Biodiversity and Conservation

Baroness Hayman of Ullock Excerpts

Thursday 13th March 2025 Grand Committee

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

My Lords, as the noble Lord, Lord Roborough, just said, there have been many questions and I have only 12 minutes to respond. I shall do my best but will of course write with any outstanding remarks that I need to make. I start by thanking the noble Lord, Lord Grayling, for tabling today’s debate. It has been a very thoughtful and interesting debate, with many different contributions, all of which have huge merit as we discuss how we restore biodiversity in our country. We know it will be a challenge—we have very challenging targets—but I want to assure noble Lords that the Government are committed to protecting nature, because we rely on biodiversity for food, for regulating our climate, for pest control and for many more things that support our ecosystems.



In England, as noble Lords will know, we have committed to ambitious targets to halt the decline by 2030, to reverse the decline by 2042, to reduce the risk of species extinction by 2042, and to restore and create over 500,000 hectares of wildlife-rich habitats by 2042. We are honouring commitments to protect 30% of the UK’s land and sea by 2030—the 30 by 30 target; although it will be very challenging, it is extremely important.

The revised environmental improvement plan was mentioned. The noble Earl, Lord Russell, asked about the rapid review. In revising the plan, we aim to be clear on the role of the enablers—for example, green finance, which was mentioned by noble Lords. That needs to be implemented across government. We need to look at how enhancing nature supports the wider outcomes that the Government want, including for energy and growth. We will clarify Environment Act target delivery plans and update the interim targets to cover the five-year period from the completion of the review, in line with our statutory requirements. We will also clarify exactly how we intend to deliver the environmental improvement plan.

Local nature recovery strategies were mentioned. Those are being prepared currently and will be published. They will cover England, and the idea is to draw on the same data and principles as the land use framework, providing a key mechanism to enable progress. It is important that we join up all the different strategies and principles that we are taking forward. However, we are not waiting for the revised environmental improvement plan or the finalised land use framework to act. We have challenging targets, and we know that we need to take action on three fronts: to restore and create wildlife-rich habitats; to tackle pressures on biodiversity; and to take targeted action for specific species. Various species have been mentioned in the debate.

We know that our environmental land management schemes are crucial to enabling much of this. A number of noble Lords mentioned farming. An announcement was made this week on the SFI. A lot of questions were asked, but there will be a Statement on this issue on Tuesday and we can explore it in more detail then.

The noble Lord, Lord Grayling, asked about planning and the Nature Restoration Fund. On Tuesday, the Planning and Infrastructure Bill was introduced. The idea is that, through the Nature Restoration Fund, the Bill will provide a more efficient and effective way for obligations related to our most important sites and species to be discharged, at a scale whereby that action has the most impact. This will benefit development and nature recovery, where both are currently stalled.

I turn to fixed tariffs and the importance of developers behaving responsibly towards the environment. Developers must deliver a 10% increase in biodiversity, and the provisions are designed deliberately to discourage certain behaviours. Often with such issues, we need to see what happens in practice, but that is what the provisions are designed to do. I hope that helps reassure noble Lords.

The noble Lord asked about biodiversity net gain and the Nature Restoration Fund and how they will work together. The idea is that BNG and the Nature Restoration Fund will work in a joined-up manner, to maximise outcomes. The development section of the Nature Restoration Fund specifically addresses environmental impact and biodiversity net gain and will continue to apply. This is to ensure that developers are incentivised to reduce their biodiversity impact on site and to secure future residents’ and local people’s access to nature. That is extremely important to ensure that people do not lose that. We want to continue to seek opportunities to grow biodiversity net gain.

The noble Baroness, Lady Jones, asked about the planning Bill and the impact it will have on nature. We are absolutely committed, when it comes to that legislation, that steps will be undertaken to deliver positive environmental outcomes. I encourage the noble Baroness to read the National Planning Policy Framework, in which the environment is central.

The noble Baroness, Lady Jones, asked about the metrics around biodiversity. We have 55 individual measures comprising 29 indicators at the UK level. England and the UK biodiversity indicators are accredited official statistics and cover a wide range of species, including birds, butterflies, mammals and plants, in addition to habitats and the extent and condition of protected areas, as well as indicators for the response to pressures such as pollution and climate change. I hope that is helpful.

The water industry was mentioned by the noble Lord, Lord Roborough. I assure him that we are doing a lot of work around this. He will be aware of the work that Sir John Cunliffe is doing. We absolutely recognise the importance of salmon and of Scottish businesses in this area. Clearly, we need to work together on this.

The noble Earl, Lord Russell, mentioned pesticides. We are taking action to ensure that pesticides are used more sustainably—for example, we have committed to ending completely the use of three neonicotinoid pesticides that we know carry substantial risk to pollinators. We published a policy statement last year that sets out the next steps around pesticide commitments.

The noble Earl, Lord Caithness, asked about bracken—

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[Baroness Hayman of Ullock (Lab)]

The noble Lord, Lord Gascoigne, and others talked about beavers. I am really pleased that we have been able to set out our approach to the wild release and management of beavers in England. Beavers can bring enormous benefits, and I am pleased that we have management tools in place so that they are in the right place and can be managed properly.

The noble Lord, Lord Grayling, talked about bottom trawling, and other noble Lords asked about it, too. The noble Lord asked whether we would complete the previous Government’s work on this. At the moment, we are considering our next steps to manage bottom trawling, along with other fishing methods, where it could damage MPA features or benthic habitats, in the context of our domestic and international nature conservation obligations. We are keen to carry on working closely with fisheries and marine stakeholders, as well as environmentalists, as we develop future plans for fisheries and the marine environment.

The noble Lord, Lord Grayling, asked about the impact of the EU reset on fisheries and environmental standards. I cannot talk about what we are discussing on the EU reset, but, clearly, all these things are taken into consideration.

The noble Baroness, Lady Jones, also asked some questions around bottom trawling. The first two stages of the Marine Management Organisation’s offshore by-laws programme introduced by-laws in marine protected areas. Currently, our figures say that this protects 10.87% of English waters from bottom-towed fishing. Clearly, it is something that we need to be working on.

The noble Lord, Lord Grayling, asked about deforestation. We recognise the urgency of taking action to ensure that UK consumption of forestry commodities is not driving deforestation. I hope we will soon be setting out our approach to this.

A number of Members asked about green finance, particularly the noble Earl, Lord Courtown, and the noble Lord, Lord Roborough. We recognise the huge importance of mobilising private finance into nature’s recovery. We are doing a lot of work on this and will be grateful to work with noble Lords on suggestions for how we can move forward.

The noble Earl, Lord Courtown, mentioned the Cali Fund. We are working closely with businesses across a lot of sectors to see how we can take this forward.

There were a number of other questions, but I have only 10 seconds left. I want to say to the noble Baroness, Lady Helic, that I absolutely heard what she has been saying about hares. There needs to be consistency—we completely appreciate that.

The noble Baroness, Lady Willis, spoke about rewilding. We have our own rewilding project at home. I personally have seen the benefits that rewilding in the right place can bring. I end by saying that, two weeks ago, we found that we had curlews.

Committee adjourned at 5.02 pm.

Flood Reinsurance (Amendment) Regulations 2025

Baroness Hayman of Ullock Excerpts

Monday 10th March 2025 Grand Committee

Moved by

[Baroness Hayman of Ullock]

That the Grand Committee do consider the Flood Reinsurance (Amendment) Regulations 2025.

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

My Lords, as most noble Lords will know, Flood Re is a reinsurance scheme that provides for accessible and affordable flood insurance for eligible households. It is a joint government and industry initiative launched in 2016, designed to improve the availability and affordability of UK household flood insurance.

For clarity, Flood Re Ltd is the name of the company established to administer the scheme. Since its launch in 2016, it has provided cover for flood insurance to more than 500,000 households that are at risk of flooding right across the UK. Before Flood Re, only 9% of policyholders with a prior flood claim could get flood insurance quotes from two or more insurers, and none could get quotes from five or more insurance companies. Some 99% of households at high risk of flooding can now obtain quotes from 15 or more insurers.

The Flood Re scheme has evolved since its launch back in 2016. When levy 1 was last reviewed in 2022, the regulations were changed to allow for Build Back Better to be included in the scheme, which allows for up to £10,000 to be offered as part of a post-flood claim to install flood-resilient measures at the property, helping to manage down the risk and impact of any future flooding. I am pleased that insurers representing some 77% of the UK household insurance market are now committed to offering Build Back Better to their customers, whether they are Flood Re-ceded policies or not.

The Flood Re scheme is a joint initiative between government and the insurance industry, and we are going further than the previous Administration to invest in flood defences. As part of this Government’s plan for change, a record £2.65 billion has been committed to better protect 52,000 properties by March 2026. Maintenance of existing flood defences will be prioritised, ensuring that a further 14,500 properties will have their expected level of protection maintained or restored. This means that a total of 66,500 properties will benefit from this funding, which will help to secure jobs, deliver growth and protect against economic damage.

I turn to the specifics of the statutory instrument. Flood Re Ltd regularly and continuously monitors the risk and market that it is supporting to ensure that it is in a position to continue to enable affordable flood insurance for those that need it. To do so, it is required to purchase reinsurance, which it does on a three-year basis. Taking into account changes to risk, claims profile and expected increase in the number of household flood insurance policies ceded to it, Flood Re Ltd has projected that its liabilities could increase from £2.1 billion to at least £3.2 billion over the next three years, and this is the level of cover that it now needs to purchase.

In addition, the global reinsurance market has become more challenging since Flood Re Ltd last negotiated its three-year reinsurance cover. Events around the world have impacted on the risk appetite of those providing reinsurance, meaning the market that Flood Re Ltd can purchase from is both more volatile and more expensive than previously. All those factors combined have resulted in Flood Re Ltd proposing this increase to levy 1, so that it can afford to purchase the required reinsurance and continue to provide that access to affordable insurance that we all recognise the need for.

I assure noble Lords that this proposal has been well scrutinised before reaching this Grand Committee for your Lordships’ approval, not only by policy and finance officials in Defra but by our colleagues at HMT. This scrutiny has been informed by advice from the Government Actuary’s Department, which has provided its opinion that the increase to levy 1 is necessary to ensure the viability of the scheme.

I recognise that any increase to costs is unwelcome at any time. The cost of increasing levy 1 is spread across all insurance companies that offer UK household insurance and is proportionately split based on their market share. We can be confident that Flood Re Ltd has done its due diligence in seeking this increase and reassured that it would not be being asked for if it were not needed. By using existing capital, Flood Re is keeping the increase to 18%, while the costs for reinsurance are expected to more than double. The decrease that was put in place three years ago, going from £180 million per year to £135 million per year, demonstrates, I suggest, that Flood Re Ltd is very conscious of its responsibilities in keeping the levy as low as possible.

In summary, this statutory instrument allows for a necessary change to the Flood Re scheme by amending Regulation 8(2)(a) of the Flood Reinsurance (Scheme Funding and Administration) Regulations 2015 to increase the levy 1 placed on UK household insurance providers from £135 million to £160 million from 1 April 2025. I emphasise that the measure in this instrument is necessary to ensure the effectiveness and continuation of the Flood Re scheme and its ability to provide affordable flood cover for the increasing number of homes that are at risk of flooding in the UK. I beg to move.

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[Lord Roborough (Con)]

My Lords, I, too, thank the Minister for introducing this statutory instrument to ensure that flood reinsurance can continue to operate effectively. For that reason, His Majesty’s most loyal Opposition are pleased to support it. Although the measures are necessary, they raise several questions about the future of the Flood Re scheme and the Government’s broader approach to flood risk and resilience.

