Water (Special Measures) Bill [Lords]

Debate between Emma Hardy and Caroline Nokes

Consideration of Lords message
Tuesday 11th February 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)]

I beg to move,

That this House insists on Commons Amendment 1 to which the Lords have disagreed, disagrees to Lords Amendment 1B, to the words restored to the Bill by the Lords’ disagreement to Commons Amendment 1, and proposes Amendments (a) and (b) to the Bill in lieu of the words left out by Commons Amendment 1.

[Madam Deputy Speaker (Caroline Nokes)]

With this, it will be convenient to consider the following Government motion:

That this House insists on Commons Amendment 2 to which the Lords have disagreed, and proposes Amendment (a) in lieu of the words so left out.

[Emma Hardy]

I am delighted to have another opportunity to debate this transformative Bill in this Chamber. I thank all Members for continuing to take an interest in this important piece of legislation, which demonstrates our shared commitment to improving the water sector. Today, this House will consider amendments made in the other place.

I recognise that there is huge interest across this House in wider issues relating to water. Though our debate today is solely focused on the changes made to the Water (Special Measures) Bill in the other place during the Lords’ consideration of Commons amendments on 5 February, I look forward to future opportunities to discuss wider concerns and actions, for example through work relating to the independent commission.

I turn first to the changes made in the other place that would require water companies to regularly report to Ofwat on their financial structure, and to ensure that that information could be readily accessed and understood by the public. It is important to highlight that water companies are already required under their licences to publish by a set date financial performance metrics within their annual performance reports. That includes the interest on their borrowings, their financial flows and an analysis of their debt. If water companies do not comply with these licence conditions, Ofwat can take enforcement action, including issuing fines.

However, the Government recognise that there is an opportunity to make financial data more accessible for members of the public. The Government have therefore worked at pace with Lord Cromwell and Ofwat to develop a way to achieve our shared objective of improving the transparency and accessibility of reporting on key financial metrics. The insertion of a new section 35E into the Water Industry Act 1991 will make it clear that water companies should provide an intelligible overview of their financial position at least once a year. That overview should include a summary of the significant changes that have taken place over the past 12 months, and will cover key aspects of water companies’ financial position, such as their share capital and debt.

--- Later in debate ---

[Emma Hardy]

I thank the hon. Gentleman. As I have said throughout, he will have to wait and see, but to imply that legislation is required for the fund would be dishonest. I am sure the hon. Gentleman does not want his honesty to be questioned. The implication that legislation is required for the water restoration fund is simply not true.

As I outlined in my opening speech, I recognise that there remains a strong interest in issues wider than the scope of today’s debate. I reiterate that the Bill is not the limit of our ambition. The Government will continue to work with hon. Members across the House to discuss and make progress in addressing the fundamental issues facing our water sector.

The hon. Gentleman mentions the words “time to time”. The wording has been specifically designed to allow Ofwat to review requirements as and when appropriate, and adapt quickly where needed. We do not want to pre-empt how often this kind of review might need to take place. To reassure him, that was discussed at length in the other place.

On parliamentary scrutiny, the Government worked with Ofwat to offer peers and MPs an opportunity to raise questions on Ofwat’s rules in a parliamentary drop-in session, providing further insight on the rules. However, that proposal was not accepted by hon. Members’ colleagues in the other place, which feels like a shame.

It has always been our intention to bring about, through the Bill, meaningful change in the performance and culture of the water sector. The amendments tabled by the Government are in keeping with that objective. I hope the House will support the Government amendments, which will ensure that the public can easily access an overview of water company financial information, and will give Ofwat a duty to issue rules on financial transparency that will commence on Royal Assent. Together, the amendments will enable the Government to take another positive step forward in restoring public trust in the water sector, which has sadly been destroyed over the past 14 years.

Similarly, I hope the House will support the Government in bringing forward amendments to ensure that Ofwat’s rules are brought forward promptly and that its independence is protected. The Government acknowledge the intention behind the changes made in the other place, but we cannot accept the risk that they create in delaying the introduction of Ofwat’s rules. I therefore hope that Members across the House will also support the Government in ensuring that these vital rules are brought forward without delay.

[Madam Deputy Speaker (Caroline Nokes)]

I am sure the Minister did not meant to imply that the shadow Minister was in any way dishonest, and she might perhaps seek to correct the record to say she felt that he was mistaken or incorrect.

[Emma Hardy]

I am very happy to issue that correction.

Question put.

A Division was called.

[Madam Deputy Speaker (Caroline Nokes)]

Division off.

Question agreed to.

Resolved,

That this House insists on Commons Amendment 1 to which the Lords have disagreed, disagrees to Lords Amendment 1B to the words restored to the Bill by the Lords’ disagreement to Commons Amendment 1, and proposes amendments (a) and (b) to the Bill in lieu of the words left out by Commons Amendment 1.

Motion made, and Question put,

That this House insists on Commons Amendment 2 to which the Lords have disagreed, and proposes amendment (a) in lieu of the words so left out.—(Keir Mather.)