Pollution in Rivers and Regulation of Private Water Companies

Lord Douglas-Miller Excerpts

Thursday 29th February 2024 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, I declare my interests as set out in the register. I congratulate the noble Baroness, Lady Bakewell, on securing this debate and thank noble Lords for their valuable contributions.

It might be helpful to remind noble Lords that the combined water and wastewater infrastructure that is managed by water companies is a system designed by our Victorian ancestors and allows, as it has for more than 150 years, for sewage to be spilt into our rivers at certain times and under certain circumstances—as the noble Baroness, Lady Pinnock, described so well. This may not be deemed desirable or even acceptable today, but it is a reality from which we cannot escape. In heavy rainfall events, of which we have more and more, there is a binary choice between sewage going into our rivers or backing up into our homes. I make reference to this to differentiate between what water companies are legally allowed to do and what I suspect the noble Baroness, Lady Bakewell, and many other noble Lords are mainly seeking to address, which is the illegal spilling of sewage into our rivers, as well as how to address reducing sewage spills altogether.

I think we can all agree with the comments that the noble Viscount, Lord Stansgate, made last week in a similar debate: the volume of sewage going into our waters is not what any Government, any Member of this House or the public would wish. We rightly expect to see the quality of our water improve and water companies to play their part.

In tackling this challenge, it is really important to be clear that there are both legal and illegal discharges of sewage, as I have already explained, and that the Government are taking action to reduce both. However, I will heed the advice of the noble Baronesses, Lady Jones and Lady Hayman, and spend my weekend rereading the speech by the noble Lord, Lord Sikka, and preparing to write to him on his detailed accountancy questions, and to the noble Baroness, Lady Jones, on the number of water companies operating illegally and blocking developers.

In April last year, the Government published the Plan for Water. We are delivering this with tighter regulation, tougher enforcement and more investment. We committed in the 25-year environment plan to restore three-quarters of our water bodies to be close to their natural state, and this plan will help us to achieve that by directing £2.2 billion of new, accelerated investment into vital infrastructure to improve water quality and secure water supplies. This includes £1.7 billion of funding to tackle storm overflows.

This is on top of the water companies investing £7.1 billion in environmental improvements between 2020 and 2025, including £3.1 billion invested in 800 storm overflow improvements, such as the Thames Tideway super sewer. Storm overflows causing the most harm are being addressed first, so that we can make the biggest difference as quickly as possible. We are the first Government to address and implement 100% storm overflow discharge monitoring, so that the public and our regulators can see exactly what the water companies are doing and set clear targets for them to significantly reduce legal storm sewage discharges. We expect water companies to use the next five-year price review period—PR24—to set bold and ambitious plans that deliver on this plan for people and the environment. This means cleaner rivers and beaches, fewer leaks and supply interruptions, and substantial improvements to tackle storm overflows.

In addition, the Storm Overflows Discharge Reduction Plan, published in September last year, will see the toughest ever crackdown on sewage spills, driving the largest infrastructure programme in water company history, with around £60 billion of capital investment over 25 years. Companies will upgrade storm overflows individually, depending on how they impact the targets set out in the plan.

Meeting these targets will result in hundreds of thousands fewer sewage discharges. By 2035, we will have protected all our designated bathing waters and the vast majority of our most sensitive and protected habitats from storm sewage discharges, and by 2050 there will be an 80% reduction in all storm sewage discharges.

This Government are the first to face up to the fact that, as a country, we need to fundamentally change how we deal with sewage. That cannot change overnight and will come with some cost. Eliminating all discharges could cost up to £600 billion, increasing annual water bills to an unacceptable level. The Government are committed to reviewing the targets in the storm overflow discharge plan in 2027 to establish whether companies can go further and faster to achieve the storm overflow targets without hiking up bills to unaffordable levels. If they can go further, the Government are clear that they must.

These initiatives work alongside a raft of other measures to improve the quality of our rivers and seas. As a result of our work, 90% of designated bathing waters in England met the highest standards of “good” or “excellent” in 2023, up from just 76% in 2010, despite stricter standards being introduced in 2015. Last week, we announced that we would consult on 27 potential designated bathing sites in England, the largest number we have ever consulted on, and encourage all interested individuals, businesses and organisations to respond to the consultation by 10 March this year.

Both the noble Baroness, Lady Jones, and the noble Earl, Lord Russell, referred to nutrient neutrality. On 25 January this year, we designated catchments in which water companies will be required to upgrade wastewater treatment works to reduce nutrient pollution by 2030. This will help unlock the homes that communities need, while also reducing pollution at source.

This Government are committed to increasing the quantity and quality of sustainable drainage systems—usually referred to as SUDS—in new developments, as my noble friend Lady McIntosh mentioned. SUDS reduce the pressure on our traditional infrastructure by slowing down the overall amount of water that ends up in the sewers and storm overflow discharges. The review and decision for making SUDS mandatory in new developments was published on 10 January last year. A public consultation on the implementation proposals will take place shortly, and I am encouraging my department to progress this as quickly as possible.

My noble friend Lady McIntosh and the noble Baroness, Lady Hayman, raised points about roads. In the Plan for Water, we committed to reducing pollution from roads by improving water quality through the road investment strategy for 2020 to 2025. So far, National Highways has delivered over 30 water quality initiatives. It is important to make it clear that National Highways is not responsible for pollution from roads, which are managed by local highway authorities.

My noble friend is also right that we must improve water efficiency. She will be pleased to hear that we have a new legally binding target under the Environment Act 2021 to reduce the use of public water supply in England per head by 20% by 2037-38. To help meet this, in our 2021 Written Ministerial Statement the Government set out our approach for a range of water efficiency measures, including our mandatory water efficiency label, leakage and metering.

As for fixing misconnections, water companies have the power to lay, inspect, maintain and repair or alter pipes falling on private land. I will write to the noble Baroness about access to government land.

I commend my noble friend for her tireless campaigning for farming and its part in storing floodwater. Since 2015, we have protected over 900,000 acres of agricultural land, along with thousands of businesses, communities and major infrastructure via our flood investment programmes. In addition, there will be measures that benefit flood risk mitigation in all three environmental land management schemes, the sustainable farming incentive, Countryside Stewardship and landscape recovery, which will include payments that relate to floodwater storage.

I move on to the issues raised about the Environment Agency. The Government’s work is backed by enforcement action from the regulators. Where there is evidence of wrongdoing, the Environment Agency and Ofwat will not hesitate to hold water companies to account. In 2013, the Government directed water companies to increase their storm overflow monitoring. In 2010, only 7% of storm overflows were monitored. As of December last year, we are at 100%. This has given us a clear sense of all discharges, which we never had before. In answer to the question from the noble Baroness, Lady Bakewell, on who is responsible for monitoring storm overflows, it is the Environment Agency.

The Environment Act requires water companies to monitor the operation of storm overflows and the water quality upstream and downstream of their assets. This is helping regulators to identify and enforce storm overflow discharge offences and permit breaches. We are providing an extra £2.2 million per year in this spending period for the Environment Agency, specifically for water company enforcement activity. We have legislated to introduce unlimited penalties on water companies that breach their environmental permits and expand the range of offences to which they can be applied.

Last week, we announced that we are significantly increasing our oversight of the water industry. Every water company should expect their wastewater treatment sites to be regularly inspected. The number of inspections, including unannounced inspections, will rise to 4,000 by the end of March 2025—a fourfold increase. Our consultation on increasing permit charges for water companies to enable these inspections is under way and due to close shortly. This will be backed by around £55 million per year. More inspections will allow the Environment Agency to conduct more in-depth audits to get to the root cause of incidents, reducing the reliance on operator self-monitoring.

Since 2015, the Environment Agency has concluded prosecutions against water and sewerage companies, securing £150 million in fines, including a record £90 million fine for Southern Water. These will go into the water restoration fund to protect and enhance the water environment. As the noble Baroness, Lady Hayman, mentioned, I will report on that date shortly.

The noble Baronesses, Lady Bakewell and Lady Jones, and the noble Lord, Lord Sikka, questioned the effectiveness of Ofwat and the Environment Agency. The Environment Agency, with Ofwat, recently launched the largest criminal and civil investigation into water company illegal sewage discharges at over 2,200 treatment works, following new data coming to light as a result of increased monitoring introduced by this Government.

In May last year, Ofwat announced that its enforcement capacity would be trebled, following the approval of £11.3 million in additional funding by the Government. If water companies fail to meet their statutory or licence obligations, Ofwat can issue an enforcement order or financial penalty of up to 10% of a company’s turnover. Following the Water Company Performance Report 2022-23, Ofwat published the financial penalties and payments for all water companies. Ofwat has required 13 companies to return £193 million to customers for underperformance in 2022–23. This money will be returned to customers through bills over 2024-25. Ofwat has also required each lagging company to prepare service commitment plans outlining the actions they will take to deliver the levels of service that customers expect. Ofwat has reviewed these plans and is regularly engaging with companies over them.

This month, the Environment Secretary announced that Ofwat will be consulting on banning water company executives from receiving bonuses if a company has committed a serious criminal breach. The consultation will seek to define the criteria for a ban, which we expect to come into effect later this year. This could include successful prosecution for a category 1 or 2 pollution incident, such as causing significant pollution at a bathing site or conservation area, or where a company has been found guilty of serious management failings. I will, however, consider the suggestion from the noble Baroness, Lady Jones of Moulsecoomb, of community service for the chief executives. This builds on Ofwat’s announcements last year to tighten restrictions on bonuses using powers given to the regulator through the Environment Act.

The noble Baroness, Lady Harris, asked about open investigations into Yorkshire Water. I am afraid I am not able to comment on those or, indeed, on any open investigation.

The noble Lord, Lord Addington, brought up the issue of anglers. As the past chair of the Atlantic Salmon Trust, I have the greatest sympathy with him and with anglers. He also mentioned that they might start to bring pressure to bear on the Government. I can assure him that the Rivers Trust, WildFish and Fish Legal and many celebrity anglers are already applying considerable pressure. I should add that, as a keen angler, I am not against canoeists at all.