The flood reinsurance scheme established under the Water Act 2014 was designed to provide much-needed reinsurance for household insurers facing flood risk, ensuring the availability and affordability of flood insurance for properties at risk of flooding. This initiative, introduced by the previous Conservative Government, remains a crucial safety net for many home owners across the country. It has offered vital support as we face increasing flood events that threaten the stability and safety of homes across Britain.

However, we must recognise that the scale of flooding is rapidly increasing. Recent assessments by the Environment Agency indicate that approximately 6.3 million properties in England are at risk of flooding from rivers, seas or surface water. This is projected to increase to 8 million properties by 2050, reflecting the escalating threat posed by climate change and extreme weather events. This highlights the importance of ensuring that the Flood Re scheme is sufficiently robust to support the growing number of home owners at risk.

The statutory instrument proposes an increase in the total levy from £135 million to £160 million. The Government’s assessment indicates that this rise will likely be passed on to consumers, resulting in an estimated increase of £1.60 per household insurance policy. Although this increase may seem modest on an individual basis, it raises concerns about the cumulative effect on policyholders, especially those already facing higher premiums due to rising costs in other areas. This adjustment reflects the growing challenges the scheme faces in a world where extreme weather events are becoming more frequent and severe.

His Majesty’s Official Opposition acknowledge the necessity of this adjustment, given the financial pressures on reinsurers, driven by factors such as inflation, global natural catastrophe claims and the need to preserve the scheme’s financial resilience. If the rate and risk of household flooding continue to rise, can the British people reasonably expect these annual increases in insurance premiums to become the norm?

I have several other key questions for the Minister today. First, can she confirm whether the Government have consulted with industry stakeholders about the feasibility of expanding the Flood Re insurance scheme, particularly in high-risk areas and to houses built after 2009?

I am most interested in the Minister’s response to my noble friend’s question regarding farmhouses and buildings. Although these are likely to have been sited in less flood-prone locations, the Government have made significant commitments to building 1.5 million new homes in the coming years, a substantial increase on the recent rate of building completions. As my noble friend Lady McIntosh of Pickering highlights, how does the Minister intend to protect these new homes from flood risk, particularly those in high-risk areas? Will the Government commit to ensuring that all new developments are designed with flood resilience in mind?

Could the Minister confirm and explain the role she sees for nature-based solutions in the management of floods at a catchment level in future? Here, I declare my interest, as set out in the register, as the owner of land in a number of river catchments.

Finally, can the Minister inform us what progress is being made in the transition from Flood Re to risk-reflective pricing for household flood insurance when Flood Re expires in 2039? We are approaching midway in the life of Flood Re and it would be desirable to see some progress.

These are questions that go to the heart of the Government’s approach to flood risk, resilience and insurance. While we understand that the increase in the levy is a pragmatic measure in the light of global challenges, we must not overlook the broader implications of a changing climate and the evolving risks that flood-prone households face. With that, I look forward to hearing the Minister’s response to these questions.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank noble Lords who have taken part in this debate today. Personally, I was very pleased when Flood Re came in; I thought it was incredibly important legislation. Anyone who has lived in a house that has flooded, like I have, and in communities that flood, will know how very important it was that we had this insurance scheme come into place. I therefore thank noble Lords who have supported this small but extremely important SI today; it is important that the scheme stays viable and continues.

I would like to try to cover most of the questions that have been asked. There has been a desire for government to look at whether the scheme can be extended; that came across clearly from all who took part. Before I go into the particular individual responses and specifics, let me say that although we have no plans to make changes right now, we are continuously keeping all our policies under review, including those relating to flooding insurance. It is important that we discuss, debate and listen to others as we move forward in how we make those decisions around policy changes. If we make any changes to the scheme in future, it would be important that we secure the appropriate reinsurance for that, which would be challenging in the current market. To put it into context, this would mean that the levy we are talking about today would then need to be increased even further.

I know that noble Lords are aware that, currently, leasehold properties with three or fewer units, where the freeholder is living in one of those units, qualify for Flood Re building insurance. The problem with larger blocks not being eligible is that they are considered to be commercial businesses, and that is why they fall outside of the scope of Flood Re.

The Flood Re scheme as it is set up at the moment, and as it will continue to be set up through the statutory instrument in front of us, is funded by the providers of household insurance, not those who underwrite commercial policies. Buildings insurance is the responsibility of the freeholder and kept separate. However, I recognise that there is a problem.

When Main Street in Cockermouth flooded, for the second time in only six years, I held meetings with business insurance companies and high street businesses to look at ways we could move forward, because there are still alternative things that we can do and that the Government can look to support.

Having said all that, and with properties built after 2009 having been referred to—the noble Baroness knows that that is something that I was concerned with—we are planning to explore this further. Minister Hardy, who is the Minister responsible for this area, has asked Flood Re to look into the matter to understand the scale of concern and how industry might respond, to ensure that those living in properties that currently do not come under the scheme could be provided with appropriate insurance cover. Although it is not in front of us today and not something we are actively looking at, we have asked for this to be considered further. In the meantime, contents insurance policies can be applicable, so there is that potential as well.

[Baroness McIntosh of Pickering (Con)]

The Minister may be coming on to this, in which case I apologise, but do we know what the policy would cost? I visited Cockermouth and Keswick after the floods in 2009—I have suddenly had a nightmare that I did not tell whoever the MP was that I was there, but we will gloss over that. Many of those people could not afford contents insurance, yet they were clearly at risk of flooding. Does the Minister have a figure, or could she provide one in writing?

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[Baroness Hayman of Ullock (Lab)]

I do not have the figure at my fingertips. This is something we are looking at. We have asked business insurance companies and the scheme itself to look at what those costs are, because if we are to consider broadening it then we need to understand the costs. I cannot provide that figure to the noble Baroness today, but it is something that we are considering.

I will move on to some other areas that were mentioned. Planning and the Government’s housebuilding programme was referred to. As noble Lords know, we have committed to building a large number of high-quality, sustainable homes. If noble Lords have not read the National Planning Policy Framework, I strongly urge them to do so. Flooding and the environment are very much part of that document. When I read it, I was pleased that the concerns that Defra had raised had been taken account of and included in the document.

Flood risk is an important consideration in the planning system. The NPPF is clear that:

“Inappropriate development in areas at risk of flooding should be avoided by directing development away from areas at highest risk”—


and that includes flood plains. Where development needs to be in locations where there is a risk of flooding, as alternative sites are not available, local planning authorities and developers should ensure that development is appropriately flood-resilient and resistant and is safe for its users for the development’s lifetime, and will not increase flood risk overall—a really important point that the noble Baroness knows I have talked about quite a lot previously.

On the point made by the noble Lord, Lord Roborough, about nature-based solutions, we are committed to that.

The noble Baroness, Lady McIntosh, asked about farms. We know that agricultural land and businesses can be seriously affected by flooding and coastal erosion; we have seen it too often in recent years. There are two points here: getting your land insured and managing your land—and managing it in order to reduce the risk of flooding and coastal erosion. Farmland has a really important part to play in that aspect.

In the floods investment programme, the amount of funding a project can attract depends on the damages it will avoid and the benefits it will deliver. Agricultural land is an important part of calculating that, and we hope that farmers will take up those opportunities.

An additional financial report will be provided to rural communities to recognise the significant impact of flooding on farms. We are monitoring closely the impacts of flooding caused by storms on the agricultural sector; that work is going on at the moment with the Environment Agency.

High Seas Treaty

Baroness Hayman of Ullock Excerpts

Monday 10th March 2025 Lords Chamber

[Baroness Boycott]

To ask His Majesty’s Government what plans they have to introduce further measures to protect 30 per cent of oceans by 2030, and to ratify the High Seas Treaty agreed by the Intergovernmental Conference on Marine Biodiversity of Areas Beyond National Jurisdiction.

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

My Lords, the Government have created a network of marine protected areas covering 40% of English waters, including the first three highly protected marine areas, which were designated in 2023. They are now focusing their efforts on ensuring that these areas are effectively conserved and managed. We have limited the use of damaging fishing gear in 60% of English MPAs and are now considering the next steps to manage bottom trawling. Legislation to implement the biodiversity beyond national jurisdiction agreement, sometimes referred to as the high seas treaty, will be introduced as soon as the legislative timetable allows.

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[Baroness Coffey (Con)]

My Lords, as Environment Secretary, I visited several marine protected areas in 2023. I accompanied my noble friend Lord Ahmad when the United Kingdom signed the agreement in New York. I am really concerned, given that officials had shared with MPs and Peers last year that a Bill would be ready by the end of 2024. I am sure that there is sufficient agreement on both sides of the House to get this legislation through in time for the conference to which the noble Baroness, Lady Boycott, referred. It would be really embarrassing for the United Kingdom not to be a full member of the first UN ocean COP in June.

[Baroness Hayman of Ullock (Lab)]

Let me confirm that the Government are completely committed to ratification of the BBNJ agreement, in line with our determination to re-invigorate the UK’s wider international leadership on climate and nature. We are working on the measures needed to implement the detailed and very complex provisions of the agreement before we can formally ratify.

[Lord Teverson (LD)]

My Lords, it is great news that we have the high seas treaty in what is otherwise a lawless area of our oceans. However, treaties are no good if they are not enforced, and this treaty does not say how it will be implemented. How does the United Kingdom feel that it can be enforced? Will it lead in that process internationally given its experience of the Blue Belt programme around our overseas territories?

[Baroness Hayman of Ullock (Lab)]

The BBNJ agreement establishes the mechanism to designate marine protected areas and other areas-based management tools in areas that are beyond national jurisdiction. We have commissioned research to develop a shortlist of the potential area-based management tools that we could develop to use in future proposals once the BBNJ agreement comes into force. We believe this will help to ensure that this agreement supports the achievements that are required by the Kunming-Montreal global biodiversity framework target.

[The Earl of Devon (CB)]

My Lords, last year I chaired the Westminster conference on marine natural capital. I learned there that while there has been considerable success in designating marine protected areas in recent years, both Defra and the MMO sadly lack the resources, technology and capacity to map, evaluate and patrol the areas that have been designated. If we are to introduce increased designations as well as a policy of marine net gain, how will we ever enforce it if we cannot even audit and protect the areas already designated?

[Baroness Hayman of Ullock (Lab)]

The noble Earl makes a very good point. No law or agreement is worth anything unless we enforce it. That is why we are determined to do all that we can to achieve our 30 by 30 commitments at sea. These are challenging targets—it is important that we acknowledge that. Minister Hardy, who is responsible for this area in Defra, has confirmed her intention to continue working on this and push forward. Enforcement and ensuring that it happens are part of that important work.

[Baroness McIntosh of Pickering (Con)]

My Lords, does the Minister share my concern at the intense pressure that our fishing grounds are coming under with a spatial squeeze from marine conservation and 10% of fishing grounds removed through the GB Energy Act? Will she look carefully at this to see that our fishing grounds and future fishers’ livelihoods are ensured?

[Baroness Hayman of Ullock (Lab)]

Supporting our fisheries is an important part of the work that Defra does. We must ensure that when we work on areas of conservation those who fish are also talked to and understand the implications—and that we understand the impact that any decision has on our fishing fleet. My honourable friend Daniel Zeichner MP, the Fisheries Minister, speaks regularly to those who fish so that we hear their voices as loudly as we hear others.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I am sure that the Minister is well aware that of our marine protected areas only 5% are protected from bottom trawling. Does the high seas treaty mean that when some of our allies, such as Denmark or France, assert that they are okay to bottom trawl in our MPAs, we can stop them?

