Ofwat: Strategic Priorities

Ruth Cadbury Excerpts

Thursday 9th June 2022 Commons Chamber

[Philip Dunne]

I would like to say to the hon. Lady that my remarks about people misinterpreting what is being done do not apply to her. She has been a doughty champion on this issue; she has led debates in this House and we have had good cross-party discussions. She makes an interesting point: there are already five-yearly reviews, but whether that should be done more frequently is an interesting question, and maybe the Minister might like to respond to it in her winding-up speech.

Moving on, the pressures on the drainage systems have been developing over six decades, as investment in water treatment infrastructure and drainage systems underground has not kept pace with development above ground, as my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) has pointed out. It is also exacerbated by pollution caused by others—both farming practices, which my right hon. Friend the Member for Hereford and South Herefordshire described, and run-off from highways and other hard standing—so I accept that it is not exclusively the responsibility of water companies.

As the Secretary of State himself acknowledged before our Select Committee, the solution ultimately may require separation of surface and foul water drainage systems, and I believe the Department is currently trying to get a harder estimate of the cost of such a massive exercise. It will take enormous capital expenditure to correct the problem for good, and the work will take decades to complete, but a start needs to be made now. The SPS provides that opportunity.

I will focus my remarks now on what Ofwat should consider in its negotiations with water companies to encourage them to identify and quantify solutions. It inevitably takes time to progress solutions through the planning process before the required infrastructure construction can begin, whether through nature-based solutions or traditional mechanical and chemical systems. Much of that involves installing monitoring equipment to increase public awareness of the quality of receiving waters in real time. That was a key transparency recommendation of my private Member’s Bill and our Committee report, and it is now required to be introduced under the Environment Act. However, it merely establishes the baseline; the real spend will be incurred in the corrective measures required.

In my own constituency, Severn Trent Water has announced plans to invest £4.5 million to achieve bathing water quality status along some 15 miles of the River Teme between Knighton and Ludlow as part of their “Get River Positive” investment plan. That is obviously very welcome. The Thames Tideway tunnel will make a remarkable difference to water quality here in London. It illustrates well both the high cost and the length of time involved in delivering a transformational project to improve water quality, namely £4.9 billion and 11 years from securing planning to becoming operational respectively.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I welcome the right hon. Gentleman’s mention of the Tideway tunnel. It is an enormously expensive project and collects a lot of the sewage from London, but not from any sewage treatment works above Hammersmith—by which I mean specifically Mogden sewage treatment works. Every time it rains more than a drizzle, Mogden and Thames Water discharge dilute sewage into the River Thames, and the Thames Tideway tunnel can do nothing about that.

[Philip Dunne]

I bow to the hon. Lady’s knowledge of her constituency and the area around it. I am informed that the tideway tunnel will take 37 million tonnes of the 39 million tonnes of sewage currently discharged annually into the Thames out of the river, so it may not affect every single treatment plant, and it is primarily coping with the north of the Thames rather than the south of the Thames, as I understand it. I will touch on how it is being paid for in a moment.

Given Ofwat’s unique opportunity to approve capital investment, it needs to focus not only on the economic impact of household bills but on the environmental impact that water companies have. With the rising cost of living, none of us wishes to see bills rising sharply, but equally, if water rates are set so low as to preclude necessary capital investment in water quality, we will simply kick the can down the road for another five years and the problem will be harder to solve and more expensive to fix.

Given that the current cost of capital is still at historically low interest rates, over a multi-decade investment cycle water companies remain well placed to fund significant capital investment. For example, the tideway tunnel, the biggest current project, is due to add only £19 per annum to household bills in London. I believe that a balance can be found as regards Ofwat’s new priority for water companies to improve treatment in addition to the necessity to secure adequate drinking supply and have low bills.

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[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I thank the Chair of the Environmental Audit Committee, the right hon. Member for Ludlow (Philip Dunne), for his report and for his speech. It is a pleasure to follow the hon. Member for Kensington (Felicity Buchan), who gave a very clear description of the flooding issues in central London, many of which my constituents have also experienced in the past couple of years, particularly in Chiswick. In previous years, flooding affected much of my constituency. Thames Water is still in the process of replacing the Victorian freshwater pipes, and when they burst because they are so old, we still get flooding; it is not as bad as it used to be, but we are not out of the woods. I thank her for raising those issues.

