to them—and the incredible work that they do as volunteers, going out there to discover the true state of many of our rivers, lakes and seas. I think we can all agree that it is vital to understand the scale and the impact of sewage discharges by ensuring that water companies install monitors on emergency overflows as soon as possible and by encouraging public access to emergency-overflow discharge statements. As the hon. Member for Broadland and Fakenham said, I think this is about us all trying to move in the same direction.
Just before I turn to the amendments, I think there may be some confusion in the debate today about the different types of monitors and the different types of discharges being discussed. There is a big difference between fully treated waste water being released from treatment outlets and the discharge of untreated sewage from an emergency or storm overflow. I am therefore very happy to share a factsheet detailing the differences in the different types of emergency and storm overflows to help inform future debates.
On amendments 13 and 14, tabled by the hon. Member for Westmorland and Lonsdale, clause 3 requires water companies to provide information on the frequency and duration of discharges from emergency overflows in near-real time. Combined with the equivalent duty for storm overflows, which has just come into force, that will ensure that all sewage overflows on the network are monitored. That will enable regulators and the public to see, in near-real time, when a discharge from any overflow has occurred, and how long it has lasted for. Water companies will use that information to prioritise investment to mitigate the impact of the most polluting overflows, as guided by the regulator.
However, the monitors required to measure volume are much more difficult and costly to install compared with those used to monitor discharge duration. By comparing that with the cost of installing flow monitors at waste water treatment works, we estimate the cost of installing flow monitors on all 18,000 storm and emergency overflow sites in England to be up to £6 billion. Network overflows are not set up for flow monitors to be installed, which means that the majority of overflows would require complex works, such as pipework modifications, in order for monitors to record volume accurately. We do not think this added cost is proportionate to the additional value that volume information would provide, especially given that volume information alone does not provide a comprehensive account of the impact of a discharge. For example, a very small volume of very concentrated foul water could enter our rivers, which would be very damaging, or a large volume of diluted rainwater overflow. Volume cannot give an accurate assessment of impact. The measurement of water quality, as the hon. Member for Broadland and Fakenham has said, is required.
Charlie Maynard
Would the Minister be willing to give information on the breakdown of that £6 billion? That would be very helpful. Also, I think we are all in agreement and of course we want to know the quality. As has been said, if that is the case, surely the plan is to go there. By all means, have flow meters with the quality meters installed, rather than not going there. I think the Minister was proposing not putting in flow meters and not putting in any quality meters either, or is she planning on putting in flow and quality meters? If so, when and how?
Emma Hardy
I am very happy to give a breakdown of the numbers that we have worked out. To reiterate the point I made before the intervention, that is why the Government believe that it is the measurement of water quality that is required. Water companies have been instructed to begin installing continuous water quality monitors for storm overflows and waste water treatment works from April 2025 onwards, so they have been told to put in those water quality monitors from April 2025. That will provide further information on the impact of sewage discharges on water quality. On that basis, I hope that the hon. Member for Westmorland and Lonsdale will see that amendment 13 is not needed and feels able to withdraw it.
Charlie Maynard
The Minister said from 2025, which is great, but over what timeline? Is that the Library’s 10 years, or is that another timeline?
Emma Hardy
I want to make sure that I am not giving the hon. Gentleman inaccurate information, so I will find out the answer to his question and return to it, if that is okay. I do not want to give him the wrong information. The main point we are making is that it is not the volume that is having the impact; it is the toxicity. We think that, by focusing on measuring water quality, we can accurately see the damage being done to our environment by what is being discharged, and I think that is the point. If we are choosing where to put the monitors, we think that focusing on water quality and how damaging it can be is more important than focusing on how much there is.
David Reed (Exmouth and Exeter East) (Con)
We talk about citizen scientists and the hard work they have to do to uncover what is going on within the data. We are talking about putting lots of different monitors on lots of infrastructure up and down the country, which is going to spew out lots of different information that is going to be quite hard to dig into. Could the Minister give a view on whether there will be an approach to the standardisation of data, to make it easier to view for people?
Emma Hardy
The hon. Member is pre-empting my responses to the next amendments on transparency, which I am just about to turn to. Before we move on from volume, I re-emphasise the point. This is something that I looked at seriously because a number of colleagues have spoken to me about it, so I really do not want hon. Members to feel like it has been dismissed out of hand—I did look at this seriously. One of the other points made to me was about lots of the pipes being different sizes. If we are going to be able to calculate the volume, we have to be able to calculate the size of the pipe, which might require standardising the size of all pipes to work out the volume coming through them, so we can measure how much is coming out at one moment.
That is where we get to the £6 billion figure; it is not just the cost of putting the monitors on but ensuring that, if we are measuring the amount of sewage flowing past something, we can understand the size of it. The hon. Member for Witney is looking at me and I can see that I have work to do to convince him of this. I am probably doing a complete injustice to the person who explained this all to me, but I will ensure that the hon. Member gets a proper explanation. The upshot of the conversation was that this is going to be really expensive, and what we all want to know is: how damaging is what is coming out of those pipes to our environment? That is why we are focusing on water quality. [Interruption.] I have had inspiration from behind me and an answer to the question of when continuous water quality monitoring will be rolled out. They have requested to begin installing continuous water quality monitors at 25% of storm overflows and sewage treatment works outlets at price review 2024. The sites selected for the first stage of roll-out have been prioritised to include sensitive sites such as chalk streams.
Jerome Mayhew
I do not want to steal the thunder of the hon. Member for Witney, but he has a good point on the speed of roll-out of the installation of water quality monitors. The 2024 price period is for five years, I believe. That suggests installation in 25% of the monitoring areas over a five-year period. If I am wrong on that, I would be very grateful if the Minister could correct me. What I am really interested in is how quickly the full network will be installed and what is preventing that from happening faster.
Emma Hardy
I feel as though we are comparing apples and pears here. The point I was making about the 25% at the next price review was around water quality monitors. The hon. Gentleman was talking about the monitoring on emergency overflows, and he was referring to the data on the speed at which they would be installed.
