Water White Paper

Earl of Courtown Excerpts

Monday 26th January 2026 Lords Chamber

For too long the previous Conservative Government turned a blind eye to water system failure. Infrastructure was neglected, pollution went unchecked and public trust was betrayed. This White Paper draws a line under that era. It lays the groundwork for our upcoming water Bill and puts us on a new path; a path where water companies act responsibly, where customers get the service they deserve, where investors can invest with confidence, and where we can all enjoy clean rivers, lakes and seas. The British public voted for change, and we are delivering that change by building a system fit for the future. I commend this Statement to the House”.

[The Earl of Courtown (Con)]

My Lords, we welcome the progress made by the Government on the recommendations of the Independent Water Commission. In particular, we welcome the proposed integrated regulator to replace Ofwat and combine functions of the Environment Agency, Natural England and the Drinking Water Inspectorate.

However, I would first like to respond to some of the criticism levelled by the Minister at the Conservative record on the water system. In 2010, the previous Labour Government left us in a position where only 7% of storm outflows were monitored; now it is 100%. The Water (Special Measures) Act last year also took on Conservative regulatory proposals, which we welcomed. We also established the water restoration fund to ensure that the money received from fines imposed on water companies would be ring-fenced to pay for water restoration efforts. Can the Minister therefore recommit to the water restoration fund and, if not, explain how the money received is being spent?

We on these Benches are supportive of improving water security and streamlining the regulatory framework. We welcome the White Paper’s commitment to reform the 2013 specified infrastructure project regulations, as suggested previously by my noble friend Lady Coffey during the passage of the Planning and Infrastructure Act.

With regard to the new regulator, we have pushed the Government to ensure it will be accountable to the Secretary of State and, by extension, to Parliament. Can the Minister outline exactly how ministerial oversight of the new regulator will function in practice? Will the new regulator take responsibility for the initial nutrient neutrality environment development plans debated at length in the Planning and Infrastructure Bill’s passage and the sites acquired currently in the remit of Natural England? How will that impact the intention to use that learning experience and the intention to extend these EDPs to species and features that will presumably still come under Natural England?

We welcome the longer-term planning horizons but ask that the funding strategies are made transparent. In addition, will the new regulator be established in time to oversee the next price review scheduled for 2029?

We also propose leverage limits on water companies to avoid some of the mistakes made in the past with debt levels. The White Paper says the new regulator will work with companies to ensure that they do not accumulate unmanageable levels of debt. Should the Government not go further and put up stronger guardrails to prevent financial risk becoming such a major issue for the industry in future, as we proposed in the Water (Special Measures) Act?

Moreover, the White Paper promises new customer panels. Can the Minister explain how many panels will be created and what the estimated cost will be? If the Government are serious about wanting to streamline, we cannot end up with yet more arm’s-length bodies than before.

We are also concerned about the pace and apparent lack of urgency from the Government. Not only was the White Paper expected to have been published last year, but it has not accompanied by a full transition plan. When can we expect this, and when can we expect the water reform Bill to be brought before Parliament?

Farmers need financial support and clear advice and guidance to make their contributions to cleaning up our water. Simply relying on increased regulation and environmental inspections to force compliance will not work with an industry that is both critical to our national security and struggling financially, with low grain prices, high costs and destabilising government measures around inheritance tax and SFIs, in particular. Enforcing these regulations on our farmers in the way described in the White Paper will place them at even more of a competitive disadvantage versus those overseas, as they will be forced to comply with higher environmental and welfare standards and costs.

We understand the department is considering extending environmental permitting to cattle farming, which would add further administration and financial burdens on businesses. As has been flagged by my noble friend in other debates, farmers have already raised concerns that they might not be able to afford the changes necessary to remain compliant. In terms of supporting farmers to adapt to new regulations, the Government have promised to increase the number of Environment Agency inspections to 6,000 by 2029, but will they consider introducing new financial incentives to offer a carrot rather than simply a stick?

We, of course, support water reform and wish it was progressing more quickly, but it also must be coherent and considerate towards the agricultural businesses on which our food security relies. I look forward to hearing the Minister’s response.