Environmental Protection

Jim Shannon Excerpts

Tuesday 18th July 2023 Commons Chamber

[Dr Coffey]

We are straying somewhat from the purpose of the statutory instruments that we are dealing with today, but I have that same situation whereby Anglian Water covers sewerage and Essex & Suffolk Water covers the supply of water. One critical element in the price review process that we have is that Ofwat goes through a mechanism of working through with water companies what they are allowed to invest in and, as a consequence, what the bill changes could be. We have a situation where bills go up with inflation—that has been part of the mechanism so far, and there is a price review process under way, but I have listened carefully to what my right hon. Friend said.

It has always been the case that Ofwat is there to ensure that the investment that is required in our waterways and our sewerage is made, to ensure that we get best value for money. It is important to note that these SIs cover what happens when we see water companies and other operators, having had that ability to invest, breach their permits. We want to make sure that the penalties are uncapped in order to act as an effective deterrent, as I have mentioned.

Hon. Members have asked how some of those penalties will be applied. I expect that, as now, the Environment Agency will use the guidelines for environmental offences, which are published by the independent Sentencing Council, to determine the level of all variable monetary penalties. Thinking particularly of some of the very small businesses covered by the environmental permitting regime, that will also include a number of safeguards to make sure that penalties are proportionate.

[Jim Shannon (Strangford) (DUP)]

On the subject of penalties, one thing probably annoys most of us—it certainly annoys many of my constituents—is that whatever happens, the chief executive seems to get a massive dividend. When it comes to damages and penalties, is it possible that those dividends could be retrieved and used for the betterment of customers?

[Dr Coffey]

The water industry in Northern Ireland is not covered by the UK Government. It is a separate system, so with the greatest respect I think the hon. Gentleman will need to follow that up with the Northern Ireland Executive when they are reformed, which I hope will be soon. However, I will also ask the permanent secretary to write to him in that regard.

The regulations apply only to England. We invited the Welsh Government to join us in making the regulations, but they felt unable to act at the pace at which we have acted. That is not to say there are not sewage spillages or other environmental breaches in Wales—there are: we know that on average there were 38 spillages from Welsh storm overflows last year, compared with 23 in England.

The new regulations sit alongside the freedom that we have given Ofwat to link water company dividends to environmental performance. As I have referred to, the fines and penalties will be reinvested in local water improvement schemes through our new water restoration fund, while the water company will pay the polluter penalty and will have to fix the problems at no cost to the bill payer.