Water Companies: Water Pollution

Lord Watson of Wyre Forest Excerpts

Wednesday 1st March 2023 Lords Chamber

[Lord Benyon (Con)]

In 2013, we only knew about 5% of the storm overflow points where sewage was going into our rivers. We now know about 90% because we instructed the water companies to provide that information. By the end of this year, we will know about 100%. The Environment Agency is the guardian of water quality and it takes forward prosecutions. The Government have said that they will increase the fines available as, at the moment, there is a cap on them, which we think should be higher. The Environment Agency is already able to launch criminal prosecutions against CEOs. Ofwat has the power to impose a fine of up to 10% of a company’s annual turnover and all fines are taken from the water company’s profits and not from customers.

[Lord Watson of Wyre Forest (Lab)]

My Lords, we consume twice as much water per capita as we did 50 years ago. There is an increasing frequency in sewage discharges as a result of extreme weather events, all of which require institutional investment. Do the Government not have the choice either to reduce profiteering in the sector in favour of this investment or to ask the taxpayer to subsidise this infrastructure?

[Lord Benyon (Con)]

We are asking water companies to spend a lot more—£56 billion. In this period alone, they are putting an extra £7 billion into investment in infrastructure. Water companies make a profit of about 3%. This is not dramatic, compared with what some other companies make, but we watch it very carefully through the instructions we give to Ofwat. We want to make sure that customers are getting a good deal but, more importantly, that there is investment going into infrastructure.