Water (Special Measures) Bill [Lords]

Pippa Heylings Excerpts

Report stage
Tuesday 28th January 2025 Commons Chamber

[Clive Lewis]

I agree with the hon. Lady. I hope her party comes to its senses at some point—maybe in the same way that my party needs to come to its senses—and accept that some form of public ownership will probably be the best way to resolve that.

[Pippa Heylings (South Cambridgeshire) (LD)]

Have you?

[Clive Lewis]

That is my personal view; I put that on the record.

These companies have legal obligations first and foremost to their shareholders, which means short-term profit maximisation. When water was privatised, to quote from Unison’s recent report on this matter, to

“ensure the commercial success of the companies, the government wrote off all the existing debts of the RWAs”—

regional water authorities—

“(£6.5 billion in total) and gave the private companies £7.7 billion of public subsidies in tax relief on profits.”

It has come to my attention that even some former chief executives of water companies fear for the future of the industry, because good investors have by and large exited it. It is now the Macquaries and vulture capitalists of this world that dominate shareholding.

This issue goes far beyond regulation. Indeed, our own regulator, Ofwat, has been found wanting, as its own growth duty prioritises business as usual. In other areas, the Government have quite rightly recognised and embraced the value of public ownership, such as in rail and with Great British Energy. Unfortunately, when it comes to water companies there seems to be an inconsistency in Government policy. Many of us on this side of the House ran on a manifesto commitment to reduce the cost of living, and that commitment is one that I think every Labour MP believes in. However, the cost of corruption and of extraction by a private water company should under no circumstances, as is currently configured in the Bill, land on the heads of our constituents should any of these companies go bust or be taken into special administration.

Water is a monopoly industry, which means that bill payers and taxpayers are the same. What message would it send to our constituents if they are asked to pay, via their bills or via tax, to make a payout for the mistakes and excesses of privatised water?

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[Dr Hudson]

It has been a wide-ranging debate, although shorter than we had hoped for. I thank Members for participating today. I thank my hon. Friend the Member for Beaconsfield (Joy Morrissey) for her passion for enhancing the accountability of water companies and protecting watersports, which we are all passionate about, and my hon. Friend the Member for Bridgwater (Sir Ashley Fox) for passionately advocating for the water restoration fund.

New clause 16 would establish the water restoration fund, to ringfence money from fines to restore local waterways, not to balance the Treasury’s books. This was a Conservative fund, and the Labour Government must not let ideology stand in the way of evidence-based policymaking. They must take the baton forward and ringfence this money, so that waterways can be restored locally.

[Pippa Heylings]

Will the hon. Member give way?

[Dr Hudson]

No, I have no time.

New clause 19 is designed to ensure that fines on water companies result in equivalent reductions in customers’ bills. That is only fair, and we urge the Government to take forward the new clause.

New clause 17 seeks to strengthen the financial resilience of water companies by enabling the Secretary of State to stipulate the limits of borrowing, so that these companies do not leverage too much debt. That is an important new clause that needs to go forward.

Through amendments 26 and 27, we want to protect customers in different parts of the country so that they do not have to pay for the misdemeanours of water companies that do not serve them. We urge the Government to take forward our amendments and make this Bill stronger, so that we can improve our precious waterways.

--- Later in debate ---

[Emma Hardy]

Let me try to get through my remarks.

If it becomes feasible in future for companies to install monitors more quickly, they will be encouraged to do so. In addition to reporting requirements for emergency overflows, other measures in this Bill will ensure that water companies have robust plans to reduce pollution incidents and empower the regulator to punish wrongdoing effectively. This includes requirements to produce pollution incident reduction plans and implementation reports, as set out in clause 2 of the Bill, and requirements for water companies to consider the use of nature-based solutions in the production of their drainage and wastewater managements plans, as set out in clause 4.

The transparency provided by these measures will drive a culture change ensuring that water companies have the right incentives to reduce discharges of sewage into our precious rivers, lakes and seas. Let me be clear that the Bill also provides comprehensive powers for Ofwat to enforce the requirements introduced by the Bill to increase transparency, including through use of significant fines. I can reassure the House that where discharges are found to have breached permit conditions, the regulator will not hesitate to take action. In relation to new clause 14, I also make it clear that Ofwat has a duty to secure that companies are able to finance the delivery of their statutory obligations, including meeting pollution targets.

The Government are committed to acting as fast as possible to reduce sewage pollution in our waterways, and already have stretching pollution targets in place, informed by detailed analysis and extensive engagement. These targets will drive £60 billion of investment between 2025 and 2050, and almost £12 billion of that investment will begin this year, improving 2,800 storm overflows by 2030. I hope this reassures the House that, where water companies do not comply with requirements around pollution incidents and the reporting of those pollution incidents, the regulator will not hesitate to take action.

[Pippa Heylings]

The water restoration fund was created by the previous Government, yet not one penny of the £11 million levied on water companies between 2022 and 2023 reached any restoration of the waterways. Does the Minister agree that our precious chalk streams could be helped by the water restoration fund being continued?

[Emma Hardy]

As I have mentioned, I am a huge fan of our chalk streams. The hon. Member is right to point out that the much-lauded water restoration fund that some Members are so keen to talk about was established in November 2022, yet 18 months later the grand total of the number of projects supported by it was zero.

A number of hon. Members have also put forward suggestions to improve information and data sharing more broadly. The hon. Member for Beaconsfield (Joy Morrissey) has put her name to some of these amendments. Although the Government do not think it necessary to bring forward legislation in this space, we are actively considering ways of making data more accessible to the public through non-legislative means. This includes information on water companies’ performance and data on local sewer networks in map form, which must be made available free of charge under the Water Industry Act 1991.