Water (Special Measures) Bill [HL]

Baroness Young of Old Scone Excerpts

2nd reading
Wednesday 9th October 2024 Lords Chamber

[Baroness Young of Old Scone (Lab)]

My Lords, I declare my interests as a former chief executive of the Environment Agency and, briefly, a non-executive director of Anglian Water—I did not gallop over the horizon with bags full of money.

Before I turn to the particulars of the Bill, I will comment on the importance of the wider review of water issues that the Government have promised, because the poor state of our water bodies and rivers is not just about how water companies and others have dealt with sewage. There are other major sources of pollution in agriculture—including, indeed, chicken shit, which the noble Lord, Lord Lipsey, promoted with vigour. There are also other pressures that have caused diminution in the quality of our rivers and water bodies. Surface water run-off is a major aspect, particularly from roads but also from other surfaces, including all urban surfaces, and there are pressures from novel and persistent chemicals.

The state of our water bodies is therefore not just about the sewerage issue, so we need to put the Bill in a much wider context. The state of our water bodies is also about the record and effectiveness of the regulators, Ofwat and the Environment Agency, as many noble Lords have pointed out. It is also about the ineffectiveness of the current arrangements for water pricing. I therefore urge the Minister to publish for consultation the framework for the review and ask that it includes the following four issues.

The first is what action would be needed to reduce overall pollution of the water environment from the whole range of sources, particularly agriculture, and not just sewage pollution. The second is what is needed to get both regulators back to the point where they can regulate effectively. In the case of the Environment Agency, this means resources to enable effective, real-time monitoring; reduce reliance on self-monitoring by operators, particularly the dodgier operators; and fund effective enforcement.

In the case of Ofwat. I believe that it seriously lost the plot from around 2010. It was focusing very much at that stage on the promotion of rather spurious competition in a business which is naturally monopolistic. It was not helped by strong direction from the Government that keeping bills flat was more important than environmental programmes. For those reasons and many others, I would be very cautious about giving more powers to Ofwat until we can be assured that it will operate more effectively in the public interest. After all, Ofwat has been responsible for overseeing the financial shambles that the current water companies have become.

The review should therefore cover the appropriate powers and approaches of the regulators. I do not support the creation of a single regulator for the water industry. I think it would be disastrous to combine economic and environmental interests in one regulator. It would hide the environmental and economic trade-offs. As long as there are two regulators, both robustly defending their part of the equation, either economic or environmental, it is a very transparent system.

In addition, if you think about it, regulating the water companies because of their impact on rivers is a rather crazy thing to do when what we should be doing is regulating rivers and water bodies in an integrated way to take account of all the pressures on them. After all, farmers, planners, builders, water companies, fisheries, forestry and a whole range of other economic activities impact on rivers. If we have one regulator which is talking simply about water company impacts and another regulator which is talking about all other impacts—or if, even worse, the regulators are fragmented even further—I think that we would lose sight completely of integrated management of our water environment. I am surprised that the noble Lord, Lord Whitty, was keen on the single regulator solution. I thought that we had trained him rather better at the Environment Agency—he is off my Christmas card list.

The third thing I would like is a review of the culture in water companies. There is a totally different culture in the parts of water companies that deal with drinking water. There is an absolute prohibition on falling from grace in that part of the water industry because drinking water standards are regarded as inviolable, and it is not good for business to poison people. There is not that culture on the other side of the water industry, which deals with sewage. That is very visible considering the prosecutions against and fines on water companies in the recent past. Many of them are not just negligent, but also carried on for far too long and caused even more damage than was necessary, had they been dealt with promptly. We need a radical look to make sure that the high-quality culture in the drinking water supply is merged in the case of pollution reduction measures. That culture really has to change.

The fourth thing I would like in the review is the need, at long last, for an open public debate about the options, trade-offs and costs of cleaning up the water environment. It is not as simple as punishing the water companies and controlling them, and the water environment then recovering. It will not, and it is unfair to wind the public up to expect that, which is what much of the public debate is about at the moment. People think: “It’s all these rotten water companies and if we sort them out we will have a clean environment”. That is simply not the case. There needs to be a properly informed, understandable public debate about how much the public can pay, what they think it is most important for them to pay for and over what period of time. At the moment we have more heat and steam than illumination.