[Baroness Hayman of Ullock (Lab)]

The key thing that we are doing around bottom trawling is looking specifically at the areas that are most important and need conserving the most. When we look at making agreements with other countries, that is clearly an important consideration, because there is no point in designating somewhere a marine protected area if we do not look carefully at which parts need protecting the most and ensure that damage does not take place. It is good that we have 60% of our MPAs protected, but, clearly, we need to move forward and do more.

[Lord Roborough]

My Lords, I am sure all noble Lords have seen the potentially tragic news of a serious shipping accident off the Yorkshire coast this morning. I know I speak for all noble Lords in expressing our sympathies and support for the crew, the emergency services and their families. Can the Minister share with the House the nature of the product being carried on the tanker, what risks this poses to the public and the marine environment, and what steps the Government are taking?

[Baroness Hayman of Ullock (Lab)]

I thank the noble Lord for raising this issue. I am sure that we were all extremely shocked and concerned on hearing about the collision that has just taken place in the North Sea. It is an emerging picture; we are still hearing more evidence as to exactly what has happened. I assure the House that we are speaking closely in Defra to the Department for Transport and the Maritime and Coastguard Agency, which are leading on the government response. They are assessing the situation, as it has only just happened. I assure the noble Lord and the House that Defra’s agencies including the Environment Agency are engaging on any clean-up that is needed and assessing any pollution. We are not sure at the moment exactly what the situation is. There has been a fire, which makes it much more difficult to look at the extent of damage and pollution. We will keep the House updated as we hear further information.

[Baroness Sheehan (LD)]

My Lords, can I press the Minister a little further on the ratification process for the high seas treaty? Can she confirm that ratification needs to take place before June 2025 if we are to have a voice at the COP process that will take place on the treaty later this year?

[Baroness Hayman of Ullock (Lab)]

To confirm, the UN ocean conference is a separate meeting. Therefore, it is not a deadline for ratification of the treaty, but we are committed to the ratification.

[Lord Hannay of Chiswick (CB)]

My Lords, does the Minister not recognise that with areas such as this in which the United States is not participating, it is even more important that we ratify promptly and show that such international arrangements can be made to work even without the United States?

[Baroness Hayman of Ullock (Lab)]

I can only reiterate our commitment to ratifying the treaty.

[Lord Lucas (Con)]

My Lords, I am grateful to the noble Baroness for her warm words, but are they not somewhat at odds with the Government’s wish to turn over the Blue Belt round the Chagos Islands to the Chinese fishing fleet?

[Baroness Hayman of Ullock (Lab)]

I have been talking about the marine protected areas. I do not see that our complete commitment to supporting our blue environment will be at odds with that.

Beaver: Reintroduction in England

Baroness Hayman of Ullock Excerpts

Thursday 27th February 2025 Lords Chamber

[Baroness Bennett of Manor Castle]

To ask His Majesty’s Government what plans they have to reintroduce the beaver in England.

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

My Lords, the Government recognise that beavers can benefit biodiversity, improve water quality and reduce flooding, among other things. However, beavers can also potentially cause damage to property and infrastructure through flooding and foraging. This means that reintroductions must balance the benefits and the risks, and be carefully considered and planned. Defra continues to work with Natural England to develop our approach to beaver reintroductions and management.

[Baroness Bennett of Manor Castle (GP)]

I thank the Minister for her Answer, although it is disappointing, given that the benefits of beavers in the UK are already very evident. I wonder if she is aware of the case in the Brdy protected landscape area in the Czech Republic, where beavers demonstrably saved the local government €1 million by putting a dam exactly where it needed to be to prevent flooding. Could not so many communities in England now be benefiting from that kind of protection at no cost?

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[Baroness Hayman of Ullock (Lab)]

My Lords, as I said, we recognise the benefits that beavers can bring. Although reintroduction worked extremely well in that particular case, they have to be released into the right place at the right time with proper management. That is what this Government are working towards.

[Lord Forsyth of Drumlean (Con)]

My Lords, I congratulate the Minister on identifying the damage that beavers do. I declare an interest: illegally introduced beavers have destroyed the willow trees at the bottom of my garden. They are ringing trees on the River Tay that are more than 100 years old, undermining the banking. Although there may be a case for introducing beavers in some places, it should be done very carefully, and those who do it illegally should be held to account.

[Baroness Hayman of Ullock (Lab)]

The noble Lord is right to say that we need to manage beaver release correctly. A licence is, of course, required to release beavers in England and these are available only for release into enclosures. The licensing scheme, which is managed by Natural England, creates controls so that any potential damage is minimised.

[Baroness Young of Old Scone (Lab)]

My Lords, though I sympathise with the noble Lord, Lord Forsyth, about his willows, does my noble friend the Minister agree that where beavers are allowed to flourish they help other species to flourish too? That is a fine thing for one of the most nature-depleted countries in the world.

[Baroness Hayman of Ullock (Lab)]

A 2020 evidence review by Natural England found that beaver reintroductions can bring benefits through the restoration of lost natural ecosystems, including boosting biodiversity and increasing other species. I am sure noble Lords listen to “The Archers”, as I do, on which there was a story around beavers this week. What we will have learned from that regarding species is that where you see beavers you will also find tits.

[Baroness Bakewell of Hardington Mandeville (LD)]

On Tuesday, I visited the South Downs National Park, which has introduced a pair of beavers. Their introduction can have benefits for other animals. They are large animals that are not aggressive to other species such as the mink, but they appear to act as a deterrent for the mink. Where water voles have been reintroduced alongside beavers, volunteers have noticed the benefit that the number of mink has reduced and thus the water voles thrive. Are the Government considering the reintroduction of both species in areas where they used to be abundant?

[Baroness Hayman of Ullock (Lab)]

The Government’s approach to reintroductions more widely needs to be considered on a case-by-case basis. We are committed to providing opportunities for the reintroduction of formerly native species where the benefits for the environment, such as the noble Baroness has demonstrated, are clear, but any reintroductions of any species must follow the published Reintroductions and conservation translocations: code and guidance for England.

[Baroness Boycott (CB)]

My Lords, I completely support the Government’s view on beavers and what the noble Baroness said about them bringing other species, but I will put in a plea for another wild species, which is the hare. At the moment, you can hunt and shoot hares 24/7, all through the year. We need to introduce a time, when hares are pregnant and breeding, when they are off the cards for people to shoot. This is really important, as the population of this majestic animal is dwindling rapidly. People in China are betting on hare coursing in Norfolk and places such as that, and they put cameras on the dogs to watch them tear the hares apart. This is truly shocking. It is an amazing, wonderful, beautiful animal.

[Baroness Hayman of Ullock (Lab)]

Of course, hare coursing is not allowed in this country. I congratulate the previous Government on tightening up the rules around this, which was really important. The particular issue around the shooting of hares is that there is not a closed season, which there is for other species. This is an anomaly, and we should look at it very carefully.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate the Minister on the stand that this Government have taken. If beavers are to be introduced in areas where they are currently not found, to what extent will farmers, drainage boards and others in the catchment area be consulted?

[Baroness Hayman of Ullock (Lab)]

I can be very brief and clear: we intend to do full consultation with stakeholders and work closely with them around any introduction.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, may I take my noble friend back to her previous answer on the reintroduction of other wild species? I am very glad to find that she is a fellow fan of “The Archers”. She will be aware that there were recently some very serious illegal releases in Scotland, which resulted in not only the use of precious resources but the death of at least one of the animals. Can she say what sanctions are available to be brought to bear against people who do that? Whether their intentions are good or ill, they are not doing anybody any favours.

[Baroness Hayman of Ullock (Lab)]

I completely agree with my noble friend. The Government condemn any illegal release of beavers. They not only are unlawful but, as she said, can lead to damage and conflict, and they undermine legitimate releases. Just to confirm, it is an offence in England under Section 14 of the Wildlife and Countryside Act 1981 to release a beaver into an enclosure or the wild, except under the authority of a licence from Natural England. Regarding penalties, doing so without a licence carries a penalty of either an unlimited fine or up to six months in prison.

[Lord Roborough (Con)]

My Lords, I refer the House to my entry in the register of interests, in particular as a host to an illegally released beaver—not by me. As the Minister pointed out, the reintroduction of beavers to the UK may well have a role to play in managing waterways and reducing the risk of flooding. We have discussed nature-based solutions in this House before on the then Water (Special Measures) Bill, and I would be most grateful to the Minister for an update on progress on nature-based solutions within the water sector.

[Baroness Hayman of Ullock (Lab)]

The noble Lord is absolutely right. The Government are very serious about this. Nature-based solutions will be incredibly important if we are to get the outcomes and results that we want. We are continuing to make progress, and I am happy to keep the noble Lord updated as that progress continues.

[Lord Inglewood (Non-Afl)]

My Lords, bearing in mind the experience of the introduction of the grey squirrel in this country and that beavers have been introduced into Scotland, is there not every likelihood that it is only a matter of time before the beavers establish themselves in England—with or without consent from Natural England?

[Baroness Hayman of Ullock (Lab)]

As I have said, any introductions are being very carefully managed and licensed. We have a five-step management approach to beavers, which can also come in if there are illegal releases or releases that have spread into areas that are less appropriate. That five-step approach has a number of actions to cope with beaver numbers as we move forward with this programme.

[Lord Douglas-Miller (Con)]

My Lords, it is often the unplanned and unbudgeted aspects of species reintroduction that cause the conflict. In Scotland—where, like my noble friend Lord Forsyth, I live—the original beaver reintroduction study concluded that there was little impact on agriculture. Beavers were released, legally and illegally, and given full protection. The study, although technically correct, failed to mention that the reason for the small impact on agriculture was largely due to the fact that there was very little agriculture in the study area. The subsequent expansion of beaver numbers has caused conflict as they go into agricultural areas. Can the Minister ensure that any study or consultation prior to a reintroduction is comprehensive, includes a plan for problem areas and has a financial contingency?

[Baroness Hayman of Ullock (Lab)]

I reassure the noble Lord that there will be proper consultation and thorough consideration of any aspects of reports or information before any releases take place. I finish by stressing the fact that beavers bring huge benefits as well as potential risks.

Water (Special Measures) Bill [HL]

Baroness Hayman of Ullock Excerpts

Consideration of Commons amendments and / or reasons
Tuesday 11th February 2025 Lords Chamber

Moved by

[Baroness Hayman of Ullock]

That this House do not insist on its disagreement to Commons Amendment 1 on which the Commons have insisted, do not insist on its Amendment 1B to which the Commons have disagreed, and do agree with the Commons in their Amendments 1C and 1D in lieu of the words left out by Commons Amendment 1.

1C: Clause 1, page 4, line 40, at end insert—
“Financial transparency requirements
In the Water Industry Act 1991, after section 35D (inserted by section 1) insert—
“Financial transparency
35E Authority to secure publication of financial overview
(1) The purpose of this section is that members of the public should have easy access to a concise, intelligible and up-to-date overview of the financial position of each relevant undertaker.
(2) A relevant undertaker’s “financial position” includes the amount and essential characteristics of the share capital and debt used to fund the operations of the undertaker.
(3) The overview should include significant changes that—
(a) took place in the period of 12 months before the publication of the overview, or
(b) are expected to take place in the period of 12 months following that publication,
provided that the changes have been publicly announced.
(4) The Authority must from time to time decide—
(a) what information should be included in the overview, and
(b) in what format it should be published,
in order to fulfil the purpose set out in subsection (1) (as read with subsection (3)).
(5) The Authority must secure that each relevant undertaker is required to publish at least once every year, in a prominent place on its website, an up-to-date overview that accords with what the Authority has decided under (4).
(6) It must do so by—
(a) exercising its appointment powers, or
(b) issuing rules under this section.
(7) The Authority’s “appointment powers” are—
(a) its powers to impose and modify conditions of appointments under this Chapter, and
(b) anything it may do by virtue of such conditions with the result that a relevant undertaker is required to act in a certain way.
(8) Sections 35B(7) to (10), 35C and 35D apply in relation to rules under this section as they apply in relation to rules under section 35B.””

