Water (Special Measures) Bill [HL]

Baroness Jones of Moulsecoomb Excerpts

Committee stage
Monday 4th November 2024 Lords Chamber

[Earl Russell (LD)]

My Lords, this group of amendments is on water company ownership. In preparing for this Bill, my Whips’ Office briefing note said that, in some circumstances, Ofwat could take no fewer than 25 years to revoke a water licence. When I read this, I found it hard to believe that this was the case, so I had to go away and have a look at it myself.

I note that different conditions apply to household water companies and retail or business suppliers, as retail suppliers operate within a different market, and that this is an extremely complex area of legislation. I understand that Ofwat can take up to 25 years to revoke the licence of a water company in some cases where it is in breach of its licence conditions. My amendment is a probing one. I want to be certain that it is possible for licences to be revoked much earlier than 25 years for matters such as sewage spills and failures to invest in infrastructure. I am also interested in looking at whether six months is a feasible timeframe for revoking licences in the cases of the worst sewage spill offenders.

It is unacceptable that, in 2023, for example, water companies dumped 54% more sewage in our lakes, rivers and coastal areas than they did in the previous year. This amounted to some 464,000 incidents and some 3.6 million hours of untreated sewage discharges in England alone, yet few water and sewage discharge licences have been revoked as a direct result of sewage spills.

The Government have given a clear commitment to make improvements, and this Bill contains many measures that we welcome. The framework for these proposed improvements is one where the Government are passing this Bill to bring in more immediate measures in order to hold the water companies to account and to strengthen the powers of the regulators. This is being done now while the water commission undertakes deeper, more fundamental thinking to make further recommendations in due course.

The Government’s argument is based on the belief that Ofwat can be supported, strengthened and remade to be an effective regulator. The arguments I want to discuss relate to the ultimate sanction of revoking water and sewage discharge licences. If Ofwat is to be effective, the ultimate sanction must act as a real deterrent against illegal and improper behaviour. I fully recognise that my suggestion of changing this to six months may not work and may need a rethink; I would be more than happy to discuss this with the Minister if it is of interest. I recognise that there is a need to balance the needs of water companies, their investors and customers, as well as to ensure continuity of supply.

I will be honest: I know that there are many different licences and conditions for revoking them, and that this is a complex area. The conditions for a quick termination, applying to the issues of a special administrator and bankruptcy, are welcome. My concerns relate more to the broader, far from general, form of deterrence for water companies doing what they have been doing up to now with no real comeback, such as siphoning funds off to shareholders while failing to meet the required levels of investments, falsifying self-reporting of sewage discharges and failing to prevent sewage spills.

I want this amendment to lead to a brief discussion on the licence conditions in place now. I seek reassurance from the Government that they will have a look at these powers, look at how they are used in practice and consider whether any changes are required as part of this Bill. I do this as there are no real changes to any of the licence termination conditions; I wondered whether this was a mistake or oversight. The imposition of tougher prison sentences and higher fines are welcome measures, but what happens if these measures alone failed to regulate companies’ behaviour?

For comparison, the revocation of licences in other regulated sectors appears generally to happen on a much quicker timescale. Can the Minister give the rationale behind leaving the 25 years in statute, and can she give examples of Ofwat acting much earlier in relation to lack of investment or pollution incidents? What is the average time for revoking a water and sewage licence?

I beg to move.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I will speak to three amendments in this group: Amendments 97, 98 and 99. This weekend saw tens of thousands of people marching for clean water in London. It was the most amazing event. It was a chance for me to speak to people who agree with me—as opposed to being here in your Lordships’ House, where not many people agree with me.

[Baroness Bakewell of Hardington Mandeville (LD)]

Oh!

[Baroness Parminter (LD)]

That is not true.

[Baroness Jones of Moulsecoomb (GP)]

I am sorry. Thank you; it is lovely to see the noble Baroness, Lady Bakewell, back in her place.

All three of my amendments are intended to be helpful—that is, to help the Government regulate the water industry properly and end the 30 years of fleecing bill payers while dumping sewage into our waterways. It is an absolutely unforgivable three decades of abuse of the system.

Amendment 97 would prohibit the Government bailing out shareholders and creditors of water companies in the event of special administration. Amendment 98 would allow the Government to take back control with public ownership of water companies, but it is only an option. It is an option that I believe the Government could use as a lever in their negotiations with the water companies, so I think it is worth putting it back in the Bill. Amendment 99 would allow water companies to be put into special administration for failing on environmental issues, such as leaks and sewage spills.

What strikes me about these issues is that the public are demanding that this is sorted, but the Government are giving us half measures. I am concerned that that will not bring the sort of change we need. There is a democratic shortfall here because polls tell us that 82% of the public want to end privatised water, but only a few of us in Parliament are willing to consider it. To me, this suggests that the Government are out of step with the public, which is very concerning for me; I would like the Labour Government to last longer than one term because I really do not want to see another Conservative Government in my lifetime. There is, of course, a fear among many campaigners that this Bill will raise their water bills by enabling the Government to bail out and reward the people who got us into this mess in the first place.