Can my noble friend the Minister tell the House more about the timescale of this review and whether the scope will be consulted on? I have gone on rather long about the review and have very little to say about the Bill itself. It is a bit performative—kicking the water companies, which have lost the confidence of the public and the Government. It is not a substitute for more fundamental action on water policy and the water environment. However, as the Bill is here, I would like to support several of the amendments to it that have already been mentioned, and raise a few of my own. It is important to give an environmental duty to Ofwat to ensure that it cannot be guided, or by default, soft-pedal the environment, as has happened since 2010. I would like the earmarking of all water company fines to an environmental fund such as the Water Restoration Fund. I would like measures to ensure the commencement of Schedule 3 to the Flood and Water Management Act, as the noble Baroness, Lady McIntosh, mentioned. It is outrageous that 14 years have passed since Parliament endorsed SUDS and soft drainage measures to try to reduce the amount of run-off into the sewerage system and therefore the cause of more overflows. Why on earth are we here creating legislation if it is never commenced? I would also like measures to strengthen the examination and sign-off of the pollution incident reduction plans by regulators and by Ministers to make sure that they are fit for purpose and can be properly implemented and monitored.

There are other amendments to come forward, but I make one last plea to the Minister. It is a more general point about legislation, but this is a good place to make it. She very kindly summarised the number of delegated powers in the Bill. I remember the days when I first came into this House when it was regarded as outrageous if we did not have, in draft, guidance and secondary legislation that flowed from a piece of primary legislation before we finally pressed the button on it at Report and Third Reading. I would like to think that a new Labour Government would bring back a commitment to making sure that this House sees in draft form what the contents of guidance and secondary legislation will look like, so that when we debate the Bill we are not debating a pig in a poke.

Water (Special Measures) Bill [HL]

Baroness Young of Old Scone Excerpts

Committee stage
Monday 28th October 2024 Lords Chamber

[Baroness Parminter (LD)]

My Lords, I will be brief because the noble Baroness, Lady Willis, has set out clearly the case for a duty for Ofwat to deliver on the Government’s biodiversity and climate change objectives. I just want to pick up on the point about the review, because I think the Minister will say, “This is a fantastic amendment, but we just need to wait for the review”, and there are three reasons why this Committee will find that response unsatisfactory.

The first point is that made by the noble Baroness, Lady Willis, which is around the timing of the review, which we all welcome, but we do not know when exactly it is going to finish. Of course, by the time it is in legislation, and we do not know when there is going to be a slot, we could have missed our biodiversity targets, let alone our climate target.

Secondly, there is nothing in this amendment which is not already Government-stated policy. It is Government-stated policy to deliver on our biodiversity objectives, to move towards our climate change objectives, and to adapt to respond to those. So why do we need to wait for the review? There is nothing about putting this in legislation now which is counter to the Government’s position and therefore there is no barrier.

Thirdly, the wording is rather clever. It does not say “Ofwat”; it talks about “the Authority”. So, whatever the review decides, it is relevant. It is also clever because it says that it must “take all reasonable steps”. Again, it is not precluding or being prescriptive about that future authority; it is just setting the parameters.

It is a very well-crafted amendment and I think the Committee will be deeply disappointed if the Minister comes back and just says we should wait for the review. It would also make us question what the point of the review is, and we would not wish to do that because we have the highest regard for the Minister. If the Government are not prepared at this stage to put in the Bill that part of the review is to ensure that we deliver on our environmental and climate targets, then how can we be sure the review is going off on the right foot?

[Baroness Young of Old Scone (Lab)]

My Lords, I add my support to these two amendments, to which I have put my name. I was pondering why Ofwat lost the plot on the environment around 2010. In a way, it is not surprising, because the reality is that it was getting a strong steer from government that the important thing was to keep bills down and that everything else should take second place. It was eminently possible to say that to Ofwat because the number of objectives and duties that it had been given was quite a large, disparate and often conflicting set and was growing yearly.

