South West Water

Richard Foord Excerpts

Tuesday 5th March 2024 Westminster Hall

[Simon Jupp (East Devon) (Con)]

I beg to move,

That this House has considered the performance of South West Water.

It is a pleasure to serve under your chairship, Mr Henderson. I am delighted to have secured this important debate, one year on from another debate that I secured on the performance of South West Water. It is another opportunity to hold South West Water to the highest possible standards in the House.

Last year, I described the performance of our water company and its historic lack of investment as “shameful”, and many of my constituents shared my point of view. This year, I want to focus my speech on the facts facing my constituency of East Devon. The public want to see evidence of improvement and delivery of the promised investment, and they want South West Water to clean up its act and our water. South West Water must deliver better services for our constituents, improve our bathing waters, and protect our natural environment. Not doing so puts the vibrancy of our coastal communities under threat.

As the MP for East Devon, I am determined to push South West Water to deliver the standards expected by local residents, visitors and businesses. I want the unacceptable pollution we have seen in Exmouth, Sidmouth and Budleigh Salterton to be met with the full force of the law. Thanks to this Conservative Government, we finally have the tools to hold South West Water to account. It is the biggest crackdown on sewage spills in history: the Government have introduced unlimited fines, accelerated investment plans, legal targets to reduce discharges from every single storm overflow and eliminate all ecological harm, as well as compulsory storm overflow monitors, and they have forced live spill data to be made public. I voted for all that. The Government have passed a suite of new laws to crack down on spills, including the Environment Act 2021, the Environmental Targets (Water) (England) Regulations 2022, the Environmental Civil Sanctions (England) (Amendment) Order 2023, and the Environmental Permitting (England and Wales) (Amendment) (England) Regulations 2023.

Those new laws, brought in by this Conservative Government—and no previous Government—are forcing the hand of water companies, but new laws on their own will not clean up our water: more investment, better data, and tougher enforcement are clearly needed. On investment, we know that South West Water has historically failed to invest; we pay the highest sewerage bills in the country, and we have not had our fair return for decades. On data, we now know the scale of the problem, because this Government lifted the lid on the water companies’ infrastructure and made them pay to monitor the results of their own failures.

On enforcement, the Environment Agency must be appropriately funded to carry out its enforcement work. In order to crack down on water pollution, this Government have boosted funding for the Environment Agency, with a budget of £2.2 million per year specifically for water company enforcement activity. That means more officers focused on regulation, more compliance checks, and more data specialists. Environment Agency workforce numbers are higher than a decade ago—there are now 13,200 staff, and it is growing at its base in Exeter. In the past two years, staff numbers have grown by 2,300 across the Environment Agency.

So are things moving in the right direction? Well, the Environment Agency has said:

“There is still much work to be done.”

Its latest annual rating for South West Water is now two stars. That rating is for 2022; in 2021, it was a one-star water company. The Environment Agency has said that the two-star rating is evidence of “modest improvements”, but it has also said that pollution is still at “unacceptable” levels. I agree: only last year, South West Water was fined £2.1 million after admitting that it caused pollution across Devon and Cornwall dating back to 2016. The year before last, it was hit by £13 million in fines in the form of bill deductions for customers. Since those fines were handed out, the Government have legislated to introduce unlimited financial penalties on water companies and expand the range of offences for which penalties can be applied.

[Richard Foord (Tiverton and Honiton) (LD)]

I am grateful to the hon. Member for giving way. It is interesting to note that a £2.1 million fine was levied against South West Water, but does he think that fine is going to make any difference to a company that has a debt in its water business of £2.8 billion?

[Simon Jupp]

I think every little helps. When we look at the scale of fines and potential future fines from ongoing investigations, which I will come to, I think we will see more money levied in that way from South West Water. Money raised by fines will then be channelled back into improving water quality, supporting local groups and community-led schemes, which help to protect our waterways.

The bosses of water firms that commit criminal acts of water pollution will be banned from receiving bonuses. I am pleased that the chief executive of South West Water led by example in not accepting a bonus last year. Meanwhile, the industry regulator, Ofwat, is currently investigating South West Water’s wastewater treatment works and leakage reporting. I and many colleagues look forward to seeing the outcome of those investigations. The need for independent regulators—Ofwat and the Environment Agency—to act decisively in these investigations is crucial.