I thank the noble Baroness, Lady Parminter, and the noble Lord, Lord Sikka, for signing Amendment 97. It is essential that the Government do not bail out the water companies in such a way that they simply hand money to shareholders and creditors and let them start afresh, behaving in the same way but perhaps with a little more regulation. Amendment 97 would prohibit this so that the public purse does not underwrite the casino capitalism and financial engineering that has been going on in the water sector. We have a ridiculous situation where the debt is being traded by hedge funds, which are gambling on water bills going up in future to finance a bailout. If these companies fail, let us instead bring them into public ownership and democratic control. The shareholders and creditors took a gamble on greed when the companies used £75 billion since privatisation to pay dividends rather than invest. Let them take the hit.

Amendment 98 would allow the Government to set out how they will bring water companies into public ownership. The Greens are deeply disappointed that the Government have ruled this out. I do not understand any sort of ideological addiction to private ownership of a public service such as this, particularly when it is not even a competitive market. It is a monopoly, and it is time it stopped.

I have heard the Government say that private investment is essential, but it is simple maths that, if we stop paying dividends and debt payments, that frees up 40% of people’s water bills to be invested in fixing the sewerage system and building more reservoirs. The Government have been using overinflated estimates from the water industry—a figure of some £90 billion—to claim that public ownership would be too expensive, but actually, it is the complete opposite: it is privatised water that is too expensive to continue. Water company shareholders have spent decades sucking out the profits while loading debt on to the balance sheets and hiking people’s bills. That is inevitable, as free market economics simply does not work without competition. Thatcher turned a public monopoly into a cash cow for people who are greedy. Unless amended, this legislation does nothing to stop that continuing for another decade. I want the Government to at least have the power to bring the companies into public ownership. If they rule out that option, the Government will make any taxpayer bailout a lot more expensive, as a potential buyer has the upper hand in all negotiations.

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Further, it is worth noting that performance in general, not just where poor performance has led to a prosecution, is already a criterion. My noble friend asked what financial assistance the Government would provide to a company under a SAR. I confirm that the Government would provide financial assistance to ensure the day-to-day operation of any water company under a SAR. However, we expect that many of these costs would be recouped through the sale of a water company at the end of the special administration, to minimise any cost to the taxpayer. I hope for these reasons that my noble friend will not move his amendment and I thank noble Lords for their contributions.

[Baroness Jones of Moulsecoomb (GP)]

Before the Minister sits down, I had better clarify: I want another Labour Government only if I cannot have a Green Government. On the issue about having monopolies where market forces do not operate, can she see that there are inherent problems in having monopolies on something such as water—or any public service that we all need?

[Baroness Hayman of Ullock (Lab)]

I completely get the noble Baroness’s point. I would hope that, when we do the review, we look completely across all the issues to do with a water company, including the way it behaves because of the way it is set up, and that that should be part of any consideration. By the time we have reported, I am sure the noble Baroness will be very happy to have another Labour Government.

Water (Special Measures) Bill [HL]

Baroness Jones of Moulsecoomb Excerpts

Committee stage
Wednesday 30th October 2024 Lords Chamber

My amendment is intended to be a compromise. We are not saying that the review should do anything other than consider these as options. The review may well consider them as options and decide very early on that they are not helpful or a way forward for the water industry, but I ask the Minister not to rule them out by implication. My amendment is trying, gracefully, to be a compromise way forward. I ask the Minister and the Government to allow the parameters not to be so restrictive that other things, not just our amendment, are ruled out. I think it is best for the Government to have good, broad, free advice, which will help them make the correct strategic decisions.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, following the noble Earl, Lord Russell, is very useful because I agree very much with his last few statements. This is an incredibly helpful group. The Labour Government would be very well advised to take all these amendments. They are so helpful, reasonable and sensible and bring in issues that I think have been left out without any rational reason.

I deeply regret not having signed Amendment 29 in the name of the noble Lord, Lord Sikka. I agree with him completely. In fact, I support most of the amendments in this group. I signed Amendment 78 because who does not want regulators of a public service to work in the interests of the public? That is a very clear statement to make, I would have thought, and it is quite necessary, even though it seems so obvious.

Amendment 84 is in my name. I admit that when I tabled this amendment to remove the duty of economic growth from water companies and regulators, I had not really appreciated that if I looked at it from a completely different perspective, possibly from the perspective of the previous Government, it was a remarkable success story over 14 years because we had huge growth in sewage and pollution—well done, guys—and it had a multiplier impact on gross national product. It is so gross that other countries see it as indicative of the UK’s approach to running privatised services—that is, not very good. When we have a river full of dead fish, the authorities buy more fish to replace them. That is economic growth—a huge success. When E. coli is found in our water systems, we get a double hit of economic growth. There is the extra spending by the NHS on treating all the cases of gastro-enteritis and all the extra money spent on plastic bottles of water handed out when consumers cannot drink from the tap. We even have the prospect of a rain-soaked country like ours spending millions on hiring supertankers to import drinking water from Norway. That is extra spending and extra growth. I can see that growth is a success factor in the previous Government’s estimation. Of course, we also cannot forget the staggering growth in shareholder dividends and CEO salaries. When these private water companies take money out of the hands of bill payers and help the rich to buy new private jets, that also adds to GNP.