Ofwat currently has a primary duty under Section 2 of the Water Industry Act 1991 to

“further the consumer objective … to protect the interests of consumers, wherever appropriate, by promoting effective competition”.

That really became the sole mission of Ofwat in the 2010s.

Section 3 says that Ofwat’s work to further the conservation of flora and fauna should be undertaken only as far as it is consistent with the primary consumer objective. So, there is a “get out of jail free” card for Ofwat about environmental improvement and biodiversity decline and they take a very second-class seat. Ofwat also has a duty for pursuing sustainable development and a whole suite of environmental and recreational duties.

In 2014, a very muddled objective was added to Ofwat’s increasing list relating to resilience. In 2024, Ofwat got a statutory duty to promote growth. If one was being benign towards Ofwat, one could say that perhaps it was a bit confused by a number of directions which were mutually inconsistent, but the primary one was that Ofwat was told very firmly to keep prices down, and it pretty well did that in terms of the environmental elements of successive price rounds since then. Had Ofwat been challenged at any point as to whether it was meeting these duties, many of which are about contributing to or furthering or having regard to, it would have been very easy for it simply to construct arguments that demonstrated that it had a limited compliance with almost anything and to deliver nothing that it did not want to deliver.

The Minister will no doubt say that the broader review which has been referred to will consider how to streamline and focus Ofwat’s duties, and I agree that that is important and that the review should do it, but I share the views expressed that we cannot wait that long. The review will report eventually and there will be a delay while legislation comes forward. This amendment, which gives equal prominence to environmental duties and consumer duties, is fundamental if Ofwat is going to immediately play its full part in meeting the legally binding targets of the Environment Act and the Climate Change Act. At the end of the day, though I gather the debate on climate change last Thursday tried to deny it, these are in fact existential issues, which is why there are legally binding targets on both climate change and biodiversity.

Water (Special Measures) Bill [HL]

Baroness Young of Old Scone Excerpts

Committee stage
Wednesday 30th October 2024 Lords Chamber

[The Duke of Wellington (CB)]

My Lords, I support some of the detail in Amendments 30, 31 and 32—I have added my name to Amendment 32. Amendment 30 makes a very good point and I would be surprised if the Minister was not prepared to devise her own amendment that would cover all these points. Obviously, water-only and sewerage undertakers should be included in the scope of this clause.

Amendments 31 and 32 are very similar. As the noble Baroness, Lady Parminter, has already said, it seems extraordinary that a water company could publish a pollution incident reduction plan without intending to implement it. It would then be just a nice idea but nothing more would happen. I would be very surprised if the Minister did not accept it; I cannot quite understand that there is a legal argument for not accepting it. My hope from this short debate is that the Minister will agree to look at these points carefully. I am sure that, with the benefit of parliamentary draftsmen who help on these matters, she could come up with an amendment of her own that would cover the points. Clearly, there is support for what I would say are the rather obvious points made in these amendments, and I hope that the Minister will react accordingly.

[Baroness Young of Old Scone (Lab)]

My Lords, I support Amendments 32, 39 and 40 in the names of the noble Baroness, Lady Parminter, and the noble Duke, the Duke of Wellington. The case has already been put very well that there is absolutely no point in having these plans drawn up and published if there is no requirement for the companies to implement them and no sanctions if they do not. This seems a bit of a no-brainer. I suggest to the Minister that, if there is some legal impediment to these plans being implemented, we should do away with the requirement to draw up and publish them. That would be the most honest thing to do, if there will be no requirement to implement and no sanctions if they do not; otherwise, they are just dangling in mid-air, of neither use nor ornament.

[Lord Roborough (Con)]

My Lords, I thank the noble Baroness, Lady Parminter, for introducing this group of amendments and for the strong case that she and the noble Duke, the Duke of Wellington, have made regarding the importance of publishing and, crucially, implementing pollution incident reduction plans, or PIRPs. I wholeheartedly support Amendment 31; I would have published our own equivalent had the noble Baroness, Lady Bakewell, not been so swift with her pen. Without a requirement to implement, a pollution incident reduction plan would, frankly, be of little use.