The noble Baroness, Lady Miller, asked about the testing of sludge. This is regulated by the Sewage Sludge in Agriculture code of practice.

The noble Lord, Lord Stoneham, referred to an investigation with Southern Water, and I will look into the speed of that response and what can be done to speed these things up in the future.

The noble Lord also commented on the chalk stream strategy. The Plan for Water recognises chalk streams as a priority for the Government and identifies action to protect and include them in the chalk stream recovery pack that is due to be published later this year—I hope by mid-summer. It will set out the Government’s policies that act together to address the key pressures on chalk streams from abstraction, agriculture and wastewater.

The noble Lord, Lord Teverson, raised the issue of Ofwat and the monitoring of water companies. The Government remain confident with Ofwat’s approach and have contingency plans in place in the event of any public service failing.

The noble Lord also brought up other points relating to farmers and farming. We are taking significant action to work with farmers to reduce diffuse pollution and deliver improved environmental outcomes. We have doubled our catchment-sensitive farming budget to £15 million per year, which enables farmers across England to receive face-to-face advice on recurring water and air pollution issues. We have also budgeted for an additional 50 Environment Agency farm inspectors to work with farmers to meet their legal obligations. Our environmental land management schemes are being rolled out to pay farmers for the delivery of environmental benefits that include activities to improve water.

The noble Baroness, Lady Hayman, asked again about the land use framework. I am afraid that the answer is the same: it will be published shortly. That is about all I can say on that at the moment.

As I have set out, this Government are going further and faster than any other to protect and enhance the health of our rivers and seas. We have set out clear targets for water companies and are holding them to account on a scale that has never been seen before, making sure that the Environment Agency and Ofwat are equipped to take enforcement action where there are failings. This Government are fully committed to addressing the historic issues that are causing pollution in our waterways, and we will continue to strive for healthy and thriving water environments.

Animal Welfare (Primate Licences) (England) Regulations 2023

Lord Douglas-Miller Excerpts

Tuesday 27th February 2024 Lords Chamber

Moved by

[Lord Douglas-Miller]

That the draft Regulations laid before the House on 14 December 2023 be approved.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, the UK has the highest welfare score in the G7, according to the world animal protection index, and some of the highest animal welfare standards in the world. This Government are determined to maintain our position as a world leader in animal welfare. These regulations will make an important contribution to the ambitious animal welfare reforms that have taken place since this Government came to power.

It is estimated that up to 5,000 primates may be being kept as pets in England. When we called for evidence in 2019, we were appalled by what we found. Some primates were being kept in bird cages; others were being fed junk food. These animals suffer and can be left malnourished, aggressive and malformed. The Government are introducing these regulations to provide the additional protection necessary for primates that are not kept in zoos but in domestic or other private settings, by requiring primate keepers to have a specialist licence to keep them. They will, in effect, ban people from keeping primates as household pets by ensuring that they are not kept in environments, such as people’s homes, that fail to provide for their needs. Primates have specific welfare needs, and this SI means that people will no longer be able to keep primates as household pets—that is, in their homes—in the same way that they might keep a pet dog or cat. Instead, private primate keepers will need to satisfy enforcement authorities that they can meet the zoo-like standards we have licensed for.

The Government consulted on the proposed prohibitions on keeping primates, and the introduction of a licensing scheme in England, in 2020 and 2023. Over 98% of responses to the Government’s consultation exercise in 2020 and over 97% of responses to the subsequent consultation in 2023 expressed overwhelming support for a bespoke licensing system for the private keeping of primates.

This SI is brought forward under Section 13 of the Animal Welfare Act 2006. The licensing scheme it introduces will set stringent rules to ensure that only private keepers who can provide high welfare standards akin to those provided by licensed zoos will be able to keep primates. The SI outlines how applications for primate licences are to be made, how local authorities are to determine whether to grant a licence application, and how licences are to be renewed, varied or surrendered. It provides local authorities with powers to issue rectification notices and to revoke or vary primate licences.

Individuals who currently keep or intend to keep primates in England will be required to have a primate licence from 6 April 2026. Primate licences will be issued by local authorities only to individuals who can meet the welfare standards set out in the regulations. Anyone keeping a primate in England without a required licence will be committing an offence under Section 13(6) of the Animal Welfare Act and will be liable on summary conviction to imprisonment for a term of up to six months, an unlimited fine or both.

Keepers will need to apply for a private primate licence from the local authority. Licences will be valid for a maximum of three years and will be granted only after a satisfactory inspection conducted by the relevant authority. Licence holders must undergo re-assessment to renew their permission to keep these animals. Inspections will assess record-keeping, provision of emergency arrangements, care and maintenance, environment, physical health, nutrition and feeding, behaviour, handling and restraint, transport, and breeding. Guidance will be provided setting out the detailed welfare standards to be met.

The Government have noted concerns about the welfare of primates whose keepers fail to meet licensing conditions but are not persuaded that a grandfather clause enabling existing owners to keep primates without complying with these conditions is best for the animals, as such a provision would sanction the keeping of primates in poor conditions.

This SI has a transitional period and owners will have approximately two years to meet the licensing requirements, reach compliance or make alternative arrangements for their primates. Before then, my officials will engage with local authority and rescue interests to work through the practical impacts of the SI and determine how they might be supported to meet potential future demand for their services.

I am more than happy to take any questions from noble Lords.

Amendment to the Motion

Moved by

--- Later in debate ---

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank the Minister for his introduction and the noble Baroness, Lady Hayman of Ullock, for her very thorough introduction to this regret amendment. I am grateful to her for the chance to debate the issue in more detail. I refer to my interests as set out in the register.

The Government carried out consultations in 2020, when there were 4,516 responses, with 98% of respondents expressing support. Further consultations were carried out from 20 June to 18 July 2023, when there were 643 responses, mainly from those involved in looking after primates, animal welfare charities, individuals who were known to already keep primates as pets and members of the public. On this occasion, 97% of respondents were in favour. The regulations will come into force on 6 April 2026. Given the high level of support from the consultations for these measures, why are the Government not implementing them sooner than April 2026? Is this due to the guidance not being published until the spring of 2024, to which local authorities, as the EM says,

“will be required to have due regard”?

I would like some clarification from the Minister, please. The noble Baroness, Lady Fookes, has referred to the lack of guidance.

The regulations are due to be administered by local authorities, which will inspect and grant licences, either by a veterinarian or by another suitably qualified and competent person. Nearly all Members have referred to this. Given that the Government do not really know just how many primates are being kept by private keepers, I am slightly alarmed at the impact on local authorities.

Paragraph 12.1 of the EM says that there will be

“no … impact on business, charities or voluntary bodies”.

However, it also says:

“There are between 1000 and 5000 primates being held as pets … and the majority of these are held by private keepers”.


For the benefit of the noble Baroness, Lady McIntosh of Pickering, that information is in the Explanatory Memorandum. There is a world of difference between 1,000 and 5,000. This is a huge number of very sensitive animals potentially being held in inappropriate circumstances, with the Government not having even an approximation of how many there are, let alone a precise number. Does the Minister believe that there are sufficient veterinary and other professionals capable of dealing with the numbers and complexities of the licensing regimes being proposed? The noble Lord, Lord Trees, and the noble Baroness, Lady Hayman of Ullock, have referred to this.

Primates currently comprise 502 extant species, which are grouped into 81 genera. These range from gorillas, orang-utangs, chimpanzees and baboons down to aye-ayes, loris and lemurs. Each is very different, requiring different treatment, diets and housing. The actual instrument gives extremely detailed restrictions and conditions on how primates are to be kept. This makes it obvious that the keeping of a primate by a private individual is difficult, if not impossible—quite rightly so.

Most primates are very social animals and need the company of others of their species. If not allowed to roam free in the countries of their origin, they should be kept in licensed zoos, whether private or open to the public. Only in these circumstances can we be sure that the stringent provisions of this SI will be enacted and that primates will be able to enjoy a life as close as possible to that which they would have enjoyed in the wild. The noble Baroness, Lady Fookes, has made reference to this.

The RSPCA is concerned that insufficient thought is being given to what will happen to the animals belonging to those primate keepers who do not receive a licence to continue to keep their pet. As has already been said, there are not innumerable spaces in animal welfare organisations or primate sanctuaries to manage the resulting flow of primates following the implementation of the SI. How are the Government going to ensure the welfare of these primates, which they have indicated should be kept in zoo-level standards?

I turn now to the issue of fees. Regulation 13 states that a local authority may

“(a) charge a fee in respect of any application relating to a primate licence under this Part; (b) charge a fee in respect of any inspection which it must or may arrange under this Part”.

This gives the impression that local authorities are free to set their own fees. That is good, but we could end up with dozens of different sets of fees up and down the country. There is also likely to be a different set of fees depending on the size and number of primates involved. While I welcome that local government itself will determine what the fee will be to cover its costs, some sort of yardstick would be useful. It is unlikely that local authorities will have veterinarians on their payroll, so they will have to buy in the services of the relevant qualified person both to inspect to grant the licence in the first place and to carry out routine inspections in the future to ensure that the terms of the licence are being adhered to. The noble Baroness, Lady McIntosh of Pickering, referred to this. No one in this Chamber is under any illusion about the state of local government finance. With populations increasing and social care under pressure, to be asking local authorities to take on yet more duties without providing the finance to cover them is unacceptable.

The instrument also has a section on rectification notices, and allows two years for steps to be taken to comply with licence conditions. This is far too long for a primate to be kept in conditions that do not comply with the licence granted. The noble Lord, Lord de Clifford, has referred to this. This might relate to poor diet or lack of space or stimulation, or it might relate to public safety. Does the Minister agree that the time for compliance for the rectification notice should be much shorter than two years?

I fear that I do not agree with others about a grandfather clause and allowing animals to stay with their keepers until the end of their life. This is a long time to be living in great misery.

