Water Companies: Regulation and Financial Stability Debate
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Edward Morello
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Water Companies: Regulation and Financial Stability
Edward Morello Excerpts(4 weeks, 1 day ago)
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Tim Farron
First of all, I am merely, and happily, an honourable Member, although it is very kind of the hon. Lady to call me “right honourable”. Secondly, we welcome many proposals in the Bill. We have already tabled many amendments in the House of Lords because although we think that the Bill is a step in the right direction, a lot more could be done. I will make more of that in a moment.
It is worth saying, as we are talking about bonuses, that although there was a 54% increase in spills between 2022 and 2023, it did not rain 54% more in 2023 than in 2022; there was no justification for that increase— and yet, the bonuses happen. I have never worked in an industry where bonuses were the norm, but my understanding is that they are paid for success, not as a commiseration for statistically proven and repeated failures.
It is easy to be angry about all this—I am, and maybe it is essential to be so—but it is just as important to be constructive and seek solutions. The depth, seriousness and complexity of this crisis means that the only answers that will work need to be radical and ambitious. Today’s announcement of a water commission, which will consider these things, is welcome, but also a little frustrating. Do we really need to spend the best part of a year stroking our chins and pondering, when what is needed is radical action now? With respect, most of us pretty much predicted the likelihood of a Labour Government two years ago. Did the victory strike them as a surprise? Why were they not ready with a plan to deliver much sooner than this?
I have a similar view, as I have just suggested, about the Water (Special Measures) Bill. It contains many positives, including criminal liability for CEOs responsible for severe environmental failure, but it does not amount to the radical structural transformation that is so obviously needed. The British people rightly believe that they voted for a far more ambitious plan to be urgently delivered. Indeed, those who voted Liberal Democrat absolutely did vote for that, so we are determined to keep our word and fight for that action.
It seems obvious how regulation could be made better. Water industry regulation is fragmented, with environmental regulation done by the Environment Agency and business regulation done by Ofwat. That just does not work.
Edward Morello (West Dorset) (LD)
To my hon. Friend’s point about the need for a regulator with teeth, West Dorset saw 45,000 hours of sewage released into our rivers and beaches last year. The River Lim last year was declared “ecologically dead”. Does my hon. Friend have a view on whether the regulator should be able to impose fines on the water companies that reflect the damage they are doing to our natural environment?
Tim Farron
I completely agree, and I will answer that point more fully in a moment.