Ivory Act 2018 (Meaning of “Ivory” and Miscellaneous Amendments) Regulations 2024

Baroness Bakewell of Hardington Mandeville Excerpts

Tuesday 5th November 2024 Grand Committee

In my few words today, I question the validity of extending the Ivory Act to species such as the sperm whale when the UK has virtually no international commercial trade in these items and when, unlike the trade in elephant ivory, there is no third country with an insatiable desire to acquire sperm whale teeth. I look forward to the Minister’s answers to the various questions and to my noble friend Lord Carrington’s concerns.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank the Minister for introducing this SI. It is right that the common hippopotamus, the killer whale, the narwhal and the sperm whale are to be included in the category of protection for their ivory. I have to say that it has taken a long time to reach this point. In 2018, when we were discussing the Ivory Bill, the Minister’s predecessor on the Labour Benches, the noble Baroness, Lady Jones of Whitchurch, who I am delighted to see in her place, was tireless in trying to persuade the Government to include narwhals and other species in the categories to be classed as having ivory, but to no avail. The then Conservative Government were content to leave it at elephant ivory. The passage of the Bill was not easy, with the antique ivory lobby pressing hard for exclusions to the Bill. I began to wonder whether we would ever get the ban on elephant ivory through, but in the end we succeeded.

I realise that the noble Lord, Lord Carrington, will not share my view. He referred to the destruction of items made of ivory that are of no antique value but are sent to landfill. He also referred to scrimshaw items made by sailors. I have some sympathy with his view on these items and I look forward to the Minister’s answer to his question about changing the policy on destroying ivory.

The noble Baroness, Lady Rawlings, referred to historical antique ivory collections that may have been donated to museums and form part of history. This is a very valid argument. I note that a public consultation that took place between 17 July and 11 September 2021 overwhelmingly supported the measures we have before us.

Paragraph 7.1 of the EM states:

“Walrus ivory is not included in the extension of the Act under this instrument because it will remain prohibited subject to certain narrow exemptions under Council Regulation (EC) No 1007/2009”,


which relates to the Windsor Framework. The Minister referred to this exemption, but I am slightly confused by it and would be grateful if she could explain exactly what it means in terms of protection for the walrus species.

I am reassured that items containing ivory or made of ivory will be protected. I am also pleased that the burden of proof will lie with any accused to prove that the item is not ivory from an elephant or from the other four species covered in the SI. Scientific tests are to be used to determine the exact origin of the article and the age of the antique artefacts.

I welcome that this debate has covered both sides of the argument and we have heard opposing views. Nevertheless, I fully support this SI.

[The Earl of Effingham (Con)]

My Lords, His Majesty’s Official Opposition are in favour of any measures to preserve the rich tapestry of species on this planet, particularly those threatened with extinction. However, we have some concerns, not with the objective of this SI and the Ivory Act more broadly, but with some of the consequences of its drafting.

The SI extends the definition of ivory to include whale teeth and narwhal tusks. Although we agree with the banning of selling of modern items manufactured from these sources, there is no modern market for whale teeth or narwhal tusks. Old pieces of art, such as inscribed sailor’s knives or mounted narwhal tusks, will fall foul of these regulations and will have to be landfilled.

As we have heard already from my noble friends Lady Rawlings and Lord Carrington, there is virtually no import or export trade in whale teeth or narwhal tusks. In 2022, there were no commercial imports of sperm whale teeth, and just two teeth were exported. Narwhals are not on the International Union for Conservation of Nature’s endangered list.

While it could be argued that this legislation is an important aspect of our soft power, it is debatable whether this soft power has worked. It has not had much influence on the EU, which bans the import and export of ivory but allows it to be traded within the EU. Will the Minister please clarify to the Committee what outcomes she foresees from this decision? Will she outline why these measures have been implemented and say whether she can see that they may have unforeseen and unintended consequences?

Animal Welfare (Livestock Exports) Enforcement Regulations 2024.

