Pollution in Rivers and Regulation of Private Water Companies

Baroness McIntosh of Pickering Excerpts

Thursday 29th February 2024 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I declare my interests as set out in the register. I co-chair the All-Party Parliamentary Group on Water, and last year I chaired a study organised by the Chartered Institution of Water and Environmental Management into bioresources strategy. I also worked with the water regulator for Scotland, the Water Industry Commission, between 2015 and 2018.

At the outset, I congratulate the noble Baroness, Lady Bakewell, on securing this timely debate on river pollution and the case for the regulation of private water companies. I, for one, recognise that privatisation has permitted the massive investment required to move UK water from being one of the dirtiest in Europe to upgrading our drinking water, rivers and bathing waters to infinitely better quality than they were in the 1980s. We can always improve regulation, although some might say that there is already a wealth of regulators for private water companies: Ofwat, the Environment Agency, the Drinking Water Inspectorate, and now the Office for Environmental Protection.

Let us examine the causes of the pollution of our rivers. A recent phenomenon has been surface water flooding, which was first recognised in 2007, with run-off from our roads spilling into combined sewers. Does my noble friend the Minister, whom I welcome to his place today, think it right that national highway authorities are not held accountable for surface water run-off? There is also the case of inappropriate developments, whereby water companies are required to connect wastewater—sewage—to antiquated infrastructure, causing further spills when mixed with flood water entering the combined sewers.

[Lord Framlingham (Con)]

Will my noble friend give way?

[Baroness McIntosh of Pickering (Con)]

We are on a timer, so I will take advice on whether we are permitted to take interventions. Does the Clock stop if I take an intervention?

[Lord Harlech (Con)]

No.

[Baroness McIntosh of Pickering (Con)]

I am afraid that I cannot give way.

Large-scale developments built in inappropriate places, such as zone B flood plains, compound that with poor connections. We must tackle the problems of sewage at source, before it enters the rivers and sea. While the Government make the case for building on flood plains in certain circumstances, that should not be encouraged. In any event, such homes will not be insured under the Flood Re scheme if built after 2009.

I will also raise the vexed issue of misconnections. The Government made two commitments under the storm overflows discharge reduction plan that could help to address the issue: to give water companies the right to repair defective drains on private property, and to give water companies the right to alter drainage systems on private property to reduce impermeable areas connected to the combined sewer network. An important part of tackling misconnections is getting to the drains on private land, so that water companies can take action, as the majority of misconnections are on private land. Will the Government also allow water companies access to government-owned land, such as hospitals and schools, to make the necessary repair work and to repair drainage separation work where required? That measure alone would prevent excess water entering combined sewers.

Having examined the causes of pollution in our rivers, is there a case for further regulation of private water companies? Water companies have a positive role to play in areas such as creating natural flood defences—as the noble Baroness, Lady Bakewell, pointed out—particularly by working with farmers and others. I pay tribute to the work of Yorkshire Water and United Utilities in that area. Defra should encourage other private sector players to contribute to that. What plans does my noble friend the Minister and his department have to do so? The Slowing the Flow scheme in Pickering, with which I was associated, is a good example of a natural flood defence combined with a small reservoir—not an overengineered project, such as those to which the noble Baroness, Lady Bakewell, objected—although all those involved were from the public sector. I urge the Government to lever more private sector funding into that. If we are to follow through with linking renumeration to performance, I invite my noble friend the Minister and his department to look at the corollary of that by giving water companies the tools to do the job.

The Government promised in this place and the other place that Schedule 3 to the Flood and Water Management Act 2010 will be implemented as it has been in Wales. Will my noble friend confirm that this will happen in England before the election? It is extremely important that we stop the automatic right to connect, whereby water companies are expected to connect pipes from three, four or five-bedroomed homes to antiquated Victorian pipes that simply cannot take the amount of wastewater and sewage coming out of these new builds. The Government must insist on mandatory SUDS—sustainable drainage systems—for all new builds. I hope they will also commit to an ambitious programme of retrofitting to existing developments, where appropriate. Obviously, that raises the question of who will maintain the SUDS, which is an open question at the moment.

Will the Government look favourably on rewarding farmers for storing water on flood land? According to the NFU, over half the most fertile farmland in Britain is on flood plains. The farming community and landowners are performing a public good by preventing communities downstream from flooding. However, there is great uncertainty as to how farmers can benefit from public funds. Often this flooding will include sewage. Can my noble friend clarify who will be eligible to apply for both the flood recovery framework and the farming recovery fund, and what level of damages can be recovered? Equally, will Defra recognise that the role farmers play in storing floodwater is a public good? Will the Government look positively at a whole-catchment area approach, and more slow-the-flow schemes such as those successfully implemented in Pickering and elsewhere protecting downstream communities from flooding?

I applaud the action that the Government have taken on holding directors to account, particularly the instruction they have given to Ofwat and the work Ofwat has done on executive pay. Ofwat has been very clear that companies need to demonstrate that performance-related executive remuneration is linked to performance for customers and the environment. In June last year, Ofwat confirmed that where companies do not demonstrate that executive pay is linked to performance, it will stop companies recovering the cost of bonuses from consumers.

I welcome the level of investment announced in the five-year business plan that Ofwat has yet to approve. It will factor in £96 billion in the next investment period 2025 to 2030, of which £11 billion will be allocated to reduce overflow spills. The noble Baroness, Lady Bakewell, identified an area which has only been recognised for spend—innovation—since 2014. I hope that Ofwat will go much further, recognising the natural flood defences to which the noble Baroness referred as innovative projects under the spending review. I think this will help many of the issues the noble Baroness identified. We do not want overengineered projects, we want natural flood defences—and these schemes have to be approved as part of the price review.

Finally, the NAO report in November 2023 made a number of very apt recommendations to increase resilience to future flood events, such as reprofiling capital spend, maximising long-term value for money and ensuring flexibility to switch money from capital spend to asset management. My preference is to establish a single budget for all flood spending.

Finally, will my noble friend look favourably on the use of SUDS and natural defences to ensure no overspill of raw sewage into combined sewers, so that it will not enter the rivers. Will he look favourably at a whole-catchment area management approach, to make highways authorities responsible for water run-off of pollution from these surfaces into combined sewers? Will he address the issue of missed connections and permit water companies to enter private land and government property in schools and hospitals? Will he look at giving water companies the right to alter drainage systems, consider the recommendation from CIWEM for a comprehensive independent review of water management, inform the public of the importance of water efficiency and address all the recommendations of the NAO report of November last year?