1D: Clause 15, page 21, line 24, at end insert—
“(ab) section (Financial transparency requirements) (financial transparency requirements);”

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

My Lords, in moving Motion A, I will also speak to Motion B. Before I speak to the detail of the changes made in the other place, I start by thanking all noble Lords for their continued interest in this important Bill. I give particular thanks to the noble Lord, Lord Cromwell, who is not in his place today, and the noble Lords, Lord Roborough and Lord Blencathra, for their collaboration with my officials and me over the last few weeks. It has been much appreciated.

I am pleased to say that, following constructive engagement with the noble Lord, Lord Cromwell, the Government have tabled amendments that will ensure the public have access to understandable and readily available water company financial data. While it is true that water companies are already required to report annually on their finances, as I have explained during previous debates, the Government agree that more could be done to improve the accessibility of this information. I also understand that the House feels strongly about this being required through legislation, rather than existing non-legislative processes.

The amendments tabled will therefore achieve our shared objective of improving the transparency and accessibility of reporting on key financial metrics. They will insert a new Section 35E into the Water Industry Act 1991, which makes clear that water companies should provide an intelligible overview of their financial position at least once a year. The overview should include a summary of significant changes that have taken place over the last 12 months and will cover key aspects of water companies’ financial positions, such as share capital and debt levels. In addition, this information must be made available in a prominent place on a water company’s website, ensuring accessibility for members of the public. Subsection (4) of new Section 35E also provides Ofwat with the power to determine the information that the water company must publish, as well as the ability to review requirements on financial reporting from time to time. This will ensure that reporting requirements can keep pace with changes in the expectations and needs of bill payers.

Ofwat is also provided with the necessary powers to enforce this new requirement, either through existing water company appointment conditions or through new rules. I would like to be clear, however, that the Government expect this power to be used to ensure that reporting requirements remain relevant, rather than to dilute or diminish the ambition of reporting requirements. Financial reporting will remain underpinned by existing statutory obligations and licence conditions. I am also pleased to confirm that Ofwat’s duty to issue rules relating to financial transparency will commence upon Royal Assent, in line with its duty to issue other rules under Clause 1.

I hope all noble Lords across this House will agree with the other place in its amendments to improve public access to, and understanding of, water companies’ financial information. Beyond this, I know that many noble Lords have expressed concerns around how water companies report on changes in their ownership structures. On this point, I am pleased to confirm that Ofwat will consult to require companies to present information on ownership structure clearly and prominently as part of its upcoming consultation on regulatory accounting guidelines.

I turn now to the changes made in the other place that will require Ofwat to provide a draft of its rules on remuneration and governance to the Secretary of State at least seven days before they are issued. This change was made in response to the changes made at our last debate by the noble Lord, Lord Blencathra. I emphasise that the Government acknowledge the sentiment of the noble Lord’s changes, which were to ensure that there is sufficient oversight of Ofwat’s rules. However, as I have previously outlined, we cannot countenance a provision that would both delay Ofwat’s rules coming into force and compromise the independence of Ofwat. I emphasise that the Bill already includes a requirement for Ofwat to run a statutory consultation on the rules before finalisation. This will guarantee adequate scrutiny of Ofwat’s rules. I also hope noble Lords agree that it would not be appropriate for Ofwat’s rules to be confirmed through affirmative statutory instrument.

On this basis, I hope that noble Lords agree with the other place in its amendment to require Ofwat to provide the rules to the Secretary of State. Again, I thank the noble Lords, Lord Blencathra and Lord Roborough, for working with me constructively to reach an agreed position on how we can ensure proper scrutiny of the rules. I beg to move.

[Lord Roborough (Con)]

My Lords, I begin by thanking the Minister for her constructive engagement with the Official Opposition during the progress of this Bill.

We are delighted that the Government have listened to the clear view of the House that more transparent financial disclosure of the state of water companies’ balance sheets and their capital structuring plans is urgently needed. The Government’s amendment delivers much of what the noble Lord, Lord Cromwell, who is not in his place, asked for, which we supported him in insisting on. We join other Members of the House in congratulating the noble Lord on securing this meaningful improvement to the Bill.

While the Government’s Amendment 2 does not deliver the same level of oversight of Ofwat’s rule-making power that our own amendments would have delivered, I am pleased that they have now tabled a substantive amendment in the other place. We accept this change to the Bill.

We disagree that our amendments requiring a statutory instrument would have led to material delay in the delivery of the Ofwat rules. However, we accept that our amendment was not conducive to a fully independent regulator. Given Ofwat’s clear failures over decades, it is no surprise that this House has supported our amendments on two previous occasions. We on these Benches question the merit of the regulator continuing to have its independence from government treated as sacrosanct. This Government’s intervention to encourage regulators to prioritise growth already demonstrates that this independence is illusory. We look forward to reading the findings of Sir Jon Cunliffe’s review on this matter in due course.

Even though it does not go as far as we wanted, we welcome the Government’s amendment, which will give the Secretary of State a seven-day opportunity to review the draft rules and, presumably, voice any concerns to the regulator prior to their publication. We welcome this additional accountability of the regulator to the Executive, who are, in turn, accountable to Parliament.

I note that, in the other place, members of the party sitting on the Benches to my left appeared to speak in favour of my amendment, and the amendment retabled by my noble friend Lord Blencathra. Had they seen the merits of the amendment earlier and not abstained twice in your Lordships’ House, we may have been able to achieve even more on the accountability of the regulator.

In conclusion, I thank all Members of the House for their engagement throughout the passage of the Bill. In particular, I thank the noble Lord, Lord Cromwell, my noble friend Lord Blencathra, the Minister’s Bill team and the Opposition Whips’ Office research team. We respect the fact that the Water (Special Measures) Bill was a manifesto commitment, and we are pleased that it will leave this House in a better state than when it arrived. We hope that it will continue to help the cleaning up of our rivers, lakes and beaches—the most important goal of the Bill. We await the publication of Sir Jon Cunliffe’s review and intend to continue to push His Majesty’s Government to do more, without increasing the burden on water consumers.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Lord, Lord Roborough, for his support and his kind words as to how we have reached this position. I agree with him that the Bill leaves this House, as most Bills do, in a better shape than when it arrived.

I hope that all noble Lords agree with the other place in its amendments brought forward today, which will strengthen water company reporting requirements while ensuring that Ofwat’s rules are brought forward without delay. These are important changes, which have further strengthened the Bill. I am grateful for the collaboration that took place with noble Lords across the House to arrive at this point.

I also hope that the amendments brought forward by the Government provide reassurance to all noble Lords that, where there has been strong feeling across the House on certain matters, the Government have not only listened but taken meaningful action. On this basis, I hope that all noble Lords can support Commons Amendments 1C, 1D and 2B. I once again thank all noble Lords for their time and interest in this important Bill.

Motion A agreed.

Moved by

[Baroness Hayman of Ullock]

That this House do not insist on its disagreement to Commons Amendment 2 on which the Commons have insisted, and do agree with the Commons in their Amendment 2B in lieu of the words so left out.

2B: Clause 1, page 4, line 32, at end insert—
“(5) The first rules under section 35B of the Water Industry Act 1991 (inserted by subsection (3)) may not be issued unless—
(1) the rules have been provided in draft to the Secretary of State, and
(2) the period of 7 days beginning with the day on which the draft was provided has elapsed.”

[Baroness Hayman of Ullock (Lab)]

My Lords, I have already spoken to Motion B. I beg to move.

Motion B agreed.

Water Companies: Fines

Baroness Hayman of Ullock Excerpts

Thursday 6th February 2025 Lords Chamber

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

My Lords, I am pleased to be able to respond to this Question on the fines paid by water companies. I thank the noble Baroness, Lady Grender, for raising this important matter and noble Lords for their interesting and valuable contributions and suggestions.

As we have heard in this debate, for too long water companies have discharged unacceptable levels of sewage into our rivers, lakes and seas, with 2023 seeing record levels of sewage discharges. We have been absolutely clear that we will not allow poor performance within the water companies to continue. This is why we are taking forward a substantial reform programme to deliver better results for the environment, customers and wider society.

I reassure the noble Baroness, Lady Grender, and others who have raised this that Defra is committed to the “polluter pays” principle. We have taken a number of actions already. In his first week in office, the Secretary of State secured an agreement from water companies and Ofwat to ring-fence money for vital infrastructure upgrades, so that it cannot be diverted to shareholder payouts and bonus payments. We are also placing water companies under special measures through the Water (Special Measures) Bill. I thank the noble Earl, Lord Russell, for his particular support in this debate for that work.

The right reverend Prelate the Bishop of Norwich mentioned the need for culture change, with which we absolutely agree. That is why the Bill is designed to drive meaningful improvement in the performance and culture of the water industry, as a first important step to enabling wider, transformative change right across the sector. I will not go into the detail of the Bill, as we have debated it so recently, and all noble Lords who have taken part are aware of what it includes. Collectively, its measures will provide the most significant increase in enforcement powers for the regulators in a decade. They will give them the teeth that they need to take tougher action against water companies in the next investment period as well as ensuring that they are able to recover costs for a much greater range of enforcement activities. I am afraid that I do not have the detail of those costs and fines at my fingertips.

On top of that Bill, last October, the Secretary of State, in conjunction with the Welsh Government, launched the independent commission on the water sector regulatory system, chaired by Sir Jon Cunliffe. Noble Lords also referred to that today. It is designed to be wide ranging and look at ways to fundamentally transform how our water system works and to clean up our rivers, lakes and seas for good. It is expected to be the largest review of the water industry since privatisation. It will look into many of the concerns that noble Lords have raised today, including those from the noble Earl, Lord Effingham, and my noble friend Lord Browne.

Last month, leading voices from the environment, public health and investment were announced as the new advisory group to the commission. We will publish a call for evidence in the next few weeks to bring in views from all parties on how we can reform. As the noble Baroness, Lady McIntosh, said, Sir Jon has also been meeting with interested groups. As noble Lords have said, we will get a report from the commission by the end of June, which will have recommendations that we can look at how best to take forward. I intend them to form the next piece of legislation that attracts further long-term investment and cleans up our waters for good.

Agriculture, road run-off, physical modifications and chemicals also significantly impact water quality and availability. These huge challenges will require a much broader approach to water management that goes beyond addressing a single issue. The independent commission is going to examine the strategic regulatory frameworks that underpin the water system, including the water framework directive and river basin management plans.

Importantly, the commission will also look at catchment-based approaches. I do not believe that we can resolve this without looking at these approaches to address the full range of demands on the water system and at how we can resolve things in an integrated and holistic way.

The public are, of course, rightly concerned to know where the money that they pay for their water bills is actually going. In December 2024, Ofwat published its final determinations for price review 2024, which sets company expenditure and customer bills for 2025-2030. This will deliver substantial, lasting improvements for customers and the environment, and will bring an approximately £104 billion upgrade for the water sector. This investment will mean clean rivers, seas and lakes across England and Wales. It will also create more jobs and provide more investment. This increased investment will fund the improvement of river water quality by improving more than 1,700 wastewater treatment works. It will also improve or protect more than 15,000 kilometres of rivers across England and Wales. Water companies will also invest £12 billion—a record amount—into improving more than 3,000 storm overflows across England and Wales. This will reduce bills by 45% compared with 2021 levels.