Baroness Bakewell of Hardington Mandeville Excerpts

Tuesday 5th November 2024 Grand Committee

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank the Minister for her introduction. It is a pleasure to support this SI. Since the noble Baroness, Lady Fookes, introduced this into the Chamber by way of a Private Member’s Bill, we have all been anticipating that it would be implemented as soon as possible. The instrument itself and the Explanatory Memorandum are clear as to what is to happen and who will perform the duties of enforcement. Much of it will fall on local authorities which, as we all know, are struggling to make their budgets balance. Can the Minister say whether local authorities will be recompensed for this additional work? The noble Baroness, Lady McIntosh of Pickering, also raised this.

No one has any doubt that animals should not be transported live to Europe or other countries specifically for the purpose of slaughter. It is unnecessary to have transported animals suffering cramped conditions, often with no access to water and food, and for disproportionately long periods. Animals which are going to slaughter should be dispatched as near to their living quarters as possible. The distress that transportation causes should be kept to a minimum and access to abattoirs should be within close proximity. Other noble Lords have referred to this.

I have received a brief from the RSPCA, which has asked two questions. First, how does the instrument ensure that transporting live animals for slaughter or further fattening, including horses, is not authorised to Northern Ireland from England, if they would then be re-exported to the Republic of Ireland? The noble Lords, Lord Trees, Lord Elliott and Lord de Clifford, also referred to this matter. Secondly, the RSPCA asks: when will the Government come forward with proposals on improving the rules on the internal transportation of live animals in England, now that it is no longer limited by the transport times in Regulation 1/2005? I would be grateful if the Minister could provide answers to these two questions.

I also have a question of my own relating to the date of implementation for this SI. In the EM, at paragraph 5.2, we learn that Royal Assent was granted for the Act on 20 May of this year. Then in paragraph 5.3 we learn that the prohibition on transportation of live animals from and through the UK

“came into force on 22 July 2024”.

Again, that is this year. However, in the SI itself, Regulation 1(b) states—I am sorry that this is very nerdy —that the regulations

“come into force on 1st January 2025”.

I would be grateful if the Minister could clarify whether the ban is already in place, as from 22 July, or whether animals will have to wait until 1 January 2025 to be totally protected. I realise that no animals have been exported for slaughter since 2020, but it is important that the dates on the legislation are accurate.

I look forward to the SI which will come forward to cover horses, as referred to by the noble Baroness, Lady McIntosh of Pickering. Apart from these queries, I totally support this vital SI and the sooner that it is enacted, the better.

[The Earl of Effingham (Con)]

My Lords, His Majesty’s Official Opposition welcome the Government’s Animal Welfare (Livestock Exports) Enforcement Regulations 2024. In government we took the issue of animal welfare very seriously, as evidenced by the passing of the Act to which this statutory instrument refers. The Animal Welfare (Livestock Exports) Act 2024 prevented the exportation of livestock for the sole purpose of slaughter or preparation for slaughter and received cross-party support.

We are pleased that the current Government continue to focus on this area by implementing the practical steps to ensure that the correct people are held responsible. Increasing the necessary requirements of evidence submission will allow inspectors to examine more closely the intentions of a transporter and ensure that there is sufficient evidence to indicate that an animal is not being taken to slaughter.

I thank the Minister for bringing this statutory instrument forward. We are satisfied that this is a sensible approach and have no issues to raise.

Budget: Implications for Farming Communities

Baroness Bakewell of Hardington Mandeville Excerpts

Tuesday 5th November 2024 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

As the noble Baroness said, I meet the Minister of Agriculture in Northern Ireland regularly and met the Ulster Farmers Union very recently, as well as the noble Baroness, to discuss these issues, and I know that my officials meet various organisations regularly to discuss them. I will be back in Belfast towards the end of this month and hope to meet the Ulster Farmers Union again shortly. As she pointed out, tax and succession planning is incredibly important. There is an issue with getting young people into farming, and I recommend that people talk to professionals about what is available to them for tax purposes going forward.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, a sustainable supply of food is essential for the country. The farming community is key to achieving this goal. The perception that farmers are wealthy is erroneous. Farmers have seen their income shrink as a result of the slow implementation of ELMS, and now they face the prospect of having to sell off or dismantle family farms to pay inheritance tax. The appalling headline “We can’t afford to let farmers die tax-free” is a gross distortion of the truth. What is the Minister doing to reverse this impression?

