Water (Special Measures) Bill [HL]

Debate between Earl Russell and Baroness Parminter

Committee stage
Wednesday 30th October 2024 Lords Chamber

[Baroness Parminter (LD)]

My Lords, I rise to introduce Amendment 78 and to return to the issue we covered on the first day in Committee around the duty of the water regulator, Ofwat, and the fact that at the moment it does not have a core duty which comprises a public interest. I thank the noble Baroness, Lady Bakewell of Hardington Mandeville, who again is unwell and cannot be with us today, the noble Lord, Lord Randall, and the noble Baroness, Lady Jones of Moulsecoomb, for their support for this amendment.

It is quite clear that the public feel extremely strongly about how the regulator is ensuring, not ensuring or unable to ensure that companies perform their duties towards the public interest correctly. If we have any doubt of that, we saw the strength of feeling in the general election, we see it every day in the newspapers, and I am sure we will see it on the streets of London this Sunday with the March for Clean Water; I declare my interest as stated in the register.

However, if anyone were to sit down and read the Water Industry Act 1991, they would be amazed that there are no duties for Ofwat with regard to the public interest, to promote public health or to ensure the protection and conservation of our environment. They would see it as an absolutely astonishing omission. What they would see is a core duty to ensure the “long-term resilience” of water company services and sewerage systems. That is effectively a “keep the taps on” clause—which my local water company, Thames Water, seems to be unable to do on quite a regular basis, although that is beside the point. Then there is a whole swathe of legally binding economic duties which ensure that Ofwat absolutely focuses the water companies on making a profit. I am not against making a profit; of course they should make a profit. However, Amendment 78 says that we should look for a triple bottom line: for profitability, environmental returns and social outcomes.

As this returns to an issue that we looked at on Monday which is fairly similar to the amendment from the noble Baroness, Lady Willis, which talked about taking all reasonable steps to contribute to the environment and climate change targets, I made sure that I read the Minister’s reply carefully in Hansard because I thought I might get the same sort of reply myself. She made three points. She says that the amendment is not necessary because it overlaps

“with existing government requirements, Ofwat’s core duties and our ambitions for the future”.—[Official Report, 28/10/24; col. 939.]

The Government do not have of themselves the mechanisms to deliver on all these targets; they rely on other bodies to work with them. Giving Ofwat this duty would enable it to support those government requirements and targets.

Secondly, on the point about Ofwat’s core duties, I strongly but respectfully disagree with the Minister. There is no evidence in Ofwat’s existing core duty of any public interest duty. Thirdly, the Minister talks about our ambitions for the future, by which I think that, rightly, she means the water industry commission. I shall quote again from her response on Monday. With regard to the independent water commission, she said the Government would put the environment

“at the heart of what we are doing”.—[Official Report, 28/10/24; col. 939.]

Great, fantastic—but, as we discussed on Monday, once we get the commission done, we will have to wait for legislation and time is rolling on, while our environmental and climate targets are here and now. We cannot wait. We should be using this opportunity in the meantime to strengthen the duties for Ofwat to ensure that our water companies can support the Government in the very necessary task of protecting our environment and delivering clean water for the public.

[Earl Russell (LD)]

My Lords, I declare my interests as set out in the register. I will speak to Amendments 56, 79, and 80, tabled by my noble friend Lady Bakewell, to which I have added my name, and to Amendment 81 in my name.

Amendment 56 would require the Environment Agency to review permits applying to water and sewerage companies every five years rather than “periodically”, as regulations currently dictate. It brings in measures to ensure that a review of environmental permits happens on a regular basis rather than the ad hoc arrangements that are currently in force. Current Regulation 34 of the Environmental Permitting (England and Wales) Regulations 2016 requires the Environment Agency only to

“periodically review environmental permits”,

including those attached to water and sewerage works. The reality is that many of these permits are unfit for the intended purposes and do not properly protect our rivers, lakes and coastal waters from pollution incidents. It has been a long time since the system was fully reviewed in any meaningful way. The system is outdated, not really fit for purpose and clearly not working as it was intended. The Bill offers an opportunity and it would be wrong not to make use of it.

“Periodic review” could mean absolutely anything. It could mean that there are regular reviews in place, with systems for a review after serious pollution incidents up and working well. Equally, it could mean that water companies conduct reviews only once every 10 years, regardless of the number of incidents that happen over that time. The language we use in the Bill is of the utmost importance. We have an industry that is not abiding by the rules and a regulatory framework that is underresourced and low on morale and has not been able to prevent, contain or stop persistent breaches of environmental regulations. The public are fed up to the back teeth with illegal sewage overflows that no one seems to be taking seriously. They want action and they want it now.

While it can be argued that at least every five years is not often enough, it is a clearly defined requirement that can be monitored and enforced. We must also bear in mind that the Environment Agency is operating under such budgetary pressures that insistence on more frequent reviews would put it under a fair amount of strain. We need to be realistic about where we are and what we can enforce. This is put forward as a compromise that we feel best achieves those two aims. It is important that we set targets that are both achievable and operable. The amendment proposes that the Environment Agency should be placed under a duty to review permits applying to water companies every five years. Ideally, this should be done in advance of each periodic review, to reflect other legal obligations on sewage pollution and water quality and therefore drive investment.

Amendment 79 seeks to abolish the Water Services Regulation Authority. Amendment 80 establishes the “clean water authority” and provides it with duties concerning the water companies’ governance and performance standards. It is well known that the Liberal Democrats do not believe that Ofwat in its current form, alongside an underfunded Environment Agency, can achieve the change necessary to prevent continued sewage overspills, provide a return to clean water running in our streams and rivers, and achieve the reversal of biodiversity decline currently found across our natural environment.