Jerome Mayhew
The Minister may be right, but it is important that we get to the bottom of this. From my perspective, the important data is the upstream and downstream of a discharge pipe water quality monitor being installed and activated. I would be very grateful if the Minister could set out during the course of the next hour and a quarter, either because she knows it off the top of her head or because her officials can give her the answer, the timeframe for those installations and the reasons why it is not happening faster.
Emma Hardy
I think the hon. Gentleman is probably moving on to amendment 16 with his point about the speed at which these were being rolled out. We were discussing amendments 13 and 14. That is where the confusion lies in this conversation. I will address the points about speed when we move on to amendment 16 —it is all to come.
I turn now to amendments 3 and 15, which were tabled by the hon. Member for Beaconsfield and the hon. Member for Westmorland and Lonsdale respectively. Clause 3 already requires companies to publish information on discharges in a readily accessible and understandable format. That includes information on the occurrence, location and start time of the discharges, which must be published within an hour of the discharge starting. To meet this requirement, water companies will install monitors that have telemetry technology to communicate discharges as they occur. To the point the hon. Member for Broadland and Fakenham made, that information cannot be falsified. It is not based on someone coming; it is automatic communication.
Those requirements are the same as those for publishing storm overflow discharges, which is now a statutory duty enforced by Ofwat. Water companies have already published individual maps for their regions to show storm overflow discharges in near real time. In addition, Water UK launched a national storm overflow hub in November last year to centralise all discharge information from water companies on a single national map. We expect that a similar approach will be taken for emergency overflows. If further direction for companies on how to approach the duty is needed, that can be more appropriately addressed through guidance. Furthermore, validated historical information on discharges from emergency overflows will be available through annual returns published by the Environment Agency. Those will allow for long-term trends in annual data to be analysed. If there are any specific requests from groups or organisations about how they would like to see information, they are of course welcome to communicate that to me.
Charlie Maynard
We are here for another week or so. I take the point about apples and pears, but if the information is already in DEFRA’s hands, would it be helpful, if DEFRA can move fast enough—I do not know whether that is possible—to have a little grid circulated to Committee members about storm and emergency installation periods, whether that is quality, flow or EDM? With that data we could talk about it decently and honestly.
Emma Hardy
I think that might be really helpful. It has been an interesting but slightly muddled conversation. We were going to produce a factsheet to explain the difference between emergency and storm. Maybe we can include as much information as we can for Committee members by the end of Committee or before Report, if that does not put too much on my hard-working officials.
On the annual data being analysed, the proposed amendments are unnecessary and I ask hon. Members not to press their amendments. On amendment 16, which was also tabled by the hon. Member for Westmorland and Lonsdale, and which is about the speed of delivery, the need to deliver the installation of monitors on emergency overflows must be balanced with practical constraints and with due consideration for the cost of rolling out so many monitors, especially as those costs are ultimately passed to consumers through water bills.
Water companies have been instructed to install monitors at 50% of emergency overflows by 2030. This represents a doubling of the previous Conservative Government’s target of 25% of emergency overflows monitored by 2030. The Environment Agency will agree with water companies which emergency overflows will have monitors installed over the next five years based on priority areas, such as those that impact designated bathing and shellfish waters. As set out in the impact assessment, we expect the roll-out of monitors at emergency overflows to cost £533 million over a 10-year period. We believe that pace of roll-out strikes the right balance of recognising the urgency—this Government are doing double what the previous Government promised—while ensuring that companies have the capacity to progress other improvements and balancing customer bill impacts.
To speak frankly, it is very important to monitor, but it is also very important to fix the causes of some of the problems that we see. There is always a balance between monitoring and fixing the problem, and we believe that we have got that balance right.
Requiring a faster roll-out of monitors could undermine the delivery of other improvements that water companies must make in price review 24—I would not want to be in a situation at the end of the price review where we monitor everything and fix nothing. That includes upgrades to wastewater treatment works and sewerage networks to reduce sewage discharges from storm overflows. Where companies can move further and faster to achieve the roll-out of monitors at emergency overflows, they will of course be encouraged to do so, but we cannot accept this amendment to require water companies to install all monitors within 12 months. I therefore ask the hon. Member to withdraw it.
Tim Farron
I am grateful to my hon. Friend the Member for Witney for his detailed points and for the Minister’s replies to them. We will not seek to press the majority of the amendments to the vote. Nevertheless, we stand by all that we have said and we do wish to press amendment 13 to a vote. The reality is that duration monitors only do so much good. Asking for volume to be added to duration is not to the exclusion of quality. In fact, it is part of an attempt to try to get to the bottom of it. Again, off the top of my head, earlier last year there was a sewage overflow into Coniston Water from 22 August, which lasted just over a week, and a sewage overflow around Easter time in Windermere, which lasted a matter of hours. The former was more of a trickle—still unacceptable—and the latter was a deluge. The difference in terms of quality was significant as well as in terms of volume. We therefore ask that the Committee considers amendment 13, which we seek to press to a vote.
Question put, That the amendment be made.
Tim Farron
I beg to move amendment 17, in clause 3, page 9, line 1, leave out from start to “in” and insert—
“a Minister with specific responsibility for issues relating to the coast,”.
I have made my argument in favour of amendment 17, probably at the wrong time. I do not seek to press it to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Hudson
I beg to move amendment 4, in clause 3, page 9, line 38, at end insert—
“141H Failure to report discharge from emergency overflows
(1) If a relevant undertaker fails to comply with its duties under section 141F—
(a) the undertaker commits an offence, and
(b) the chief executive of the undertaker commits an offence, subject to subsection (2).
(2) It is a defence for the chief executive to prove that they took all reasonable steps to avoid the failure.
(3) A person who commits an offence under this section is liable, on summary conviction or conviction on indictment, to imprisonment for a term not exceeding 5 years or an unlimited fine, or both.”.
This amendment would make it an offence for an undertaker to fail to comply with its duty to report discharges from emergency overflows.