Water (Special Measures) Bill [HL]

Baroness Bakewell of Hardington Mandeville Excerpts

Committee stage
Monday 4th November 2024 Lords Chamber

[Lord Roborough (Con)]

My Lords, I welcome the noble Baroness, Lady Bakewell of Hardington Mandeville, back to her place. Her contributions have been missed on earlier days in Committee.

The main focus of the Bill is on improving the health of our rivers, and that aim will likely lead to a larger number of punishable offences. In its manifesto, Labour set out its plans to impose severe fines on water companies that failed to meet the expected standards, but it did not establish what would be done with that additional income. Amendment 70 seeks to put in place a system whereby the fines imposed on water companies and their employees—by this Government, the devolved Governments or, in fact, any other relevant authorities—are collected. Then, once a year, the income from these fines could be used to reduce customer bills.

In government we created the water restoration fund, which sees the money collected by the Treasury from fines and penalties and then channelled into improving the water environment. However, we sit here today with consumers facing pressure on their water bills as part of the inflationary environment that has created the cost of living crisis, as well as the cost of investing to improve water quality. It seems appropriate that fines and penalties should be returned to those consumers and identified by a separate line in their bills, making it clear that the regulator is taking action to punish wrongdoing and that money is returned to the consumer as a consequence.

An amendment such as this would benefit so many individuals and resolve how additional income from stricter fines is applied. It is not a subject that the Bill adequately addresses, as the noble Baroness, Lady Bakewell of Hardington Mandeville, has recognised in other amendments. Does the Minister agree that the money from the fines should be used to benefit the consumer through mechanisms such as the water restoration fund that we implemented when in government or by using the sum to reduce customer Bills, as this amendment suggests? As such, will the Minister confirm that the penalties will not return to the Treasury under this Government? I beg to move.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I apologise to the Committee and the Minister for my absence on the first and second days in Committee. I regret that an attack of Covid meant that I was confined to quarters and unable to travel to London. I did, however, watch the debate on both days on parliamentlive.tv and was therefore able to hear the nuances of the contributions, which you do not always get by reading Hansard. I thank the noble Lord, Lord Roborough, for his comments.

A seminar of all the devolved Administrations once a year, to discuss how to return all fines to the relevant customers, will do nothing to fix the problems of inadequate investment in crumbling and inadequate infrastructure. I am sympathetic to the need to keep customers’ bills to an acceptable level. Consumers should not have to pay for the inadequacies of the water boards to ensure that problems are fixed. I do not see why an annual gathering of the devolved Administrations or other authorities will be sufficient to refund bill payers in a timely fashion.

--- Later in debate ---

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I will speak to three amendments in this group: Amendments 97, 98 and 99. This weekend saw tens of thousands of people marching for clean water in London. It was the most amazing event. It was a chance for me to speak to people who agree with me—as opposed to being here in your Lordships’ House, where not many people agree with me.

[Baroness Bakewell of Hardington Mandeville (LD)]

Oh!

[Baroness Parminter (LD)]

That is not true.

--- Later in debate ---

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, it is a while since I have taken part in proceedings where a stand part debate has been used to try to remove clauses of a Bill. On our Benches, our departed colleague Lord Greaves was very fond of this measure to enable him to make detailed speeches railing against the Government of the day’s proposed legislation.

