Water and Sewage Regulation (Industry and Regulators Committee Report)

Baroness Bakewell of Hardington Mandeville Excerpts

Monday 16th October 2023 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I congratulate the noble Lord, Lord Hollick, on his excellent introduction to this brilliant report. All contributors to the debate have raised the worrying operational methods of the water companies. The noble Lord, Lord Cameron of Dillington, raised the absence of water testing.

Water is a resource we have taken for granted for far too long. We assume there will always be a sufficient supply for our needs: we turn on our taps and are able to drink clean water, we can shower whenever we wish, and we assume that when we flush our toilets, the system will deal with it and all will be well. Sadly, those days are gone, and everyone has a part to play in ensuring that our water supply is plentiful and fit for purpose and that our streams, waterways and coastlines are not stinking and polluted.

Primarily, it is the role of the water authorities to ensure that water supply and sewage disposal are fit for purpose. However, there has been little infrastructure investment over a long period. No new reservoirs have been built since 1991 and are not likely to be before 2029. The population of this country, however, has increased dramatically over this period. Water authorities appear not to have taken any of this into account in their business plans or strategies. The noble Lord, Lord Whitty, referred to this absence.

There have been failures on all sides: Governments have not provided sufficient funding for enforcement or set a central direction, and Ofwat has not required water companies to provide sufficient investment in infrastructure but has encouraged keeping consumers’ bills low. The Minister has, in the past, raised the difficulty of increasing water bills. During a cost of living crisis, care is needed to protect the vulnerable to ensure that water supplies are not cut off due to inability to pay water and sewage charges—the noble Lord, Lord Hollick, referred to unaffordable bills.

It will be a challenge but there must be more investment in solutions. There do not need to be costly concrete constructions, which Defra seems to prefer; the lower-cost, nature-based solutions are much preferable. NBS help with restoring habitats, storing water, creating new woodlands and rewetting bogs. However, when such solutions are put before government, they are rejected in favour of costly concrete solutions, with technical specifications cited as a reason. In a time when water is seen as a finite resource, it is not reasonable to apply the same technical specification to nature-based solutions as apply to concrete ones. A quite different approach is needed, and the noble Lord, Lord Agnew, gave an excellent example. Ofwat, the Environment Agency and Defra need to encourage nature-based solutions and, together, provide new guidance to make this happen. Reaching net zero is vital and if it is possible to assist in this process, then this should be a priority.

Nutrients are polluting our waterways due to runoff from both farming and housing developments. Developers have been dragging their feet on this issue. Due to the right to connect, they have failed to separate surface water runoff from foul water discharge. This has, in part, led to the current scandal of increased sewage overflows, especially when there has been no rain. Instead, developers should be encouraged to ensure that all new buildings have rainwater harvesting capabilities. It is time the right to connect was repealed.

I was dismayed to find that despite the vote in the Chamber banning nutrient discharge from housing developments, the Government are delaying the implementation of this measure, which would assist in improving countryside and wildlife habitats. Biodiversity net gain would have been mandatory in planning from November—that is, next month—but the Government have told developers that this will now not be implemented until sometime next year. Can the Minister say when exactly this law will be implemented and what the Government are doing to ensure that developers take rainwater harvesting seriously?

In April this year, the Government produced a plan for water: their integrated plan for developing clean and plentiful water. This was a step in the right direction but does not go far enough. An effective national water strategy is needed. Recently, the Secretary of State for Environment wrote to water companies via the Environment Agency, suggesting investment plans should be slowed down in order to keep water bills at a low level. This is a false economy. We need a water and sewerage infrastructure that is fit for purpose and can meet its current demands, not one that is antiquated, creaking at the knees and crumbling.

The Environment Agency has seen its budget cut drastically, from £170 million in 2009-10 to £76 million in 2019-20. Some increases have been made to its budget since then, but nothing takes it back to its original level and it does not account for intervening inflation. Underfunding has led a to lack of enforcement action, which is no longer a deterrent. The polluter pays principle is not taken seriously. Fines have been derisory compared to the profits which water companies have made.

Privatisation has led some water companies to put share dividends and directors’ bonuses before infrastructure investment. I noted in the report that it was suggested that no reward payments should be made when a water company did not meet its water quality targets. I fully support this view. The noble Baroness, Lady Jones of Moulsecoomb, has spoken eloquently on this.

In 2021, storm overflows, referred to by the noble Lord, Lord Agnew, were used 325,533 times for 2.6 million hours. Given that polluted water is a human health risk, I support the view that individual CEOs and directors should be held personally accountable for failures, with the penalties increased dramatically for them. I fully support paragraphs 252 to 256 of the report. It is time the softly, softly approach was abandoned altogether. The mechanism is there in the Environment Act for this to happen. The Office for Environmental Protection has a critical role to play and has already demonstrated that it is up for the challenge.

As I said at the beginning, this is a problem where we all have to play a part. I turn to wet wipes. The vast majority of packaged wet wipes indicate that they are not flushable, but this is in ridiculously small print. It is time the consumer realised that by flushing wet wipes and other plastic items down the toilet, they are responsible for helping to create fatbergs which are clogging up our sewerage system. It is time to ban plastic in wet wipes, but do we really need consultation, as the noble Duke, the Duke of Wellington, indicated? Manufacturers should move away from plastics. The information on flushability must be on the front of the package and in a minimum of 10-point characters, so that a magnifying glass is not needed to read it. Consumer awareness should be raised via advertising.

My noble friend Lady Bowles of Berkhamsted raised the issue of water usage by householders, including watering their gardens and washing their cars—which, as the noble Lord, Lord Cromwell, indicated, should be minimised. Use by farmers, horticulturists and manufacturing industry must be minimised where possible. This must be coupled with a programme of reservoir provision, both small local and larger regional provision. Not to do so is to adopt the attitude of the ostrich. The water and sewerage system must meet the demands of the current population, which is not predicted to decrease: quite the opposite. I know the Minister is aware of the difficulties surrounding the water industry and I look forward to his response to the many justified questions raised in this debate, especially those from the noble Duke, the Duke of Wellington.