Finally—others have referred to this point—paragraph 39 of Schedule 1, dealing with restraint, states:

“No primate may be handled or restrained except … insofar as … it is necessary for the purposes of an exhibition activity.”


Paragraph 42 says:

“No primate may be transported unless … it is necessary for the purposes of an exhibition activity”.


This gives the impression that a primate may be transported for the purposes of performing in front of others, and the public. Can the Minister say what is meant by

“for the purposes of an exhibition”

because, as written, it is extremely worrying? The noble Baroness, Lady Hayman of Ullock, raised this, as did the noble Baroness, Lady Fookes.

I remain concerned that, unless these measures are implemented quickly, some primates will live in unsuitable conditions, without the company of their fellows, and be miserable as a result. Although it is not perfect, I support the general thrust of this SI.

[Lord Douglas-Miller (Con)]

I thank all noble Lords for their valuable contributions to the debate. I have listened carefully to the points made by the noble Baroness, Lady Hayman, in support of her amendment, and to other contributions in today’s debate, and I have been struck by our shared commitment to act to improve the welfare of privately kept primates. It is important that we do act.

We introduced this SI in response to a call for evidence and consultation exercises that confirmed the extensive mistreatment of privately kept primates. Some of this evidence was, frankly, horrible and highlighted primates being kept in poor conditions, in small enclosures or birdcages, and suffering from fractures or misshapen bones. It is absolutely right that the Government take action to address primate welfare in non-zoo settings.

It has been encouraging to note that the strong response to the consultation exercises has been to welcome the Government’s decision to put a licensing scheme in place for the keeping of primates to address their specialised needs. It has also been encouraging today to note support from across the House for our objective of improving primate welfare. I am grateful to the noble Baroness for giving me the opportunity to state clearly the Government’s view. I recognise her and other noble Lords’ concerns and will seek to address them now.

The amendment suggests that the SI does not ban the keeping of primates as pets. I have explained in my opening remarks that that is essentially incorrect. The vast majority of animals kept as pets in this country do not need to comply with the kinds of licensing conditions contained in this SI. This is not semantics. Primates have particular welfare needs that cannot be met by keeping them as household pets, and this SI seeks to end that practice. Those currently keeping primates in birdcages and in other wholly inappropriate conditions will no longer be able to do so. Only those people keeping or wishing to keep primates who can demonstrate compliance with the licensing conditions and welfare standards to the satisfaction of enforcement authorities will be able to keep primates privately. These conditions are stringent and are the kinds of measures that would not apply to household pets.

The noble Baroness’s amendment also regrets the absence of a grandfather clause, as was raised by a number of other noble Lords, and advocates government policies to support rehoming. Given the evidence that we have about mistreatment of primates, the Government do not believe that continuing to allow private primate keepers to retain primates in poor conditions is the best thing for these animals. Future rehoming and surrender arrangements are very important concerns, of course, but the Government do not believe that the answer is to allow suffering animals to be kept as they are. Instead, this SI provides a two-year period before the requirements come into force to provide keepers time to comply with the requirements. Until we license, we will not know the scale of primate keeping, but I can assure the House that we will continue to work closely with rescue and rehoming charities to monitor the impact of the SI on rehoming activity, and to respond accordingly to evidence.

The noble Baroness, Lady Hayman, asked whether we might consider keeping a register of primate specialists. I shall certainly take that suggestion back to the department. I can confirm that this legislation applies only to England. If you have a criminal conviction for animal welfare issues, you will not be eligible for a primate licence.

The noble Baroness, Lady Bakewell, and others asked about the licensing conditions that must be met. The primate licence will be issued only to those who can meet the welfare standards set out in the regulation. Those standards are akin to the standards that licensed zoos must meet and include requirements such as microchipping, local authority inspections and record-keeping. They also include minimum welfare requirements, such as emergency arrangements and requirements regarding care and maintenance, nutrition and feeding, physical health, environment, behaviour, handling and restraint, transport, and breeding.

--- Later in debate ---

[Lord Trees (CB)]

Is the Minister confident that suitably qualified persons can appropriately inspect and monitor the enforcement of these regulations for primates?

[Lord Douglas-Miller (Con)]

The noble Lord asks a very good question. One reason for the two-year lead-in is to give us time to assess the qualifications that are needed and put the appropriate training in place to ensure that we can fulfil that obligation.

Water and Sewage Companies: Directors’ Remuneration

Lord Douglas-Miller Excerpts

Thursday 22nd February 2024 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, I congratulate the noble Lord, Lord Sikka, on securing this important debate and sharing his extensive views on the subject, and thank other noble Lords for their thoughtful contributions to today’s discussion. I welcome the opportunity to speak about the progress we have made to improve the water environment and our reforms to the remuneration of company executives.

This Government have been leading the way on delivering clean water for customers and the environment. Our plan for water sets us on a holistic path to deliver more investment, stronger regulation and tougher enforcement of our water system. Through this, we will transform our management of the water system, delivering cleaner water for nature and people and securing a plentiful water supply for the future. We have set out significant funding to support this work. Our plan for water committed £2.2 billion of new, accelerated investment directed into vital infrastructure to improve water quality and secure future supplies, including £1.7 billion funding to tackle storm overflows. In September 2023 we also published our expanded storm overflows plan, which set stringent targets to reduce the use of storm overflows. This plan will lead to the toughest-ever crackdown on sewage spills. In answer to the question asked by the noble Baroness, Lady Bakewell, the Government have increased the number of storm overflows monitored to 100% since the end of last year. Furthermore, this plan will also drive the largest infrastructure programme in water company history: £60 billion of capital investment over the next 25 years.

It is important to put this investment into context. Since privatisation, we have unlocked more than £215 billion of investment in the water sector in England alone to deliver services for customers and the environment. Privatisation has delivered a range of benefits, including high-quality drinking water, leakage being reduced by around a third and 90% of our bathing waters in England currently being classed as good or excellent. In addition, since 2010 water bills have fallen by 1% on average per year while companies have been investing around £5 billion annually over the same period. Looking forward to the future, the next water company investment cycle will include the biggest environmental improvement programme since privatisation. Water companies’ business plans show a planned £96 billion of investment between 2025 and 2030.

The noble Baroness, Lady Hayman, raised customers funding investment. The Government have been very clear that customers will not be paying for water companies’ mistakes. However, new infrastructure will need to be paid for, and while water companies can attract private investment, this will also need to come from customers’ bills. Ofwat assesses any increase in customers’ bills to ensure that they are fair and proportionate. We recognise that a balance must be struck here between ensuring that we prioritise spending on infrastructure to reduce environmental harm and securing supplies for the future without unduly hitting customers with bill increases.

I turn now to address the main point made by the noble Lord, Lord Sikka. We are taking clear and decisive action to ensure that no one profits from illegal behaviour and that water company executives take personal responsibility for serious breaches and damaging the environment. On 12 February my right honourable friend the Environment Secretary announced that the independent regulator, Ofwat, will consult on preventing the executives of water companies receiving bonuses if their company has committed a serious criminal breach. That could include, as the noble Lord said, successful prosecution for a category 1 or 2 pollution incident, such as causing significant pollution at a bathing site or conservation area, or where a company has been found guilty of a serious management failing.

Subject to consultation, we expect the ban to apply to all executive board members and chief executives. In answer to the question from the noble Viscount, Lord Stansgate, it will come into effect later this year. This builds on Ofwat’s announcement last year that it will tighten restrictions on bonuses using new powers given to the regulator through the Environment Act. It is important to make clear that this new announcement sits among a strong and ambitious long-term strategy to tackle pollution, clean up British waters and ensure a plentiful supply for the future. For instance, in March 2023 Ofwat announced new measures enabling it to take enforcement action against water companies.

[Baroness Ludford (LD)]

I apologise for interrupting the Minister, but I have been slightly provoked by his talk of a long-term ambition and a vision of 25 years. Does he accept that it was 1991—I am sorry to be a nerd about this—when the relevant EU directive was passed, under a Tory Government, and it should have been implemented by 1998? We are already 25 years after that but now he is giving us another 25-year horizon, so it will have been half a century before the discharge of sewage is cleaned up.

[Lord Douglas-Miller (Con)]

I thank the noble Baroness for her question. Perhaps I might write to her on that subject, given that she did not contribute to the debate earlier.

Additionally, on 21 February we announced that inspections of water company assets by the Environment Agency would more than quadruple in order to strengthen our oversight of water companies and better hold them to account. That is not all. We have legislated to introduce unlimited penalties on water companies that breach their environmental permits and to expand the range of offences to which they can be applied. That can include criminal prosecutions, for which there can be unlimited fines.

Following the publication of its performance report in November 2023, Ofwat published the financial penalties and payments for all water companies. This required 13 companies to return £193 million to customers for underperformance in 2022-23, with money rightly being returned to customers through bills in the year 2024-25. We make no apology for setting high standards for the water sector or for our tough expectations of what companies have to deliver. That is why, in addition to returning money to customers, Ofwat and the Environment Agency will not hesitate to use the powers that the Government have given them to enforce the law and hold them to account.

I turn to various questions raised by noble Lords. If I miss any questions or run out of time, I will write to individual noble Lords and send a copy to the Library. The noble Lord, Lord Sikka, asked whether the Government will give customers the opportunity to vote each year on executive pay. Remuneration committees for each water company independently determine the appropriate level of remuneration for their water company executives. Ofwat expects water companies to take into account the legitimate concerns of stakeholders when making decisions on the application of remuneration policies.

The noble Viscount, Lord Stansgate, and others raised the issue of sewage spills and correctly pointed out that no one wants to see this happen. Significant progress has been made. The noble Viscount asked how the Government and regulators will hold water companies to account. The Environment Agency and Ofwat have recently launched the largest ever criminal and civil investigations into water companies’ sewage discharges, and into over 2,200 treatment works, following new data coming to light as a result of increased monitoring.

