Independent Water Commission: Final Report

Anna Dixon Excerpts

Tuesday 10th February 2026 Westminster Hall

[Edward Morello]

The hon. Member is absolutely right. I shall come on to some of the recommendations that we believe are necessary to make it more than just a reset in name only.

Let me start with the reality in my constituency. In 2024, West Dorset recorded 4,200 sewage spills and the discharging of raw sewage for nearly 49,000 hours from 90 storm overflows. I have no doubt that other Members can cite similar, if not worse, statistics for their constituency. Only 11% of our monitored river sites reach “good” ecological status. The River Lim is categorised as ecologically dead. Rare chalk streams such as the River Frome, Wraxall brook and West Compton stream are under severe pressure, as are Atlantic salmon populations.

Tourism in West Dorset, worth over £322 million a year and supporting more than 5,000 jobs, is threatened by our poor water quality. My constituents, their children, the visitors who support our communities, and families, including my own, love our beautiful world-famous waterways, but no one should have to check an app on their phone to see whether it is safe to swim that day. The final report continually underlines the lack of public trust. To change this, reforms must be visible, transparent and public facing. If people are to believe that things are changing, they need to see progress, understand the standards and know that failure has consequences.

We need blue flag-style standards for rivers and chalk streams. Clear standards, mandatory testing and visible ratings would help rebuild trust. Where standards are met, confidence grows. Where they are not, communities can hold companies and regulators to account. Recommendation 3 of the report proposes a comprehensive systems planning framework, with regional water authorities responsible for integrated planning, funding, setting objectives, monitoring and convening stakeholders. That approach recognises that water does not respect administrative boundaries and neither should planning. Housing growth, agriculture, flood risk, river health and water supply must be considered together across Government Departments. The bodies must be statutory, democratically accountable and empowered to make binding decisions. Without that authority, we would risk repeating the mistakes of the past: endless consultation without delivery.

When I have previously argued that water companies should be made statutory consultees in the planning system, the Government have resisted that change. The water White Paper now states that Ministers

“will also consider the role of water and sewerage companies in relation to planning applications”

as part of the reforms to statutory consultees. That is a welcome change, but simply considering it is no longer enough. Making water companies and national landscapes statutory consultees for major developments would be a preventive, low-cost reform that aligns planning decisions with environmental reality, reducing flood risk.

The commission is also right to highlight the importance of pre-pipe solutions. Recommendation 10 calls for legislative changes to expand pre-pipe solutions, so that we can stop pollutants and rainwater entering the system in the first place. In too many places, combined sewers are overwhelmed by rainfall that mixes with raw sewage and triggers spills. That is not sustainable in a changing climate.

We need a long-term national rainwater management strategy, with sustainable drainage systems being mandatory in all new developments, and a serious programme of retrofitting in existing communities. Rainwater harvesting should become the norm. We must bring ourselves in line with modern housing standards and our European neighbours, just as minimum solar requirements are being made mandatory, thanks to the private Member’s Bill introduced by my hon. Friend the Member for Cheltenham (Max Wilkinson). Those are low-carbon, cost-effective and resilient solutions. They would reduce pressure on sewers, lower flood risk and protect rivers, but the White Paper only gestures vaguely in that direction. Without clear, consistent standards and funding, progress will remain slow.

On regulation, the commission calls to replace Ofwat with a new integrated regulator, which is welcome and overdue. The Liberal Democrats have called for exactly that since 2022. Ofwat’s primary duty to ensure reasonable returns has shaped a culture that has tolerated pollution, debt loading and under-investment. A regulator with explicit duties to protect public health and the environment is a step forward.

I am glad that the White Paper has stated that the Government will commit to a new regulator by abolishing Ofwat and bringing together the relevant water system functions from existing regulators—Ofwat, the Drinking Water Inspectorate, the Environment Agency and Natural England—into one new body. But again, that alone is not enough. That body must have teeth: it must be properly resourced, independent and willing to enforce the law.

[Anna Dixon (Shipley) (Lab)]

The Public Accounts Committee recently had a hearing on environmental regulation with the Environment Agency and Natural England. Does the hon. Gentleman share my concern that the transition to a new regulator is a huge undertaking and that there is a risk while it is being set up? We must not take our eyes off the enforcement and regulation of water companies to ensure that we reduce the amount of their pollution in the meantime.

[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.

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[Anna Dixon (Shipley) (Lab)]

It is a pleasure to serve under your chairship, Sir Jeremy. I congratulate the hon. Member for West Dorset (Edward Morello) on securing this important debate.

My constituents in Shipley, with the lovely River Wharfe and River Aire flowing through, have been outraged at the levels of water pollution in them. They face high bills, while leaking infrastructure causes damage to roads and homes. Companies such as Yorkshire Water have been failing us for years now. We suffered last year from a failure to invest in new reservoirs, with an almost year-long drought starting in the spring.

I very much welcome the fact that this Labour Government have come in with a determination to tackle those issues. I was pleased to vote for and support the Water (Special Measures) Act 2025, which made sure we took immediate action to clamp down on the obscene bosses’ bonuses, including those that the chief exec of Yorkshire Water was receiving. Very sadly, the Kelda holdings company, which owns Yorkshire Water, also paid her a sort of behind-the-scenes £1.3 million extra payment, which I and others have been urging her to donate or give back. I hope that in future the companies meet the spirit of the legislation.