Unfortunately, I have to report that the start of 2024 was particularly poor for South West Water in my constituency. Exmouth has faced several major incidents resulting from failures in South West Water’s infrastructure and the lack of investment in the town. South West Water has been using tankers to take sewage from burst sewer pipes to pumping stations, causing additional spills due to the disposal of additional tankered sewage. Those incidents are currently under investigation by the Environment Agency. The situation was—and is— completely unacceptable.

--- Later in debate ---

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

Thank you, Mr Henderson. It is good to follow my fellow Janner, the hon. Member for East Devon (Simon Jupp), who brought forward this debate. The performance of South West Water is not good enough: that is felt by the constituents both he and I represent. We need renewed cross-party pressure on the company to invest in the services required to cut sewage spills and to return reliable water usage all year round, as well as to address the concerns about drought in our area.

Raw sewage is the perfect metaphor for the last 14 years. For years, South West Water dished out huge dividends to its shareholders while dumping sewage into our rivers and seas. Our region deserves so much better than that. The most recent data from the Environment Agency has not been published for 2023, but the 2022 figures show there were more than 37,000 sewage spills in the south-west. In Plymouth alone, there were more than 2,000—an average of five spills every day, or 12,750 hours of sewage dumping.

According to South West Water’s live, interactive storm overflow map, as of half-past 3 today there are 26 bathing water locations across Devon and Cornwall that may be affected by the operation of overflows, including two in Plymouth. Having more data is a necessary part of being able to respond to the challenges of a lack of investment in infrastructure over a long time. However, that data must lead to enforcement and to a change in investment behaviour by South West Water in order to start shutting down those storm overflows for routine discharge.

All of us in this House recognise that, in the event of extreme weather, our water system cannot hold that much water—but we are not talking about extreme weather on a day-to-day basis; discharge is a routine daily occurrence from a water company that knows it should not be doing it, but is still doing it. I would like the water company to be more honest with customers and parliamentarians about what needs to be done to get to a point where all those storm overflows do not routinely discharge on a daily basis.

[Richard Foord]

The hon. Member talked about how data on sewage spills is gathered. Does he agree that, rather than water companies having complete control over gathering data on sewage spills, that function ought to sit with the regulator, the Environment Agency?

[Luke Pollard]

I am not a huge fan of the Environment Agency—I like the people who work there, but there are just not enough of them. Certainly, since 2010, Environment Agency funding has been cut by over 50%, which creates real challenges in the efficiency of prosecutions. Prosecutions that take years do not represent justice delivered quickly, or fines going to the affected communities quickly; they represent justice delayed, and something that can be built into the company’s daily business operations.

I will pick up on a final point before I finish: the investment that South West Water is making at Devil’s Point in Plymouth. As a regular wild swimmer there—I swim all year round, in shorts or wetsuits, depending on the time of year—I am grateful that the Minister and his predecessor authorised the campaign I was running for a new bathing water status at Devil’s Point and Firestone Bay. That is very welcome. The data collection there shows excellent water quality nearly all year round, but the two private raw sewage outlets that pump untreated human effluent into that important part of Plymouth Sound are not acceptable. I am grateful to South West Water for starting the work on closing those and adopting those raw sewers, but that work is taking too long and I would like to see a greater urgency in delivering it. We know raw sewage is going into our sea, and the action taken there should be quicker.

I encourage the Minister to keep pressure on South West Water, because as a water company it is not investing enough in the infrastructure we need. I have long-term concerns about the amount of water in our system to prevent future droughts and water restrictions in the summer. I would be grateful if the Minister could keep that pressure on South West Water, so that the region gets the water and sewage services that we deserve.

--- Later in debate ---

[Richard Foord (Tiverton and Honiton) (LD)]

It is a pleasure to serve under your chairship, Mr Henderson. A policy paper says:

“the costs of cleaning up coastal waters, a national resource, have not fallen fairly across the country. Thirty per cent of the cost has fallen on Devon and Cornwall, which have just 3 per cent of the nation’s population. The chair of the South West Water Consumers Committee believes their average bill will go up by a further £150 a year”.