In my remarks on amendment 3, I highlighted the fact that parity of attention between storm overflows and emergency flows is critical to action in regulating the water industry. With that point in mind, I move amendment 4, in the name of my hon. Friend the Member for Beaconsfield, which would make it a criminal offence for water companies and their chief executives to fail to comply with their duty to report on discharges from emergency overflows.
As I stated earlier, much was done to tackle the issue of storm overflows by the previous Conservative Government, including the passing of the Environment Act 2021, which we have spoken a lot about today. That introduced the statutory duty for water companies to publish storm overflow data in England every year and a storm overflow discharge reduction plan that created strict targets for sewage pollution and demanded water company investment in the necessary infrastructure to resolve issues.
Amendment 4 would address the need to ensure that emergency overflows are subject to the strict enforcement that we have seen exercised towards storm overflows in recent years. We have seen that an emphasis on strict enforcement can work in getting the reform that we all want to see the industry practise, and indeed in improving water quality. I note and welcome the comments from the hon. Member for Witney who welcomed the progress that we have made in that area on monitoring and trying to address these issues.
The Government have set out in the Bill plans to put in place a criminal offence for failing to co-operate with or obstructing regulatory investigations. The amendment seeks to address a gap in those plans in a key area of public concern—a duty to report discharges from emergency overflows.
Despite significant steps, some water companies are not taking their responsibilities to protect our waterways seriously enough. This is a sector where the rewards for success have historically been high for shareholders and, as we have heard a lot about, for executives. It is time now for serious consequences for failure to protect our waterways and the public to sit alongside those rewards for success.
The duty to report discharges from emergency overflows is basic, reasonable and vital to public transparency. I come back to our points about transparency. There can be no defence from any water company that it does not understand that duty or why that duty matters. Given the Bill already puts in place the principle of a criminal offence for failure to fulfil a reasonable duty and establishes a criminal offence for failure to co-operate or to obstruct a regulatory investigation, the amendment would strengthen the Bill’s intent that water companies’ conduct must be subject to criminal sanction and unlimited fines.
Of course, at the same time, however, as human error and technical fault can plague many walks of life and water companies are no exception, there must be a fair and reasonable opportunity for water companies and chief executives accused of violating their duties to show that they have genuinely tried to comply with the duties of reporting emergency overflows. Therefore, subsection (2) of amendment 4 provides explicit criteria that failure to meet the duties of publication for storm overflows does not result in a criminal offence when the company has done all it reasonably could to prevent the incident from occurring.
Emma Hardy
I thank the hon. Member for Beaconsfield for tabling amendment 4, which seeks to make a failure to publish discharge data from emergency overflows in near-real time a criminal offence.
I wholeheartedly agree that it is vital that regulators have a clear means of ensuring that water companies comply with this duty. However, clause 3 already ensures that the duty is enforceable by Ofwat under section 18 of the Water Industry Act 1991, which provides a range of tools—including significant fines—for Ofwat to bring companies into compliance. Changing the provision to a criminal offence might slow down enforcement, because criminal prosecution is typically slower than enforcement by section 18 of the 1991 Act.
In addition, we do not believe that in this case it would be proportionate to create direct criminal liability for a chief executive, particularly the potential sanction of imprisonment, because the large number of emergency overflows operated by companies, with each company operating in a different situational context, means that it is unreasonable to hold a single person to account for full compliance with the duty. By making changes such as introducing bonus bans and provisions to support prosecuting executives for obstructing the regulator, the Bill already strengthens provisions to hold executives to account for wrongdoing.
Dr Hudson
I beg to move amendment 10, in clause 3, page 9, line 38, at end insert—
“141H Restriction on the use of emergency overflows in areas used for aquatic sports
(1) A sewerage undertaker must not permit a discharge from an emergency overflow in an area used for aquatic sports.
(2) In this section, an ‘area used for aquatic sports’ is a section of any body of water connected to and within a one mile radius of—
(a) the clubhouse of a rowing club affiliated with British Rowing,
(b) a Royal Yacht association training centre or the clubhouse of an affiliate member, and
(c) the properties or facilities used by any organisation that the Secretary of State deems to provides water-based sporting activities for the purpose of teaching, training or leisure.
(3) If a relevant undertaker fails to comply with its duties under section (1)—
(a) the undertaker commits an offence, and
(b) the chief executive of the undertaker commits an offence, subject to subsection (5).
(4) It is a defence for the chief executive to prove that they took all reasonable steps to avoid the failure.
(5) A person who commits an offence under this section is liable, on summary conviction or conviction on indictment, to imprisonment for a term not exceeding 5 years or an unlimited fine, or both.”
This amendment creates an offence for a sewerage undertaker to use an emergency overflow in an area used for aquatic sports.
I will try not to mention teeth in this part of our proceedings, but I cannot promise. It is with great pleasure that I rise to speak in favour of amendment 10, on behalf of my hon. Friend the Member for Beaconsfield —this is sounding like “Groundhog Day”, isn’t it? The amendment has a simple principle: that waters used for aquatic sports should be subject to the same protections as those used for bathing. It establishes that there should be clear consequences for water companies and their chief executives when they fail to comply with a clear duty to protect the waters in which people practise aquatic sports.
Aquatic sports are an important part of our sporting heritage in this country, but the impact of overflow discharges into our waterways and rivers is potentially creating an existential risk to some sports clubs up and down the country. We have heard reports of increased incidences of illness among participants as a direct and indirect consequence of exposure to pathogens and bacteria from sewage outflows in the waterways where they practise their water sports. That is a significant cause for concern for our rowing, sailing, canoeing and other aquatic sports clubs.
Many clubs take their duty of care very seriously indeed. They are having to put in place their own monitoring systems to protect their participating members. Training sessions, competitions and regattas are all facing potential cancellation, and participation in those sports risks becoming less attractive and less available to people. We can all agree that actively participating in sport and physical exercise is so good for not only our physical health, but our mental health. Any deterrents discouraging people from being involved in some sports are deeply regrettable.