The Government are working with the Environment Agency to hold the water industry to account. Where water and sewerage companies are found to be breaking the law, we will hold them to account through enforcement. The Environment Agency can now use new powers to impose unlimited penalties for a wider range of offences following the Government’s changes to broaden the scope of the existing civil sanctions regime and remove the previous cap on penalties.

The noble Baroness, Lady McIntosh, raised the issue of the automatic right to connect to the sewerage system in Schedule 3 and Schedule 10. In April 2023, the Government published the Plan for Water. This plan included the requirement for standardising sustainable drainage systems in new developments in 2024. Subject to final decisions on the scope, threshold and process, we expect to commence consultation on this by spring 2024 and aim to have finalised the implementation pathway by the end of 2024. Schedule 3 would make the right to connect surplus water run-off to public sewers conditional upon the drainage system being approved as capable of managing it. The noble Baroness also raised issues around building on floodplains, water run-off, Schedule 10 and storing water. Perhaps I might write to her on those issues.

The noble Lord, Lord Sikka, asked whether the Government have confidence in Ofwat. We are confident the industry regulators are using their powers to hold water companies to account, and we will continue to work with them and drive improvements that benefit customers and the environment. The noble Lord, Lord Sikka, gave an admirable list of the fines that Ofwat have recently handed out.

The noble Lord also raised the issue of foreign ownership. Ofwat, as the independent regulator, protects the interests of consumers by making sure that water companies carry out their statutory functions and are financially resilient, as well as holding them to account on overall performance and delivery of essential services. These same standards and licence conditions apply across all water companies, regardless of whether they are owned by foreign or domestic investors.

As I come to the end of my remarks, I want to be absolutely clear that profit should never come at the cost of pollution. As I have set out, this Government are going further and faster than any before to protect and enhance the health of our rivers and seas. We are holding water companies to account on a scale never seen before. This new action proposed by Ofwat will help us go even further to ensure that no one profits from illegal behaviour and that water company executives take full responsibility. I therefore assure noble Lords that the Government are fully committed to addressing the issues causing pollution in our waterways and we will continue to strive for a healthy and thriving water environment.

Peatlands

Lord Douglas-Miller Excerpts

Thursday 22nd February 2024 Lords Chamber

[Baroness Ritchie of Downpatrick]

To ask His Majesty’s Government what progress they have made in restoring peatlands, and by what date they expect all degraded peatlands to be restored.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, I declare my interests in farming and land management, as set out in the register, and draw your Lordships’ attention to the fact that I have been involved in numerous peatland restoration projects. The Government have made good progress in restoring our peatlands; we have accelerated the rate of peatland restoration in England through the Nature for Climate Fund, launched in 2020. Through this fund, we have so far provided £35 million for peatland restoration projects, financially committing us to restoring approximately 27,000 hectares of peatland. This represents significant progress against our ambitious commitment, made in the net-zero strategy, to restore 280,000 hectares of peatland by 2050.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, I thank the Minister for his Answer. We all know that well-managed peatlands can sequester carbon and mitigate flood risks, but about 80% of UK peatlands are in a degraded condition, and we are still selling it for horticultural use. Can the Minister go a little further and tell the House when the threshold of 35,000 hectares, which the Government committed to restore by 2025, will be restored—he already mentioned 27,000—and what the plan is for the remaining 245,000 hectares they committed to restore through the net-zero strategy by 2050?

[Lord Douglas-Miller (Con)]

I am grateful to the noble Baroness for raising the important issue of peatland restoration. We are making good progress to deliver the commitments to restore the 35,000 hectares of peatlands by 2025. She alluded to the fact that we are aiming for about 27,000 at the moment. It is fair to say that we are slightly behind the target, but also that there have been some good reasons for that—namely the pandemic, which slowed everybody up, but also that it is quite difficult to plan and organise these things. They tend to be back-loaded rather than front-loaded in their completion. Since making that commitment, restoration activity has been delivered through our agri-environment schemes, and most significantly through the Nature for Climate Fund, as I said. This fund has already financially committed the Government to restoring the 27,000 hectares of peatland, and 11,000 hectares of that have already been delivered. We are also fully committed to restoring the 240,000 hectares of remaining peatland by 2050.

[Baroness McIntosh of Pickering (Con)]

My Lords, given the role that peatlands play in flood defences, as the noble Baroness said, will the Minister pay tribute to all those involved in the Slowing the Flow pilot scheme in Pickering? Will he ensure that more private sector funding, either from water companies or others, can also be factored in to speed up the programme to which he refers?

[Lord Douglas-Miller (Con)]

My noble friend makes a very good point on the involvement of private companies. It is one of the Government’s aims to involve them more and get a bigger response from them shortly.

[Lord Hamilton of Epsom (Con)]

My Lords, I have raised this with my noble friend before. Wildfires are one of the greatest dangers to our peatlands. They get very much worse when heather is allowed to grow out and become hard and woody. Then, during a drought you can have a fire that lasts for six weeks with endless fire engines being deployed and the peat still burning underneath, as happened on Saddleworth Moor. Does he not recognise that this is one of the greatest dangers to our peatlands?

[Lord Douglas-Miller (Con)]

My noble friend makes another very good point on the use of a range of different measures for protecting our uplands from wildfire. We have in our armoury, if you like, the ability to cut heather, and we still allow people to burn heather in certain areas and, in particular, to use that as a defence against wildfire.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, my noble friend Lady Ritchie referred to the use of peat in horticulture. Will the Minister remind the House what the Government have done and what they will do in the future to reduce to zero the use of peat in horticulture, both domestically and commercially?

[Lord Douglas-Miller (Con)]

My Lords, we need to give the horticultural industry some time to adapt. I assure the noble Baroness that the Government are committed to banning peat in horticulture. The reason we have not got there yet is primarily down to parliamentary time. I hope that we will be able to address that issue very shortly.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, 95% of respondents to the Government’s 2022 consultation supported a legal ban on retail sales. Retailers, including B&Q, Tesco, the Co-op, the Royal Horticultural Society and Dobbies, have ended the sale of peat in bags of growing media. The horticultural industry requires clarity. When will it get it?

[Lord Douglas-Miller (Con)]

As I said in answer to the previous question, the Government are committed to this ban, and it will be in place by 2030.

[Baroness Taylor of Stevenage (Lab)]

My Lords, over the past few years, we have seen a shocking rise in wildfires, many of which destroy peatlands. With the El Niño effect, we are expecting even more this summer. What are the Government doing to prevent wildfires to avoid further destruction of our precious peatlands?

--- Later in debate ---

[Lord Douglas-Miller (Con)]

My Lords, the Government are committed to a range of activities to prevent wildfire. I discussed two of those just now: cutting heather and burning heather. We also have the fire service on standby and are in constant communication with the fire service across the country to address wildfire issues.

[Lord Trees (CB)]

My Lords, peat has been an important domestic fuel in the Highlands for centuries. Is the Minister aware that bags of peat are still freely available in Scottish shops to burn on open fires? This seems inconsistent with our other policy objectives with regard to the conservation of peat.

[Lord Douglas-Miller (Con)]

The noble Lord makes a very good point. I am sure that he is aware that peatland matters in Scotland are a devolved issue. I understand that, for historic reasons, there is an inclination towards peat. I hope, as I am sure he does, that it is on the decline.

[Baroness Jones of Moulsecoomb (GP)]

Is the Minister aware that it takes millennia for peat bogs to form? Do the Government have any idea of the ratio between the so-called restored peat bogs and those that are still being disrupted?

[Lord Douglas-Miller (Con)]

I am entirely aware of the amount of time it takes to create peat. I spent a great deal of time doing peatland restoration work.

[Lord Patel (CB)]

My Lords, the Science and Technology Committee, which I chaired at the time, produced a report on nature-based solutions to climate change. One of the things it recommended, because of confusion related to both woodland and peatland codes, was that the Government should have a strategy for land use. Subsequently, an ad hoc committee of the House of Lords recommended that a land use commission should be set up. The Government were resistant to both these recommendations of two independent House of Lords committees. Can the Minister suggest what the Government intend to do about a land use strategy?

[Lord Douglas-Miller (Con)]

My Lords, the noble Lord is quite right. The Government have every intention of publishing their land use strategy shortly.

[Lord Blunkett (Lab)]

My Lords, I did not intend to intervene but in view of the answers I am bound to ask the Minister whether, in a consensual and non-divisive way, he would mind approaching the Duke of Rutland to ask him not to continue burn-off in the south Pennines, which is clearly damaging not just the peat bogs but the general environment, including the atmosphere in my city of Sheffield?

[Lord Douglas-Miller (Con)]

I am not aware of the specific details that the noble Lord has raised. I commit to finding out about them. Perhaps I can drop him a letter on that subject.

[Lord Vaux of Harrowden (CB)]

My Lords, planting conifers on deep peat is probably one of the biggest reasons for peat’s degradation; I think about 20% of peat degradation is caused by that. Can the Minister confirm that there will be no more planting of conifers on deep peat and that, where it has happened in the past, when those trees are felled they will not be replaced?

[Lord Douglas-Miller (Con)]

The noble Lord is absolutely right on his statistics and the danger that conifers pose to peat. I do not have the details available here now, but I commit to write to him on that subject.

[Lord Harris of Haringey (Lab)]

My Lords, the Minister said that one of mitigations is that the fire service would be on standby. I have always thought that the nature of the fire service is that it is always on standby. What assessment have the Government done in the light of my noble friend’s Question to ensure that the fire service resources are going to be adequate, given the increasing likelihood of wildfires of various sorts, the El Niño effect and, of course, climate change?

[Lord Douglas-Miller (Con)]

I thank the noble Lord for his interesting question. The Government have taken a number of initiatives in preventing wildfire, and that is the start point from which we work. We are in communication with the fire service on a permanent basis relating to this. Obviously, when the risk is elevated, we are in constant communication with it to make sure that it is available for that activity.

Animal Welfare (Livestock Exports) Bill

Lord Douglas-Miller Excerpts

2nd reading
Wednesday 21st February 2024 Lords Chamber

Moved by

[Lord Douglas-Miller]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, I beg to move that the Bill be now read a second time. I declare my interests as set out in the register, in particular my livestock farming and land management interests.