For many years as a councillor and for the last seven as a local MP, I have been dealing with Thames Water, particularly in relation to its management of the Mogden sewage works in Isleworth, Britain’s third largest sewage treatment works. From the many emails and messages that I have received from constituents, I know that people are rightly frustrated with Thames Water and with Ofwat, which is supposed to regulate our water companies.

The worst local impact of Mogden was the flooding of the Duke of Northumberland’s river with raw undiluted sewage in January 2021. The flood occurred after a break in a brick wall separating the river, which is a freshwater stream, from the Mogden works’ main incoming sewage pipe. The inlet sieve into the works was blocked with silt, and the incoming sewage pipe, which is over two metres wide, filled to the top. When the incoming foul water had nowhere else to go, a weakness in the roof of the intake burst and poured into the Duke of Northumberland’s river running alongside it. That small river was subsumed by sewage that flooded into homes, gardens and two parks in Isleworth. It would have been far worse if an affected resident had not coincidentally known the holder of a key to the sluice gate into the Thames. Opening it relieved the pressure on the Duke of Northumberland’s river before the fire service could get there, and long before Thames Water worked out what had happened.

The flood had a devasting impact, especially on local residents who had sewage water flowing into their back gardens and in some cases their homes. A number of people also wrote to me to rightly express their worry about the impact on the wildlife in and around the precious Duke of Northumberland’s river. I was very concerned to discover that two months after the flood, there were still debris and sewage waste in and around the river and the river banks.

A small group of great volunteers work to keep the river tidy, but it is not fair or right to expect them to have to clean up afterwards. Local councillors, such as Councillor Salman Shaheen, have been persistent in pushing Thames Water to clean up the mess.

More than a year after this disaster, Thames Water has not yet started the inquiry that it promised us, although it has admitted that it still does not know the reason for the silt build-up that blocked the main inlet to the works, and I did manage to get it to admit that such a situation had not featured in its risk register; it certainly will now.

However, this is not the only recent disaster originating from Mogden. We now know, thanks to the Select Committee, that in October 2020 Thames Water pumped 2 billion litres—2 billion, not 2 million—of untreated sewage into the Thames in just two days. That is shocking, but it is part of a growing trend. In 2020, 3.5 billion litres of untreated sewage entered the Thames from Mogden—seven times as much as was dumped in 2016, just four years earlier.

As I have already pointed out, the Tideway tunnel starts downstream of Mogden, so it will not take these discharges. Not only are the discharges a gross environmental crime; they affect many people’s leisure activities. In our part of west London, the Thames plays a huge part in many water sports, such as rowing, kayaking and paddleboarding. Residents walk their dogs along the Thames. Should they really be expected to do so while it is full of sewage?

I wish I could say that these were the only negative experiences that my constituents have had with Thames Water, but there are ongoing and long-running issues involving Mogden sewage treatment works. For years, residents of, in particular, Isleworth and parts of Hounslow have all too often experienced the foul pong of poo wafting around locally, and have also had to put up with the mosquitoes that breed in the stagnant water there and then come out and bite.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Lady agree that rather than new technology, new data and new mindsets, what is needed to reduce the difficulties involving waterworks is a rehaul of the system to include communities and secure their buy-in? Does she agree that that would require a financial contribution from the water companies as well?

[Ruth Cadbury]

The hon. Gentleman has made an important point. I shall say more about resident engagement shortly.

To be fair to Thames Water, it has made efforts to deal with the smell and the mosquitoes. It is currently working through a programme of upgrading parts of the works, which should reduce some of the smells, and it has contracted specialists to keep the mosquitoes at bay. Neither nuisance is as bad as it has been during the time I have represented those residents. Nevertheless, councillors, residents’ representatives and I feel that we have to keep up the pressure through the Mogden residents liaison group that Thames Water convenes.

Other issues, apart from Mogden, have affected my constituents. There has been localised flooding: dirty water has shot out of toilets or out of inspection covers in their gardens. In some cases Thames Water have acted quickly and responsibly, but that has not always been the case. Residents have been passed from pillar to post when trying to obtain help and support, and an acknowledgement from Thames Water.

This takes us back to the wider issue of the culture of these privatised water companies. Billions of pounds are being paid out in dividends, but I wonder whether we are seeing the investment in crucial infrastructure that is so badly needed. Between the 1990s and the 2020s, Thames Water has seen a £6 million decrease in annual investment in waste water. That underinvestment is simply not fair to our constituents, who face the impact of it at first hand.

