Water (Special Measures) Bill [Lords]

Claire Young Excerpts

Report stage
Tuesday 28th January 2025 Commons Chamber

[Emma Hardy]

Despite our political differences, the hon. Gentleman and I had a very interesting and—what is the right word?—comradely debate in Committee.

As we explained in Committee, conversations on the water restoration fund are still ongoing. I honestly do not believe that primary legislation is needed, which Conservative Front Benchers know, as they established the fund without primary legislation. I gently point out, as I have already mentioned, that within the 18 months of its establishment under the previous Government, the fund did absolutely nothing.

[Claire Young (Thornbury and Yate) (LD)]

Will the Minister give way?

[Emma Hardy]

I have two minutes remaining, so I have to skip through as much as I can, as I know Members will want me to answer questions, particularly on the SAR.

Some hon. Members have expressed concern about the rules on performance-related pay and consumer representation. Although the Government agree it is crucial that consumers’ voices are heard and considered in water company decision making, we have already taken action on this. It is not necessary to require environmental experts to be placed on company boards because, following the agreement made with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs in his first week in office, nine of the 16 companies have updated their articles of association to include a social and environmental commitment. DEFRA is working with all of them to ensure they do the rest as soon as possible.

I agree with the hon. Member for Westmorland and Lonsdale (Tim Farron) about the representation of environmental non-governmental organisations on company boards. Members of water company boards are subject to a number of duties under the Companies Act 2006, including a duty to promote the success of that company. A director’s fiduciary duties may conflict with the organisational objectives of the environmental group in question, thus preventing their objective participation in board membership. We cannot have a situation in which an environmentalist on a water company board is not comfortable with their duty to promote the success of that company.

I produced a factsheet detailing how the SAR is used to ensure the continued provision of vital public services. However, I remind the House of the facts. I am being very clear: the shortfall recovery power can only be used to recover shortfalls in repaying Government funding. For the last time, I hope, it cannot and would never be used to recover financial creditor or shareholder losses relating to investment in the company. If the amendments were accepted as proposed, it would involve a radical change to insolvency policy, which has been a long-established practice since 1986.

Question put and agreed to.

New clause 18 accordingly read a Second time, and added to the Bill.