We are here to consider the Animal Welfare (Livestock Exports) Bill, which will fulfil the Government’s commitment to end excessively long journeys for slaughter. The Bill will ban the export of cattle, sheep, goats, pigs and horses for slaughter and fattening from Great Britain, stopping the unnecessary stress, exhaustion and injury caused by this trade. I think noble Lords will agree that, from a welfare perspective, animals should be transported only when necessary. This Bill will prevent unnecessarily long export journeys by ensuring that livestock are transported on shorter and less stressful journeys for slaughter domestically.

The Government recognise that we are a nation of animal lovers, with some of the highest animal welfare standards in the world. Indeed, we were the first country in the world to pass legislation to protect animals, and we are now building on that tradition by continuing to strengthen our animal welfare standards even further.

On farm animal welfare in particular, the Government have launched the animal health and welfare pathway, providing financial support for farmers to help them improve the health and welfare of their livestock. We have made available £30 million in capital grants to co-fund investment in equipment, technology and infrastructure projects. We have introduced a £4 million smaller abattoir fund, which will improve animal health and welfare and help to sustain our network of smaller abattoirs. This support will help to maintain short journey times for livestock to slaughter.

This brings us to today’s consideration of the Animal Welfare (Livestock Exports) Bill. In the 1990s, a vast number of animals were exported for slaughter each year. This period saw several unsuccessful attempts to ban live animal exports through legal challenges by local and port authorities. At that time, we were bound by EU free trade rules that prevented any such prohibition on live exports.

The RSPCA and Compassion in World Farming have taken up the cause of live animal exports and have campaigned for a ban on exports for slaughter for over 50 years. World Horse Welfare was founded in 1927 with the aim of stopping the export of horses for slaughter. I am grateful to these, and many other animal welfare organisations, for their support of the Bill.

I also recognise the long-standing interest of many noble Lords in banning live exports. I particularly acknowledge the work of the noble Baroness, Lady Fookes —who I believe is 21 again today—the noble Baronesses, Lady Hodgson of Abinger and Lady Jones of Moulsecoomb, and the noble Lord, Lord Randall of Uxbridge. I am grateful for their efforts in championing these causes.

We have seen the number of live animal exports decrease significantly over recent decades. Since 2020, there have been no recorded exports for slaughter or fattening from Great Britain to the EU. However, the demand from Europe’s slaughterhouses for British livestock, especially sheep, remains. The Bill will ensure that this trade cannot resume.

There is a clear rationale for the Bill. The shortest direct-to-slaughter export journey from Great Britain to continental Europe in 2018 took 18 hours. Most domestic journeys to slaughter in the UK are significantly shorter. Journeys of unweaned calves from Great Britain for fattening in Spain were found to last on average 60 hours.

The UK Government and the Scottish and Welsh Governments commissioned the Farm Animal Welfare Committee to examine animal welfare during the transport of livestock. Its 2018 report identified several aspects of transport that have a detrimental effect on animal welfare and recommended that animals should be transported only when necessary. Following the committee’s report, we undertook a public consultation with the Welsh Government in 2020 on banning live exports. We received over 11,000 responses, and 87% of respondents agreed that livestock and horses should not be exported for slaughter or fattening.

The ban on live exports must be GB-wide to be effective, and I am grateful to colleagues in Scotland and Wales for their valuable contributions to the Bill. While the Bill does not extend to Northern Ireland— I will come on to why shortly—I also thank the Department of Agriculture, Environment and Rural Affairs for its work alongside my officials in the development of our policies.

I now turn to the detail of the Bill’s provisions. The core provision prohibits the export of relevant livestock from Great Britain for slaughter and makes it an offence to do so. The Bill is focused on banning live exports where major animal welfare concerns have been identified. Accordingly, it legislates to end all exports from, and transit journeys through, Great Britain of cattle, sheep, pigs, goats and horses for fattening and slaughter.

Prior discussions in the other place explored whether the scope of the ban should be extended to cover a wider list of species. When we carried out our consultation in 2020, we were clear about the species we were seeking to apply the ban to. We received no evidence then—and have received none since—that a ban on any other species was necessary.

It is also important to be clear about what is not prohibited. The Bill still allows for exports of livestock and horses for other purposes, such as breeding, shows and competitions. Animals exported for breeding are transported in very good conditions, so that they can live a full and healthy life once they arrive at their destination. The Bill does not apply to journeys within the United Kingdom, the Channel Islands and the Isle of Man.

I return to the reason the Bill does not extend to Northern Ireland. To ensure that farmers in Northern Ireland have unfettered access to both the UK and Republic of Ireland markets, the Bill will not apply to Northern Ireland. As part of the new Windsor Framework constitutional arrangements, a Minister in charge of a Bill must make certain written statements if the Bill contains provisions that would affect trade between Northern Ireland and other parts of the United Kingdom. Since this Bill does not apply to livestock and horse movements within the UK, it is my view that there will be no such impact and that no such statement is therefore required.

Recent discussions in the other place highlighted the importance of protecting the access that Northern Irish farmers have to the Republic of Ireland. Farmers in Northern Ireland routinely move animals to the Republic of Ireland for slaughter and fattening. It is critical that we protect the Northern Irish agricultural sector and wider economy, and that is why the Bill’s territorial extent is drafted as it is.

The Bill contains a delegated power to provide for regulations about the enforcement of the ban. It empowers the appropriate national authorities to make enforcement regulations and sets out their possible scope. That power will enable the department to work closely with the Scottish and Welsh Governments to provide an effective and proportionate suite of measures to enforce the ban. We intend to bring the ban and its associated enforcement regulations into force as soon as possible. The Bill also repeals Sections 40 to 49 of the Animal Health Act 1981. Those provisions were intended to prevent the export of horses and ponies for slaughter, particularly by setting minimum value standards. Now that we are banning all live exports of horses and ponies for slaughter, those provisions are unnecessary.

I know that there is considerable support for this ban both in Parliament and among the public. I hope that Members of your Lordships’ House will agree on the importance of working to enhance this country’s proud record on animal welfare. The Bill marks another significant milestone in our progress towards delivering better animal welfare across the nation. In 2016, the EU referendum brought renewed public interest in finally ending live exports for slaughter. Now that we have that long-awaited opportunity, I hope that your Lordships will support the Bill and ensure that our exports take place on the hook, rather than on the hoof.

--- Later in debate ---

[Lord Douglas-Miller (Con)]

My Lords, I thank all 14 noble Lords and noble Baronesses who have spoken for their thoughtful and constructive comments, and in particular those, beginning with the noble Baroness, Lady Young, who congratulated me on my appointment and my first Bill. It is a pleasure to have delivered such a happy birthday present to my noble friend Lady Fookes.

As we have heard, the Bill will end the unnecessary export of livestock and horses for slaughter and fattening, and prevent the associated stress, exhaustion and injury caused by these journeys. It signals to our international partners our firm commitment to improving welfare standards for all kept animals, reinforcing our position as global leaders on this important issue. Many animal welfare groups, as well as a number of parliamentarians, have called for this ban on live exports. We know that there is also huge public support for this measure. There is clear and broad recognition that we must end these unnecessary journeys.

Before I address a number of the specific questions, I will briefly touch on two things. The first, from the noble Baroness, Lady Bakewell, is the bluetongue virus, which is very current. I do not have a timeframe for when this restriction will be lifted, but I will get back to her as soon as I do. The second, from the noble Baroness, Lady Hayman, is the welfare of animals during a transport delay. I will write and confirm the exact details of how they are looked after and how we address this issue.

I turn now to the questions asked by noble Lords. The noble Baronesses, Lady Young and Lady Jones, my noble friend Lady Fookes and many others queried why other species were not within the scope of the ban. I assure them that the Bill’s definition of “relevant livestock” covers all species for which there has been a significant slaughter export trade, which the Government consulted on in 2020. In the 10 years prior to EU exit, the live export trade for slaughter and fattening mainly involved sheep and unweaned calves.

Compassion in World Farming and the RSPCA, both leading campaigners on banning live exports for the past 50 years, agree that the Bill covers the relevant species to end this unnecessary trade. Responding to proposed amendments in the other place, Compassion in World Farming said that it is not aware of any alpacas, llamas or deer being exported for slaughter, and the RSPCA said that only sheep, calves and horses have been exported from Britain for slaughter over the last 10 years.

The issue of small abattoirs was raised by the right reverend Prelate the Bishop of St Edmundsbury and Ipswich, the noble Lords, Lord Carrington, Lord Trees and Lord de Clifford, the noble Baronesses, Lady Hoey, Lady Bakewell and Lady Hayman, and my noble friend Lady Hodgson, so it was a popular subject today. Many asked what further financial assistance there is for small abattoirs and what work we are doing to promote and market sheep products, particularly in order to develop our meat export trade. The farming investment fund has offered access to financial support to establish new producer-led abattoirs. Now that the first round is closed, we will assess how the scheme has performed and will investigate the potential launching of a second round later this year. The Government are working with the Agriculture and Horticulture Development Board and industry to help secure market access for world-class British red meat and dairy, empowering our exporters to maximise opportunities on the global stage.

The noble Lord, Lord Trees, queried whether Northern Ireland could be used as a loophole for transporters wanting to export livestock for slaughter and fattening. I assure him that the requirements when moving animals to Northern Ireland would make such a slaughter trade uneconomic. Livestock transported for slaughter from Great Britain to Northern Ireland must go directly to the slaughterhouse. It would be an offence to take them anywhere else. When livestock are moved for other purposes, they must be moved directly to the holding destination and remain there for at least 30 days. Failure to do so is an offence and may result in prosecution. We will also continue to monitor volumes over the next few years as this policy takes effect.

[Baroness Hoey (Non-Afl)]

The Minister rightly said that, in theory, anyway, the 30-day period stops in respect of transportation from Great Britain to Northern Ireland. But what about all the animals in Northern Ireland that will not be affected by that limit, and that will go to the Republic and down to Rosslare, and on a long journey to France and then Morocco?