My problem is that this kind of GNP adds to most people’s unhappiness. In fact, that is why the promotion of growth for growth’s sake is complete nonsense. I do not understand why anyone would advocate that. The more that rivers are polluted, the unhappier the lives of everybody using that space, whether they are dog walkers, anglers, wild swimmers or nature lovers. The more money that shareholders and CEOs get, the less happy the bill payers are about 40% of their money being spent on debt repayments and dividends. Growth is not an indicator of happiness or of the economy being run for the benefit of many. It is a nonsense soundbite for the economically illiterate and needs to be deleted from this legislation.

On Amendment 85, if Ofwat had been given a duty to protect the environment when it was set up decades ago, we would not be in the mess that we are. There would have been a clear connection in Ofwat’s role between signing off bill payers’ money to fund environmental improvements and ensuring that those improvements actually happened. Ofwat needs two sets of books open on its desk all the time. The first would show the real state of the industry’s finances, including the accounts of the big financial businesses that own the water companies, and the second would show whether those companies were environmentally solvent. By that, I mean whether they are capable of meeting the environmental standards on clean water and the obligations to maintain the health of the waterways.

Whether Ofwat is competent enough to carry out this new duty, or any other duties, is a completely separate debate. We have to remember that Ofwat was meant to be looking after the interests of bill payers but has completely failed to do so. It has allowed the water industry to become owned and controlled by a superstructure of financial institutions that use clever scams to fleece the bill payer in ways that Ofwat has appeared to be completely oblivious to.

We know that if this Government allow Ofwat to remain the main regulator of private water companies over the next few years, its role must include the environment. Fixing the regular discharges of sewage into our waterways, along with the polluting run-off from agriculture, is by far the biggest financial challenge the industry faces. If Ofwat does not understand that duty, the regulation will not match up to the challenge.

I am afraid the Government did not turn out very well on climate change and our ecological crisis in the Budget. They do not seem to understand how climate change comes down to the lowest level and affects every single individual, and I would be really happy to help explain that. It is time to put this particular duty on the environment into the legislation.

[Lord Cromwell (CB)]

My Lords, a thread that runs through many of these amendments is the divergence between the environmental objectives and the clean water consumption objectives. A number of times, we on these Benches have raised the issue that there are two regulators with those responsibilities separated between them. That is something with which the Minister is going to have to grapple in her reply. I think it was the noble Baroness, Lady Parminter, who made the point that time is of the essence, and that waiting for the review may be too late. There is a choice to be made about giving Ofwat these objectives now or making a more fundamental structural change about who regulates the whole environmental question around water.

The noble Baroness, Lady Jones, may be pleased to note in the Budget the increase in tax on people flying on private jets, which she referred to. Apart from that, I agree that there was not much coverage of the environment.

This thread keeps coming up and it needs to be addressed. Is it going to go into the Bill now or will it become part of the review later?

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Moved by

[Baroness Jones of Moulsecoomb]

37: Clause 2, page 5, line 29, at end insert—
“(7A) A sewerage undertaker must have regard to opportunities for nature-based solutions to be used to reduce pollution and to deliver other environmental benefits when preparing and publishing a pollution incident reduction plan.”Member's explanatory statement
This amendment would require consideration of opportunities to use nature-based solutions to address pollution within pollution incident reduction plans.

[Baroness Jones of Moulsecoomb]

My Lords, it is a pleasure to open the debate on this group of amendments, which are focused on nature-based solutions to reduce pollution.

We know that nature is incredible and complex. Every living organism is nigh impossible for humans to replicate, and when those organisms all come together in an ecosystem they are even more complex—the complexity increases by many more degrees of magnitude. Human industrial processes, by comparison, are very crude. Unlike nature’s cycles and interactions, which have evolved over millennia, industrial processes are inefficient and almost always create some kind of waste product. So, while humans still struggle to comprehend the intricacy of those natural processes and cannot replicate them, it is much easier for us to mimic the natural world with nature-based solutions.

The fact is that it is better to protect what we have than to try to reproduce it. While I absolutely support rewilding and restoration projects, making sure that we do not do any more damage is of primary importance. Reed beds are a simple example: not only do they provide a wonderful home for wildlife—they are a priority habitat for nature conservation in the UK—but they are great at cleaning water, filtering out sediment, and buffering against pollutants from industry and agriculture. They also offer some protection from rising sea levels. Slimbridge Wetland Centre is a great demonstration site of that water treatment in action. It is a self-sufficient water treatment system that removes phosphates, nitrates and sediment, leaving just clean, fresh water for the nature reserve. It sounds like a dream.

