Water Companies: Licences

Baroness Bakewell of Hardington Mandeville Excerpts

Monday 24th April 2023 Lords Chamber

Asked by

[Baroness Bakewell of Hardington Mandeville]

To ask His Majesty’s Government what assessment they have made of the announcement by Ofwat on 20 March of a change to the licences of water companies requiring that dividend payments are linked to performance.

[The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)]

My Lords, we support Ofwat’s new measures, which were made possible by new licence modification powers that this Government gave to Ofwat via the Environment Act 2021. The measures strengthen the existing dividend licence conditions so that Ofwat can take enforcement action against water companies that do not make an explicit link between dividend payments and their performance for customers and the environment.

[Baroness Bakewell of Hardington Mandeville (LD)]

I thank the Minister for his response. Since I tabled this Question, the Government have published their plan for delivering clean and plentiful water, which is to be welcomed and offers much hope. However, river pollution has blocked the development of 20,000 much-needed new homes, and more than 7,500 days’ worth of raw sewage has been dumped in various Ministers’ constituencies. Does the Minister believe that withholding dividend payments to water company executives and shareholders will really contribute to making the difference needed to improve long-term water quality? Surely something more robust is needed.

[Lord Benyon (Con)]

My Lords, that is just part of a great many things that the Government are doing. The new power that the Environment Agency has to link the companies’ licences to ring-fence provision on infrastructure spending is important. This comes as part of a plan that includes the Environment Act, as I said earlier; the Storm Overflows Discharge Reduction Plan; a strategic policy statement for Ofwat, in which the Government required very stringent new standards; and our recently published plan for water. No Government are doing more to tackle this issue.