Moving on to Amendment 34A, and declaring my interest as a landowner within Dartmoor National Park, while I approve of the sentiment behind the amendment, I would be reluctant to make our national parks a special case. We treasure our entire country. My preference would be for the water companies to focus on the worst pollution incident risks, which I imagine will be a consequence of their pollution incident reporting plans, particularly if compliance with those plans becomes strengthened through this group of amendments. We are committed to decreasing the impact of pollution incidents, and in government we committed to creating the water restoration fund, which would have seen the money collected from fines and penalties directly channelled into improving the water environment. We proposed a plan to improve water systems and, as such, we recognise the importance of creating and adhering to these PIRPs.

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The department needs further to investigate the drafting of this Bill. To ignore capacity issues in both these areas is to permit an outcome which must be obvious to all. This new Bill seeks to tighten up regulation, and it could go part way towards the Minister’s department resolving in advance a problem that is almost certain to emerge, given the Government’s quite acceptable wish to increase housebuilding in this Parliament.

[Baroness Young of Old Scone (Lab)]

My Lords, I support Amendment 53 in the name of the noble Baroness, Lady McIntosh of Pickering. It gives the Secretary of State six months to report on the implementation of Schedule 3 to the Flood and Water Management Act 2010, which covers sustainable drainage. The Act is what it says on the tin: enacted in 2010—but, if I understand it correctly, Schedule 3, which we slaved over in your Lordships’ House, has never been formally commenced. There is no point in legislating if it is not brought into effect. What is the point of us being here if the legislation we meticulously pore over and pass is never implemented?

This is an important issue of sustainable drainage. The noble Baroness has already outlined how it impacts on housing development and other developments. It has a big impact on river and water body quality, so I look forward to hearing how the Government intend to deal with this issue.

[Baroness Pinnock (LD)]

My Lords, the amendments from the noble Baronesses, Lady McIntosh of Pickering and Lady Browning, and the noble Duke, the Duke of Wellington, are, in their varied ways, interesting.

The amendment of the noble Baroness, Lady McIntosh, urges the Government to give greater consideration to encouraging water companies to use nature to slow down excessive water flows, particularly in rivers, because that would reduce the impact on combined sewers, which take both sewage and rainfall through the sewerage system. The noble Baroness gave the example of Pickering, which was discussed when I was on the board of Yorkshire Water some years ago. I was very pleased to hear that that approach has worked so well.

There is another interesting example, in Somerset. A group of environmentalists—not a water company—encouraged a river to return from a driven channel to its natural meandering state. That has benefited nature in many ways, but it has also reduced the speed of the water flow, thereby bringing about the benefits the noble Baroness described. The Government could encourage such approaches—not much more is needed. The Pickering scheme was supported by the board of Yorkshire Water because it was a lot less expensive and had many environmental pluses, among which was the reduced carbon cost of not having to use huge amounts of concrete, adopting a nature-driven approach instead.

I hope the Minister will take on board what has been said. The water companies, with a bit of oomph behind them, could be encouraged to experiment and use these ways to reduce water flows and therefore flooding, to reduce excessive water in the system, and to reduce storm water overflow pollution incidents. This would have a huge benefit.

The next issue, which we discussed on Monday, is the failure to implement SUDS. That was supposed to happen this year and has not, but it ought to. On the plus side, although the Government have not implemented it, in my experience planning authorities are already insisting on new planning applications having a SUDS scheme, because of the capacity issues raised by the noble Baroness, Lady Browning. In any major housing development scheme, the sewerage undertaker is required to commentate on the scheme and may say, “Guess what? There’s not enough capacity in the system”. A SUDS scheme is then applied, which reduces the highways rainfall flow so that it goes not into the sewerage system but, via attenuation tanks, into a neighbouring water course.

In some ways these things are already happening, but I agree with the noble Baroness, Lady Browning, about the importance of considering the capacity of the sewerage system and water resource availability. We know that in some parts of the country, particularly the south-east, housing developments do not happen because there is insufficient water supply. I heard what the Minister said earlier—that in the price review to be signed off by the end of this year, sufficient capital was agreed for nine new reservoirs. That is important, but we also need to think about using water more efficiently, as was said earlier. The volume of water that each of us uses compared to even 10 years ago is quite concerning. We need to think carefully about water efficiency, so that we use what is a precious resource more carefully.