I do not really need to rehearse all the arguments for nature-based solutions because, in the almost 11 years that I have been here, I heard Labour Peers calling on the then Government to put these solutions into action. Now the issues are the same but the Government are different, and so it is Conservative Peers who are lobbying on these issues and pointing out why it is so urgent for the Government to work with nature. I acknowledge that many Conservative Peers have said that in the past, but now their voices have the opportunity to be heard a little more loudly.

The Committee will probably support the whole concept of nature-based solutions. In that cross-party spirit, I hope the Minister will set out the Government’s plan to put these nature-based solutions at the heart of the recovery plan for our toxic and polluted riverways.

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[Baroness Hayman of Ullock (Lab)]

My Lords, I thank noble Lords for their amendments and for a very interesting discussion. Clearly, it is very passionately felt as well. I thank the noble Baroness, Lady Jones, for introducing her Amendment 37. I would also like to discuss Amendment 104 tabled by the noble Lord Gascoigne, because they are both about nature-based solutions.

As I mentioned on the previous group, the Government agree that nature-based solutions are an important tool for tackling the root causes of sewage pollution and addressing flood risk, while delivering wide ecological benefits. In line with this, I am pleased that Ofwat has proposed an allowance of over £2 billion for investments in nature-based solutions in PR24. I was pleased that the amendment from the noble Lord, Lord Gascoigne, refers to catchments, because catchment and nature-based solutions are part of that £2 billion investment, and £1.6 billion is looking to reduce storm overflow spills through those solutions.

Ofwat has made it clear in its guidance for PR24 that it expects water companies to adopt more nature-based solutions. The noble Baroness, Lady Jones, mentioned reed beds, and it is important to say that the further funding includes money for reed beds and wetlands for nutrient removal. The Government are also supporting water companies with trialling different nature-based solutions. As I mentioned, this is obviously subject to the final determinations in December, but we hope to move forward in these areas.

At the same time, we need to recognise that nature-based solutions may not always be the most appropriate or effective means of improving water quality or flood risk. We need to ensure that water companies and Ofwat have sufficient flexibility to develop the right solution to deliver the best outcomes for customers and the environment. In a similar vein, although nature-based solutions may feature in pollution incident reduction plans, it is important to recognise that these may not be the most effective or available response to pollution incidents in every circumstance.

Having said that, we will not support the amendments, but I reassure the noble Baroness and the noble Lord that we take this seriously. I am happy to have further discussions on this particular amendment, if that is helpful.

I turn to Amendment 55, tabled by the noble Baroness, Lady Bakewell of Hardington-Mandeville. It is important to draw our attention to the impact of sewage pollution in our national parks. The Government agree that our national parks—Lake Windermere in the Lake District and the Broads have had particular attention regarding this matter—are a vital part of our environmental heritage, and everyone agrees that they must be protected better. For this reason, the Government will seek to use the powers in the Levelling-up and Regeneration Act to ensure that relevant authorities, including water companies, deliver better outcomes in protected landscapes.

I reassure noble Lords that existing plans are in place to protect high-priority sites from sewage pollution, including the Storm Overflows Discharge Reduction Plan. As part of that reduction plan, we expect water companies to tackle overflows discharging to high-priority sites by 2035. These sites include designated bathing waters, SSSIs, special areas of conservation and chalk streams. However, completely eradicating sewage discharges is not possible without a costly redesign of the whole sewerage system.

Similar issues may arise in relation to the proposed requirement for all water bodies in national parks to achieve “high” ecological status. Under the Water Environment (Water Framework Directive) (England and Wales) Regulations, most surface water bodies have an objective to reach “good” ecological status, except where it is technically infeasible or disproportionately costly. I stress that “good” ecological status is a very high standard to achieve, and represents a thriving aquatic environment with only minor disturbance from natural conditions. In this way, it supports a diverse group of aquatic invertebrates, fish, mammals and birds.

“High” ecological status equates to water almost entirely undisturbed from its natural conditions, with almost no impact from human activity. Requiring this very high status would have wide-ranging impacts on any future planning developments and human interaction with national parks—that would include farming and fishing. The requirement would place achieving this demanding objective on only water companies, regardless of the pressures and sectors that are actually impacting on water bodies within the protected landscapes. It would also not allow for the consideration of costs, which would ultimately be borne by water bill payers, and any technical feasibility around this.

It is clearly important to reduce phosphorus levels— I have seen the damage that phosphorus can cause in the lakes near where I live. A reduction of phosphorus levels by 90% by 2028 goes significantly beyond the Environment Act target to reduce phosphorus loading by 80% by 2038—that is assuming that the baseline is at 2020 levels. This would require an extremely expensive and immediate increase to the number of phosphorus improvement schemes planned in the price review of 2024. We are concerned that that is a big jump, with a big extra investment that would immediately be passed on to bill payers. We do not want to risk the delivery of any wider environmental improvements through the price review of 2024.