The amendment is trying to put the safety of the waters used for aquatic sports on the same basis as those where people bathe. It is time for water companies to take responsibility for ensuring that those waters are safe to use. The amendment sets out a reasonable expectation that a water company must not discharge from an emergency overflow within a one-mile radius of an area used for aquatic sports. The definition of such an area is clearly outlined, and further discretion is provided for the Secretary of State to determine such areas where needed. The consequences for water companies and their chief executives for failure to comply with this duty are set out clearly and are consistent with amendment 4, also tabled by my hon. Friend the Member for Beaconsfield.
Emma Hardy
I thank the hon. Member for Beaconsfield for proposing amendment 10, which seeks to make it an offence for sewage undertakers to use an emergency overflow in areas used for aquatic sports. I will mention how much I enjoyed meeting the Clean Water Sports Alliance just last week to hear about its fantastic work to get us all up, out and active, although I have so far resisted the temptation to don a wetsuit and join in.
I agree that it is vital for us to reduce the impact of sewage pollution, so that our children and their children can make the memories that we did enjoying our waterways. However, we do not believe that the amendment is necessary. It risks duplicating existing requirements to limit pollution for emergency overflows, as well as protections for bathers that are already in place. Emergency overflow discharges are permitted only in very strict circumstances and as a last resort, such as in the event of mechanical breakdown or a downstream blockage. That factsheet on the different circumstances might help.
Should an emergency overflow discharge occur outside permit conditions, the Environment Agency is able to take robust enforcement action, including fines and criminal prosecution. The measures in the Bill will increase transparency around emergency overflow discharges, shining a light on where they should not be happening.
Tim Farron
I want to point out something that is probably blindingly obvious, because I want to support the hon. Members for Epping Forest and for Beaconsfield. When emergency overflows happen in rivers near places where people may engage in aquatic sports, that is one thing and it is unacceptable, but it is worth bearing the lakes in mind—I will pick Windermere for an example. A drop of water that enters the north end of the lake takes nine months to pass through the River Leven and out into Morecambe bay. The consequences of an overflow in a lake—in the Lake district or elsewhere—are so much greater than in other waterways. I also have 30 outdoor education centres in my constituency, many of them on lakes. They are much more affected by overflows than any other form of spillage, which is why I think the amendment is worth pursuing.
Emma Hardy
As I say, I wholeheartedly agree with the intention behind the amendment, but I note that later on we will be discussing the importance of chalk streams as well. The amendment would create a hierarchy between what is important and what is not. My argument is that emergency overflows are a problem wherever they are, and they should not be used unless it is, as the Bill says, an absolute emergency.
Measures in the Bill will increase transparency around emergency overflow discharges, shining a light on where they are happening. Although emergency overflow discharge should occur only very rarely—when it says on the tin; it should be an emergency—it is not possible to eliminate them altogether, as they are important safety valves to protect businesses and home in time of emergency. Removing or blocking emergency overflow outlets could lead to excess effluent waste water being released elsewhere, including through manholes. That would have significant safety implications.
Significant protections are in place for designated bathing waters both inland and on the coast. The Government consult on and designate our bathing waters. The Environment Agency monitors them to ensure that the health of bathers is protected, and to assess what action is needed to improve water quality. Once designated, water companies are required to investigate and improve bathing water sites, including with upgrades and improvements to overflows where needed. As part of the storm overflow discharge plan—those are obviously different from emergency overflows—by 2035 water companies will have improved all storm overflows that are discharging near every designated bathing water. We have also recently consulted on reforms to the Bathing Water Regulations 2013, including expanding the definition of “bathers” to include other water users.
A Government response to the consultation will be issued in due course, and if reforms are taken forward in future, that could mean that more bathing sites, including those used by aquatic sport users, will be subject to improvements. As such, we do not believe that the amendment is required.
Dr Hudson
I thank the Minister for her comments and for acknowledging the importance of the safety of the waters in which people practise water sports. I also thank the hon. Member for Westmorland and Lonsdale for supporting that concept—we must try to keep these waters safe. I confirm, happily, that we will not be pushing the amendment to a vote.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to consider new clause 25— Duty on sewerage undertakers to monitor overflows at sewage treatment works, pumping stations and on the sewer network—
‘(1) The Water Industry Act 1991 is amended as follows.
(2) In section 94—
(a) after subsection (1)(b) insert—
“(c) to make provision for the accurate collection of data relating to its performance in fulfilling its duties under paragraphs (a) and (b).”
(b) after subsection (2) insert—
“(2A) In performing its duties under subsection (1)(c), a sewerage undertaker must—
(a) install volume flow meters in all locations where sewage overflows occur, including sewage treatment works, pumping stations and on the sewer network for which it is responsible;
(b) establish appropriate required capacities for each sewage treatment works and pumping station;
(c) publish information on the data and calculations used to establish such required capacities; and
(d) install all required monitoring tools within 12 months of the passing of this Act.”’
Emma Hardy
Thank you, Mr Vickers, for the opportunity to speak about the importance of clause 3. Monitoring and reporting on discharges from sewage outlets provides important transparency around the frequency and duration of sewage discharges, to support enforcement action and policy development and to direct investment to reduce discharges. English water companies have installed monitors at 100% of storm overflows. Near real-time information on storm overflow discharges in England is available on company websites and the national storm overflow hub, which provides a national map of all storm overflows. However, emergency overflows are currently not fully monitored, and data from emergency overflows is not published in near real-time.
There are 7,000 emergency overflows in England, and it is vital that we better understand the frequency and duration of those discharges so that action can be taken to reduce the harm they cause to the environment. The clause will close the monitoring gap across sewage outlets by requiring that discharges from emergency overflows be published within an hour. The near real-time information on discharges from emergency overflows will be independently scrutinised by the regulators, making it easier and quicker to investigate and punish wrongdoing. That information must also be published in a format that is both accessible and understandable to the public. If there are any specific requirements regarding that information, we can of course pass that to the Environment Agency.