It is not just Thames Water, however. Analysis has found that the investment in waste water management has been slashed by £520 million. Like the DEFRA Committee, I was concerned to see a proposal that Ofwat should incentivise water companies to improve their environmental performance. Surely it should be doing that anyway, because it is the right thing to do.

There is a wider issue, beyond the environmental protection of our rivers. What role will Ofwat play in ensuring that new developments have the water infra- structure they need? Additionally, the Rivers Trust has raised the importance of ensuring that Ofwat plays a role in relation to climate change and net zero, as my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) also helpfully explained.

My increasing fear is that as an MP I am seeing more and more examples of various regulatory bodies—whether it is Ofwat, Ofgem or the Financial Conduct Authority—that just do not seem to be acting with the urgency needed not only to protect consumers but to tackle the big issues facing our country over the next few decades. I sometimes wonder whether it is a deliberate policy of this Government to downplay the importance of regulators. Does this stem from their libertarian wing? All of us, particularly our children, feel that the planet and ourselves and our future generations lose out when the role of regulation is downplayed.

[Sir Charles Walker]

I hear what the hon. Lady is saying. I have a lot of respect for the Environment Agency, but I also listened closely to what her colleague the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) said. I feel that the Environment Agency does sometimes shy away from taking on the polluters and holding them to account. I hope that it will hear this debate and that when organisations or businesses are found to be polluting our rivers, they will be held to account and pay a penalty.

[Ruth Cadbury]

The hon. Member is right, and I should have included the Environment Agency in the list of regulators in my speech. As I was saying, the role of regulation is too often downplayed by this Government. Ofwat cannot and should not be a silent partner when it comes to the adequate management of sewage treatment works, the cleaning up of our rivers and waterways and the protection of residents from the after-effects of floods.

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[Rebecca Pow]

I thank my right hon. Friend for pointing out the opportunity to do a little canvassing.

The report from the Environmental Audit Committee is extremely comprehensive. As my right hon. Friend said, we took careful note of it and took on board a great many of the recommendations made, which shows what a role a Select Committee can play when it is working constructively and well, and we are singing from the same hymn sheet of wanting to improve the quality of our water. We are taking extremely strong action on that agenda and this Government will not stand still. I expect to see change and to see it happen very quickly, and judging by the consensus on both sides of the House today, I believe we all share that view. This Government will not hesitate to take action if the measures we put in place do not happen.

I made water quality a priority when I became an Environment Minister. As the Environment Bill went through, we really strengthened it, with lots of input from Members on both sides of the House. We now have some really strong measures to tackle the unacceptable situation that has come to light. I make absolutely no bones about that. It is this Government who have, for the first time, set out in the strategic policy statement to Ofwat, the regulator, that water quality is a priority and the regulator must hold water companies to account for delivering affordable, secure and resilient water services. This Government have also made it crystal clear that water companies must significantly reduce the frequency and volume of discharges from storm sewage overflows, to the point where the Environment Act 2022, which is an exceedingly weighty tome, now has six pages on tackling storm sewage overflows alone. If hon. Members and hon. Friends have not looked at it, they should do. We have set out a plan that will revolutionise how water companies tackle the number of discharges of untreated sewage.

[Ruth Cadbury]

I thank the Minister for referring to the Act, but for the purposes of Hansard and the debate, can she say exactly where the stormwater will go if it does not go into the sewage works because the sewage works are overflowing into the river courses? What are the proposals for the excess flows into sewage works, because that is why they are discharging dilute sewage into water courses?

[Rebecca Pow]

That would be a very long answer—I could write to the hon. Lady with all the detail in the Environment Act, because the whole system is geared up to reduce the sewage going into the pipes in the first place. The clean treated water from sewage works does get released back into the water course, which is why it is important to set targets on a whole range of aspects to do with water; we are not just talking about sewage and how that gets treated. Ultimately, that water goes back into our water courses and channels, which is why it is critical to look at every angle of it and every source of pollution, not just sewage, to stop that going into the water in the first place. All the measures that we have put in place will tackle that from all sides, but I am happy to send her more info on that if she would like.