Amendment 74 was tabled by the noble Earl, Lord Russell. I confirm that the Government are absolutely committed to the protection and restoration of our cherished chalk streams. We recognise that these unique water bodies are not just vital ecosystems but a symbol of our national heritage: we in this country have by far the majority of chalk streams. This requirement would have significant implications for existing legal frameworks’ operational delivery, and would not necessarily result in environmental improvement for chalk streams. As discussed in relation to Amendment 55, requiring “high” ecological status would have the wide-ranging impacts that I mentioned.

The levelling-up Act brought in some protections for chalk streams. The independent water commission on the water sector regulatory system, already announced by the Secretary of State, is the appropriate vehicle for considering broader reforms, including to the current water system and overarching targets for the water sector. In the previous group we talked about better use of water and grey water. If we move forward with that through our review, that will reduce abstraction, which will help to support chalk streams better.

I hope the noble Earl therefore understands why the Government will not accept his amendment. However, he requested a meeting to discuss Blue Flag status as a possible way forward, and I am more than happy to offer him one.

Amendment 90 was tabled by the noble Baroness, Lady Browning. I am grateful to her for this amendment. We are clear that water companies must improve on their delivery of water resources management plans. The independent commission will help to transform how our water system works and will inform further legislation. It would be more appropriate at the moment to consider how we make improvements to the water resources management planning process as part of the independent commission. I note that there are already requirements for the review process in Section 37A of the Water Industry Act 1991. Water companies must also report to the Secretary of State on their reviews annually. Defra works closely with the EA and Ofwat to review water companies’ delivery of their plans, and the EA recently published a summary of assessments of water company delivery and the actions that they must take to deliver their plans.

We are concerned that, in practice, a duty on water companies to deliver all measures simply would not work. Many measures, such as new reservoirs, need further permissions, for example, before they can proceed, and a water company cannot guarantee that it will get those permissions. That is why we will not support that particular amendment. I thank noble Lords again for this interesting and helpful debate.

[Baroness Jones of Moulsecoomb (GP)]

I thank the Minister for her reply. I do not think anyone in the Committee doubts her sincerity or her concern for nature—that is a given. I am afraid it is the Government I do not trust. I did not trust the last Government and I do not trust this one either—it must be something in my nature.

I supported two other amendments: Amendment 74 in the names of the noble Earl, Lord Russell, and the noble Baroness, Lady Browning, and Amendment 104 in the names of the noble Lords, Lord Gascoigne and Lord Roborough. Chalk streams, for example, are incredibly important; they are so rare. We have the most in the world and we trash them. The amendment of the noble Lord, Lord Gascoigne, goes much further than my modest amendment. The noble Lord, Lord Cromwell, has never called anything I have ever done modest, so I look forward to his signing this same amendment on Report to show that he is sincere.

The noble Baroness, Lady Boycott, talked about local engagement. Just this week, I hosted a group of 30 or 40 people from the Bengali community who are working on recovering mangrove forests in Sundarbans. They do it because they care about the local; they are losing culture, opportunities and so on. I really see that local activity is incredibly important, but the Government have to make that easy. This is the thing about the nature recovery schemes. They are obviously not the only way; they can be extremely effective, and sometimes quite cheap as well. It definitely engages the local community. I was up at Lake Windermere recently, and the local support there for cleaning up the lake was quite astonishingly broad.

Water (Special Measures) Bill [HL]

Baroness Jones of Moulsecoomb Excerpts

Committee stage
Monday 28th October 2024 Lords Chamber

[Lord Sikka (Lab)]

My Lords, my Amendment 82 addresses a major question that the Bill does not address: why do water regulators fail? After all, they have been at it for many years—at least 35 years, some of them—yet they continue to fail. No proposal in the Bill addresses that. They continue to fail because they are isolated from the lives of the people affected by sewage spills, high customer bills, low investment and water simply leaking away.

The regulatory bodies are generally made up of former Ministers and executives. Someone who has done a stint at a water company disappears to Ofwat; Ofwat’s former chief executive is now director of a water company. There is a revolving door. These people have a world of their own which does not connect with that of the people directly affected by their activities. For any regulatory system to be effective, it must represent a plurality of interests, but our regulatory system and bodies are closely aligned with corporate interests. They are, in essence, captured. If this capture is not there—and is not the reason for their failures—then someone will have to explain why the water industry is in a mess and why the guiding hand of regulators has not been able to put it on a path to recovery, good practices or good behaviour.

The Bill seems to propose consumer panels, which are, in essence, toothless: they have no social constituency to report to because they are not really elected by anyone but simply co-opted on the basis that someone knows somebody and brings them in; they are not required to report to any constituencies; they cannot easily object to the practices of the regulatory bodies; and they can simply be bludgeoned into silence and just go along because that is the norm. We have heard that these amendments somehow propose something unusual and therefore we have to be bludgeoned into silence and simply go along, because tradition is oppressive and that is what we have to do.