Beyond these measures, since 1 January, water companies are required to publish data relating to discharges from all storm overflows within one hour of discharge. This means that all storm overflows—of which there are more than 14,000 in England—are now monitored, with discharge data being published in near real time. Importantly, this will provide the crucial information that regulators need when they are making their investigations. It will also create an unprecedented level of transparency to enable regulators and the public to see where and how often overflows are discharging, and better enable water companies to be held to account. Combined with the measures in the Water (Special Measures) Bill to require monitoring of all emergency overflows, this will meet the Government’s commitment to ensure the monitoring of every sewage outlet.

Much of the debate was around the future of the water restoration fund. I will ensure that the department is aware of the strength of noble Lords’ feelings on this issue. The noble Baroness, Lady Grender, mentioned a number of specific projects. At this point, I need to declare an interest: my husband is a trustee of West Cumbria Rivers Trust, so I am very aware of local concerns in this area. Again, it enables me to represent noble Lords’ concerns to the department.

I reassure noble Lords that Defra is currently evaluating how water company fines and penalties can be reinvested in improvements to the water environment. We will announce a final decision on this in due course. It is important that the Government do not let companies get away with any illegal activity. Where breaches are found, the Environment Agency must not hesitate to hold companies to account. The regulators, the Environment Agency and Ofwat, have launched the largest ever criminal and civil investigation into water company sewage discharges at more than 2,200 treatment works. The EA has a dedicated team of more than 30 staff working on this. Where companies fail to meet their statutory or licence obligations, Ofwat has the power to take action through an enforcement order or financial penalties of up to 10% of the company’s annual turnover. The cost burden for water company fines is borne by their shareholders, not by charging customers.

I must keep an eye on the time but, before I conclude, there are a few questions I must answer. I thank my noble friend Lord Berkeley for his question but, as he said, I do not have the answer in front of me. I will need to write to him with the detail of the specific issue that he asked about.

The noble Earl, Lord Russell, asked about chalk streams. The Government are committed to restoring chalk streams. We are continuing to invest in priority local projects to restore them—for example, through the water environment improvement fund, the Government are funding more than 45 projects during this financial year to improve chalk streams. This is worth £2.5 million of government investment, and each has an injection of private investment.

We are also committed to ending the damaging abstraction of water from rivers and groundwater wherever possible. Through the Environment Agency’s restoring sustainable abstraction programme, which was launched in 2008, so far a total of 110 licences that would affect chalk streams have been revoked.

The noble Baroness, Lady McIntosh, asked about Schedule 3. This Government are strongly committed to requiring standardised sustainable drainage systems in any new developments. I apologise to her, but I am unable to say more at this stage, other than that a final decision on whether to progress implementation of Schedule 3 at this time will be made in the coming months. I am afraid that I cannot offer any more specific information on that at the moment.

I thank the noble Baroness, Lady Grender, once again for securing this debate. The speakers were not hugely numerous, but the passion was there—it is very important to note that. It is very clear from the regular number of questions and debates that we have in this House—and, no doubt, in the other place as well—that the concerns about the water industry, and the pollution from it, must be government priorities. I assure noble Lords that the Government are absolutely and fully committed to fixing the broken water system that they inherited. I reaffirm the Government’s commitment to ensuring that the damage caused by sewage pollution is repaired.

Water (Special Measures) Bill [HL]

Baroness Hayman of Ullock Excerpts

Consideration of Commons amendments and / or reasons
Wednesday 5th February 2025 Lords Chamber

Moved by

[Baroness Hayman of Ullock]

That this House do agree with the Commons in their Amendment 1.

1: Clause 1, page 2, leave out lines 4 to 8

--- Later in debate ---

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

My Lords, I will also speak to the other amendments in this group and to the Motions tabled by the noble Lords, Lord Cromwell and Lord Blencathra.

I am delighted to be back in the Chamber debating this important legislation. I thank all noble Lords for their continued interest in this Bill. In recent weeks I have met noble Lords from across the House to discuss changes made to the Bill during its passage through the other place, and I am grateful for the insightful questions and views shared with me and my officials in advance of our debate today. I am also grateful to the noble Duke, the Duke of Wellington, for accompanying me on an interesting day we spent at two emergency overflows operated by Anglian Water. Although Clause 2 is no longer in scope of our discussions on the Bill, I hope the noble Duke found his visit helpful in bringing to life some of the issues we considered during previous debates.

I turn to today’s debate and to the first group of amendments that the House must consider. I thank the noble Lords, Lord Cromwell, Lord Roborough and Lord Blencathra, for the very constructive way in which they have worked with me and my officials to strengthen the Bill during its passage through this House. Although I am sure the noble Lords were somewhat disappointed to see the Commons overturn their amendments, which were voted into the Bill at Lords Report stage, I am grateful to them for meeting me over the past weeks and months to discuss the reasons why and to try to find alternative means of realising the intent behind their amendments.

I will now take some time to share the key points from these discussions with other noble Lords here today. Commons Amendment 1 removes from Clause 1 the requirement for Ofwat to set rules on the reporting of water company finances. This requirement was removed because it would duplicate existing processes and requirements set out within water company licences, which I will briefly summarise now.

Water companies are already required under their licences to publish, by a set date, financial performance metrics within their annual performance reports. These metrics include interest on their borrowings, financial flows and an analysis of their debt. Condition F requires water companies to keep appropriate accounting records, while condition P requires them to report material financial issues to Ofwat and includes restrictions on dividend payments. If water companies do not comply with these licence conditions, Ofwat can take enforcement action, including issuing fines.

I hope that noble Lords can therefore see why additional, detailed financial reporting requirements, such as those that would be introduced as a result of Motion 1A tabled by the noble Lord, Lord Cromwell, would not be a necessary addition to the Bill. However, having further discussed the intention behind the previous amendment with the noble Lord, the Government now understand that he has been seeking more transparent and accessible reporting on the key financial metrics. Indeed, I believe that this is what Amendment 1B, also tabled by the noble Lord, Lord Cromwell, seeks to do.

Ensuring that key financial information is presented in a format that is easy for the public to understand is vital, particularly if we are to rebuild public trust in the sector, and we agree with the noble Lord that there is room for improvement in making financial data more accessible. From studying a range of water company financial reports, it is evident that some water companies provide information much more clearly than others, so to achieve our shared objective to improve accessibility, in recent weeks my officials have worked closely with Ofwat and the noble Lord, Lord Cromwell, to identify the most effective way of ensuring that data on water company finances is presented in a simple format. The Government and Ofwat believe that this outcome can be achieved through the use of water company annual performance reports, which must be produced in line with Ofwat’s regulatory accounting guidelines.

As previously outlined, Ofwat requires companies to keep appropriate accounting records through licence conditions. Crucially, Ofwat can also specify how this information is presented through its regulatory accounting guidelines. Ofwat is due to consult on changes to these guidelines this year, which will provide an opportunity to update how financial information is presented in annual performance reports. These updates could include, for example, a requirement for a summary table of financial information, such as debt levels and financial restructuring, among other things, to be presented at the front of the report, all on one page.

Using Ofwat’s regulatory accounting guidelines ensures flexibility and means that requirements around data presentation can be updated to reflect changes in the public’s priorities and interests. Ofwat can also use its guidelines to help ensure consistent presentation of financial information across all water companies’ reports. Updating these guidelines would quickly and effectively achieve the objective that the noble Lord, Lord Cromwell, seeks to achieve.

I understand that other noble Lords across the House also want to see improved transparency around water company financial reporting, and I encourage noble Lords to think about how we can most effectively achieve this outcome. We believe that a dynamic approach using existing powers, rather than a non-specific legislative requirement, would be more effective because it can respond to the changing needs and expectations of the public.

If the House agrees with the Government’s proposed approach, Ofwat stands ready to consult on the necessary changes to its reporting guidelines and the change will be made in time for the 2025-26 annual performance reports to be published. However, I am not able to ask Ofwat to proceed with this approach if water companies are separately required to meet a new legislative obligation. Therefore, I kindly ask all noble Lords to carefully consider the options I have outlined here today.

I now turn to Commons Amendment 2, which removed the requirement for rules made by Ofwat under Clause 1 to be brought into force by statutory instrument and within six months of the Act coming into force. I will take this opportunity to speak to Motion 2A tabled by the noble Lord, Lord Blencathra, which does the reverse. As the noble Lord is aware, the Government understand the need to ensure that Ofwat’s rules are brought forward as soon as possible. Indeed, that is why the Government tabled Commons Amendments 5 to 7, which collectively will ensure that the duty on Ofwat in Clause 1 to make rules commences on Royal Assent.

Motion 2A would require publication of Ofwat’s rules within six months of this Act coming into force. This timing obligation is rendered unnecessary as a result of Commons Amendments 5 to 7, which amend the commencement provisions for Clause 1 so that Ofwat will now have a statutory duty to issue the rules without significant delay following Royal Assent. I hope noble Lords can understand why we believe that this aspect of Motion 2A is no longer appropriate. I am also pleased to report to the House that Ofwat has been making good progress towards developing its rules and had already completed its initial policy consultation at the end of 2024.

The other key element of Motion 2A requires that rules made by Ofwat under Clause 1 be brought into force by statutory instrument. Existing powers in the Water Industry Act 1991 for Ofwat to make rules adopt the same approach to scrutiny as in Clause 1 and do not require confirmation by statutory instrument. Further, I am concerned that the additional scrutiny process in Motion 2A would lead to a delay in bringing the rules into force. I have also previously outlined that this additional legislative process risks compromising the independence of Ofwat, which must be protected. The necessary secondary legislation would also need to be prepared by government, and therefore represents significant government interference in the independent regulatory process. This kind of interference has the potential to have adverse impacts on investor confidence and confidence in the regulatory regime.

I also note that the Delegated Powers and Regulatory Reform Committee has reviewed and reported on the appropriateness of all powers in the Bill, excluding the new clause on support schemes, and did not recommend additional parliamentary scrutiny of Ofwat’s rule-making processes. While the noble Lord, Lord Blencathra, does not necessarily agree with the Government on this point, I know we agree on the intention behind the amendment, which is to ensure that parliamentarians have sufficient oversight of Ofwat’s rules.

On that basis, my officials have worked with the team of the noble Lord, Lord Blencathra, and Ofwat to find an alternative way of providing parliamentarians with the opportunity to scrutinise Ofwat’s rules. I am pleased to say that, as a result of this collaborative approach, Ofwat has offered to hold a drop-in session in Parliament where it will answer questions on its proposed rules on remuneration and governance. This session would provide all interested Peers and MPs with the opportunity to ask Ofwat questions about the rules and raise any concerns before they are finalised.

Ofwat has provided a draft of a letter stating its intention to hold this drop-in session and stands ready to finalise and issue this letter to formalise its commitment to doing so should the House be supportive of this approach. I therefore urge the noble Lord, Lord Blencathra, in light of what I have just laid out, to reconsider whether his Motion is now needed. As I am sure he would understand, Ofwat cannot reasonably be expected to offer its drop-in session if additional, legislative processes are required in this space.

I once again thank the noble Lords, Lord Cromwell, Lord Roborough and Lord Blencathra, for their continued and thoughtful scrutiny of the Bill and for drawing attention to areas where improvements could be made and on which the Government have responded, as I have laid out. I hope the noble Lords, and indeed all noble Lords across this House, will see that the alternative proposals put forward by the Government and Ofwat present a more effective means of achieving the intended outcomes. On that basis, I hope that both noble Lords feel able to not press their Motions. I beg to move.