[Lord Douglas-Miller (Con)]

The noble Baroness makes a very good point. Once animals have passed into the Republic of Ireland, that is outwith the jurisdiction of the Bill. That is the current position.

I would like to address the issues eloquently described by the noble Lord, Lord Dodds, and the noble Baroness, Lady Hoey, concerning Northern Ireland and the Bill. I hope they will appreciate that I am somewhat constrained in this respect. Perhaps I might write to them separately on the issues they have raised.

The noble Lord, Lord Dodds, raised the question of negotiations with the EU on veterinary medicines going into Northern Ireland. The Government are committed to seeing a long-term, sustainable solution ahead of December 2025 that will properly support the flow of veterinary medicines into Northern Ireland from Great Britain on an enduring basis. It remains our priority to find a solution, through technical talks with the EU, that removes the barriers to supply of veterinary medicines into Northern Ireland. The Government are very clear that, in all scenarios, it is imperative to safeguard the supply of veterinary medicines into Northern Ireland. If necessary, we will deploy all available flexibilities in line with our legal obligations.

The noble Lord, Lord Carrington, and the noble Baroness, Lady Hayman, asked about the impact of this legislation on farmers and businesses. The current position is that we expect the ban to have minimal impact. We published an impact assessment in 2021, which can be accessed via the Bill’s Explanatory Notes. We estimated the direct cost to businesses of ending live exports to be around £5.2 million across the 10-year appraisal period, or around £500,000 per year. As there have been no exports for this purpose since 2020, the impact will have further decreased.

My noble friend Lady McIntosh, the noble Baroness, Lady Young, and the noble Lord, Lord Carrington, also asked about border control posts on the northern coast of France. EU border control posts can be operated only with the approval of the competent authority in the relevant EU member state. The majority of BCPs are privately operated, and the main barrier to date for the establishment of a BCP for livestock is the commercial viability of such a site. We have encouraged our counterparts in France to do more to support commercial efforts to construct and operate a BCP for livestock, and we continue to engage with them to try to resolve this issue.

[Baroness McIntosh of Pickering (Con)]

My Lords, may I press my noble friend on that point? Across the European Union, most ports are owned by the state. Is there any wriggle room whereby my noble friend and the Government could ask the Government of France to look into providing some sort of help? It looks like a rather protectionist measure as it stands.

[Lord Douglas-Miller (Con)]

I understand my noble friend’s point. I assure her that our officials are working very hard on this issue, but it is not going at pace at the moment.

My noble friend Lady McIntosh also asked why the Bill had been brought forward, given that there are other issues facing our farming sector. It is important that we put a permanent end to this unnecessary trade. Although there have been no exports of livestock for slaughter recently, given that there is demand from the EU for sheep from Great Britain, we would expect that trade to restart in the future if we did not legislate to ban live exports now. She also asked whether there were any plans to introduce a corresponding ban on animals imported for slaughter and fattening. There has never been a particularly significant import trade for either: for example, in 2019, only 91 cattle and 178 sheep were imported for slaughter or fattening from mainland Europe.

The noble Baronesses, Lady Bakewell and Lady Hayman, reflected on the Government’s broader animal welfare commitments. I take this opportunity to reassure them that we remain committed to our other animal welfare manifesto commitments, which are to crack down on illegal puppy smuggling, ban the keeping of primates as pets, and prevent livestock worrying.

On the question that the noble Baroness, Lady Hayman, raised on poultry, when we consulted on banning live exports for slaughter or fattening, we were clear that we were not proposing to extend the ban to poultry. There have been no exports of adult poultry for slaughter in recent years. I appreciate that the poultry industry and breeding companies export around 25 million day-old chicks every year, but no welfare concerns have been identified with this practice.

I once again thank all those who have spoken for their thoughtful and valuable comments. It has been hugely encouraging to hear the broad consensus throughout the debate on the importance of protecting and enhancing the welfare of the animals in our care. It is also clear that we can agree on the core aims of the Bill.

Bill read a second time and committed to a Grand Committee.

Right to Roam

Lord Douglas-Miller Excerpts

Wednesday 21st February 2024 Lords Chamber

[Baroness Jones of Moulsecoomb]

To ask His Majesty’s Government, in the light of reported plans for mass trespass on Dartmoor on 24 February, what assessment they have made of the case for the right to roam.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, I declare my farming interests, as set out in the register. The Government have not undertaken any assessment of the case for the right to roam. The Countryside and Rights of Way Act 2000 already provides a right of access to large areas of mountain, moor, heath, down, registered common land and coastal margin in England. In our environmental improvement plan, we committed that everyone should live within a 15-minute walk of a green or blue space and to work to reduce barriers that prevent people accessing such spaces.

[Baroness Jones of Moulsecoomb (GP)]

I tabled this Question because there will be a mass trespass, and the reason for it is that there are places that people are allowed to access but cannot get to because they have to trespass to access them. I understand that it is a difficult problem when half the country is owned by less than 1% of the population, but, quite honestly, the first duty of this Government—of any Government—is the health of the people, and being able to get out into nature is part of that. Will the Minister look at updating this and at having a logical right to roam Act?

[Lord Douglas-Miller (Con)]

The noble Baroness raises a good point regarding connecting to lost land and open spaces. The Government are aware that in the original mapping of open access land, some areas were identified to which there is no legal route. We are committed to undertaking a review of this position, and legislation to facilitate this review was recently passed into law in the Levelling-up and Regeneration Act.

[Lord Clark of Windermere (Lab)]

My Lords, we all welcome the Minister’s answer about open access land, and I am encouraged by it. The previous Government proposed that it be mountains, moorland, heath, et cetera. In addition to that, the Forestry Commission decided it would open up its forests wherever possible. Can the Minister give me an assurance that there will be no pressure at all on the Forestry Commission to weaken its provision of access for the people?

[Lord Douglas-Miller (Con)]

My Lords, public access is already available to over 1 million hectares of England’s open access land, including areas of coast, heath, moor and mountains, as I said, as well as 258,000 hectares of public forest estate. That commitment remains.

[Baroness Fraser of Craigmaddie (Con)]

My Lords, like me, my noble friend will know that there is a right to roam in Scotland, so he will also be aware that, with the right to roam, comes responsibilities. Can he give the House an assurance that, if the Government are minded to look at any right to roam, the aspect of responsibilities—such as keeping dogs on leads, particularly in farming areas, and the setting of fires—will be given due consideration?

[Lord Douglas-Miller (Con)]

My noble friend raises a good point. There are issues around responsible access, such as illegal parking, livestock worrying, disrupting wildlife, damage and littering—a favourite topic of mine. The issues in Scotland are obviously devolved to the Scottish Government, but, if the Westminster Government were ever minded to look at this again, establishing a proper code of conduct for accessing the outdoors, and linking that to a proper consultation and a proper plan for education on this issue, would be absolutely critical.

[Baroness Hayman of Ullock (Lab)]

My Lords, it was over 20 years ago that we last had this reviewed, under the Countryside and Rights of Way Act, so I am pleased that that will happen. We have to end this piecemeal approach, which causes completely unnecessary divisions between landowners and people who want to walk. Will the review look at existing footpaths? I can think of a number of footpaths in Cumbria that are completely impassable now. It is really important that we keep existing routes clear and open for people to use.

[Lord Douglas-Miller (Con)]

The noble Baroness makes a good point. Maintaining access to all these routes is at the forefront of the Government’s agenda at the moment. I will certainly take away her specific point regarding Cumbria and see whether we can do something about that.

[Lord Deben (Con)]

My Lords, I am a small farmer, and just as the last ministerial Answer said that it was very difficult to make decisions about parking on pavements, this is also a very difficult area, and it is not helped by slogans. There is a difficult issue around balancing the demands in the countryside, and many of us have noticed that, particularly during the flooded periods when the land is extremely vulnerable. Will the Minister make sure that he gets the balance right between those of us who produce the food and those who want to use the land for roaming?

[Lord Douglas-Miller (Con)]

As a small farmer as well, I sympathise with my noble friend. Getting the balance right between responsible access and the other legitimate uses of that land is critical. In future, I hope that we can strike that balance correctly.

[Earl Russell (LD)]

My Lords, a recent survey showed that there were 32,000 blockages on our public footpaths. Further to the points already raised, it is extremely important that our footpaths are clear and accessible. Will the Government therefore consider providing long-term funding to local councils, which have the legal responsibility but not the resources to keep our public footpath networks open?

--- Later in debate ---

[Lord Douglas-Miller (Con)]

The noble Lord is quite right that local authorities have that responsibility. I can certainly take away his suggestion that we provide additional funding for that, but it is not part of the programme at the moment.

[Baroness Blower (Lab)]

My Lords, given what we know about the parlous state of the mental health of children and young people, and what we know about the restorative properties of spending time in green space and open countryside, does the Minister agree that getting on with this should be done expeditiously and urgently?

[Lord Douglas-Miller (Con)]

I completely agree with the noble Baroness on the restorative qualities of access to nature, for not just young people but people of any age. The Government have spent considerable amounts of money on improving access for the public to not just our urban spaces but wider spaces, with the creation of new national parks and other areas. I completely agree with the noble Baroness on her point.

[Lord Bellingham (Con)]

My Lords, will the Minister find time today to look at the damage being done to various tracks and byways open to all traffic—so-called BOATs—where, quite often, off-roaders are not just causing damage to the local environment but disturbing walkers, riders and other people who want to enjoy the countryside?

[Lord Douglas-Miller (Con)]

It seems like a similar issue to bikes on pavements—bikes on paths in the countryside. This is a really difficult area, and one I come across a lot in my private life, with people accessing the countryside in inappropriate ways. Paths are narrow, and it is often quite dangerous when someone on a mountain bike, or a group of people on mountain bikes, is coming down that path. It is intimidating, and it is very challenging to find a safe place and a safe way to make those two meet. I sympathise with my noble friend.