My amendment calls for direct representation of elected representatives of employees and stakeholders on the board of the regulatory authority and to give them power to vote on executive remuneration. That would be the ultimate sanction when they disapprove of how the regulatory body is safeguarding or protecting the public interest. If they cannot vote on executive remuneration, they will simply be a shadow. The amendment seeks, in essence, to democratise regulation. I know that democracy is not very fashionable these days, so if the Minister opposes this democratisation of regulation, it would be helpful to know how the Government will check cognitive capture of regulatory bodies, because no other solution is being offered by anybody. If we were to expand on this, in the next group I could lay out a complete framework of what else needs to be done, but this is simply to test and, I hope, elicit a response from the Government.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I will speak to my Amendment 100. The issues of water pollution and the supply of clean water to everybody are ones I clearly care a lot about. But this Bill is just papering over the cracks. If we are going to paper over cracks, we could at least try a radical departure; perhaps we could try to bring some democracy into the regime.

I take issue with the noble Duke, the Duke of Wellington, and the noble Lord, Lord Remnant. I have chaired a board and it was extremely successful. Part of that was because I invited people who thought very differently on to the board. We had 20 members or so. It was called London Food and we were tasked with writing a report for the Mayor of London on a sustainable food strategy for the city. It was successful, I would argue, partly because of my charm—obviously —but also because we had extremely good reports from every single aspect of food and food supply for London. We had a member from the City who was obviously a Conservative, we had an organic farmer and so on. We had a huge range of people, but we agreed on the strategy and we came to some very useful conclusions. This is what we need: we need some democracy in the systems that try to keep us safe.

Honestly, given the scale of the challenge that the water industry faces at the moment, in trying to make a system work that has proved not to work, we need to ensure that there are some new voices that can represent other parts of society that use the water system and care very deeply about it. We should also involve the people who actually do the work. My amendment brings in people from the workforce.

At the moment, the CEOs and senior staff are more focused on delivering dividends than they are on delivering a quality service, so having worker representatives on the board would provide a constant voice for those whose job it is to provide a service. The regulators have been captured by the industry they are meant to be keeping an eye on, so they are almost useless. This system should not be a national scheme but one based on the geography of the water systems themselves.

I am a believer in democracy and this would be an extremely useful way of making sure that a crucial industry for our society has some resonance with people out there. I am sure that this would be welcomed by the majority of people, just as I am sure that the Minister is aware that polls suggest a majority of people would prefer public ownership. Failing that, however, let us get the public in there, talking and being listened to.

[Lord Deben (Con)]

My Lords, I rise to support the amendments, particularly those placed before us by the noble Duke, the Duke of Wellington. To the last speaker I have to say that there is a fundamental difference between chairing a committee to produce a report and running a business, which is what the water company has to be. She is absolutely right, however, that this Bill does not properly address the fundamental problem that we have two regulators and they have failed to produce a co-ordinated programme for the water industry.

I speak as somebody who knows a bit about it because, until 10 or 11 years ago, I was chairman of a water-only water company—so do not blame me about sewage as I never had anything to do with that. However, I do therefore know a bit about water companies. It was always impossible to meet the requirements of both the Environment Agency and Ofwat. Ofwat was under pressure from the Government to keep bills down and the Environment Agency, perfectly rightly, was saying that we should do more for the environment. As chairman of a water-only company, I was interested in doing something about the pollution of the water sources right from the beginning instead of having to clean them up, which is a very stupid way of dealing with it. Ofwat, however, would never allow one to do those things, whereas the Environment Agency was much more sympathetic.

Waste: Incineration

Baroness Jones of Moulsecoomb Excerpts

Tuesday 22nd October 2024 Lords Chamber

Asked by

[Baroness Jones of Moulsecoomb]

To ask His Majesty’s Government whether they plan to implement the Climate Change Committee’s recommendation to pause permission for new incineration plants to allow for a review of the treatment of residual waste.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, the Government are committed to transitioning to a circular economy. We are considering the role of energy from waste in the context of circularity, economic growth and reaching net zero. As part of this, we are giving consideration to the Climate Change Committee’s recommendation. This year, Defra will publish an analysis of energy-from-waste capacity in England to inform future policy. We continue work to implement packaging reforms, drive up recycling rates and take material out of incineration.

[Baroness Jones of Moulsecoomb (GP)]

I thank the Minister, but I am deeply dissatisfied. This Government, in whom I had a lot of trust, have made the deeply irresponsible decision to allow the Portland incinerator to go ahead. I declare an interest as a resident of Dorset, although nowhere near Portland. Incineration and energy from waste is not a practical way forward; it is very damaging both in terms of public health and environmentally. I beg the Minister to speak to her department and suggest getting better advice on energy?

[Baroness Hayman of Ullock (Lab)]

My Lords, it does say in the Companion that you should not thank a noble Member for their Question—so, on this occasion, I will not. The environmental permitting regulations prevent the incineration of separately collected paper, metal, glass or plastic waste, unless it has gone through some sort of treatment process first. Following that treatment, incineration is seen to be the best environmental outcome. We know that the recycling rate is too low, that we burn too much waste and that, for too long, recycling rates in England have plateaued. The way forward is to look at the whole big picture and our circular economy ambitions are designed to address this.

