Environmental Protection

Roger Gale Excerpts

Tuesday 18th July 2023 Commons Chamber

[The Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)]

I beg to move,

That the draft Environmental Civil Sanctions (England) (Amendment) Order 2023, which was laid before this House on 12 July, be approved.

[Mr Deputy Speaker (Sir Roger Gale)]

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

That the draft Environmental Permitting (England and Wales) (Amendment) (England) (No. 2) Regulations 2023, which were laid before this House on 12 July, be approved.

[Dr Coffey]

The purpose of these instruments is to strengthen environmental civil sanctions, so that our environmental regulators can apply an unlimited penalty to companies that break the terms of their permits and do damage to the environment. We are also making it easier for such penalties to be applied rather than having to resort exclusively to taking polluters to court for fines to be applied.

Rightly, the Government care about the environment, as do the public. In January, we published our environmental improvement plan, which set out an ambitious five-year blueprint for action to make our country cleaner and greener, to restore nature and to improve the state of our environment. In April, we set out our comprehensive integrated plan for clean and plentiful water. Both plans demonstrated our ambition and the action that we would undertake to have a laser-like focus on cleaning up the environment, including enabling our regulators to enforce the law effectively and efficiently.

Let me turn to the enablers that we are debating today. First, the current provision for variable monetary penalties under the Environmental Civil Sanctions (England) Order 2010 is capped at £250,000. Possible penalties are supposed to be an effective deterrent to poor performance. Unfortunately, it seems that some operators may have priced in the fact that it can be cheaper to pay the current penalty than to fix the problem and tackle the pollution. Of course, people who breach their permits and pollute can be taken to court facing a criminal conviction and be faced with an unlimited fine and the prospect of going to prison. However, we know that such investigations and court cases can take years to accomplish such an outcome. Therefore, I am clear that we must provide a strong deterrent, particularly for large operators with significant turnover.

--- Later in debate ---

[Mr Deputy Speaker (Sir Roger Gale)]

Order. I have two points to make. First, interventions should be interventions, not speeches. Secondly, there is a lot of chirruping going on. Even if I am the only person in the House who wants to hear what the Secretary of State and shadow Secretary of State have to say, then I want to be able to hear.

[Dr Coffey]

My hon. Friend is absolutely right about these measures. By voting for them today—of course, they also need to go through the Lords—we will give our regulators all the tools that they need and that they have asked for to tackle this situation. He is right that it is a bit of a surprise that the Liberal Democrats are absent, but there we go. We will be able to remind people that, when Parliament was voting for this legislation, the Liberal Democrats were nowhere to be seen.

Secondly, there is currently no provision under the Environmental Permitting (England and Wales) Regulations 2016 for variable monetary penalties. The majority of Environment Agency investigations are conducted under those regulations, and at the moment the Environment Agency is limited in its enforcement options to giving warnings, advice, guidance or enforcement undertakings, or indeed having to go the whole hog and undertake formal criminal prosecutions.

The secondary legislation that we are debating will introduce variable monetary penalties to the 2016 regulations, ensuring a comprehensive, clear, effective and proportionate deterrent within the environmental civil sanctions regime. Penalties will be based on the degree of environmental harm and culpability, as well as the size of the operator. They are calibrated to act as a proportionate deterrent and punishment, and both instruments will require the environmental regulators to update and publish guidance that sets out their methodology for determining the penalty levels.

--- Later in debate ---

[Mr Francois]

Perhaps he could tell us, as it is his plan, what the figure is?

[Mr Deputy Speaker (Sir Roger Gale)]

Order.

[Jim McMahon]

If the right hon. Gentleman is excited at this point, he is going to get even more animated shortly, so he should bear with me.

What we see today is not just the result of Government inaction or an industry too focused on short-term dividend payouts, above the long-term interests of the country. More than that, it is about a system of regulation that is not just ineffective but a clear part of the problem. All the failings we see in the sector have built up in plain sight of Ofwat, as the financial regulator, and the Environment Agency—debt piling up, dividends pouring out, sewage being dumped, water leaks leading to supply shortages, and at least one water company now on the financial cliff edge. These water companies have not acted under the radar; they have done it all in plain sight, all allowed to get completely out of hand and all signed off.