The noble Lord, Lord Roborough, has set out his case eloquently for why he believes that Clauses 10 and 11 should be removed from the Bill. Clause 10 refers to England, and Clause 11 offers the same powers to Welsh Ministers. Both clauses are complex and deal with the recovery of losses. I respect the motives of the noble Lord, who appears to be on the side of the water industry and the bill payers at the same time. However, when 15,000 people from around the country are prepared to give up their Sunday to come to London to join a protest against the action of the water companies, I fear that he may have misjudged the mood of the water company bill payers. The public are rightly furious that, while their water and sewage bills have increased, the infrastructure has not been improved, but directors’ bonuses and shareholders’ dividends have not reflected the poor service that some water companies have given. I say “some” water companies, because some are performing well and do meet their targets; unfortunately, it is the ones that do not do so that we hear about on a continual basis.

Removing from the Bill the two clauses, which would have seen some balance being provided to enable costs to be recovered from those water companies that have failed to deliver on their Ofwat targets, is to give a signal to bill payers that the poor service that they have received is acceptable. If Clauses 10 and 11 are removed from the Bill, there would be no clarity on what is happening or how recompense would be achieved. I am therefore afraid that, on the Lib Dem Benches, we are unable to oppose these clauses standing part of the Bill.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Lord, Lord Roborough, for his interest in Clauses 10 and 11 and also thank the noble Baroness, Lady Bakewell, for her support for them standing part. A special administration regime—or SAR—enables a company that provides vital public services to be put into administration in certain circumstances to ensure that the public service will continue to be provided pending rescue or transfer to new owners. An SAR would be required only when there is evidence that a company is insolvent or in serious breach of its statutory duties. It is the ultimate enforcement tool in Ofwat’s regulatory toolkit and, as such, as I said in the last debate, the bar is set high.

Although government has had the powers to place water companies into special administration for over three decades, it is important that we regularly update legislation to reflect modernisation of law and experiences in other sectors. If a SAR occurs, government funding would be required to cover the costs of a special administration, including both operational and capital expenditure—for example, ensuring that statutory environmental obligations were met, as well as for paying the cost of the special administrator.

In the unlikely event that the proceeds of a sale or the repayments agreed as part of a rescue at the end of a SAR are insufficient to cover repaying government funding, there is a risk of a funding shortfall. Clauses 10 and 11 introduce a flexible power, allowing the Secretary of State and Welsh Ministers to recover any shortfall in funding in a manner that is appropriate to the circumstances. They allow for modification of water company licences to recover any shortfall in financial assistance provided in a water industry SAR. These clauses will align the water industry SAR regime with the energy sector. Without this power, there is a risk that taxpayers will foot the bill for the water industry SAR.

The Secretary of State and Welsh Ministers will be able to decide whether or not they should use this power and the rate at which the shortfall should be recovered from customers. This will include which group of customers it should be recovered from—for example, all water company customers, a subset of the sector, or only customers whose water company went into a SAR.

Although the power is flexible, the design of a recovery mechanism will be subject to consultation with all relevant sector stakeholders. The Government must consider these views and explain our approach accordingly. If a SAR occurs and this power is ever required, this will allow a decision to be made, and be consulted upon, on what the fairest cost recovery option is, based on the evidence and circumstances at the time.

I reiterate that the shortfall recovery mechanism does not mean that customers end up paying for water companies’ failures. Any intervention that would increase customer bills would be considered very seriously and as a last resort. In the first instance, the Government would seek to recoup all the funds spent on financing the SAR through the sale or rescue of the water company after the administrators’ conclusion. This new power would be utilised only if it were not possible to recover what the Government spent funding the administration. If there was a shortfall, Ministers would then decide whether they felt that it was appropriate to exercise this power.

This power would allow the Secretary of State to decide, subject to consultation, the rate at which the shortfall should be recovered from customers and which group of customers it should be recovered from, as I just mentioned. This will ensure that the shortfall recovery mechanism is always implemented in a way that ensures that costs are recovered fairly. I hope that noble Lords agree that this power is essential to protect taxpayers’ money in the event of a SAR, and that these clauses should stand part of the Bill.