I welcome the work of Sir Jon Cunliffe in bringing forward the Independent Water Commission. I put in a submission to the review, setting out some actions that I felt were necessary for fundamental reform of the water industry, so that it works better in the interests of customers and the public by clamping down on the illegal discharges of sewage, which are all too frequent. I am pleased to see that the Government have addressed quite a number of those issues in the water White Paper. I put on record my thanks to the People’s Water Commission, a group of campaigners, researchers and experts who came together to engage the public on their views about water. I particularly thank Becky Malby, a local resident who is involved in the Ilkley Clean River Group.

I sit on the Public Accounts Committee; I do not know whether that is part of my entry on the Register of Members’ Financial Interests. The Committee has recently undertaken two reports, the first on water regulation and the second, not yet published, on environmental regulation. I will briefly quote findings from the first report:

“Ofwat has failed to prevent companies taking excessive dividends, increasing levels of debt and setting up complex company structures, all of which have reduced their financial resilience. The sector’s risk profile has risen and customers must now pay investors higher returns as a result.”

To illustrate the point, my own Yorkshire Water bill shows that 23% is just to finance debt, while 17% is spent on infrastructure investment. How can that be? Unfortunately, there is no end in sight for the bill payers being made to pay that debt. I urge the Minister to say how she will change the gearing of those companies that are so indebted. Despite the figures of £104 billion in investment and, for Yorkshire Water, £8.3 billion, it does not seem as if the shareholders are actually putting their hands in their pocket. It is the customers who will have to pay for the infrastructure upgrade and for the past failure of companies to invest.

I would like to draw attention to a couple of other points on which I would welcome the Minister’s reassurance. I warmly welcome the creation of a new regulator, as the Public Accounts Committee has recommended. How will we ensure that it has the right skills and resources? The previous Government cut funding to the Environment Agency, which meant that it failed to do its job of prosecuting some incidents; I am pleased that under this Government we now have many cases in hand. The regulator needs skills to take action on the finances, given the complex structures.

How will we ensure that customers’ money is going where they want? How will the regulator take action on pollution and work with the Environment Agency on how farmers, who face many regulations, can play their part in cleaning up our rivers and seas? I urge the Minister to take all the actions in the water White Paper to make sure that companies such as Yorkshire Water are properly held to account in future.

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[Jeremy Corbyn (Islington North) (Ind)]

I congratulate the hon. Member for West Dorset (Edward Morello) on securing this debate, which is timely and very important. The Cunliffe report is seriously flawed, in that it did not consider public ownership of the industry or agriculture, which is a major polluter, as other colleagues have already pointed out.

Privatisation of water has been an absolute disaster from the very beginning, when many of us at the time warned against it. It has resulted in £72 billion being taken out of the industry in dividends and profits, and fantastic levels of executive pay. It has left behind pollution and flooding, with the cost of the pollution, flooding and foul water being borne by the public—our constituents—who are increasingly angry about it.

By any standard, river quality is appalling right across the country and is one of the worst anywhere in Europe. That is caused by the mixing of rainwater with sewage waste, and by agricultural run-offs that have a devastating effect. The River Wye is just one example of how awful the rivers can become, because of agricultural waste run-offs—hon. Members who drew attention to that are absolutely right. The waste of water from leaks is a huge problem, and I think I am right that the totality of leaks across the whole country would fill the whole of Loch Ness every year.

Therefore, instead of calling for new reservoirs to be built, should we not look at much better water management, rainwater retention and water distribution across the country? In England, the biggest water consumers are in London and the south-east, which is, broadly speaking, the driest part of the country. The wettest part of the country is the midlands and the north-west. Clearly, moving water from one part to the other makes a lot of sense. Can we not have some sense surrounding the organisation of water distribution?

[Anna Dixon]

Does the right hon. Gentleman recognise that under the previous Government, light-touch regulation left our infrastructure crumbling? It is right that there will be asset mapping under the new proposals, so that we can finally know the state of the infrastructure and whether these investments are actually fixing the leaks.

[Jeremy Corbyn]

Absolutely. The state of the infrastructure does need to be examined. Like many Members, my constituents have endless complaints about that. Thames Water is one of the most frequent visitors to my constituency; it digs up the roads frequently. With the resulting road closures—which are absurd—Thames Water is much better at traffic management than Transport for London, actually.

I would also ask that we look much more seriously at river basin management. I remember visiting York with the hon. Member for York Central (Rachael Maskell) during the flooding at that time. We had a long discussion with the Environment Agency about planning for flooding, which would involve restoring peatlands, upland planting, reintroducing beavers and others into rivers—that has an effect on a small scale, with lots of rivers and streams—and restoring floodplains. Those sorts of things are some of the most important things we can do.

Water should be taken back into public ownership—not old-style public ownership, with a board of governors or directors appointed by the Government, but a popular form of public ownership that would involve the brilliant workforce in all those companies, and their knowledge. The directors would come from them, and from local communities, businesses, local authorities and unions, so we would have a locally and popular-based water industry in our society. We could do it. Why don’t we try that?

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[Anna Dixon]

Will the Minister assure the House that the regional planning for water catchments will have a strong citizen voice embedded in it, as well as drawing on evidence and expertise?

[Emma Hardy]

Absolutely—evidence and expertise. We are yet to work this out. As I said, the composition will depend on the catchment. In the White Paper, we referred to “community voices”, which we want to represent.