That was written in 1996. It is a Liberal Democrat policy paper from almost 30 years ago, and it is a story that continues to chime today and echoes through the decades. It is good that we are talking about the performance of a single water company, and South West Water is plainly one of the worst performing water companies in the country, but we should not focus myopically on the performance of one single water company and miss the big picture: the regulatory environment in which all water companies work. That is what I shall address my remarks to.

It is true that South West Water pays out some staggering dividend payments. Since 1990, South West Water has paid out in dividends an amount equivalent to £2,931 per property. That is more than any of the other 13 English water companies. A constituent of mine from Seaton recently pointed out to me that South West Water, or its parent company Pennon Group, owes £3.1 billion, which is similar to the amount paid in dividends since 1990, which is £3.2 billion. By those measures, South West Water is a poorly performing water company, but we have to look at the environment in which it is working. The water companies are working to the incentives that their shareholders set for them, rather than for the public benefit and good.

There were 146 recorded dry spills over a 12-month period last year. To recap, those are illegal spills made by water companies when there is no heavy rainfall. Just yesterday evening, I was talking to Jo Bateman from the East Devon constituency, who attended the End Sewage Pollution coalition meeting that I brought together. She explained to me that she is suing South West Water for those illegal dry spills. I am not at all persuaded that water companies will simply do the right thing without Government intervention. We know the Environment Agency has been denuded of resources in recent years. The agency had £235 million cut from its budget when the right hon. Member for South West Norfolk (Elizabeth Truss) was the Secretary of State for Environment, Food and Rural Affairs.

[Simon Jupp]

Obviously, the hon. Member was in the room for my speech, and I explained that more investment is going into the Environment Agency to tackle the issues he raises. Would he shed some light on Lib Dem policy? Does his party still want to abolish the EA or keep it? It is not clear—it is a muddle and a farce.

[Richard Foord]

Liberal Democrat policy is to abolish Ofwat but very much to bolster the Environment Agency. We need to ensure that we have a regulator with teeth. As I have said to the hon. Member before, if the Environment Agency has teeth, they are in a glass of water by the side of the bed. He says he thinks that South West Water will hear his concerns, but I point out that the chief executive only forwent her bonus when it was plain that the level of outrage and campaigning in the west country was such that anything else would have been unacceptable. I should say that it is under pressure from parties like the Liberal Democrats that the Conservatives seem to have been talking in recent weeks about water companies and their executives not taking their bonuses when their performance is so poor.

[Selaine Saxby (North Devon) (Con)]

In clarifying Liberal Democrat policy and the actions they have taken, perhaps the hon. Gentleman could explain what his party’s leader, the right hon. Member for Kingston and Surbiton (Ed Davey), did to tackle this issue when he was Secretary of State for Energy and Climate Change between 2012 and 2015.

[Richard Foord]

I would be very happy to. Of course, at that time the Secretary of State for Energy and Climate Change had different responsibilities.

Our policy now is very much about reforming water companies’ boards. They need to be transformed into public benefit companies. We need boards to have grassroots campaigners such as those I gathered together last night. We had Surfers Against Sewage and the Women’s Institute, which is pushing its “Water You Waiting For?” campaign. Fantastic campaigners such as these need a voice at the board level of these companies, otherwise we will face the catastrophe of our tourist hotspots being struck with the affliction that is water pollution. According to Blue Flag, four of the 10 beaches most affected by pollution last year were in Devon, including Sidmouth, which endured over 600 hours of sewage spills.

We heard earlier in the debate about the Environment Agency. In my view, we need to see the end of operator self-monitoring, which is where water companies get to gather their data themselves before passing it to the regulator. It means that they can potentially vary the data they are collecting. Water companies are essentially marking their own homework. This is having a devastating effect on some tourist areas such as the ones in Honiton.

I feel that there is a mismatch between the rhetoric we have heard this afternoon from some hon. Members and their voting records. I point them to 25 January 2023, when we voted on the draft Environmental Targets (Water) (England) Regulations 2022 and when I was very proud to insist that the Government should have more stringent targets for water pollution. I can see, Mr Henderson, that you are suggesting I have reached the end of my time, but I am grateful to have had the chance to make my remarks.

