King’s Speech

Duke of Wellington Excerpts

Thursday 18th July 2024 Lords Chamber

[The Duke of Wellington (CB)]

My Lords, I start by congratulating the new Secretary of State for Environment, Food and Rural Affairs on his first public statement. He said that we have

“record levels of sewage in … our rivers”.

We all know that, but it is very good that the Secretary of State made it his first statement. He then went on to state that the department’s first of five core priorities would be to clean up British lakes, rivers and seas. That is clearly a policy that the public has wanted to hear for some time, and I very much commend the new Government for that. I also welcome further announcements by the Secretary of State last Friday; in particular, that in future increased charges to customers may not be diverted to bonuses, dividends or salary increases.

In the King’s Speech yesterday there was reference to a Bill to improve water quality and to strengthen powers of the water regulator—of course I welcome that. It is worth looking for a moment at the history of why we are in this terrible situation. The water companies were privatised in 1989. Mrs Thatcher, the then Prime Minister, would have preferred to create a competitive market, but she had to accept that water companies are natural monopolies and must therefore be efficiently regulated. With hindsight, the Government of the day made a mistake in splitting the regulatory responsibility between the Water Services Regulation Authority, Ofwat, and the then National Rivers Authority, which subsequently became the Environment Agency. We must accept with hindsight that that regulatory structure was flawed. Ofwat is programmed to try to keep customers’ bills as low as possible, but without sufficient regard to the unending need to invest in and modernise the infrastructure of water distribution and waste management treatment. Ofwat has allowed many of the water companies to become overindebted, and several are now owned by private equity groups that do not have an environmental objective.

Interestingly, Mrs Thatcher apparently believed that privatising the water companies would be beneficial to the environment. That was before the days of highly leveraged capital structures devised by private equity groups. I must quickly accept, though, that privatisation, including eventual ownership by private equity groups, has brought large amounts of capital investment, which we must recognise would not have been available under state ownership.

The other regulator is the Environment Agency, which in my opinion failed until quite recently to attach sufficient priority to monitoring the effluent from sewerage works and the discharges of storm overflows. In fact, during the passage of the Environment Bill through this House, in 2021, it became obvious that Defra officials and the Environment Agency thought that those of us—and there are several today in this House—who tried to draw attention to the dreadful levels of sewage discharges were exaggerating the seriousness of the situation. Since then, Ministers and the regulators have tried to reduce discharges but, in 2023, there were more discharges than ever before. So it is absolutely right that a new set of Ministers should apply themselves to the problem.

I congratulate the noble Baroness, Lady Hayman of Ullock, on her appointment as a Minister in the department. I cannot imagine anyone more qualified to take on this role, and I hope that she will be able to transmit to officials and the regulators her undoubted determination to have an impact on this appalling situation.

The Prime Minister’s Office published yesterday a background briefing on the new proposed water (special measures) Bill, and I welcome a number of the features in the proposed Bill. Directors of water companies will face personal criminal liability for breaking the law. The water regulator—I assume Ofwat—will have the power to ban bonuses. There will be a new code of conduct for executives of water companies, and a new power to bring automatic and severe fines, although it is not clear whether that power will be given to both Ofwat and the Environment Agency. There will be a requirement for water companies to install real-time monitors at every sewage outlet, and the data will be scrutinised by the water regulators—I assume both Ofwat and the Environment Agency.

The briefing goes on to say:

“The Government will outline further legislation to fundamentally transform our water industry”


and reset it. I therefore suggest to the Minister and Secretary of State that they should set up an independent review of the way in which the water companies are regulated. I realise that that would have an effect only in the medium term, but clearly the Government want to change the water industry. The current regulatory procedures have clearly not worked in these past 35 years. We cannot know whether a different structure or a single regulator might have done better, but it certainly could not have done worse.

The advantage of a review is that it would enable a small group of independent individuals to step back from the operations of government, the regulators and the water companies to assess the best way to regulate private finance in the water industry while rectifying the appalling damage to human health and the aquatic environment currently being wrought by the privately owned water companies. Both regulators have historically let us down. Both are now trying to catch up with the public mood and with revised legislation. But it is at least worth reviewing the structure to consider whether an alternative might not achieve in the medium term what the new Government clearly want from the water industry.

I hope that the Minister will take seriously my suggestion and discuss it with her ministerial colleagues. In the meantime, I wish the Minister well in her new post.