I urge the Government to think again about a national water grid. Water is connected across the country, but the water resources are owned by individual water companies. There is quite a lot of water in the north and not anywhere near enough in the south of the country. Water is currently pushed from one part of a company’s resources to the neighbouring water company. For instance, Yorkshire Water regularly pushes water to whatever the neighbouring authority is in the Midlands. The Government should think about using the water in the north—I am sure that we who live in Yorkshire would be willing to sell it at a good price to those of you in the south who do not have enough.

On that basis, we support what has been proposed by the noble Baronesses, Lady McIntosh and Lady Browning, and we look forward to the Minister’s response to those concerns.

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[Lord Cromwell (CB)]

My Lords, I will speak to three practical amendments in my name in this group: Amendments 44, 46 and 49. They are modest and proportionate—perhaps that is my catchphrase. I support and echo almost everything, I think, that the noble Earl, Lord Russell, said a few moments ago, especially about citizen science.

Public accountability and transparency need data that is both sufficient and timely. As currently drafted, I do not think that this Bill does that sufficiently. My Amendments 44 and 46 together would solve this. Amendment 44 provides for relevant information to be made publicly available and Amendment 46 recognises that this is not something that can always be provided immediately—I am trying to anticipate the Minister’s reply here. Amendment 46 would allow the water companies to indicate when the information would be available, rather than requiring them to produce it immediately. By including these questions in the Bill while allowing a reasonable approach to how soon it can be provided, the amendments would fill the information and accountability gap that is in the Bill currently.

To turn to Amendment 49, experience shows that allowing companies—we had this exact issue during the passage of the Modern Slavery Bill, by the way—to report things exclusively on their own websites results in difficulties such as differences in the information that is included, where it is shown, how easily it can be found and how fully it is reported. That makes it unnecessarily difficult for those seeking to monitor performance on a comparative or aggregated basis. As represented in my amendment, putting this into one place where it is accessible to everybody is not a large amount of work. It is simply a matter of the water company putting it on its own website and firing off a link to the authority, which can put it on its website. That is how it should be, and it would enable comparative measures of performance, which will be lacking if water companies bury this on their own websites and report it in different ways.

[Baroness Young of Old Scone (Lab)]

My Lords, this is a large group of amendments and I am going to go on a bit; I apologise for that. I will speak first of all to my Amendment 45, which is a probing amendment. I should say, for the avoidance of doubt, that I declare no beavers. The Bill requires sewerage undertakers to publish a range of information when there is a discharge from an emergency overflow. My Amendment 45 would add a requirement that such monitoring and reporting should include whether what are known as “emerging contaminants” are present, including but not limited to per-fluoroalkyl and poly-fluoroalkyl substances—PFAS—and microplastics.

Let me explain why this is important. The noble Earl, Lord Russell, expressed worries about these sorts of chemicals in discharges in national parks, but it not just national parks; these discharges are happening everywhere. PFAS are serious pollutants and occur in entirely innocent-looking products and processes. They accumulate in our rivers and seas, they are persistent and cannot be extracted, and they harm both human and animal health. These PFAS are used in over 200 applications, and I felt pretty guilty when I was briefed on these applications by the Marine Stewardship Council, as I—and probably other noble Lords—use these harmful applications, day in, day out. PFAS are used in anything with Teflon, for example, including non-stick pots, in waterproof clothing, in stain-resisting products, in cosmetics, in firefighting foams, and even in Apple watchstraps. My daily slow-release pills that keep me alive in the face of ulcerative colitis send PFAS into the water environment straight from my gut. So I and all noble Lords are responsible for all of this.

PFAS are tricky to manage: they reach the water environment as particulates through storm or emergency overflows from sewage treatment works, but also from sewage sludge spread on the land or from being sprayed directly into the environment, as with firefighting foams. Once in our waters, they cause damage to wildlife and human health. Although some PFAS can be removed at sewage treatment works, the only secure way to deal with them is to ban those PFAS for which there is a viable alternative—there are a number of viable alternatives for many PFAS—and then seek to develop alternatives for those for which there are not yet alternatives.