Water (Special Measures) Bill [HL]

Baroness Jones of Moulsecoomb Excerpts

2nd reading
Wednesday 9th October 2024 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

It is always a pleasure to follow the noble Baroness, Lady Parminter, but it is also daunting, because she can speak without notes for eight minutes. I cannot do that because I have so many complaints about the Bill, so excuse me for reading notes.

We have heard about the organisation River Action a couple of times; I am on its board and it will be playing a role in giving advice to the Government on how the Bill can be improved.

I know that the Minister knows how much I admire her and trust her as a Minister and in her role today. But, at the same time, the Bill is deeply disappointing. It is disappointing to the point of being almost a joke, because it does not do what the majority of people would like it to do. It is about the regulation of a capitalist monopoly and the good management of a privatised cash machine that water bill payers subsidise. The money just goes straight out and we do not get a benefit. The Bill tries to regulate by using the same people and organisations that have failed for the past 30 years. How can that change? I do not see that that is possible.

The Bill also tries to threaten the top people with jail time using the same tools that have been failing to work for 20 years. What it does not do is get back the billions of pounds that these company shareholders have pocketed for decades, or even stop those same shareholders from pocketing billions of pounds of our money in the future. Nor does it stop the water companies dumping sewage in the waterways. Instead, we hear about Ofwat making backroom deals that will keep the private companies in business by weakening the enforcement of regulations. I do not understand how that can be happening.

We should enforce the regulations—if the businesses fail, they fail—and let the companies know that this Government want the work done. Ofwat has made clear that the water companies have had the money they need, so they must either get the job done or give us a refund. What the Government should not do is allow these companies to run up more debts in order to pay out more dividends. Those debts and dividend payments have already cost us four months-worth of water bill payments. In what other area of life are consumers paying out four months-worth of bills each year but getting nothing back in return?

We are not even being offered a guarantee of clean water or that the leaks will be fixed. In fact, we have the insanity of a country soaked in record rainfall arranging a deal that would use tankers to import Norwegian water in the event of drought. That is so lunatic that I cannot even finish my sentence about it. As other noble Lords have said, water is a basic of life. We need water—all life needs water—so why is it in private hands and subject to profiteering?

Much of this Bill is about what happens when a water company fails and goes into a special administrative regime. Ministers have said on several occasions that they will not bring water companies into public ownership because of the cost. They have been quoting a six year-old Social Market Foundation report, but they ignore the very recent calculations by Moody’s and the S&P credit rating agency that these shares are junk. Their estimate of how much it would cost is very different.

Professor Ewan McGaughey of King’s College London said:

“Special administration would not cost the Treasury or taxpayers anything ... special administration enables the Minister to put a plan before”


the High Court to cancel a company’s debt

“if continued payments to banks would interfere with properly carrying out the water company’s sewage or clean water functions”.

So why does the Minister not just do that? Special administration sounds great and very cheap. As Professor McGaughey said:

“The best way to clean our water is with more investment. Forty percent more investment would be possible if we stop bailing out banks and shareholders with billpayer rises. It will cost us over £12.5 billion this Parliament to keep paying shareholders and banks. … The right way to close this black hole is to make failed companies lose their licences, cancel the debt and transition to public water … This is all possible under the existing law”.


As for the debt that was accumulated to pay shareholder dividends, I understand that the Thames Water debt is now being traded by hedge funds. They are buying this debt on the cheap because they think this Government are stupid enough, or corrupt enough, to compensate them at a higher level. As much as I hate the idea of rewarding the parasites in our water industry with compensation for worthless shares, I dislike even more the idea of hedge-fund managers making a profit from a Labour Government’s ideological rejection of public ownership, so will the Minister give me an assurance that minimal compensation will be paid to the creditors of failed water companies and that our water bills will not be used to line the pockets of the hedge funds?

The Minister mentioned in her opening statement that this Bill had public support. I knocked on a lot of doors during the general election—I spoke to a lot of people in their homes and on the streets—and I think that a huge number of people, if not the majority, would support the following criteria for a more radical water Bill: no compensation for shareholders, minimal compensation for creditors, and public ownership being one of the options for these failed companies.

I will bring forward amendments to ensure that this Bill does not simply allow these failed zombie companies to continue extracting bill payers’ cash while loading huge amounts of debt on to the balance sheet. The Government need a serious look at the opportunity to bring these companies into public ownership, and this Bill should give Ministers the option to nationalise these companies where it makes sense.

Environment and Climate Change Committee Report: An Extraordinary Challenge: Restoring 30 per cent of our Land and Sea by 2030

Baroness Jones of Moulsecoomb Excerpts

Wednesday 11th September 2024 Grand Committee

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I congratulate the noble Baroness, Lady Parminter, for securing the debate and getting so many people together to speak on the environment. It was a very clever thing to do. The report is also good, and I thank the committee.