To support implementation of this measure, we have instructed English water companies to install monitors at 50% of emergency overflows by 2030, and 100% by 2035. During implementation, monitors will also be independently certified to ensure that they are correctly installed and maintained at emergency overflows. I hope the Committee agrees that that duty is essential to meet our manifesto commitment of ensuring independent monitoring of every sewage outlet.
I turn to new clause 25, tabled by the hon. Member for Westmorland and Lonsdale. We agree that it is vital to understand the scale and impact of sewage discharges. That is why clause 3 requires water companies to provide information on the frequency and duration of discharges from emergency overflows in real time. I look forward to hearing what the hon. Member has to say about the issue. I will respond to and provide reassurances about the amendment in detail in my closing speech.
Charlie Maynard
I will keep this short. I am looking forward to the factsheet, but the Minister will note that new clause 25 focuses on overflows, not emergencies or storms. Frankly, it does not make much difference to a bug, a bunny or a bather whether they get whacked by an emergency overflow or a storm overflow—they are still getting whacked by the sewage. Trying to unify things and get all the issues into one table would be really helpful.
We have already been denied one amendment about flow; I recognise that and will not go on. But quality and flow are important. I am afraid that I find the Government’s position—“We really need to focus on quality, so let’s not talk about flow or install flow meters”—to be spurious. I mean no offence, but it feels like a real let-down that we are not going there now. I do not see any reason why we cannot; respectfully, I think the Government are being flim-flammed by the £6 billion figure.
We talk about sewage treatment works, pumping stations and so on. I have mentioned them already but really want to push the point home because we want to be capturing every overflow, wherever it is. Too often, people talk about works but forget pumping stations and the overflows on the network itself. We look forward to seeing that being covered in the legislation: overflows, works, pumping stations and the network. We will not press the new clause to a Division.
Darren Paffey
Thank you, Mr Vickers—so keen was I to support the clause that I tried to speak to it too early. I appreciate your forbearance.
Clause 3 has my full support. As I mentioned, I live in an area served by Southern Water. The citizen scientists on the River Itchen have done such good work that they regularly and consistently show that there are unacceptably high levels of faecal matter in the river, even when there has been no storm or emergency. The fleshing out of the requirement for monitoring so that there can be greater accountability is hugely welcome.
Furthermore, my area is entirely relevant to new clause 25 because of the aquatic sports, particularly during the pandemic. A great wild swimming group use the river, and there are also paddle boarders, canoeists and kayakers. I have the greatest respect for them: they go where I would not be willing to at the moment because the levels of illness that people have reported. The stench of what goes into the river also affects local schoolchildren, who cannot play outside. There are all kinds of reasons why the clause will deal with the issues being experienced in my constituency.
We want bathing water status in the area, but that is almost an impossibility at the moment because of the water quality. Again, clause 3 will guarantee the openness, monitoring and forcing of accountability in the area. I welcome the clause and thank the Minister for bringing it forward. The Bill takes action and makes achieving that status much more likely. People in my constituency and beyond, across not only Southern Water’s area but the country, will welcome it too.
Helena Dollimore
Does my hon. Friend share my horror at our current situation, in which constituents are getting ear and eye infections from swimming in the sea or rivers? One constituent of mine even attributes their deafness in one ear to an infection they got in the sea. Does my hon. Friend agree that the Bill is desperately needed for our constituents?
Darren Paffey
I share my hon. Friend’s shock and disgust at not only what people are suffering, but the entirely avoidable reasons why people are becoming ill. There are so many benefits to what the clause and the wider Bill can achieve, not just on the issues that Members on both sides of the House have mentioned in relation to trust in our water companies and the use of public money, but for public health. How much more public health benefit could people across all our constituencies experience if they were able to engage with aquatic sports or just enjoy the park areas that surround so many of our rivers, beaches and waterways? I entirely agree with my hon. Friend and am grateful that her point adds even more weight to why this clause is absolutely necessary.
Emma Hardy
I thank all Members for their contributions to the debate on clause 3. I reiterate my promise to provide a factsheet and information about the numbers we have used. We have had an interesting debate about the different types of monitors. To clarify, we have emergency overflows, storm overflows, water quality monitors, event duration monitors and volume monitors, which we have discussed. We will make sure that the factsheet provides clarification so that we are all on the same page and understand the debate clearly.
Putting all that to one side, I think we ultimately all agree that it is important to better understand the frequency and duration of discharges from all the emergency overflows. We all think we need to improve transparency and inform investigations by the regulators into potential non-compliance.
Combined with the equivalent duty for storm overflows, which has just come into force, clause 3 will ensure that all sewage overflows on the network are monitored. That will enable regulators and, importantly, the public to see, in near real time, when a discharge from any overflow has occurred and how long it lasted. Water companies will use that information to prioritise investment to mitigate the impact of the most polluting overflows, as guided by the regulators. We have discussed our concerns about volume monitors being more difficult and costly to install. I gave a rather garbled explanation of the difficulty owing to the pipework in the majority of overflows requiring modification. As I said, I will provide further information on those numbers.
Such a large programme of work would take much longer than 12 months. We do not think that this added cost is proportionate to the additional value that volume information would provide, especially given that volume information alone does not provide a comprehensive account of the impact of a discharge—measurement of the water quality is required for that. To repeat a point, I do not want to be a Minister in a few years’ time who has perfected the art of monitoring and done nothing to deal with the causes. That is why the water companies will begin installing continuous water quality monitors for storm overflows, as set out in the price review ’24, to provide further information on the impact of sewage discharges on water quality.
New clause 25, tabled by the hon. Member for Westmorland and Lonsdale, would require capacities for each sewage treatment works and pumping station to be calculated. That is unnecessary because that information is already included in environmental permits and available from the Environment Agency’s public register. The new clause also proposes a general duty for water companies to collect data relating to their performance operating a sewerage system. We do not believe that that broad duty adds any meaningful requirement on water companies beyond their existing duties through the environmental information regulations.
On that basis, I commend clause 3 to the Committee and ask the hon. Gentleman not to press his new clause.
Question put and agreed to.
Clause 3 accordingly ordered to stand part of the Bill.