[Lord Browne of Ladyton (Lab)]

My Lords, traditionally, people in Scotland have been allowed freely to access the outdoors. I am 71 years of age, and all my life I have known that I was free to walk anywhere, as long as I did not do any damage. This was codified in the Land Reform (Scotland) Act 2003, which set out the conditions that you must observe if you do so. Can we not just adopt the same here and let people enjoy this? it does not cause any problems.

[Lord Douglas-Miller (Con)]

As a resident in Scotland, I would not necessarily agree with everything that the noble Lord has said. It is a devolved issue, and Scotland is entitled to make its own decisions on this.

[Lord Lilley (Con)]

My Lords, as a young boy, walking in the countryside and coming across a sign saying, “Trespassers Will Be Prosecuted”, my father assured me that it was a bluff. There is no law against trespass in this country, as long as you do not do damage to crops, livestock or property. That was why Mr Fagan, when he climbed over the wall into Buckingham Palace and got into the Queen’s bedroom, could not be sued for trespass but had to be convicted of stealing half a bottle of wine.

[Lord Douglas-Miller (Con)]

I am not entirely sure what the question was, but if my noble friend wants me to agree with him about Mr Fagan, I am very happy to do that.

Water Industry Act 1991 (Amendment) Order 2024

Lord Douglas-Miller Excerpts

Wednesday 21st February 2024 Lords Chamber

Moved by

[Lord Douglas-Miller]

That the draft Order and the draft Regulations laid before the House on 15 January be approved. Considered in Grand Committee on 19 February.

Motions agreed.

Environment Agency: Flood Defence Expenditure

Lord Douglas-Miller Excerpts

Tuesday 20th February 2024 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

I beg leave to ask the Question standing in my name on the Order Paper and declare my interest as co-chairman of the All-Party Parliamentary Group on Water.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, I declare my interests as set out in the register. In the 2021 spending review, the Government increased funding for flood defence maintenance by £22 million annually, bringing the total investment to more than £200 million a year. Additionally, the Government switched £25 million from the capital programme to use on maintenance this financial year. As a result, 93.3% of flood defences are at the required condition, protecting over 240,000 properties in recent storms.

[Baroness McIntosh of Pickering (Con)]

My Lords, given the constraints on flood spending, does my noble friend agree that resources could be spent differently, possibly better? Does he recognise the importance of regular maintenance and dredging of watercourses and the role of farmers and drainage boards in performing them? Will he agree to look at the possibility of merging the flood spending budget into one total budget, instead of artificially dividing capital and operational expenditure? That one measure alone would prevent arguments taking place during a flood about what constitutes capital or operational expenditure, meaning that the funding could be achieved quicker.

[Lord Douglas-Miller (Con)]

My noble friend raises a good point. With over £200 million per year spent on maintenance, and a £5.2 billion capital investment for the 2021-27 years, flood defences are well resourced. There is a degree of flexibility between the two pots. By way of an example, last autumn the Government switched, as I said, £25 million from the capital programme to use on maintenance, given the severity of the storms. Resource funding to maintain existing flood defences is prioritised and allocated on a risk basis, focusing on assets protecting the greatest number of people and property. My noble friend also asked why we have a maintenance and a capital budget allocation. There are two separate budgets here: one for annual maintenance and one for flood defences. This approach is not specific to flood expenditure, but relates to how the Government account for public expenditure based on the Treasury guidelines.

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, the noble Lord, Lord Campbell-Savours, is participating remotely.

[Lord Campbell-Savours (Lab) [V]]

My Lords, why do we not just stop housebuilding on the flood plain, when it is quite clear that we have increased flooding due to climate change? The expense of Flood Re settlements can only rise, with the already battered wider insurance market paying higher and higher premiums. Surely the answer is to ignore the pressure from developers for planning permission on flood plains, and sensitively to take more green-belt land—or is it that the developers have some undue influence on government?

[Lord Douglas-Miller (Con)]

The issue relating to flooding is not so much where we build our houses but how we build them. Historically, there have been some real challenges putting the right defences in place when houses have been built on flood plains. The reality is that if we banned any housebuilding on any flood plains, we would build very few houses going forward.

[The Earl of Devon (CB)]

My Lords, I live and farm in a community that was inundated by inches of rain in a couple of hours last September. The 400 year-old school is no longer usable and ancient houses are uninhabitable. The cause of this was a simple lack of maintenance of culverts, ditches and drains by National Highways and local government. They simply do not have the budget to do that. What are the Government going to do to address this and ensure that local government has the money it needs to do the jobs we need?

--- Later in debate ---

[Lord Douglas-Miller (Con)]

The Government continue to invest in flood and coastal defence maintenance, with an extra £22 million per year for the current spending review period. Furthermore, £25 million from the capital programme has been reallocated to maintenance this year. In 2022-23, the Environment Agency spent more than £200 million maintaining flood risk assets across the country. Across the country we have about 90,000 flood risk assets which are checked annually by the Environment Agency.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, internal drainage boards provide essential services to areas that are habitually flooded. Currently, they are funded through district council tax. This is already stretching budgets, as IDB levies were increased by 18% last year. The Government have provided £3 million on a short-term basis. A more secure long-term solution is needed. Can the Minister say when this will be forthcoming?

[Lord Douglas-Miller (Con)]

Just today at the NFU conference, the Prime Minister announced new funding packages available to drainage boards across the country.

[Baroness Eaton (Con)]

My Lords, many councils report that the formula used to determine the Environment Agency flood defence grant favours urban areas over rural communities. Will my noble friend the Minister consider exploring a new funding model for flood defences that combines capital and revenue funding into a single place-based pot?

[Lord Douglas-Miller (Con)]

My noble friend raises a good point. The allocation of resources is pretty much exactly as she expressed. It is done on the basis that areas most at risk will receive most of the funding. The Government will keep this under review, and I will take that point back to the department.

[Baroness Hayman of Ullock (Lab)]

My Lords, I want to come back on the internal drainage boards answer. The councils affected are significantly financially impacted. We had a question yesterday on the impact on council finances. It is all very well that the Prime Minister has announced extra funding—that is excellent—but this is an urgent issue. How much money has been pledged, and when will councils see it?

[Lord Douglas-Miller (Con)]

I do not have the details to hand at the moment, but I will write to the noble Baroness in due course.

[The Earl of Clancarty (CB)]

My Lords, I will follow on from the question asked by the noble Lord, Lord Campbell-Savours. In answer to a Written Question that I asked last month, I had the most extraordinary reply: that neither Defra nor the Environment Agency holds data on the amount of new build that has been flooded. This is clearly important in thinking about both flood defences and building new homes. Do the Government intend to make good this gap in knowledge?

--- Later in debate ---

[Lord Douglas-Miller (Con)]

Indeed they do. A significant amount of research is ongoing around this issue. It is obviously very topical. Perhaps, once that research has been published, I can come back to the noble Earl.

[Earl Russell (LD)]

My Lords, the National Audit Office has noted that the Government have not set targets for the level of flood resilience they expect to achieve, and have not mapped any solid plans beyond 2026 to bridge the gap between their short-term actions and longer-term objectives. When will the FCERM strategy be updated, and are the Government planning to provide longer-term stable funding?

[Lord Douglas-Miller (Con)]

The Government have a very large budget for this spending period—£5.2 billion—and we are about half way through that process at the moment. The future funding arrangements will be subject to a funding review at the end of this period.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, can the Minister tell the House what can be done to stem the flood of Tory donors to the House of Lords?

[Lord Douglas-Miller (Con)]

I am not sure why we would want to do that.

[The Lord Bishop of Edmundsbury and Ipswich]

My Lords, I thought my question was going to be off the point. One of the issues raised frequently with me by those managing the coastline in Suffolk is the disparity between flooding risks, for which the Environment Agency takes responsibility, and coastal erosion, which is managed by local authorities. What assessment have the Government made of the disparity of funding for these two vital activities?

[Lord Douglas-Miller (Con)]

There is a difficult balance to strike here in how you allocate the amount of money that we have to protect flooding defences right across the country, between the allocation made on the basis of risk and the amount of money located to areas where we can make the most difference in the shortest time.

Water Industry Act 1991 (Amendment) Order 2024

Lord Douglas-Miller Excerpts

Monday 19th February 2024 Grand Committee

Moved by

[Lord Douglas-Miller]

That the Grand Committee do consider the Water Industry Act 1991 (Amendment) Order 2024.

Motion agreed.

Water Industry (Special Administration) Regulations 2024

Lord Douglas-Miller Excerpts

Monday 19th February 2024 Grand Committee

Moved by

[Lord Douglas-Miller]

That the Grand Committee do consider the Water Industry (Special Administration) Regulations 2024.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, these regulations and the Water Industry Act 1991 (Amendment) Order are part of a package that updates the water industry special administration regime legislation. The package is made up of two commencement orders and three statutory instruments. The first commencement order was made on 11 January and the two affirmative statutory instruments being debated today were laid in draft on 15 January. The second commencement order and the negative resolution statutory instrument will follow shortly after the affirmatives are debated.

The purpose of these statutory instruments is to enable the Government to facilitate a more effective water industry special administration regime. They apply to England and Wales, and ministerial consent has been secured where necessary. The Government already have powers in the Water Industry Act 1991 to apply to the High Court for a special administration order. However, updates are required as the current legislative regime is outdated and modelled largely on the Insolvency Act 1986, which has since been modernised. The most notable legislative updates were the Enterprise Act 2002; the Small Business, Enterprise and Employment Act 2015; and the Insolvency (England and Wales) Rules 2016. These updates to insolvency legislation are not automatically applied to the legislative framework of the water industry special administration regime. Instead, the Government must assess how to adapt these insolvency law changes to each industry’s specific special administration regime. Legislation relating to special administration regimes is laid periodically; recent examples of this are the Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021 and the Energy Act 2023.