Flood Prevention: Farmers

Baroness Bakewell of Hardington Mandeville Excerpts

Thursday 10th October 2024 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I congratulate the right reverend Prelate the Bishop of St Albans on securing this extremely important debate and on his excellent and informative introduction to the subject, on which he has become something of an expert. I also congratulate the noble Earl, Lord Devon, on his excellent and informative speech. All speakers have spoken in depth about the effects of climate change on the lives of farmers. I am grateful to the NFU, the CLA and the House of Lords Library for their briefings on this subject, which affects many rural and farming communities.

Between October 2022 and March 2024, according to the NFU, the country experienced torrential rain, the most since records started in 1836. Storms Babet, Ciarán and Henk left many farms underwater between October 2023 and April 2024. Farmers were unable to plant crops or graze their stock. The Government’s response was to announce the flood recovery framework in May. This was welcomed, but information was difficult to find on who would be eligible and how to apply, and it had a short application timeframe. Many farmers missed the closing deadline or were turned away because their local authority was not aware of the scheme. As we approach autumn and another season of poor weather, can the Minister reassure us that this will not happen again and that there will be better communication in future?

One of the reasons the flood recovery framework was underused was that many believed that the farming recovery fund was only one option. This fund had grants of up to £25,000 towards repair and reinstatement costs for farmers who had suffered exceptional flooding. The noble Earl, Lord Caithness, has referred to this. This scheme now needs urgent expansion. The fund was also for exceptional flooding, but there are areas of the country where devastating flooding is not exceptional but the norm. These farmers are often part of a scheme whereby their land is offered up regularly for flooding, so that towns and villages are protected. The noble Baroness, Lady McIntosh of Pickering, also raised this issue.

Such is the case on the Somerset Levels, where a system of regular flooding of certain moors in rotation occurs to protect the town of Bridgwater and the surrounding villages. The IDBs are a key element for the success of these schemes. On a fine day during the winter, the Somerset Levels can look picturesque, with the whole area underwater and trees loftily rising above the flood-water, with ducks, swans and other fowl floating serenely along, but this does not put bread and butter on the farmers’ tables, nor does it enable the farmer to plant crops for the next season or feed their cattle, or allow them to put their cattle or sheep out to graze.

Flood Re recompenses those householders who live in areas prone to severe flooding who cannot get insurance through the normal routes, but Flood Re is not available to businesses, nor to farmers. ELMS is designed to reward those farmers who deliver public good. It really is time that those farmers whose land is used to store flood-water on a continual, year-on-year basis should have some financial recompense for the loss of the use of that land. If protecting homes, villages and towns by preventing them flooding is not a public good then I am not sure what is. I urge the Minister to act to recompense these farmers.

The right reverend Prelate the Bishop of St Albans raised the issue of building new flood defences as well as repairing those which are in a poor state of repair. It is important that those which are already there but crumbling should be repaired, and that is a much more cost-effective option.

As has been said, the qualification for claiming under the flood recovery framework is 50 properties affected in an area. This is helpful for centres of towns and villages but pretty ineffectual in rural areas, where hamlets and households are more widely spread. Meanwhile, the farming recovery fund criteria for claiming was being within 150 metres of the river which was flooding. Again, this was a limited criterion, which left many without access to funding.

In April 2024, the previous Government announced that this scheme would be expanded to more farmers, but as we have already heard, so far nothing has happened. Although this commitment was made in April 2024, no details from either Defra or the Rural Payments Agency have been forthcoming, despite numerous requests from the NFU. Can the Minister say whether the new Government will honour this commitment and, if so, when it is likely to be rolled out? The right reverend Prelate the Bishop of St Albans also raised this. I understand that some announcement may be waiting for the Budget, but that does not fill me with confidence that we will get a positive announcement.

The AHDB reran its cropping early bird survey in March 2024. This indicated that reductions in the following crops were anticipated due to flooding: wheat, down 15% at 1.463 million hectares, which is the biggest reduction since 2020; oilseed rape, down 28% at 280,000 hectares, which is the biggest reduction since the 1980s; and winter barley, down 22% at 355,000 hectares, which is the biggest reduction since 2020. That clearly demonstrates the effects on the farming and food-producing communities of continual rainfall leading to extreme flooding.