We know that Ofwat already has the power today to issue unlimited fines, to curb dividends and to stop the debt mountain getting even higher. The chair of the Environment Agency spoke out against the previous £250 million cap proposed by the Government, saying at an Environment, Food and Rural Affairs Committee hearing just a few months ago:

“The previous Secretary of State suggested that the limit on penalties should increase from £250,000 to £250 million. That is a number that I believe to be higher than should be given to us for a penalty that we can impose.”

He went on to say:

“My personal view is in the £10 million to £25 million range.”

That is the chair of the agency that these powers are being handed over to for unlimited fines. In there lies the truth—watering down the threat of action and watering down the consequences, too.

Rather than going further than what was previously announced, what we see in practice is the Government going backwards, now suggesting penalties just of between 5% and 10% of the cap previously mooted. The Government know that this is not an answer to the Tory sewage scandal and, more than that, the water companies know full well that it is not either. They know it is not even business as usual. I am concerned about the very likely consequence that we will see even less money being taken in penalties and fines, as the regulator moves away from using its criminal powers to civil powers, with grubby backroom deals being struck in favour of the water companies. There is also the risk, as we have seen in the case of Thames Water, that even where water companies are found to have deliberately frustrated and misled an investigation, criminal powers to hold individuals to account are not used.

Regulators under pressure to demonstrate that this cut-price policy is delivering the goods, matched with a lack of capacity and political will to undertake criminal investigations, could well mean that offenders are let off the hook. Water bosses are already given a “get out of jail free” card, and now they will not even see the inside of a courtroom—that is what this will do. What safeguards will be in place to ensure that there is full transparency on financial penalties, to rule out cut-price discounts or dodgy deals in backrooms? Given what has come to pass, will the Secretary of State use this opportunity to give notice to the regulators that the watchdogs themselves are now being watched?

The Labour party presented a Bill to the House on 25 April that would have ended the Tory sewage scandal by 2030. That Bill proposed four crucial measures to reduce sewage discharges while ensuring that no further burden was added to household bills. First, it would have set a legal requirement for the monitoring of all sewage outlets and penalties if companies failed to monitor. Secondly, it would have introduced automatic fines for sewage dumping. Thirdly, Labour’s plan would have implemented a legally binding target to reduce dumping by 90% by 2030. Finally, it would have required the Secretary of State to publish a strategy for the reduction of sewage discharges and, importantly, regular economic impact assessments. That is a plan—that was Labour’s plan—but the Tories blocked it. They marched through the Lobby to make sure it would not get time to be debated in this House.

--- Later in debate ---

[Mr Francois]

I thank my hon. Friend for that helpful observation. The passion on the Labour Back Benches has almost doubled in the last 15 minutes. The Whips have obviously been around the Tea Room and said, “It’s looking a bit thin at the back there, boys and girls. You’d better get in there quickly.” So now—I want to be accurate—I count seven Labour MPs in the Chamber. Am I short-changing anybody? No. As for the abstention —[Hon. Members: “They’re coming in now.”] Oh, crikey. Keep going; we could be in double figures in a minute.

As for the abstention on 25 April, it is admittedly unusual to table an Opposition day motion and then abstain on it; that is not an everyday thing. Because the shadow Secretary of State said that Labour was so passionate about it, I can only assume that it was a passionate abstention. Labour felt so strongly that it deliberately chose one of its Opposition day debates to raise the issue, and then passionately abstained in person, as someone once famously said. If there is a really good explanation for that, I look forward to hearing it from the Opposition. In fact, I will allow—

[Mr Deputy Speaker (Sir Roger Gale)]

Order. Could I gently try to connect the hon. Gentleman’s speech with the motion before the House?

[Mr Francois]

In the interests of equity, I was allowing the shadow Secretary of State to intervene on me. Perhaps he could connect it? He does not want to intervene to explain why Labour abstained on its own motion. Going, going, gone. In that case, perhaps the Secretary of State could help to elucidate, because the Labour party, clearly, is incapable of explaining its own policy. On that point, so as not to detain us further, I conclude my remarks.