It is an extraordinary experience for me to agree with virtually everything that everybody has said in this debate. That is highly unusual for a Green—even among Greens in the Green Party. I thank your Lordships for the wonderful things that have been said. It is also interesting to follow the noble Earl, Lord Caithness, with whom I mostly agreed—mostly.

If I get irritable during my speech, it is because the Green Party has been saying this sort of thing for 50 years. I have personally been saying it for only 36 years, but it still gets a little repetitive sometimes. In essence, when we look at the basics of human life, without nature, we cease to exist. Without life in our oceans, the whole planet goes awry, and we cease to exist. Nature is not just something to enjoy—although that is a good aspect of it—it is our life support. Nature is resilient but, with humanity’s decimation of our species and habitats, life has become more fragile and precious.

We have conservation programmes across the UK and the globe, but climate change puts them all under threat. There are fewer birds in our skies, fish in our seas and bees on our crops. One in six UK wildlife species is now at risk of extinction. As Britain heats up, plants, insects, birds, animals and people will all need to shift north. That is happening right now and, unless we hit this 2030 target, it is possible that green corridors, the right soils and suitable spaces will not be there for many species.

A report by Wildlife and Countryside Link estimated that just 3% of land and up to 8% of sea are effectively protected for nature in England. I hope that the new Government have not been fooled by the rubbish we had from the last Government about our being on track to meet the 2030 target. It is absolutely clear that we are not on track and have a real problem.

Obviously, the Green Party offers big solutions to these big challenges. First, we need an independent commission for nature, which would protect nature and ensure the restoration of wildlife habitats. This new watchdog should be created as part of a new rights of nature Act that would enshrine the intrinsic value of nature in law. I am so sorry if I am stumbling; I can write with only my left hand at the moment, which I am not very good at, and I am having trouble reading my writing.

This independent commission for nature would set up targets for nature protection and restoration, and would enforce them through the courts; that is a very important issue. This would give individuals, communities and conservation groups the opportunity to take legal action on behalf of nature. We need legislation that sets standards for soil quality and phases out the most harmful pesticides immediately as we move towards regenerative farming methods. Only pesticides that pass this test and demonstrably do not harm bees, butterflies and other wildlife should be approved for use in the UK.

Of course, one quick win would be to stop the use of peat for horticulture. Let us ban imports of peat. Let us stop using it and understand that the damage we do to peat bogs—including peat bogs in other countries where imported peat comes from—is unrecoverable.

I hope that the Minister will do everything that she can to prevent any rollback of the existing protections for the green belt, national landscapes and sites of special scientific interest; I am sure that she will because I know that she cares. Those protections should be strengthened, not weakened. Having clean water in national parks should be obvious but it is not there. Will the Government change the rules to make it compulsory and tell the water company bosses that they will be given community service orders if they dump sewage in Windermere and every other precious waterway? I would love to see some water company bosses on their hands and knees restoring the rivers that they have absolutely trashed, and I know that my friend Feargal Sharkey would love some help with the chalk streams that run through England.

While the Government consult on that, can the Minister urgently publish the regulation and guidance needed to enforce the recent legislation that Peers helped to pass on water companies having duties to further national park purposes? Further, can the Minister promise legislation to make it absolutely clear that national parks are nature designations as well as landscape designations? There is something cold and disconnected about knowing that a beautiful landscape is a poisonous, no-go area for wildlife.

Now we come on to money. The Government will have got off to a bad start if they cut £100 million from their annual budget for nature-friendly farming in England. This cut will mean at least 239,000 fewer hectares of nature-friendly farmland, according to research from the RSPB. The Green Party argues not only that we can afford to promote nature-friendly farming but that—here, we agree with the National Farmers’ Union—a big increase in the budget is an essential step towards promoting havens for wildlife, as well as cleaning up our water supply. The Government want to protect our coastlines and oceans but there is no money to monitor progress or even establish a baseline to work from.

Of course, a ban on bottom trawling is another essential; I really do not understand the delay in making that happen, but the noble Baroness, Lady Boycott, covered this issue absolutely fantastically. Could the Minister perhaps make a statement on the appointment of a Minister with a portfolio of responsibility for the international marine environment?

Finally, can we please ratify the Global Ocean Treaty agreement, which seeks to conserve marine biology? I realise that this would be a huge task for a new Government but, if the Government do not come up with the right policies, it will be to all our disbenefit.

Water Companies: Financial Resilience

Baroness Jones of Moulsecoomb Excerpts

Tuesday 23rd July 2024 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

I too welcome the noble Baroness to her new post; I am sure she will be superb. How many water companies are currently financially resilient?

[Baroness Hayman of Ullock (Lab)]

I thank the noble Baroness for her welcome. I am sure she has seen the environmental performance assessment that came out today. It reports that most companies continue to underperform and there continue to be a lot of concerns in this area. On the specific question she asked, I will write to her with the proper information so I know I am accurate.