Water Companies: Fines

Earl Russell Excerpts

Thursday 6th February 2025 Lords Chamber

[Earl Russell (LD)]

My Lords, I declare my interests as set out in the register. It is a pleasure to speak in this debate, and I thank my noble friend Lady Grender for bringing it and all who have spoken today. At heart, this debate is about broken promises: broken promises to small and medium-sized charities working to help clean up our polluted rivers, small charities that stand ready to help, that made funding applications in good faith to help undertake the work of beginning to restore our polluted rivers and streams some eight months ago, that have not heard a word back and that have not been treated with the respect that they deserve.

This Government need the good will of the third sector to help meet the challenges coming over the horizon, particularly the 30 by 30 targets. The last election was driven by anger at the wanton pollution of our rivers and streams by water companies that seemed immune to caring and to being held accountable. The noble Lord, Lord Browne, made it clear that these criminal activities have upset everybody, across all sides.

Between 2020 and 2023, England’s water companies used storm overflows more than 1.5 million times for more than 11 million hours. The Labour party’s election manifesto said:

“Labour will put failing water companies under special measures … give regulators new powers to block the payment of bonuses to executives … and bring criminal charges”.


Labour promised automatic and severe fines for wrongdoing, to deliver for nature and, most importantly for this debate, to

“work in partnership with civil society, communities and businesses to restore and protect our natural world”.

Much in the Water (Special Measures) Bill is welcome, but we still have the water commission to come for the longer-term solutions that Labour plans. I thank the Minister for her open and constructive engagement on that Bill. During that debate, I moved an amendment on behalf of my noble friend Lady Bakewell that sought to require all funds from the fining of water companies for environmental offences to be ring-fenced for the water restitution fund and spent on freshwater recovery. I said that,

“the Bill could be used to bolster the water restitution fund—the pot set up by the previous Administration to channel environmental fines and penalties into projects that improve the water environment”.—[Official Report, 30/10/24; col. 1199.]

In retrospect, I should have done more to ensure that we moved that amendment on Report, but I am pleased that we pressured our MPs in the other place to raise it, and I thank Tim Farron and other MPs who spoke on those matters.

I have a huge amount of respect for the Minister. Indeed, I sympathise with the position that she finds herself in today. As my noble friend Lady Grender has already said, it really should be the Treasury that is answerable for this debate today, as it is really the Treasury’s failures that are causing these problems. The Chancellor appears to have forgotten that she is supposed to be the greenest one ever.

It is not difficult to imagine how we got here. The Conservatives brought forward the water restitution fund but failed to impose any fines to make it do anything. Labour then won the general election and brought about legislation that raised the number and the values of fines over time. No doubt, the Treasury had concerns. Worries were probably expressed that if the first tranche of the £11 million promised was paid, that would set a precedent, and that the next tranche of £168 million would need to be paid afterwards, with maybe even greater fines after that. No doubt at some point, paralysis set in, and the argument between the Minister’s department and the Treasury was just not capable of being resolved.

The money involved in the first round of the water restitution fund is only £11 million. The Government did not remove the fund when they came into power, and the applications were made in good faith. I believe this Government are under a contractual obligation to meet those payments. I hope that this debate can help to sharpen the elbows, so to speak, of the Minister in her negotiations with the Treasury, but what we need today is absolute clarity on the £11 million pending in grant payments. Are they going to be paid? If so, when, and if not, why not?

Further forward, of course I would argue that all future funds should be provided to the charities to help with restitution, but I understand that this may not be possible. If there are further issues going forward, I suggest to the Minister that the commission that this Government have set up is tasked with looking at future fines and how those fines should be used, and that, in the meantime, all fines that are levied are made available for the charities that need this money.

This Labour Government need good co-operation with civil society on nature; it is our ally and partner in getting this stuff done. I strongly encourage this Government to think seriously about those working relations and to make that argument to the Treasury because we need this to be done, whether it is action on fly tipping, the protection of our SSSIs or our watercourses.

Finally, can the Minister please say what is happening to protect our chalk streams? Chalk streams should be getting a share of this money. I understand that the chalk stream protection fund is not happening, so can the Minister please say a word about the Government’s plans for the protection of chalk streams and when we will hear something further?