Clause 4
Nature-based solutions
Tim Farron
I beg to move amendment 26, in clause 4, page 10, line 4, leave out—
“use that is to be made of”
and insert—
“priority that is to be given to”.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
New clause 5—Licence conditions about nature recovery—
“In the Water Industry Act 1991, after section 17FB insert—
‘17FC Nature recovery
(1) It is a condition of all licences granted under section 17A (water supply licences) that relevant undertakers must give due consideration to nature-based solutions targeted at reducing flood risk and pollution incidents, improving water quality and benefiting nature restoration in their catchment area.
(2) The Authority must not take any action that discourages or prevents a relevant undertaker from making an investment in accordance with subsection (1).’”
This new clause would make it a condition of all water companies’ licences to consider nature-based solutions to flood risk, improving water quality and benefiting nature restoration in their catchment area, and prevent the regulator from discouraging or stopping such investments.
Tim Farron
You will be delighted to hear that I will not say very much about this, Mr Vickers. Amendment 26 relates to nature-based solutions for these broader issues, and many of my points were covered under amendment 24. I simply want to point out the value of nature-based solutions. They are cheap, they are low input, they provide potential income for farmers and other land managers, they are environmentally friendly in and of themselves, and they involve very light engineering to install and maintain. They are also less complex, not labour-intensive and much quicker to achieve and install, as well as having very clear ecological benefits and alleviating pressure on more conventional forms of sewage treatment. I make those points just to add to the importance of prioritising nature-based solutions to tackling sewage treatment.
Jerome Mayhew
I understand that this will not be put to a vote, but I want to add my support for nature-based solutions and to draw to the Minister’s attention an experience I had with Anglian Water. It had a village-sized water treatment works just over the border in north Norfolk at a place called Langham. The chalk stream that the sewage works discharge into is the Stiffkey, which runs through my constituency and then just over the border. To its great credit, Anglian Water co-operated with a local landowner and created a wetland. I would have thought it would be the easiest thing in the world to have the treated sewage discharge into a secondary processing unit—it was, from memory, about two acres in size, so it is quite a large wetland with meandering going through it—and then exit back into the Stiffkey.
The Environment Agency eventually allowed this to take place, but it is worth highlighting that its initial response was, “No, you have to apply for a new licence to discharge effluent into the river.” That was because it was coming not from the pipe, which was semi-treated, but from a new entrance into the stream via the wetland. The “computer said no” attitude of the Environment Agency was quite extraordinary, because it was not going to get any worse with the discharged water going through a wetland before entering the stream, and yet it took several months. It was a very significant constraint, and it called into question whether or not the project would go ahead.
I would be grateful if the Minister could take that away with her and ensure that the Environment Agency sees the development of wetlands as a really positive step forward. I know its senior leadership does, but that message should go right through the organisation so that the time and delay of bureaucracy, and the requirement for new applications for licences, do not get in the way of what we all wish to achieve.
Dr Hudson
I rise to speak to new clause 5, tabled by His Majesty’s loyal Opposition. We are talking about practical nature-based solutions to flood risk. I welcome the comments made about nature-based solutions, not least from the hon. Member for Westmorland and Lonsdale, who talks passionately about the importance of nature-based solutions for flood mitigation and that side of things.
I noted that during the election campaign, he waxed lyrical about Windermere, which is a beautiful part of his constituency. I know that he was an active participant with the leader of his party in water sports as well, although I note that he was a lot more competent at staying on the paddleboard than his leader. I welcome his comments on the importance of protecting and preserving our water spaces, but very much encourage the Government to facilitate landowners, land managers and farmers to do nature-based solutions to mitigate flood issues.
New clause 5 would try to ensure that water companies consider practical, nature-based solutions to flood risk. That would also make water companies try to improve water quality and nature restoration in their catchment areas, so there would be a double win. In Government, we Conservatives set specific, legally binding targets to improve water quality and availability in order to try to reduce nutrient pollution and sediment pollution from agriculture to the water environment. We also set out how to reduce water pollution in our environmental improvement plan. Nature recovery was carried out under us, and opportunities to do that with nature-based solutions should be seized on as we move forward.
Emma Hardy
I thank all hon. Members for their thoughtful contributions during this debate and the careful consideration of the amendments tabled to clause 4. We are in danger of having a bit of a love-in with so much agreement in this room.
I turn first to amendment 26, which was tabled by the hon. Member for Westmorland and Lonsdale. I was genuinely really pleased to see clause 4 added on Report in the Lords, as a result of the collaborative cross-party approach to strengthening the Bill so that it further encourages greater use of nature-based solutions by water companies, and I appreciate the kind comments from the Opposition spokesperson, the hon. Member for Epping Forest. This is why clause 4 requires sewerage undertakers to address, in their drainage and sewerage management plans, the use that is to be made of nature-based solutions in their networks.
Sewerage undertakers already have existing obligations under section 94A of the Water Industry Act to address the sequence and timing for the implementation of measures proposed in their drainage and sewerage management plans. We believe that these obligations sufficiently require sewerage undertakers to address the relative prioritisation of the proposed measures in their plans. Nature-based solutions are one of a diverse range of potential solutions to complex drainage and sewerage issues. Clause 4 will ensure that sewerage undertakers highlight the proposed role of nature-based solutions within their network. It is right that undertakers have due flexibility to consider the full range of solutions available to them and to work with stakeholders to identify the right solutions.
As much as I love nature-based solutions—and so does everyone in the room, it appears—I am sure we all accept that it is not appropriate to prioritise nature-based solutions ahead of other available options in every circumstance. We believe, however, that the provisions in clause 4 will have sufficient positive effect in supporting greater exploration and development of nature-based solutions without posing operational challenges for the sewerage undertakers. On that basis, I ask the hon. Member for Westmorland and Lonsdale to withdraw his amendment.