Motion 1A (Amendment to the Motion on Amendment 1)

Moved by

--- Later in debate ---

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I am grateful for this opportunity to speak at this stage of the Bill, which is ping-pong, not Report. I was satisfied with the progress we made on the Bill while it was completing its passage in this Chamber before going off to the other place. I am naturally disappointed that the amendments we voted on were removed. However, I understand the rationale for this. I am grateful to the Minister for her time, and that of her officials, in providing a briefing ahead of ping-pong. This helped to set the scene for moving forward.

From the outset, the Government made it clear that the Water (Special Measures) Bill was the first step in a series of changes that the Government were considering to improve the water industry generally. Yesterday morning, I attended a briefing with Sir Jon Cunliffe, who is chairing the water commission, which is looking into a wide range of aspects of the water industry on behalf of the Government. The water commission will call for evidence towards the end of this month, and a period when submissions will be made and received will follow. At the right time, Sir Jon will publish his report. At that stage, there will no doubt be a series of debates and discussions around the recommendations contained in that report.

Given that the Government’s stated aim is to look at the water industry in its entirety, I believe that there is wisdom in waiting for the water commission to report, so that we can see where the Water (Special Measures) Bill fits into that scenario. We could then understand how the pieces of the jigsaw fit together and have a more complete picture of how the water industry is to be taken forward for the benefit of both the consumer and the water companies as a whole.

Turning to Motions 1A and Amendment 1B, in lieu of government Amendment 1, I understand the desire of the noble Lord, Lord Cromwell, to have transparency and clarity over the issue of water company debt. He is looking for this to be in the Bill. It is not acceptable for water companies to hide their level of debt in the depths of their financial reports, where it is unlikely that many water bill payers will be able to find it. Transparency is essential for consumers to grasp the level of debt that water companies are carrying. If the noble Lord, Lord Cromwell, is not satisfied with the Minister’s response this evening and decides to test the opinion of the House, these Benches will support him.

Motion 2A, from the noble Lord, Lord Blencathra, which seeks to amend the government Motion on Amendment 2, would require the Secretary of State to bring in regulations relating to Ofwat via statutory instrument. The use of statutory instruments to bring in legislation is a slow, cumbersome and not very transparent way of moving forward; perhaps that is the intention of the noble Lord, Lord Blencathra. These Benches did not support the noble Lord, Lord Roborough, when he moved his original amendment on Report. We welcome the Minister’s commitment that Ofwat will hold drop-in sessions, and we will not support the noble Lord, Lord Blencathra, today.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank all noble Lords for their further contributions to this debate. I am grateful to the noble Lords, Lord Cromwell and Lord Blencathra, for providing further detail around their concerns. I would like to make it clear that the Government have carefully considered all non-government amendments tabled throughout the passage of the Bill, and that, where we agree with the intent behind a given amendment, we have worked hard to find an appropriate way forward.

It is in that spirit that I reviewed Motion 1A and Amendment 1B, tabled by the noble Lord, Lord Cromwell. As previously explained, the Government agree that it is of utmost importance to ensure that members of the public can easily access and understand information on water company finances. However, I do not agree that the approach proposed by Motion 1 A and Amendment 1B is the most effective way of achieving this outcome. I am disappointed that, after considerable engagement on the Government’s alternative approach, the noble Lord, Lord Cromwell, is still dissatisfied with the suggested way forward.

The noble Lord has previously spoken to me about the need to specify how data is presented. I want to be clear that the specific metrics that he wants to see in reports are already required to be included through licence conditions. Indeed, he has pointed that out himself; the information appears in the annual Water Company Performance Report. What is missing, and what we agree with him on, is better formatting and clearer presentation with this information readily available right at the front of these reports, which is exactly what we propose can be achieved through regulatory accounting guidelines.

The noble Lord’s amendments require only that the data is presented in a format that can be “readily accessed and understood”, which is arguably open to interpretation by water companies. Having listened closely to him, we agree that data should be presented in this way, but the approach proposed by government would be more specific and could include, as I mentioned before, a summary table of financial information right at the front of the annual Water Company Performance Report. As such, while I am grateful to the noble Lord for bringing this important matter to the attention of the House, I maintain the view that primary legislation is not the most effective means by which to achieve the intended outcome. I therefore urge Members of the House to support Commons Amendment 1 and the non-legislative proposal put forward by government and Ofwat.

I am also grateful to the noble Lords, Lord Roborough and Lord Blencathra, for continuing to raise the need for sufficient parliamentary oversight of Ofwat’s rules. These rules will be central in driving improvements in the culture of water companies, which of course we all want to see. As such, it is right that we, as parliamentarians, do what we can to ensure the rules are robust, without compromising the regulatory independence of Ofwat. That is why I was pleased to receive Ofwat’s offer of a drop-in session, which would give noble Lords and MPs an opportunity to further understand and raise concerns on the rules before they are finalised. I therefore urge all members of the House to support Commons Amendment 2 and enable Ofwat to move forward with arrangements for that session.

To finish, I reiterate that the Government strongly agree with the need to ensure increased transparency and accessibility of water company data and ensure sufficient scrutiny of Ofwat’s rules on remuneration and governance. I believe that the approaches that I have outlined today demonstrate the commitment of government and Ofwat to effectively and comprehensively address the concerns raised by noble Lords on these topics. I therefore ask that all noble Lords support Commons Amendments 1 and 2 and, in conjunction, the non-legislative proposals put forward by the Government.

[Lord Cromwell (CB)]

My Lords, the hour is late. I thank the Minister for her kind, helpful and almost persuasive words. I do not think that anything that she has proposed is precluded by my amendment—in fact, it could be a way of implementing it. Had I put it down in such detail, I would have been told that it was too prescriptive. However, for the reasons I set out earlier, I am afraid that my amendment needs to be in the Bill, and I wish to test the opinion of the House.

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Moved by

[Baroness Hayman of Ullock]

That this House do agree with the Commons in their Amendment 2.

2: Clause 1, page 4, line 33, leave out subsections (5) and (6)

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Moved by

[Baroness Hayman of Ullock]

That this House do agree with the Commons in their Amendment 3.

3: Clause 10, page 15, leave out lines 6 and 7 and insert—
“(a) sections 205A and 205B of the Water Industry Act 1991 (pollution incident
reduction plans and implementation reports),”

[Baroness Hayman of Ullock (Lab)]

My Lords, I will speak also to Commons Amendments 4 to 9.

I will begin by speaking to Commons Amendments 5 to 7, which amend the commencement provisions for Clause 1. These amendments will see Ofwat’s duty to set rules on remuneration and governance brought into force on Royal Assent, rather than through the use of commencement regulations. This emphasises the Government’s expectation that Ofwat’s rules should be in place as soon as possible following Royal Assent, as well as providing greater certainty to Ofwat and water companies as to when Ofwat’s duty will come into force.

I know that many noble Lords—in particular the noble Lord, Lord Roborough—previously spoke to the importance of ensuring that Ofwat’s rules on remuneration and governance will be set promptly after Royal Assent. I hope that these amendments provide further reassurance that the Government expect these rules to be brought forward at pace, and I hope that the House is supportive of them.

Commons Amendment 3 is another minor and technical amendment, this time to Clause 10. It ensures that the Environment Agency and Natural Resources Wales’s cost recovery powers are broad enough to enable the recovery of costs associated with the enforcement of the requirement on water companies to produce implementation reports.

Noble Lords will recall that this requirement was added to Clause 2 on Report following calls from across this House to strengthen requirements around the implementation of measures set out in water company pollution incident reduction plans. However, an expansion in the regulators’ cost recovery powers—as set out in Clause 10—was not enabled at the same stage, which left a potential funding gap. Commons Amendment 3 addresses the gap, ensuring that the Environment Agency and Natural Resources Wales can recover all costs associated with the enforcement of the new requirements introduced by Clause 2.

Commons Amendment 3 also clarifies that cost recovery powers concerning pollution incident reduction plans and the implementation reports are available for plans covering areas that are wholly or mainly in Wales, as well as plans covering England. I again hope that noble Lords will feel able to support this amendment, which will help to ensure the regulators can carry out their enforcement duties and functions effectively.

I will speak now to Commons Amendment 4, which introduces a new clause to the Bill, and Commons Amendment 8, which is consequential to Commons Amendment 4. During the Bill’s passage through this House, many noble Lords voiced concerns about vulnerable customers and their ability to absorb forthcoming increases in their water bills. I thank all noble Lords who shared their views on this critical matter, particularly the noble Baroness, Lady Bakewell, who worked with her team to ensure that the discussion continued in the other place.

I reassure the House that the Government absolutely recognise and share these concerns. That is why the Government introduced Commons Amendments 4 and 8, which add to existing powers for water companies to provide for special charging arrangements for customers in need. This will enable water companies to provide consistent support for water consumers right across the country, replacing the current postcode lottery of existing support schemes, which vary from company to company.

The new clause will allow for the possible automatic enrolment of vulnerable customers on to future schemes, enabling them to get the full support to which they are entitled without having to proactively apply. This will be enabled through improved information sharing between public authorities and water companies.

The details of any scheme brought forward will be established through consultation, as required by the new clause and secondary legislation. In the meantime, existing schemes will continue to operate to ensure that vulnerable customers across the country are supported. Separately, we remain firm on our expectation that water companies will hold themselves to account for their public commitment to end water poverty by 2030 and will work with the sector to ensure appropriate measures are taken to deliver this. I hope that noble Lords will welcome this addition to the Bill and will support the Government in ensuring that the necessary powers are in place to enable support to be brought forward through secondary legislation.

Finally, briefly, Commons Amendment 9 was tabled simply to remove the privilege amendment made in my name in this place. Tabling such an amendment is standard practice; I therefore believe no noble Lord will oppose the Government doing so.

I again thank all noble Lords for the time and attention that they have given to the Bill. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I shall speak briefly to Amendment 4 and the consequential Amendment 8. I support the Government in this regard. I put a question or two to the Minister on the correlation between energy poverty and water poverty. Is this something that her Government will look at closely? The Minister wrote to me with the level of bad debt, which is a staggering figure: between 2019 and 2024, it cost the water sector £2.2 billion. Will this be addressed by the amendments that she has brought before the House? That would be very welcome indeed. Obviously there are those who can pay but will not pay, but there are those vulnerable customers to which she referred, and I welcome the fact that continuity of support will be secured by these amendments. Although I lend my support, I would be grateful if the Minister could address those two brief points.

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[Lord Blencathra (Con)]

My Lords, I begin by saying to the noble Baroness, Lady Bakewell of Hardington Mandeville, in the nicest possible way, that I feel she did me a disservice in her remarks in the previous debate when she suggested that our support for a statutory instrument was to slow things down. Our support for the statutory instrument was to get better parliamentary scrutiny. As a former chairman of the Delegated Powers Committee, I am well aware of the speed at which the Government can go at times, and making statutory instruments is not a slowing down measure.

However, I officially rose to speak to the government amendments in this group which were made in the other place. The principal, substantive amendment relates to the special provision in water company charging schemes and will help the Government to ensure that water companies take a consistent approach when supporting vulnerable customers. We are firmly in favour of protecting consumers from unaffordable increases in their bills, and we are disappointed that the Government rejected our amendment to protect consumers from higher water bills at Report.

The other government amendments largely relate to the commencement of the Bill, and we will not oppose those changes at this stage.

[Baroness Hayman of Ullock (Lab)]

I thank noble Lords for their contributions to this short debate. I thank the noble Baroness, Lady Bakewell, for her support and the noble Lord, Lord Blencathra, for not voting against anything that we are proposing.

On the questions put forward by the noble Baroness, Lady McIntosh of Pickering, obviously, money owed by customers is bad debt and anything that we do to address the amount of money that is owed for vulnerable customers will clearly have an impact, so these amendments will affect the issue that she raised. I appreciate the point she makes on energy costs and water poverty. Poverty needs to be addressed in all sorts of ways. I am pleased that I am a member of the Government’s child poverty task force; these are the kinds of issues that it is looking at and considering how best to address, because there is no point looking at the issue in just one place. You have to look at it right across the piece. That is what we hope to address in this case. With no further ado, I thank noble Lords very much for their time on the Bill so far.