My noble friend Lord Russell raised the issue of suicide among farmers. Farming is not an easy way of life. Surely now is the time for the Government to act to ensure that our farming communities do not disappear altogether. I look forward to the Minister’s response.

Water (Special Measures) Bill [HL]

Baroness Bakewell of Hardington Mandeville Excerpts

2nd reading
Wednesday 9th October 2024 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I congratulate the Minister on her introduction to this Bill. The issue of continual sewage overflows and the failure of water companies to deal with this effectively has been the subject of many debates in this Chamber. It is also a subject of great concern to the public, who have to suffer the consequences of raw sewage in their waterways and lakes, and often in their back gardens. The noble Lord, Lord Lipsey, and others have referred to public involvement in this issue.

This is a hot political issue, which featured in manifestos during the recent general election. I know that the Minister is keen to deal with this problem, and I am pleased that this Bill is one of the first pieces of legislation that the new Government have decided to start in this Chamber—especially since we have had so many debates and Questions on the subject. Every noble Lord this afternoon has welcomed this Bill. The performance of the water companies and their regulators is an especially important part of our everyday lives. Industry through to domestic householders rely on an efficient water system and have been badly let down in the past. I concur completely with the comments of the noble Duke, the Duke of Wellington.

The Bill is only part of an overall programme of reform needed for the water industry. The Government are promising a review. This is urgently needed, and we all look forward to it being holistic and in-depth, and setting out a clear programme of action to provide the country with an efficient water and sewage industry that will be fit for purpose. My noble friend Lord Russell has referred to this.

The Bill itself has 13 clauses and three main sections: remuneration and governance; pollution incident reduction plans; and sanctions. Remuneration and governance are in desperate need of reform. Since privatisation, CEOs, directors and shareholders have enjoyed payouts that do not reflect the appalling performance of the industry. At privatisation, the water companies were debt free. Since then, they have borrowed money on a large scale, not to invest in infrastructure but to reward themselves. No new reservoirs have been built since 1992, and sewage works are crumbling and out of date. Infrastructure needs addressing urgently.

Solutions so far have been concrete construction-based, which has a high carbon footprint. Nature-based solutions, which are more carbon friendly, have been rejected. Only 2% of Ofwat’s budget is allocated to nature recovery solutions. Bill payers have had an extremely poor deal, while the shareholders and directors have been rewarded. It is time that this trend was reversed. There will be amendments in Committee to ensure that this happens efficiently—and we have heard a lot about the amendments that may be coming forward.

It is absurd that Ofwat is unable to rescind the licence of a poorly performing company without giving 25 years’ notice. My noble friend Lord Russell referred to that. I wonder what planet those who drafted that legislation were living on when they drew up that guidance.

Pollution incident reduction plans should help to concentrate the minds of those managers running the sewerage systems. The plans should include reporting on the state of the sewerage infrastructure, alongside the action being proposed to remedy this within a reasonable time limit. Monitoring each sewage discharge within the hour of occurrence is to be welcomed but, once the spillages have been recorded, are they to be published in a way that can be readily accessible to the public and those directly affected? Transparency is strongly recommended by the Information Commissioner’s Office.

I note that the regulations under this section will be made only after the Minister has consulted such persons as the Minister considers fit. That could be anyone—the CEO of the water company concerned, Ofwat, the Environment Agency or some other person. I am sure that this is something that will come forward in Committee. If the regulations are to be meaningful and effective, the regulator has to have teeth and be up for the job. Currently, there is little confidence in the ability of either Ofwat or the Environment Agency to deal with the scale of the problem, which is endemic within the water industry.

This leads me on to sanctions. It is going to be extremely difficult to identify who is the guilty party responsible for a breach of the regulations regarding sewage discharges, as well as dealing with water leakages. The noble Baroness, Lady Jones of Moulsecoomb, raised the issue of leakages. I welcome that the sanctions are to be stricter and toughened up. The Bill gives the job of monitoring and implementing this section to the Environment Agency.