Retained EU Law (Revocation and Reform) Bill

Duke of Wellington Excerpts

Committee stage
Tuesday 28th February 2023 Lords Chamber

[The Duke of Wellington (CB)]

My Lords, I apologise to the House that I was not able to speak at Second Reading as I could not be sure of arriving in time on that day, and that last week I was in Madrid on a parliamentary delegation and therefore missed the first day in Committee. I now wish to speak to Amendments 11 and 12, which I would happily have signed. I repeat the gratitude we all feel to the Minister, the noble Lord, Lord Benyon, for being present today. The previous debate would, I am sure, have been helped enormously by the presence of a Minister from the Department for Transport. However, we do have the noble Lord, Lord Benyon, and we all recognise his commitment to the environment and strong credentials in this area.

I suspect that the debate on this group could have been avoided if, at the very beginning, the noble Lord, Lord Benyon, had simply announced that all these directives would be retained. I was one of those who attended the briefing session yesterday afternoon, where he began by saying that his default position was indeed to retain. If that is true of all the different directives referred to in these amendments—Amendments 10, 11, 12 and 37—there is no need for us to be discussing them this afternoon. However, I fear that may not be the case. If it is the case, it should be in the Bill and then we need not be concerned. If it is not the case, we really must argue very strongly for some adaptation of these directives—and indeed improvements, because the Government have repeatedly said that they wish to improve and not reduce environmental protection.

Specifically on the bathing water regulations, for example, I seem to remember that Britain was rather embarrassed, many years ago, to be told by the EU that the state of our beaches made them some of the worst in Europe. That came from the EU and then public opinion became more interested in the subject, and indeed was very supportive of any attempts to improve the state of our beaches. Yet we find repeatedly —it is still going on—that sewage is discharged into coastal waters on and around our beaches. It is a complete disgrace and I would be worried that repealing the bathing water regulations would, in some way, weaken the determination of the Government to clean up our beaches. I genuinely believe that the Minister does wish to clean them up; therefore, why would we possibly repeal the bathing water regulations?

Similarly, on Amendment 12 about the water frame- work directive, we have had many debates in this House on our aquatic environment. There was a very strong feeling across the whole House that we had to tighten up all the regulations about sewage discharges. That was supported by the public in an extraordinary way. Again, I would be worried—maybe the Minister can reassure me—that repealing the water framework directive could, in an unintended way, weaken the determination of the Government and regulators to put a stop to discharges of sewage on to beaches and into our rivers.

Finally, on Amendment 37 I commend the noble Baroness, Lady Hayman, on drawing up this list; I am sure she did it with expertise and knowledge far greater than my own. Looking at the list, I am very much of the view that there are some important regulations on it. I cannot possibly imagine why we would, for example, repeal the urban wastewater treatment directive. However, I look forward to the Minister telling me that my concerns are unfounded. I therefore hope that, in winding up this section of the debate, the Minister will be able to confirm that all the various directives referred to in this group will be retained or improved.

[Baroness Lawlor (Con)]

My Lords, I am grateful to noble Lords for raising some of these important subjects, which we must think about very carefully. I do not share the assumption that divergence necessarily is for the worse; it can be for the better. I am not entirely sure that the EU regulations now in place are necessarily the best for the jobs they intend to do.

I will take one example from the many that noble Lords have raised. I share concerns on the protection of wild birds, habitats, wild mammals and clean bathing water, but I ask your Lordships’ Committee whether it is really the case that these regulations work as we all wish they would. In the country with which I am most familiar, our nearest neighbour, I am constantly very disappointed to see the sale of wild birds in cages—and, even worse, some wild mammals—to the pet market.

Where I differ from many in your Lordships’ Committee is that I believe the laws protecting these matters are shaped by the people of this country and the culture. I have no evidence because I have never seen caged wild birds on open sale in pet shops here, but I do not believe that the people of this country would tolerate such a thing. They will be responsible for making the laws of this country. I have every confidence that, where the laws do not work in other countries, such as our neighbours—countries I have a great respect for in many other areas—the people of this country will do well by the wildlife that they believe they are custodians of.

--- Later in debate ---

[Lord Benyon (Con)]

I will of course reflect on the points made today, and we will consider them all in due course. I do want to make some progress, if possible.

[The Duke of Wellington (CB)]

I thank the Minister giving way. Forgive me. I think I heard him say a few moments ago that the existing water framework directive was, in one sense, too demanding, because it divided rivers into sections, and any one section not passing ruled out the whole of the river. However, I then thought I heard him say that, nevertheless, we want to have very high targets. Which is it? Are we repealing the water framework directive or are we not?

[Lord Benyon (Con)]

We are transposing it. I am sorry if I was not clear. I was setting out a very high standard that we have applied to ourselves, retained since we left the European Union and will be committed to in the future. I say that because I want this and future Governments to be held to the highest possible standard. I very much regret if the noble Duke got the impression that I was somehow indicating that those standards were too high. I was applauding the fact that they are high and want to keep them so. If the noble Lord will allow me, I really want to make some progress, because we have spent two hours on this—