Motion on Amendment 3 agreed.

Moved by

[Baroness Hayman of Ullock]

That this House do agree with the Commons in their Amendments 4 to 9.

4: After Clause 11, insert the following Clause—
“Consumer charges
Special provision in charges schemes
(1) The Water Industry Act 1991 is amended as set out in subsections (2) and (3).
(2) In section 143A(3)(b), after “regulations” insert “or, in the case of regulations made by the Secretary of State (rather than the Welsh Ministers), by which that entitlement is otherwise to be established”.
After section 143A insert—
“143AA Special provision under section 143A: financial arrangements
(1) Subsection (2) applies if regulations under section 143A impose on relevant undertakers whose areas are wholly or mainly in England requirements of the sort described in subsection (2)(d) of that section.
(2) The Secretary of State may by regulations establish a scheme for the purpose of distributing among the relevant undertakers that are subject to the requirements all or part of the costs incurred by them in complying with the requirements (with the distribution to be on such basis as is provided for in the regulations).
(3)The scheme may operate by way of—
(a) direct payments between relevant undertakers, or
(b) payments into and out of a fund established and maintained under the regulations.
(4) Subsections (5) and (6) apply if a scheme is established under subsection (2).
(5) If the Secretary of State or the Authority makes price control provision, they must design the provision with a view to not preventing the passing-on of costs as described in subsection (7).
(6) The Secretary of State may by regulations—
(a) make provision about how the Authority is to comply with subsection (5);
(b) modify the effect of any price control provision made by the Authority with a view to enabling the passing-on of costs as described in subsection (7).
(7) The passing-on of costs occurs when a relevant undertaker is able to recoup its relevant net costs by charging additional amounts under section 142(1).
(8) An undertaker’s relevant net costs are the total of its costs incurred in—
(a) complying with the requirements referred to in subsection (1), and
(b) complying with the requirements of the scheme, less any payments it receives under the scheme.
(9) In this section, “price control provision” means provision made by or under—
(a) regulations under section 143A,
(b) rules under section 143B, or
(c) a condition of a relevant undertaker’s appointment under Chapter 1 of Part 2, that restricts the amount that may be charged by a relevant undertaker under section 142(1).
(10) Where a determination within section 12(3) (determination by CMA provided for by undertaker’s appointment) involves the making of price control provision, subsections (5) and (6) apply in relation to the CMA as they apply in relation to the Authority.
143AB Special provision under section 143A: consultation
(1) This section applies to—
(a) regulations under section 143A that, in relation to relevant undertakers whose areas are wholly or mainly in England, make provision of the sort described in subsection (2)(d) of that section, and
(b) regulations under section 143AA.
(2) Before making regulations to which this section applies, the Secretary of State must (subject to subsection (3)) consult—
(a) the Authority,
(b) the relevant undertakers to which the regulations would apply, and
(c) such other persons as the Secretary of State considers appropriate.
(3) But the Secretary of State does not have to consult if— (a) the regulations only amend earlier regulations, and
(b) the Secretary of State considers that the amendments are sufficiently minor that consultation is unnecessary.”
(4) The Digital Economy Act 2017 is amended as set out in subsections (5) and (6).
(5) In section 38 (disclosure of information to water and sewerage undertakers)—
(a) in subsection (2), for “people living in water poverty” substitute “eligible people”;
(b) after subsection (9) insert—
“(9A) A person is “eligible” for the purposes of this section and section 39—
(a) if the person is living in water poverty, or
(b) in the application of the sections to a water or sewerage undertaker for an area which is wholly or mainly in England, if the person is among those for whom special provision is required to be made by regulations within subsection (3)(a).”
(6) In section 39 (disclosure of information by water and sewerage undertakers), in subsection (2), for “people living in water poverty” substitute “eligible people (see section 38(9A))”.”

Separation of Waste (England) Regulations 2025

Baroness Hayman of Ullock Excerpts

Wednesday 5th February 2025 Lords Chamber

Moved by

[Baroness Hayman of Ullock]

That the draft Regulations laid before the House on 3 December 2024 be approved.

Relevant document: 12th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 3 February.

Motion agreed.

Avian Influenza

Baroness Hayman of Ullock Excerpts

Tuesday 4th February 2025 Lords Chamber

[Lord Blencathra (Con)]

My Lords, as the shadow Secretary of State said in the other place on Thursday, this is a very difficult time for bird-keepers and farmers, particularly those whose birds have died or been culled, and all those who have had to upend their flocks and move them inside, given the impact that doing so can have on the mental and economic resilience of individuals. Will the Government commit to looking to remove the restrictions as soon as it is safe to do so and also consider the possibility of vaccinations?

While avian flu has been financially devastating for farmers, the last outbreak was devastating and disastrous for wild bird flocks. Will the Government therefore continue monitoring seabirds, including using citizen science, which delivers much of the monitoring, and commit to funding for research to secure best practice and understand the transfer of avian influenza and other diseases between wild and captive birds, including sub-lethal effects?

[Baroness Hayman of Ullock (Lab)]

My Lords, we are clearly very concerned about avian influenza. The noble Lord asked about the removal of restrictions. Of course, we want to lift restrictions as soon as we can, but only when we are absolutely certain that it is safe from a biosecurity perspective. He also asked specifically about seabirds, which is important because we know that there was a huge impact on seabirds in the last, very serious, outbreak. We are committed to continuing our work to monitor the impact of avian influenza on wild birds, together with other threats to their populations. This work is progressing through the English seabird conservation and recovery pathway through Natural England. The noble Lord may be interested to know that we have recently held a workshop with stakeholders to discuss how we can work together to take the key actions from the report forward. I also reiterate that members of the public are encouraged to report any findings of dead wild birds.

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[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, avian flu is becoming a yearly occurrence. In the run-up to Christmas 2022, special measures had to be taken to ensure that the supply of turkeys was secured. Currently, free range chickens are kept in barns. What reassurances can the Minister provide that, following her department’s call for free range birds to be required to be kept indoors, their welfare will be protected in these confined conditions? What plans do the Government have to support farmers to train staff to prepare for future outbreaks?

[Baroness Hayman of Ullock (Lab)]

I am sure that the noble Baroness is aware that we recently brought in a statutory instrument in order that owners of poultry that are free range do not lose that designation while there is an outbreak going forward. Clearly, it is really important that farmers and poultry and egg producers have support during influenza outbreaks. We have compensation in, and we are looking at labelling changes; we do not want to put extra costs on to farmers and egg producers during an outbreak, and we are working very hard to ensure that that does not happen.

[Lord Lennie (Lab)]

My Lords, with apologies to the Liberal Democrats, following on from the Minister’s opening remarks, could she say what assessment has been made about the effects on the north-east tourism industry following the avian flu outbreak, which closed visits to the Farne Islands and other islands off the north-east coast? Could she say whether she thinks that Newcastle United’s success in the Carabao Cup against Arsenal can provide some compensation towards this loss?

[Baroness Hayman of Ullock (Lab)]

Well, in Defra, we work actively with all areas that are affected by avian influenza, including the areas that my noble friend refers to. All I can say is that Newcastle United appear to be having a better season than Leicester City.

[Baroness McIntosh of Pickering (Con)]

My Lords, will the noble Baroness share sympathy with producers of poultry and eggs, who are deeply worried at this time? My noble friend asked from the Front Bench about the status of vaccination. Is she able to say what that status is, at this time, for domestic production?

[Baroness Hayman of Ullock (Lab)]

Yes. The vaccination of poultry and captive birds—clearly, we are not talking about wild birds—is not currently permitted. Avian influenza vaccination is not considered to be a viable option for this season. We have a cross-government and industry task force exploring the potential for vaccination to be used as a preventive measure in the future. In spring this year, we expect the task force to publish its initial report and there will be a statement on that. We realise this is something we need to work on.

[The Lord Bishop of St Albans]

My Lords, research is absolutely fundamental at this point as we monitor what is going on and its very worrying effects. What are His Majesty’s Government doing to support centres such as the Animal and Plant Health Agency in New Haw, which is trying to work on this and desperately needs to redevelop its facilities?

[Baroness Hayman of Ullock (Lab)]

We work very closely with APHA—the Animal and Plant Health Agency—and are very pleased that we have secured funding for the continued upgrading at Weybridge. We also work with the other sites in order to ensure that we have the best research possible to deal with our ongoing biosecurity and disease risks, of which there are, unfortunately, so many these days.

[Lord Bellingham (Con)]

My Lords, I pay tribute to various poultry farmers across Norfolk and, in particular, in my former constituency of North West Norfolk, who set the highest possible standards of biosecurity and animal welfare. Can the Minister say something about what HMG are doing to co-ordinate action across the devolved Administrations? Can she confirm to the House that her department is firmly in control and that there is one unified policy?

[Baroness Hayman of Ullock (Lab)]

I can absolutely reassure the noble Lord on that. I speak very regularly with my devolved Administration counterparts and, obviously, we discuss issues such as avian influenza. My officials work constantly with the devolved Administration officials as well when we have an outbreak such as this.

[Lord Elliott of Ballinamallard (UUP)]

My Lords, noble Lords will be aware that Northern Ireland comes under the European regulations for organic egg production, not the UK ones. Because of the impact of avian influenza on free range eggs, which is an impact on organic egg production in the UK, would the Minister consider a lobby to bring Northern Ireland under UK organic egg regulations, as opposed to EU regulations?

[Baroness Hayman of Ullock (Lab)]

The noble Lord is absolutely right and, again, this is why I regularly meet with both the Permanent Secretary and the Minister at DAERA to discuss exactly these sorts of issues. We do not want any part of the UK to be at an unnecessary disadvantage. It is really important that we support egg producers and poultry producers in whichever part of the UK they are. I am certainly happy to discuss his suggestion with officials.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I am sure the Minister is aware of the disturbing outbreak of H5N9 in the US where, for the first time, this variant of avian influenza has proved to be highly pathogenic. As a result, some 119,000 ducks have been killed on one farm. Given that H5N1 is also circulating extremely widely in the US—clearly out of control in animals, and with some human cases—are the Government working with and speaking to the US Government? No one is safe until everyone is safe, and the current situation with highly pathogenic avian flu in the US is deeply concerning.

--- Later in debate ---

[Baroness Hayman of Ullock (Lab)]

Yes, we of course work internationally on issues such as this and we are currently monitoring the situation in the USA. It is important to point out that the influenza of avian origin in the USA is a single genotype—B3.13—of highly pathogenic avian influenza. It has been identified in lactating cattle, as the noble Baroness pointed out, and we are trying to understand the virus strain associated with those cases. We have published a case definition to allow us to monitor, triage and, if necessary, test any reported cases so that we can focus any resources appropriately. But it is important to stress that this does not change the risk level for mammalian livestock in the UK, which is currently very low. We have no reason to suspect that the virus is circulating in our cattle, and nor is the virus strain circulating in Europe.

[Lord Lansley (Con)]

My Lords, while I entirely agree with the Minister that the risk to humans is very low, none the less, more than once in the past we have used H5N1 as a basis for potential pandemic preparedness. Would this not be a wise moment to re-enter the question of pandemic preparedness, with a training exercise looking at the risks associated with the mutation of this virus, so that it is transmissible between humans?