What we are doing with the storm overflows plan is a game changer that will overhaul our whole sewerage system to tackle those overflows. We heard some great criticism, if I might say so, from the hon. Member for St Albans (Daisy Cooper) on behalf of the Liberal Democrats, but they voted against the amendments in the Environment Act that will improve water quality. Those amendments require the water companies to invest more in improving the infrastructure to prevent all that sewage pollution occurring, so it is a pity that they did not support them.

The hon. Lady mentioned a lot about monitoring, but she seems unaware of all the monitoring procedures and reporting procedures that are being put in place, such as the event duration monitoring, which was picked up by my right hon. Friend the Member for Ludlow. I urge the hon. Lady to look at what is being put in place, much of which is already starting. Indeed, all event duration monitoring will be in place by next year—it is happening now and it will happen increasingly. We are working on that and all the measures to make sure that it occurs. Water companies will also face strict limits on when they can use overflows, because they must eliminate the harm that any sewage discharge causes to the environment.

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[Rebecca Pow]

I thank the hon. Member, and I did write to her; that is right. Obviously, the Chancellor has already announced a whole package of measures to help households with the cost of living, and we do expect the water companies to play their part. All water companies actually have social tariffs in place, as she will know, to support customers who struggle to pay their bills, and close to 1 million customers currently receive that help. My Department is exploring other measures that we may look at to improve this whole sector. I cannot give more detail now, but we are very aware of it.

I want to refer to some of the other excellent contributions to the debate. I am so pleased that my hon. Friend the Member for Southend West (Anna Firth) mentioned wet wipes. Shockingly, wet wipes make up 93% of the material that causes sewerage blockages. That is partly why storm sewage overflows are used so often: they are blocked up by wet wipes which have been chucked down the loo. [Interruption.] Yes, and there are horrified looks; I am sure Madam Deputy Speaker does not do that. The cost of dealing with that to the water industry is £100 million a year. We are considering options and we have consulted on what action we might take. It is also important to remember that wet wipes contain plastics.

[Ruth Cadbury]

The Minister is right about the scourge of wet wipes: they are plastic and they cause damage to ecosystems in our rivers and seas. Thames Water tells me that one of the costs to water companies is caused by the wet wipes in many of the sewers in our cities and towns combining with the fat illegally discharged into the sewerage system to create fatbergs. What is the Minister doing to stop the discharge of oil into our sewerage systems, such as incentivising caterers?

[Rebecca Pow]

That is a horrible, graphic description, and we also need to make people aware that they should not pour fat down the drain; that causes huge disruption and cost. We have consulted on wet wipes: we put out a call for evidence and are now looking at what further action might be taken. Also, water companies are indeed raising the issue of illegally discharged fat.

It was great that my hon. Friend the Member for Devizes (Danny Kruger) talked about how wetlands and nature-based solutions are critical to cleaning up our water. We are increasingly using those solutions; the Government are encouraging that.

My hon. Friend the Member for Broxbourne (Sir Charles Walker) was as ever the angler extraordinaire—the canary in the coalmine as he calls himself—and I always listen when he speaks. Along with many others, he mentioned supporting a river recovery fund. My right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), who has left his seat, also mentioned that, as did my right hon. Friend the Member for Ludlow, who raised as well the idea of pollution fines going to solving problems relating to water. We are working on a holistic plan for water; it is an interesting concept, and I hear what he says on that. He also talked about development consents and local authorities having no power to include infrastructure relating to water. Again I hear those comments; that is another valid point which I am happy to discuss further with him. In short, he has raised some important points in addition to the inquiry’s recommendations and, as ever, the door is open for us to consider them.

I thank all Members who have participated in the debate. I honestly believe this is a turning point for water. We have all had enough, and water companies must put the environment first—that is what the policy statement to Ofwat says. The message has been clearly sent that Ofwat must reduce the harm from storm sewage overflows. We will no longer stand poor performance from the water companies.

Almost everybody raised the issue of the enormous salaries and the dividends taken. It has been made very clear to Ofwat that that is no longer acceptable, and it has already started measures which came through in 2019 to make information on salaries and what they are based on more transparent. I think many colleagues commented that, actually, it is great to take a dividend or a big salary, but something must be shown for it. Our water is a precious thing and, without a shadow of a doubt, we should not be abusing it. We should be cleaning it up, and that is what the Government intend to do. I thank all colleagues for taking part in this extremely constructive debate.