--- Later in debate ---

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

I thank my hon. Friend the Member for East Devon (Simon Jupp) for bringing the matter of the performance of South West Water before the House, which has proven to be an incredibly important debate. I am disappointed in the continued poor performance shown by South West Water and its impact on our local environment.

Recently, I undertook a tour of the south-west and heard at first hand how pollution can impact coastal communities and local economies. I want it to be clear that this Government have made improving water company performance a top priority. While performance may have improved in the 2022-23 reporting year, South West Water remains one of the worst performing companies, with a long way to go still—in particular on pollution incidents and storm overflow discharges, both of which were significantly above the industry average in 2022. That is completely unacceptable. South West Water should be under no illusion: it must take urgent steps to reduce its pollution incidents significantly, as well as addressing other performance concerns, such as increasing resilience of the water supply.

Among the concerns expressed by Members, my hon. Friend the Member for East Devon raised the issue of sewage discharge into Exmouth bathing water. I have recently had discussions with him about that, and he has written to me several times. Although the condition of the bathing water is currently classified as excellent by the Environment Agency, I wish to reassure the House that the recent incidents raised by my hon. Friend are currently being investigated by the Environment Agency. It has required South West Water to provide data and information to support its investigations. It would be inappropriate for me to comment from the Dispatch Box while this investigation is ongoing, but please rest assured that the regulator will not hesitate to hold the water company to account if a breach has occurred.

The Environment Agency is also scrutinising South West Water’s overall pollution reduction plan to ensure that the company has the right plans in place to prevent future issues. I will also be personally seeking assurance from the chief executive of South West Water, Susan Davy, that the company is doing all it can to mitigate the environmental impacts and protect bathing waters both in Exmouth and across the south-west for the sake of both the environment and public health.

I am also aware of the concerns of Members and the public following high-profile sewage spills, such as those at Harlyn bay in Cornwall. I am pleased to see that South West Water has outlined an £800,000 investment in this area by 2025 to reduce surface water ingress into the combined sewer network to help reduce storm overflow spill frequencies. However, its actions are again coming too late, following years of neglecting its civic duties. This Government will not be shy of holding the company to account.

[Richard Foord]

Would the Minister agree that the problem is not just with one single water company but with the regulatory environment in which water companies operate? That is why at last night’s #EndSewagePollution coalition meeting, which I brought together, we had present the Rivers Trust, British Canoeing, the Angling Trust, River Action UK, Swim England, Surfers Against Sewage and the Women’s Institute. Does the Minister regret being unable to attend?

[Robbie Moore]

I find it a huge misfortune that it is Lib Dem policy to get rid of one of the key regulators, Ofwat, as has been confirmed in this debate. We have just given Ofwat powers to take a much more robust approach to dividends and water company bosses’ bonuses, so I fear for the future of holding water companies to account if Lib Dem policy is get rid of it. This Government know that the industry needs to go further and faster to address these issues.

In 2022, data indicated that 6.47% of South West Water storm overflows spilled 100 times or more, which was twice the sector average. That is quite simply unsatisfactory. That is why we have introduced our storm overflows discharge reduction plan—the most ambitious plan to address storm overflows discharges in water company history, which will deliver £60 billion of capital investment by 2050 and target our most important sites, including bathing waters first.

The Government have also driven water companies to ensure that we now have 100% monitoring of storm overflows; that is up from 7% in 2010 under the previous Labour Administration. It was the last Labour Administration who brought out self-monitoring; we want to overturn that as we have better data from the roll-out of 100% monitoring.

However, I recognise the progress happening in the south-west. Indeed, I recently visited a pilot scheme at Combe Martin village with my hon. Friend the Member for North Devon (Selaine Saxby), where smart water butts and sustainable drainage had been introduced to better manage rainwater. That was having a positive impact. I commend my hon. Friend on the good work that she has been doing in her constituency, working together with her constituents and with campaign groups to ensure that a partnership-led approach can actively work on the ground when it comes to tackling sewage pollution.