[Baroness Hayman of Ullock (Lab)]

Of course, it is critical that we are on top of the issues that the noble Lord raises, because I think we all agree that there is likely to be another pandemic on the horizon at some point in the future. We need to ensure that we look at all areas where we could potentially have problems. We are looking closely at what has happened where there has been transmission from birds to humans. At the moment, it is clear that this happens only when poultry owners spend a lot of time handling infected birds, so it is not a general concern for human contamination— but we absolutely have to be prepared for the next pandemic.

Separation of Waste (England) Regulations 2024

Baroness Hayman of Ullock Excerpts

Monday 3rd February 2025 Grand Committee

Moved by

[Baroness Hayman of Ullock]

That the Grand Committee do consider the Separation of Waste (England) Regulations 2024.

Relevant document: 12th Report from the Secondary Legislation Scrutiny Committee

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

My Lords, these regulations were laid in draft before the House on 3 December 2024 and confirm the final policy position for simpler recycling in England. For too long, households in England have been presented with a muddled and confusing patchwork of approaches to bin collections. The Government’s simpler recycling reforms will ensure that across England people will be able to recycle the same materials, whether at home, work or school, putting an end to confusion over what can and cannot be recycled in different parts of the country.

We are all responsible for addressing our country’s waste problem, and we know that citizens want to play their part and recycle as much as possible but that they are frustrated by the limited and confusing recycling services. Through these reforms, we are empowering citizens to turn their good intentions into simple, effective actions. Simpler recycling is one of the three core pillars of the Government’s ambitious collection and packaging reforms, alongside the forthcoming deposit return scheme and the extended producer responsibility scheme for packaging. Together, we estimate that the collection and packaging reforms will support 21,000 jobs in our nations and regions and stimulate more than £10 billion of investment in recycling capability over the next decade. The reforms are also estimated to deliver carbon savings of more than 46 million tonnes of carbon dioxide equivalent by 2035, valued at over £10 billion in carbon benefits.

Since 2015, household recycling rates in England have plateaued at around 45%, decreasing to 43% in 2022, so we urgently need to take steps to improve the nation’s recycling performance. Simpler recycling will end the postcode lottery of bin collections in England by ensuring that all households and workplaces can recycle the same core waste streams: plastic, metal, glass, paper and card, and food waste, with garden waste for households upon request. Simpler recycling will improve services for householders by introducing weekly food collections for all households in England and kerbside plastic film collections. This will make a significant contribution towards meeting our ambition to recycle 65% of municipal waste by 2035 and our target to reduce residual waste generated per capita by 50% by 2042 compared with 2019 levels. Furthermore, these changes represent a critical first step towards meeting the commitment in our manifesto to transition to a resource-resilient, productive circular economy which delivers long-term, sustainable growth.

I draw noble Lords’ attention to the exemptions introduced by the instrument. The legislation to implement the core legislative requirements for simpler recycling was introduced by the previous Government through the Environment Act 2021. This legislation has already come into force; in practice, this means that simpler recycling will automatically come into effect, beginning in March 2025 for workplaces and March 2026 for households.

Sections 45A, 45AZA and 45AZB of the Environmental Protection Act 1990, as amended by the Environment Act 2021, require that the six recyclable waste streams—plastic, glass, metal, paper and card, food waste, and garden waste—are collected separately, alongside residual waste. The legislation states that local authorities and other waste collectors can make use of an exception to collect these recyclable materials together, if it is not technically nor economically practicable to collect them separately or if there is no significant environmental benefit from doing so. However, if using an exception, waste collectors must produce a written assessment to record the justification.

This instrument sets sensible exemptions from this condition, allowing any combination of the recyclable waste streams of metal, glass and plastic to be collected together, at all times. This exemption applies to collections from both households and workplaces. It also allows food waste and garden waste to be collected together from households, at all times. Waste collectors will not have to justify co-collection of any of these materials, as they would have to under the primary legislation as it stands.

We have taken this decision because the Secretary of State has determined, based on the evidence, that co-collection of those materials does not affect the potential for those materials to be recycled. We will not include paper and card in the exemption. This must, by default, be collected separately from the other dry recyclable waste streams. This applies to collections from both households and workplaces. This is because paper and card are particularly vulnerable to cross-contamination from food and liquid commonly found on other recycling materials, which could significantly reduce the potential for collected material to be recycled.

However, we want to provide flexibility for local councils and other waste collectors. Where waste collectors consider that it is not technically or economically practicable to collect paper and card separately, or where there is no significant environmental benefit from doing so, they may collect paper and card together with other dry recycling, if they provide a written assessment to document the justification.

Waste collectors will decide where an exception applies. There is no need to request permission from Defra or the Environment Agency to co-collect paper and card where an exception applies. We have published guidance for local councils and other waste collectors to support their decision-making regarding the co-collection of paper and card with other dry recyclable materials, where appropriate. All exemptions will be automatic and local councils and other waste collectors will not need to apply for them. They will need to produce only a written assessment to co-collect paper and card with other recyclable materials. To reiterate, without this instrument, they would have had to produce written assessments to co-collect any combination of recyclable materials.

These exemptions mean that the new default requirement for most households will be four containers: for food waste, mixed with garden waste if appropriate; paper and card; all other dry recyclable materials, these being plastic, metal and glass; and non-recyclable waste. As we are maintaining flexibility, councils and other waste collectors may choose to separate materials further if this suits local need. We believe that this is a sensible, straightforward approach to the collection of recycling for every household and workplace in England.

This instrument will also mean that micro-firms—workplaces with fewer than 10 full-time equivalent employees—will not need to arrange for the recycling of the core recyclable waste streams, as required by the Environmental Protection Act 1990, until 31 March 2027. Without this exemption, under the primary legislation, micro-firms would have had to meet the simpler recycling requirements at the same time as all other businesses—by 31 March 2025. We recognise that micro-firms, of which there are an estimated 1.8 million, may face more challenges introducing the changes, so this phase-in period provides additional time for them to prepare.

These are substantial reforms. We will support local councils and workplaces to deliver these new requirements in the most cost-efficient way. Right now, we are focused on raising awareness and providing guidance, including webinars and toolkits, for both local councils and workplaces on how to deliver efficient services. For local councils, we are working to distribute funding for food waste collections as soon as possible; we have already provided £258 million of capital funding, and we will also provide resource and ongoing funding. We will continue to engage with stakeholders in order to understand the challenges that they are facing and to ensure the successful delivery of simpler recycling.

In conclusion, the need for simpler recycling has never been clearer. By simplifying what households and workplaces across England can recycle, these long-awaited reforms will jump-start England’s faltering recycling rate, maximising environmental benefits, ensuring that we keep our precious resources in use for longer, and unleashing investment and economic opportunities. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate the Minister on introducing the regulations before us, which I broadly support. I will direct my questions to two specific areas.

The Minister mentioned that guidance will be given to councils on the separate collections. My concern is around what guidance will be given by councils to households in particular. I remember chairing the Environment, Food and Rural Affairs Select Committee at the time of the “horsegate” scandal, where people found that they were eating prepared foods—usually lasagne—made from horsemeat, not beef. It ended, I think, a lot of people’s desire to carry on eating these pre-prepared, highly expensive, undernutritious, highly salted foods. However, if you are a householder and you have one of these trays in front of you, it normally goes, I assume, in your food waste because it is highly contaminated—or the packet that the lasagne I have eaten was in will have to be rinsed sufficiently to ensure that it is not contaminated.

Who is going to guide households on what to do with such prepared food, where it is difficult to get rid of the residual food waste? How does the Minister intend to ensure that, if it goes into the paper recycling, which will now be a separate collection, this will not lead to greater contamination? How will guidance be given to households to ensure that there is no cross-contamination? How does the Minister plan to ensure that there will be no increase in cross-contamination because of the contaminated stuff going into the wrong recycling bin or plastic bag—whatever it is called—that we are going to be issued with?

I would also like to press the Minister on ensuring that a strong message will go out from the Government to councils that there will continue to be a mandatory weekly food waste collection. Anything less frequent than that will lead to vermin and a lot of highly undesirable threats to households, through no fault of their own.

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I am grateful that the Government have brought forward these regulations, I look forward to clarification on some of the concerns raised by noble Lords and me, and I look forward to seeing the regulation implemented in due course.

[Baroness Hayman of Ullock (Lab)]

My Lord, I thank all noble Lords for their valuable contributions to this debate today and for their support for this statutory instrument. I particularly welcome the noble Baroness, Lady Coffey, to Defra debates in this House. She brings huge knowledge and experience, and I look forward to working with her.

In response to the last question, I will start with cross-contamination because all noble Lords mentioned it in relation to the exemptions impacting material quality. To reiterate, the Secretary of State is satisfied that the impact of contamination is not significant in terms of the overall impact on the ability of materials to be recycled when co-collecting plastic, metal and glass. As I said, separate collection of paper and card will be required by default due to the potential impact of co-collection on material quality. Waste collectors will be able to co-collect paper and card with other materials, where justified on technical, economic or environmental grounds. We are going for an evidence-based pragmatic approach to ensure a suitable balance to support environmental outcomes, while providing local flexibility and convenience for households while at the same time looking to increase recycling rates.

Where waste has been separately collected, Regulation 14 of the Waste (England and Wales) Regulations 2011 requires waste collectors to ensure that it is not then mixed with other materials with different properties unless certain exemptions apply; for example, if doing so would not damage material quality. This will ensure that contamination of paper and card is minimal once it has been collected.

The number of councils likely to use an exemption to co-collect paper and card was mentioned. We recognise that there are various technical, economic and environmental circumstances in which separate collection is not practical. In such cases, waste collectors will retain flexibility to co-collect paper and card with other dry recyclable materials but must produce a written assessment to record this justification, as I mentioned earlier.

The noble Baroness, Lady Coffey, asked what evidence there is to support the paper and card decision. We reviewed extensive stakeholder feedback and evidence about plans for collection of dry materials and the Secretary of State concluded that there is some evidence to indicate that simplifying the number of bins can help participation in recycling. But evidence also suggests that systems with one mixed dry recycling bin have the highest levels of contamination, which would affect the recycling rate. Contaminated materials may be rejected after collection if it is not economically viable to reprocess them. As has been mentioned, paper and card are particularly vulnerable to cross-contamination from food and liquid, commonly found in other recycling materials. We do not want that to happen because it significantly reduces the quality of collected materials. That is how that decision was taken.

On monitoring and evaluating, we are committed to monitoring the success of the simpler recycling project and have commissioned Ipsos, in partnership with Ricardo and Technopolis, to carry out an evaluation of Defra’s resources and waste policy programme, including simpler recycling, over a five-year period that started in February 2022.

The noble Lord, Lord Blencathra, asked about micro-firms and whether the two-year delay would affect recycling rates. We are proceeding with the exemption to allow micro-firms until 31 March 2027, as I mentioned, but also to allow them to implement in the most sustainable and cost-efficient way. Including micro-firms in scope of this policy is estimated to increase the non-household municipal recycling rate by 9.3 percentage points, as micro-firms are responsible for around 30% of that waste.

The noble Lord also asked about support for micro-firms. We are working with WRAP and representative voices from each sector to develop sector-specific guidance for the Business of Recycling website. It is designed to support businesses as they transition to compliant waste collection services. Four sector-specific guides—on retail and wholesale, hospitality, health and social care, and offices—have been published so far. Three more—on food manufacturing, education, and transport and storage—will be published shortly. We are also working to develop guidance on how to optimise waste services to minimise the cost burden where possible and, in some cases, to maximise any potential cost savings.

Noble Lords asked about local authorities and their preparedness. Councils have been planning to implement simpler recycling since the legislation was passed back in 2021 with the Environment Act. We have already provided £258 million of capital funding to support this and will shortly confirm resource funding for the 2024-25 financial year.