Water (Special Measures) Bill [Lords]

Andrew Pakes Excerpts

2nd reading
Monday 16th December 2024 Commons Chamber

[Andrew Pakes (Peterborough) (Lab)]

Phew! Thank you, Madam Deputy Speaker. [Laughter.] I am privileged to speak on Second Reading of a Bill that is of huge interest to my constituents and the country. After 14 years, the new Government have inherited record levels of illegal sewage dumping in our rivers, lakes and seas, an Environment Agency budget halved since 2010, crumbling infrastructure, with bursting pipes and record spills, and unaccountable water companies.

It is time to change that. It is time to hold our water companies to account and to start fixing the problem. That is why this Government have made the Water (Special Measures) Bill a priority. We need immediate action to end the disgraceful behaviour of water companies and their unruly bosses. We had more than 3,000 hours of sewage poured into our rivers in my constituency alone last year. A lot of sewage came out of the last Government, but certainly not the sewage we are talking about tonight.

After our sewage discharges, Anglian Water, which I know is many Members’ provider, belatedly had to pay £38 million to Ofwat. The year before, Anglian Water’s chief executive received a £1.3 million package in pay and bonuses, despite the company’s poor performance. Despite overseeing the catastrophic failure, water chief executives have paid themselves more than £41 million in bonuses and incentives since 2010. It gets worse: Thames Water’s boss took a £195,000 bonus at the end of March for just three months’ work. That is the unacceptable face of unaccountable privatisation.

Little wonder, then, that constituents writing to me are angry and that people have so little faith in the power of accountability and regulation, when so little was done by the last Government. I asked Ofwat these questions directly when it appeared before the Environment, Food and Rural Affairs Committee recently. The answers were wanting. That is why the Bill is so needed, and why Ministers have brought it forward so quickly. It sets out new powers to make water companies accountable, to ban bonuses for CEOs and senior leaders unless high standards are met, and criminal liability for water executives, and it sets out a new approach to ensuring that water companies live up to their environmental obligations and serve the public good. I want to put on record my thanks to those public servants who have been fighting hard against the water companies, despite the cuts of the last decade: those in the Environment Agency, the public servants in our water utilities, and members of GMB, Unison and Prospect who know what looking after our water and nature is really about.

The Bill treads where the last Government failed to go. Let us be clear about the Conservatives’ legacy: they failed to invest in broken infrastructure and let consumer money be spent irresponsibly on bonuses and shareholder payouts. The Bill rightly calls time on that unruly behaviour. It begins to restore trust in the management of our waterways and in public service and accountable regulation. I commend the Bill.

Water (Special Measures) Bill [ Lords ] (First sitting)

Andrew Pakes Excerpts

Committee stage
Thursday 9th January 2025 Public Bill Committees

[Charlie Maynard]

Perhaps, since I am standing, I will make the other two points I want to make.

We have touched on Government amendment 2 already, but I think it is important. I was very pleased to see the wording coming in about bonuses. Proposed new section 35B(3) of the Water Industry Act 1991 says:

“Rules made for the purposes of imposing the prohibition mentioned in subsection (2)(a) (“the pay prohibition”)”.

That is the ban on bonuses. While the explanatory statement says that it is to prevent the need for a statutory instrument—which the Liberal Democrats support and seek to do in further amendments—the impact of the Government’s change is also to remove the requirement for the rules to be published by Ofwat within six months. That we find very odd.

I take it in good faith that the Government are keen to have the measures implemented, so we do not understand why they would take the timeline out. The Government want to ensure that it happens, but as currently stated, they are removing the timeline. Taking it on good faith that Ofwat will publish the rules is less strong than keeping in that commitment to six months.

I will correct the hon. Member for Epping Forest on our amendment 21. Our amendment relates to the same aspect of the Bill as Government amendment 2. However, we want to retain the need for Ofwat to publish the rules on bonuses within six months but remove the option for that to be kicked into the long grass by requiring the Secretary of State to lay a statutory instrument to bring them into effect. By taking out that provision, we remove that risk. That is the purpose.

[Andrew Pakes (Peterborough) (Lab)]

As a new Member, it is a privilege to serve on a Bill Committee under your chairmanship, Mr Vickers—I hope I will get all of it right. I felt particularly moved to speak on these amendments and clause 1, given some of the earlier comments. I was a bit worried that we had been transported by the Opposition back to a previous Conservative age, because we seem to be being told that water customers have never had it so good—as one of their predecessors said—because of all the action that was taken.

There has been a lot of talk about teeth. I ask the Minister to confirm that the Bill is about the dentistry that is needed to put more teeth into the water sector. When she responds, will she identify whether the clauses that the Government have tabled help to address some of the very real anger that my constituents feel about the way they have been ghosted and treated by the big water companies and the behaviour of some of the senior leadership? Representing a seat with Anglian Water, which I think applies to some other Members present, I place it on the record that there is real frustration at the performance and actions of such a large company when at the same time as more than 3,000 hours of sewage were being dumped into rivers around my area, the fens and John Clare county, we saw the Anglian Water chief executive receiving £1.3 million in a package of pay and bonuses, despite that poor performance. The anger and the desire and drive of this Government, but also the public, to see action is palpable, so I very much welcome the Bill and I seek clarity on that. It is absolutely right, as the Government have outlined, that we have a fast Bill to get these teeth and this emergency dental treatment delivered quickly, so that we can come back and put the braces on for the rest of the water sector—[Laughter.] I think I am running out of places where that analogy can go; it is getting very dangerous.

When we get the Cunliffe report and others, we will look at some of the bigger issues for the water sector, but I am very concerned by that £1.3 million. I serve as a member of the Environment, Food and Rural Affairs Committee and I share the concerns expressed by my hon. Friend the Member for Hastings and Rye that when we directly asked Ofwat whether it had the dental tools to challenge and put the surgery on to the water companies, Ofwat was very clear that it did not. I specifically asked the chief executive and leadership of Ofwat about another bête noire of the debate, which is Thames Water. Up until March 2024, in those three months, the chief executive gave themself a £195,000 bonus. Since 2020, we have seen £41 million given to water company chief executives in bonuses and incentives, so can the Minister reassure this Committee that the clauses that the Government have put forward will help to restore trust and put in place initial measures so that we can get on with this, end the delay, take action and start to put right the problems that the Government have inherited, and then look at the wider issues when we get the report later in the year?