Moving to new clause 5, which the hon. Member for Epping Forest tabled, I take this opportunity again to agree and emphasise that the Government think that nature-based solutions are critical to ensuring that we have a resilient and sustainable sewerage system. I am therefore delighted to inform the House that we have recently seen the regulator doing just that. In its final determinations for the 2024 price review, Ofwat has set out an allowance of £3 billion for water company investment in nature-based solutions and biodiversity. That includes £2.5 billion to reduce storm overflow spills through green solutions.
However, the Government have noted the concerns and amendments in the other place, which is why we introduced our amendment to place a new requirement on sewerage undertakers to support the greater use of nature-based solutions, which now forms clause 4. Clause 4 will ensure that nature-based solutions are considered from the start of investment planning and decision making as a solution across multiple risks, including pollution, flooding and drainage. I trust that the hon. Member is therefore reassured that his new clause has already been provided for. On that basis, I ask him not to push his new clause to a vote.
Although I have outlined some of the merits of clause 4, I will briefly reiterate why this Government consider the clause to be an essential part of the Bill. Nature-based solutions are vital to protecting the environment and the wider water system, as well as delivering co-benefits including protection from flooding for the public and enhancing the natural environment. I concur with the comments made about flooding by the Opposition spokesperson. Clause 4 will drive further exploration and development of nature-based solutions, and will require undertakers to be transparent as to how they have deployed, or propose to deploy, nature-based solutions within their drainage and sewerage networks. Compliance with that duty will be monitored by Government and regulators.
Sewerage undertakers will also be required to conduct public consultations on their drainage and sewerage management plans, which will allow the public to scrutinise the plans and propose changes. Therefore, to help realise the Government’s desire to see further development of nature-based solutions by sewerage undertakers, I commend clause 4 to the Committee.
Tim Farron
I will add to the words I have already said, but not by very many, I promise. The simple bottom line of our proposal is that nature-based solutions offer great value for dealing with sewage. As has been mentioned on both sides of the Committee, they also have a significant impact on flood prevention. I am bound to crowbar this in, but it is a reminder that among the things that we should be enormously grateful to those who work our uplands—our hill farmers—for is that their work, if we support them properly, prevents people who live in towns, villages and cities from being flooded.
Another part of the Department for Environment, Food and Rural Affairs brief is the environmental land management scheme, and how we can look to further support those working in the uplands—our land managers and our upland farmers, both tenants and owners—to be able to deliver those nature-based solutions to protect millions of homes and avoid billions of pounds of damage, as well as being part of the solution to dealing with sewage.
We will not seek to press the Committee to a Division. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 ordered to stand part of the Bill.
Clause 5
Impeding investigations: sentencing and liability
Question proposed, That the clause stand part of the Bill.
Emma Hardy
Thank you, Mr Vickers, for the opportunity to speak on the importance of clause 5. The clause strengthens the penalty for obstructing the investigations of the Environment Agency, Natural Resources Wales and the Drinking Water Inspectorate. Obstruction of investigations by the regulators is already an offence, but that has not stopped companies blocking the regulators’ investigations.
In 2019, the Environment Agency prosecuted a number of individuals at Southern Water for removing evidence from the possession of officers. I am sure Members will agree that such behaviour is unacceptable. Currently, the offence of obstructing the Environment Agency and Natural Resources Wales’s investigatory powers—under section 108 of the Environment Act 1995—is punishable only by a fine, and can only be heard in the magistrates court. There is also no mechanism for prosecuting executives where obstruction of those powers occurs under their guidance.
The offence of obstructing the Drinking Water Inspectorate is already triable in the Crown court. That too, however, only carries a maximum penalty of a fine. I am sure Members will agree that it should never be preferable to accept a fine rather than face the full consequences of lawbreaking, and where lawbreaking occurs with their involvement, executives should be held accountable. Clause 5 makes the offence of obstructing the Environment Agency and Natural Resources Wales’s powers under section 108 of the 1995 Act triable in the Crown court. It expands the maximum penalty for obstructing Environment Agency, Natural Resources Wales and Drinking Water Inspectorate investigations to be up to two years’ imprisonment for conviction on indictment.
Clause 5 will address a notable justice gap and further deter the offence of obstruction. In turn, it should better enable our regulators to carry out their investigations uninhibited and hold water companies to account accordingly.
Emma Hardy
I am just about to finish. On the basis of what I have said, I hope that clause the clause can stand part of the Bill.
Jerome Mayhew
I think this is technically now a speech rather than an intervention. I am supportive of the content of the clause, but I have one technical question: if we choose to move a penalty from a fine to imprisonment, there has to be a person to apply that penalty to, rather than a body corporate. The question that obviously arises out of that is: is it the intention of the Government to apply the penalty to the controlling mind, or to a member of an organisation who may be several layers below that of the controlling mind? Who is it intended that the criminal offence should be applied to, and how will the Government ensure that there is no misunderstanding and uncertainty based on the current drafting? It is not at all clear.
The Chair
We will assume that that was an intervention, and I will give the Minister a chance to respond.
Emma Hardy
Individuals can already be prosecuted, under section 110 of the Environment Act 1995, for obstructing Environment Agency investigations. However, that legislation does not allow executives to be prosecuted where obstruction has occurred with their consent or connivance or is attributable to their neglect. The Bill will remedy that omission by adding a consent, connivance or neglect provision to the Act, meaning that executives or other relevant officers may face imprisonment if obstruction occurs as a consequence of their actions.
Dr Hudson
The Opposition have no formal objections to the clause, but I do have a couple of clarifying questions. I realise I am getting into territory with which I have no familiarity. I am not a lawyer; I am a veterinary surgeon. When we are changing offences to make them more criminal, there are implications for the courts and for individuals. Although expanding the options available to the court when sentencing offenders who have not followed the rules is welcome, how have the Government ensured that the offences are clear, so that those who commit them face the full punishment if and when required?
In terms of modelling the potential impact downstream, what work have the Government done to look at the situation retrospectively? If this provision had been law over the last few years, how many offenders would have been caught by it and potentially imprisoned? I realise that that is quite a technical question, but I wonder if the Government have looked at that at all. When we bring in laws, we need to ensure that we are aware of their implications and know how the legal and judicial system can exercise them. However, we have no formal opposition to the clause.