During the passage of both the Agriculture Act and the Environment Act, the woeful reduction in funding for the Environment Agency was a cause for concern to your Lordships across all sections of the Chamber. This funding situation has not improved. It seems unlikely that the Environment Agency will be able to conduct its role in this Bill effectively.

The system of fines laid out in the Bill may be levied and go into a consolidation fund. Those fines will recompense the EA for the cost of the work that it has conducted in imposing fines, but it will be retrospective. Surely any fines levied should go into a fund for remedial action to ensure that a problem does not occur again and be returned to bill payers, who have, after all, suffered as a result of loss of water supply and incursions of sewage into their homes and business premises.

One of the Environment Act’s tenets is that the polluter pays. That has to happen. The noble Lord, Lord Lipsey, gave a graphic description of pollution in the River Wye—and we have heard that before. My noble friend Lady Parminter referred to yesterday’s news that Ofwat had fined water companies £158 million, with Thames Water having the largest share. I received an email from David Black, CEO of Ofwat, yesterday morning informing me of this, and giving me some detail. Later, I listened on the radio to David Henderson, the CEO of the water industry’s union, Water UK, saying the problem was lack of investment due to Ofwat preventing the industry raising consumers’ bills and preventing borrowing for investment. There was no mention that the water companies were set up debt free; nor that some of their assets had been sold off to increase shareholders’ dividends; nor that salaries and bonuses of CEOs and directors had been increased to what an ordinary bill payer would consider an obscene level.

The water industry as a whole is in a dire state. The regulators are ineffective and too close to those they are supposed to be bringing to book. My noble friend Lady Pinnock and the noble Baroness, Lady Browning, raised the issue of ex-water board members being on the regulatory boards—hardly impartial. The noble Lord, Lord Sikka, gave detail of Ofwat’s poor performance. Neither Ofwat nor the Environment Agency are going to change their modus operandi in the way in which the Government envisage. The EA has been chronically underfunded for years. Ofwat already has powers which, if they had been exercised continually since inauguration, would have prevented some of the excesses and failure of service from which the country is suffering. It is no secret that on these Liberal Democrat Benches we would have abandoned the current system and replaced it with a clean water authority to take on the relevant environmental and regulatory powers, including river health, as my noble friend Lord Russell indicated.

We have heard some excellent contributions from all sides of the Chamber. Many have suggested how they would improve the Bill. My noble friend Lady Parminter referred to public interest being essential for Ofwat. The noble Lords, Lord Remnant and Lord Douglas-Miller, and my noble friend Lady Pinnock warned about a broad-brush approach that lumps all water companies together. Your Lordships are exercised about the state of the water and sewage industry, quite rightly so. I am grateful to all those organisations which have provided briefings for this debate, many of which have suggested amendments for Committee. I agree completely with the need for impact assessments and statutory instruments to be prepared.

I look forward to the Minister’s response to the debate and to working with her during future stages of the Bill to ensure that we have a Bill that is effective into the future and dovetails into subsequent legislation which the Government intend to bring forward following the review of the water industry. As all noble Lords have said, this is not going to be an easy task—quite the opposite.

Water Companies: Financial Resilience

Baroness Bakewell of Hardington Mandeville Excerpts

Tuesday 23rd July 2024 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, we are working with Ofwat and the water companies to deliver change as quickly as possible. As I mentioned, the first thing we are doing is bringing in the water special measures Bill to try to change the culture within the water companies. We will work on another water Bill that will come forward, and I look forward to working with all noble Lords, including my noble friends, on what that could contain in order to make the biggest difference to the current situation.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, Thames Water is in a precarious state due not only to its financial position but to the poor quality of drinking water and sewage treatment facilities. Are the Government taking action to ensure that those living in the Thames Water area will have access to adequate and safe drinking water now and into the future while they sort out the financial issues?

[Baroness Hayman of Ullock (Lab)]

There is no way we would allow there not to be safe drinking water during the current financial situation. The drinking water directive works extremely hard to ensure that we have safe water in this country. Although Thames Water clearly has financial issues, that should not be affected.