Water Companies: Executive Bonuses

Seema Malhotra Excerpts

Tuesday 5th December 2023 Commons Chamber

[Steve Reed]

I will not be that kind to you, Mr Deputy Speaker.

Our beautiful waterways have been polluted by the highest level of illegal sewage discharges in our history under this Conservative Government. Last year, there was at least one spill every 2.5 minutes—and that is just the spills that we know about, because not every spill is properly reported. Over a year ago, Vaughan Lewis, an Environment Agency whistleblower, warned the Government about serious failures of regulation. He said that

“it was impossible for the Environment Agency to know what’s going on”

because the Government had

“ceded the control of monitoring to water companies, which ended up being able to mark their own homework. They take their own samples and assess whether they are being compliant.”

Now, we have more evidence that that is precisely what has been going on.

Last night, the BBC’s “Panorama” investigation exposed yet another scandal—exactly what that whistleblower warned about in August 2022, which has been ignored by four Conservative Environment Secretaries since. According to the “Panorama” team, leaked records show that United Utilities deliberately downgraded and misreported severe sewage leaks, including discharges into Lake Windermere, one of the most beautiful places in England. Of 931 reported water company pollution incidents in north-west England last year, the Environment Agency attended a paltry six. It is as clear as day that the water companies are covering up illegal sewage discharges. That is a national scandal.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

My hon. Friend is making a powerful point. Does he agree that the failure of the Conservatives to prevent illegal sewage leaks has led to a drastic increase in illegal discharges, which has affected our communities, damaged nature, damaged tourism, and put the health of kids and adults at risk?

--- Later in debate ---

[Rebecca Pow]

That is an important point, and it is why we have made so many changes to the regulator—I will go into detail in a minute. It is quite clear that customers will not be paying for water company bonuses. Ofwat and its board now have very strong powers to oversee all of this.

I am going to go through the points one by one. I will start with more investment. We are ensuring that our regulators have the investment and the powers they need, and we are ensuring that the water companies deliver the infrastructure improvements that we urgently require. Since privatisation we have unlocked over £215 billion of investment in England, with £7.1 billion in environmental improvements by water companies over the period 2020 to 2025. It includes £3.1 billion in storm overflow improvements; and £1.9 billion of that is for the incredible Thames tideway tunnel, which is on track to transform tackling sewage pollution for the people of London. I am sure that our Liberal Democrats present will welcome that, because it is a game-changing project.

In addition, over 800 storm overflow improvements countrywide have been set in motion. They are under way and will be completed by 2025. It is because of all our monitoring that we were able to pinpoint where all this work needs to take place.

[Seema Malhotra]

Could the Minister perhaps say a bit more about consumer protection? We all want this problem to be dealt with, and she is laying out some of the actions that she is saying the Government will take forward, but with my constituents having seen a £175 increase and expecting that to continue, there is a real question about consumer fairness and what customers are actually paying for. It would be helpful to know what discussions she has had with water bosses about their increased bills and what they are going towards.

[Rebecca Pow]

That is a very sensible and important point. That is why the price review process is under way, and all the water company plans are being forensically analysed, with requirements that we have put on them to deliver all this infrastructure, but also always to be mindful of the costs to the bill payer. We have to get investors in to invest in this, but we also have to be mindful of what goes on the bill, which is essential, and that is what Ofwat will be considering. Members will be hearing a lot more about those price plans shortly. There is also a system for vulnerable customers. We have upped the number of customers that water companies have to help if they are struggling with their bills, so there is a clear plan for that.

Our storm overflows discharge reduction plan goes even further. It requires water companies to deliver the largest infrastructure programme in water company history, amounting to £60 billion of investment over 25 years.