Tim Farron
Likewise, the Liberal Democrats have no objection at all to this clause. I cite from memory that in 2021-22, there were just under half a million spillage incidents in this country: a total of 16 were prosecuted, eight with a fine of more than £50,000. I think what the Minister was getting at before was that very often, it is worth taking the hit. First, organisations get away with it, but even if they do not, they pay a pittance compared to the cost had they invested properly in the infrastructure. It is right to take these things seriously. However, prosecutions with potential imprisonment and loss of liberty may be as few and far between as prosecutions relating to fines, unless we make sure that the whole process is more rigorous than it has been so far.
We are supportive of the clause and I need say nothing further.
David Reed
I want to raise one minor point. Public confidence in us restoring our water systems is the reason we are here, scrutinising this Bill. Feargal Sharkey—a main campaigner who many people up and down the country listen to—recently wrote an article saying that no water boss would ever go to prison as a result of this legislation. Will the Minister comment on that to give confidence to people watching this proceeding?
Emma Hardy
I am obviously a bit of a fangirl of Feargal Sharkey, not least because of his musical career before entering the field of environmental campaigning.
We do not expect this measure to materially impact on court case numbers. The intention is to deter offending. Not all cases will go to the Crown court, but it is right that that is a possibility. Obstruction of the Environment Agency’s emergency powers, under section 108 of the Environment Act 1995, is already triable in the Crown court. The EA will consult on updating the enforcement sanctions policy to ensure that that is absolutely clear. Although this is not a new offence, we are talking about changing the maximum penalty because of the justice gap that I have mentioned. Previously, it was punishable only by fine and heard only in the magistrates court, and we are moving it to be punishable in the Crown court and including a prison sentence.
I am pleased that there is lots of agreement on the importance of the clause. We are talking about something very serious: obstructing the Environment Agency or the Drinking Water Inspectorate in going about and collecting the evidence that they require. This is a serious matter, and it deserves a serious penalty. I thank hon. Members for their views on the clause, but nothing that has been said detracts from the importance of addressing the justice gap. I am pleased that there is agreement, which has, on occasion, has been exploited by water companies. I commend the clause to the Committee.
Question put and agreed to.
Clause 5 accordingly ordered to stand part of the Bill.
Clause 6
Civil penalties: modification of standard of proof
Question proposed, That the clause stand part of the Bill.
Emma Hardy
Regulators can currently impose civil penalties where they are satisfied beyond reasonable doubt that an offence has been committed. The civil penalties are imposed by the regulators, rather than through the courts. The criminal standard of proof is appropriate for severe offences—for example, where there is a major impact on human health, on quality of life or on the environment. A high investigatory burden is not proportionate for minor to moderate offences that have a lower impact. Clause 6 will allow these offences to be enforced more quickly, cost-effectively and proportionately by enabling penalties to be imposed using the civil standard of proof, which is
“on the balance of probabilities”.
The penalties will be in addition to existing enforcement options that can be imposed only using the criminal standard of proof, including prosecution and unlimited variable monetary penalties, which will remain unchanged. Of course, the most serious cases will still require criminal proceedings. The Government will consult on the specific offences for which the civil standard of proof may be used and on the cap for the new lower standard of proof for variable monetary penalties. There are no plans to remove unlimited penalties for severe offences. Parliament will then debate and vote on secondary legislation before any changes are made.
The clause will strengthen the power of the water industry regulators, driving improved performance in the sector, and I commend it to the Committee.
Dr Hudson
I note that clause 6 would grant the Secretary of State and Welsh Ministers the power to introduce secondary legislation concerning fixed and variable monetary penalties, as confirmed by the Regulatory Enforcement and Sanctions Act 2008. It would likewise change the condition of imposing these penalties from “beyond reasonable doubt” to
“on the balance of probabilities”.
Although His Majesty’s Opposition have no problems with the clause, we believe it would be beneficial for the Minister to make some clarifications to aid the reading of the clause in the future. First, how often does the Minister think that secondary legislation may be required for the fixed monetary penalties? During the last Government’s period in office, we knew that sometimes penalties needed to be adapted to get regulation of our water industries right. As I discussed in previous debates, the Conservative Government saw fit to amend the amount that water companies could be fined for violating the water quality rules.
As was also mentioned earlier, Baroness Hayman in the other place highlighted the importance of flexibility in changing rules on the water industry. The Opposition agree that flexibility is important, but for there to be flexibility, there also needs to be consistency, and awareness and monitoring of the issue so that we know exactly what flexibility is needed. Could the Minister therefore comment, now or in due course, on whether the Government will be continuously updating and monitoring to ensure that monetary penalties are having the desired outcome, that they remain aware of any potential issues and that they can determine whether they need to modulate and change things?
Does the Minister support the use of secondary legislation to increase scrutiny? As we have already discussed, the Government have sought to avoid the responsibility of accountability at ministerial and Government level by using statutory instruments for things like Ofwat’s remuneration and governance guidance. Can they not see that a bit of a discrepancy remains? If they are willing to use available powers to make change but not enhance powers, they might need to do that on other issues that we have discussed. Barring those comments and clarifying questions, we have no formal objections that we wish to raise.
Emma Hardy
I thank the hon. Member for Epping Forest for his contribution to the debate. I think the point my hon. Friend, and friend, Baroness Hayman made in the Lords is that we do need some flexibility, and that it would be inappropriate to set out the details of implementing these powers in the Bill, because that would result in a fixed power that would not be adaptable to the industry’s circumstances. We would like to be able to continue to adapt it.
I think the shadow Minister is trying to make sure that we set things in the right way and at the right level. That is why Ofwat will be doing a consultation. We want the level to be a deterrent rather than something that water companies can easily dismiss, but it needs to be set at the right level. It is important that that is done properly and through consultation.
I am grateful that everybody supports the clause. By strengthening the powers of the water industry regulators, we will drive improved performance in the sector.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Jeff Smith.)