It is vital that the Government are prepared for a range of scenarios, particularly regarding the continued provision of public services. This is why an updated water industry special administration regime is so important. I want to make it clear that the two main grounds on which a water company can enter special administration are unchanged by this legislation. They are insolvency, where a company may be unable to pay its debts or its liabilities are greater than its assets; and performance, where the company has failed to carry out its statutory functions or licensed activities to such an extent that it is inappropriate for the company to continue to hold its appointment or licence. During a special administration regime, customers’ water and wastewater services will continue to be provided.

The first statutory instrument for noble Lords’ consideration is the draft Water Industry Act 1991 (Amendment) Order 2024. This order implements hive down provisions through amending Schedule 2 to the Water Industry Act, which makes provision about transfer schemes upon the termination of an appointment or the transfer of a licence for a water industry company and is amended by this order to include provisions about transfer schemes in cases where there is a transfer by hive down. This amendment is necessary to ensure that the hive down provisions commenced last month by the Flood and Water Industry Act 2010 (Commencement Order 10) Order 2024 are fully operable. Hive down is a common commercial restructuring practice to ring-fence value and attract potential buyers. This amendment allows the administrator to hive down the regulated business to a subsidiary in order to protect its business and facilitate a sale process that may be more attractive to a potential buyer.

The second statutory instrument that I ask the Committee to consider today is the Water Industry (Special Administration) Regulations 2024. This instrument will apply, disapply and modify general insolvency provisions as they apply in relation to water companies, including licensed infrastructure providers, and special administration orders made in respect of those water companies under the Water Industry Act 1991.

These regulations make general modifications to the Insolvency Act 1986 and other enactments about insolvency provisions, alongside specific modifications to Schedule B1 to that Act. The amendments adapt Parts 26 and 26A of the Companies Act 2006 via specific modifications for the purpose of the water industry special administration regime and amend Section 26 of the Water Industry Act, and Schedule 1 to the Water Industry (Specified Infrastructure Projects) (English Undertakers) Regulations 2013. In addition, this set of regulations will give government the power to lay a negative statutory instrument in the coming weeks, which will revoke the Water Industry (Special Administration) Rules 2009, replacing them with updated special administration rules for water companies, based on the 2016 general insolvency rules.

These statutory instruments update the water industry special administration regime legislation to ensure that, should a water company ever be required to go into special administration, a modern, efficient water industry special administration can be implemented. I am grateful for the support of the Committee and am happy to take questions, which I will endeavour to answer in my closing speech.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am most grateful to my noble friend Lord Douglas-Miller for setting out the content of the SIs before us. I am in great support of them and have just a couple of questions to press my noble friend on.

When my noble friend set out the circumstances behind these instruments, he seemed to indicate that we are just putting into effect existing legislation here and updating it. I would just query the timing of this, which was also queried in the House of Commons when these measures were debated there. At the moment, there are additional investments that we are, rightly, asking water companies to make and which are of a very high order: £60 billion of capital investment over 25 years for storm overflows and other investments such as the self-monitoring programme, which was embarked on under the Labour Government and which we vigorously and enthusiastically pursued. Might these additional responsibilities on water companies be causing the Government some concern, or is it literally about putting in and updating the background, as my noble friend set out? Obviously, we all want to ensure that the water companies are fulfilling the legitimate investment that we have asked them to make.

I have a rather cheeky question. My noble friend knows of my interest in Schedule 3 to the 2010 water Act. Why has Schedule 5 been preferred to be implemented before us in these instruments, and when might we get the orders implementing Schedule 3 to the same 2010 Act? That would put into place the sustainable drainage systems and end the automatic right to connect, which has been called for since the Pitt review and surface water flooding of 2007. That is my rather cheeky interjection, which my noble friend might either want to respond to today or write to me on.

Parallels have been drawn in the report before us with energy companies. When energy companies have failed over the last two or three years, the existing customers of a company which was asked to take on the customers of a failed energy company have found, regrettably, that their tariffs and charges have gone up. This is obviously a matter for Ofwat, but can the Government give any undertaking to customers in the event of a water company failing—which, heaven forfend, we would not wish to see—so that, essentially, what happens in the water sector will not be what we saw happen in the energy sector?

--- Later in debate ---

Having said all that, as I mentioned earlier, we support these SIs. We think they are important, but we need to ensure that there is proper consideration of how water companies manage their environmental responsibilities.

[Lord Douglas-Miller (Con)]

I thank noble Lords for all their questions, which I will now endeavour to have a go at, and for their very welcome support for these instruments. As I mentioned in my opening speech, these statutory instruments will enable the Government to facilitate a more effective, efficient water industry special administration regime, ensuring that we are prepared for all eventualities to ensure the uninterrupted provision of vital services. A number of noble Baronesses touched on that today.

I will start with the several questions asked by the noble Baroness, Lady McIntosh of Pickering. I might have three out of four answers for her; the second one probably eluded us all.

Everyone will be aware that there has been some recent instability and speculation around the financial resilience of some of our companies in the water sector. This has led Defra to carry out due diligence work on our water industry special administration regime legislation. This exercise identified unmodernised provisions in the current legislative framework. These statutory instruments update water industry special administration regime legislation to ensure that it reflects modern insolvency practices, as is the case for special administration regime legislation for other public services. Ensuring that legislation on special administration takes account of modern insolvency and business practices is important, regardless of the financial resilience of the sector, to ensure proper preparedness.

The noble Baroness, Lady McIntosh, also asked whether customers will be paying for water companies’ failures. I think that was the gist of her question, which cropped up in a number of noble Lords’ concerns. I want to make it clear that we will always act to protect consumers as a priority. Any intervention that puts pressure on the public purse will be considered very seriously and only as a last resort. The purpose of being able to utilise a more efficient insolvency practice is to protect consumers and ensure not only that they do not pay for those mistakes but, more importantly in the short term—a point raised by the noble Baroness, Lady Hayman—that we can provide that service. We can have an argument later about who paid for what and whether somebody needs some money back, but it is crucial that that service—water and wastewater—is delivered for everybody. That would be critical if we had to go through an insolvency, so I reassure the Committee on that front.

The final question that I can answer from the noble Baroness, Lady McIntosh, is whether the public would end up paying to bail out a company in special administration. I again make it clear that we will always act to protect consumers as a priority and that, as I have said, any intervention that puts pressure on the public purse would be considered very seriously and as a last resort.

The noble Baroness, Lady Bakewell, asked a lot of questions. I am not sure that I will get to all of them but I will reflect on the ones I have missed and make sure that she gets a written response. The first question was about the Government’s position on Thames Water. As the noble Baroness is probably aware, water companies are commercial entities; it is not appropriate for me or any member of the Government to comment on the position of a specific company. It is for the company and its investors to manage the company’s financial resilience in the context of its licence and broader statutory obligations.

The second question was about why no companies are listed in Ofwat’s leading category, or how many are failing—I think that was the gist of the noble Baroness’s question. It is clear from Ofwat’s performance report that there has been a marked decline in the performance of a number of water companies over the past year or so. This has been driven by company-specific factors but also by the effects of extreme weather, including an unusually hot, dry summer and a winter that brought multiple freeze-thaw events in 2022 and 2023. There are also live enforcement cases against six companies, which precludes a leading rating where an enforcement case is under way. Specifically, there was a question on how many companies we think are going to fail; I am not aware of any companies that are about to fail. I do not have any information on that at all.

The third question was about why the hive down provisions have been introduced. Without them, only a direct sale of assets would be possible. This is likely to be much more expensive and complex to implement from a tax perspective as you would not benefit from the no-gain, no-loss treatment on transfer. It is probably also important to recognise that, if you get to the point of insolvency, the quickest route to providing the services that are absolutely critical is to package up what the company has to deliver in that hive down and get it back into the hands of somebody who can operate the business in the most effective way. Tying it up, with all the debt and the other complications that go with an insolvency, will just complicate and delay the issue.

I turn to the question from the noble Baroness, Lady Bakewell, about breaching environmental standards. As I stated in my opening speech, a water company can be placed into special administration on performance grounds where there is either a serious breach of their principles or statutory duties or an enforcement order that it is no longer appropriate for it to continue to hold its licence. One of the principal statutory duties held by a water company is under Section 94 of the Water Industry Act 1991, which says that a water company has a duty to deal with the contents of sewers effectually and provide the necessary infrastructure for that purpose, including meeting the requirements of the Urban Waste Water Treatment (England and Wales) Regulations 1994. This is key as, without treatment, urban wastewater has significant adverse impacts on our water environment.

Finally, the noble Baroness, Lady Hayman, asked a number of questions. I think I have touched on a few of them as I have gone through here. One of the issues that she focused on specifically was how Ofwat will regulate underperformance. Following the publication of its performance report in November 2023, Ofwat published the financial penalties and payments for all water companies. Ofwat required 13 companies to return £193 million to customers for underperformance in 2022-23. This money will be returned to customers through bills over the 2024-25 year. On the action that the Government are taking on underperformance, industry performance is below the level that the Government and regulators expect and the Government are taking action, alongside Ofwat, as we progress.

[Baroness McIntosh of Pickering (Con)]

Both the noble Baroness, Lady Bakewell, and I asked about the unusual position in which we will find ourselves, where a subsidiary company can be set up, meaning that the company is not competitive or living up to its responsibilities financially. I drew the parallel with chapter 11. Is this the first time that we have done this in the UK or is there another parallel? My noble friend could write to me on this.

[Lord Douglas-Miller (Con)]

It might be easier if I wrote specifically on that. Is my noble friend referring to the special administrator’s duties?

[Baroness McIntosh of Pickering (Con)]

If I have understood correctly, if a subsidiary company is set up for the purposes of the company continuing to act, does that mean, as with chapter 11, that it does not need to pay off its creditors or debtors? Is this the first time that it has happened in this country?

[Lord Douglas-Miller (Con)]

I am a little unsure on that, so perhaps the best thing for me to do is write.

I think we have covered the questions for which I have answers, and I will write to the noble Baronesses on a number of other questions. With that, I commend these instruments to the Committee.

Motion agreed.