Independent Water Commission: Final Report

Adam Dance Excerpts

Tuesday 10th February 2026 Westminster Hall

[Edward Morello]

I 100% share the hon. Lady’s concerns that water companies will exploit this moment in time. The public are calling out for firmer action, so the speed of the transition is vital.

Existing legislation already requires sewage to be treated effectively, and allows storm overflows only in exceptional circumstances, but the Government have admitted that overflows are being used far beyond their original purpose. Investigations have shown illegal discharge even on dry days. The Office for Environmental Protection has concluded that regulators have failed to comply with existing environmental law. The first task of the new regulator must be to enforce what is already on the statute book and to review permits across the system.

The commission also highlights the need for stronger customer protection. Recommendation 41 proposes strengthening the C-MeX—customer measure of experience—incentive and moving to a supervisory approach. That reflects the reality that customer experience has not improved, despite financial incentives. People paying their bills expect reliable service, timely responses and basic competence—not call centres that do not answer and complaints that disappear into the void.

That brings me to the question of accountability and ownership. The White Paper recognises the unsustainable debt levels created by the current model, and talks about attracting long-term, low-risk investors. It also introduces new performance improvement regimes. But there is a real risk of tinkering around the edges while leaving a fundamentally broken model intact. As long as water companies exist primarily to generate profit, decisions will be shaped by that motive alone.

Alternative models across Europe deliver lower bills, higher investment relative to debt, and fewer discharges. Both the commission and the White Paper fail to engage seriously with those models. In West Dorset, we are served by Wessex Water and in a small part by South West Water. My constituents see a pattern of rewarding failure across the water system that is impossible to justify during a cost of living crisis.

[Adam Dance (Yeovil) (LD)]

Last year, bosses of Wessex Water received £50,000 in extra pay—more than many people in Yeovil earn in a year—from the parent company, while constituents in Ilminster report that they cannot swim in their rivers without risking getting sick. Does my hon. Friend agree that the Government must now ensure that sewage dumping at bathing sites ends by 2030 and that water bosses get no extra pay until sewage spills stop?

[Edward Morello]

My hon. Friend is absolutely right to highlight the issues in his constituency. At a time when people are paying higher and higher water bills, there is understandably a sense of frustration with the outlandish bonuses being paid to executive bosses overseeing this failure.

Between 2020 and 2021, water company executives paid themselves £51 million in remuneration, including £30.6 million in bonuses. I am glad that the Government have started to take action on this behaviour in the Water (Special Measures) Act 2025, but it is not enough. In 2022 alone, water and sewage companies paid out £1.4 billion in dividends, nearly three times as much as the year before, while household bills rose and families were forced to make difficult decisions. All the time, sewage continued to be pumped into our rivers and beaches.

We need a proactive, evidence-based assessment of alternative ownership models before the water reform Bill is finalised. Water companies should be redesigned with public benefit and environmental protection as their core purpose. The Liberal Democrats are calling for a new ownership model, with water companies mutually owned by customers and professionally managed. The special administration regime exists to protect customers and the environment when companies fail. Thames Water is the clearest example of a company that has failed financially, operationally and environmentally. We need transparent criteria for when the SAR will be triggered and a clear plan for using it to transition companies to public benefit models where necessary.

Affordability must also be central to reform. It was not mentioned enough in the final commission report. Families are already under intense pressure from the cost of living crisis. Environmental improvement cannot be paid for on the backs of those least able to afford it. It must be paid for by those who caused the problem. Bills must be fair, and investment must be efficient, long-term and low-risk. Financial penalties must be ringfenced for infrastructure upgrades and nature-based solutions, not absorbed as a cost of doing business.

The commission’s call to end operator self-monitoring is welcome, as is the move towards open monitoring and near-real-time data. The speeding ticket-style fines previously introduced by this Government should also be welcomed. However, credibility depends on independent testing, frequent inspections and proper funding for regulators. Data must be accessible, understandable and trusted by the public.

We cannot clean up our rivers by focusing on sewage alone. Agriculture accounts for pollution in about 40% of water bodies. Farmers are essential partners, but are struggling in our current system of underfunding. The system must support prevention at source by supporting our farmers and helping them to tackle water pollution through better funding and guidance.

This is a huge opportunity for cross-party consensus, legislative reform and long-term thinking and change. The support across the House for it is a testament to the scale of the problem, but also to people’s willingness to collaborate on the future. The Independent Water Commission has laid important foundations, and the White Paper moves the conversation forward, but neither goes far enough on its own. Change must be public-facing, rooted in public benefit and focused on prevention rather than clean-up. It must restore trust—trust that politics can deliver change, that regulators will enforce the law, that legislation passed in this House will make a difference and can change the sector, and that water companies will finally put people and the environment before profit.

Communities such as mine in West Dorset cannot afford another decade of half-measures. Our rivers, our coastlines, our communities, our health and our homes are at risk. I hope we can seize this moment to deliver the transformational reform that the public rightly want.