Watchdogs (Industry and Regulators Committee Report)

Baroness Jones of Moulsecoomb Excerpts

Monday 9th September 2024 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I congratulate the noble Lord, Lord Hollick, on his opening speech, which was very good, and also congratulate his committee on this report, which was extremely interesting. If Who Watches the Watchdogs? is to have an impact, we in your Lordships’ House have a responsibility to hold those watchdogs to account.

The report highlights a lot of challenges, but the key challenge for the new Government is to ensure that real change actually happens. It is very easy—well, perhaps not easy—to produce a report, and we produce reports and they are then often ignored. As the Institute for Government says about the infected blood scandal:

“Past inquiries, including the high-profile Mid Staffs inquiry, have put forward similar recommendations on culture, candour and patient safety. These have not, however, resulted in change.”


We have 90 watchdogs, a library full of regulations, and all supported by some very high-level civil servants, probably drawn from our best public schools. It is a puzzle as to why we have had Grenfell, infected blood, sub-postmaster prosecutions, Hillsborough and the PPE contract scandals. It seems that here in this country, ordinary people can die but those responsible never get jail time. Ordinary people can lose everything but will have to wait decades for compensation, while the CEOs enjoy bonus payments and retirement cheques, and never have to worry about paying any money back. It seems that ordinary people take pay cuts for years but the profits for energy companies stay excessively high. Why do the shareholders of water companies get billions in dividends while those of us paying the bills pay the interest on their debts?

If noble Lords want to know why Britain has more billionaires than ever before but collapsing public services, it is because many modern fortunes have been built on regulatory capture, privatised services, and a system of corruption designed to separate taxpayers and bill payers from their money.

I was shocked to discover today that water companies have a duty to not pay shareholder dividends if that stops them delivering improvements and doing their jobs. What has Ofwat being doing for the last few decades? Why do this Government think that this is going to suddenly change if they leave Ofwat in charge?

This report examines the many and varied reasons why watchdogs are failing, but I want to focus on two that the proposed watchdog of the watchdogs is seeking to address. First, there is regulatory capture. The water industry is riven with revolving doors, as Ofwat is joined by water company bosses and water companies co-opt ex-Ofwat chiefs. The deals are arranged between an overstretched Environment Agency and water companies to keep the industry solvent. Is the Environment Agency captured by business interests rather than doing its job to protect the environment?

This weekend, I visited Lake Windermere to see the well-publicised problem of pollution there, and I heard some distressing reports. On the August bank holiday in 2022—when, as you can imagine, a lot of holidaymakers were making their way to Lake Windermere—around the lake, six miles of blue-green algae were clearly visible in the north basin. World Health Organization limits were breached, yet the Environment Agency issued no warning because of “reputational risk”. On 15 May 2024, United Utilities spilled 10 million litres of untreated sewage into the lake in an eight-hour period. Again, the Environment Agency response was inadequate.

I argue that within the definition of “national park” there should be a high standard for the water in that park, which does not happen at the moment, and that should prevent sewage dumps and other pollution. Lake Windermere could be a pilot for that idea.

The Grenfell Tower Inquiry report points out the problem that successive Governments have failed. It seems that the cutting of red tape was done with a carelessness that is absolutely incredible. Regulations can be influenced by the power of money. Private developers accounted for around a third of donations to the Conservative Party for about a decade, and lobbying by developers and the construction industry undoubtedly played a part in the shameful Grenfell cladding scandal and the deaths of residents.

I say to the Minister opposite and to the new Government: please listen to other voices. If you hold a meeting with the water companies, meet Feargal Sharkey to get a counterview. If you meet Post Office bosses to discuss compensation for sub-postmasters, please also meet Mr Bates. If you get a Civil Service briefing on a scandal such as infected blood, personally check what the victims have to say. You have to listen to other voices. It will not make for an easier life but it will make for wiser decisions.