South West Water

Simon Jupp 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.

[Anthony Mangnall (Totnes) (Con)]

I thank my hon. Friend for securing this debate. Incidents such as the one he has just described have been happening in Kingsbridge in my constituency, where there have been significant floods and raw sewage has been coming out of the network. The problem is that the investigations are not quick enough, nor are the actions to resolve them, and the damage done to residents and businesses is not well enough understood by South West Water, which needs to engage at a far quicker rate. Does he agree?

[Simon Jupp]

I do agree with my hon. Friend. The extra resources being pumped into the Environment Agency in our region will no doubt be helpful. Coming back to Exmouth, unfortunately some of the ground team, both contractors and people who work for South West Water, who were trying to fix this mess faced harassment and abuse during the weeks of disruption. Historical underinvestment and poor management by South West Water executives are not the fault of workers on the ground, who are out day in, day out in all weathers. I thank everyone who worked so hard to fix those failures, come rain or shine.

As investigations continue into this extremely sorry state of affairs, I continue to work with the Environment Agency, Ofwat and the water Minister. Every option must be on the table in response, including hefty fines. The recent debacle in Exmouth has once again demonstrated the dire need for fast-tracked investment into Exmouth’s water infrastructure, fully funded by South West Water. I have asked Ofwat to include Exmouth’s recent pollution incidents as part of its ongoing investigation into sewage treatment works, and I am pleased that that is happening.

I visited the Exmouth burst pipe alongside the Environment Agency, and I challenged South West Water on the timescale for a permanent solution. I repeated my calls for it to speed up its plans for £38 million of investment in Exmouth. That work includes upgrades to reduce spill frequency at Phear Park and Maer Road pumping stations, and upgrading the sewage treatment works outlet through Sandy Bay holiday park.

That is apparently due to be completed by March 2025, but let me be exceptionally clear: I remain to be convinced that plans to manage spills by moving them across town from one part of the network to the other, or by building pipes further out to sea, will deliver the result that the people of Exmouth dearly deserve. Nor will I or anyone else be grateful for a partial fix. I would add that we still do not know the precise location of an important sewer overflow in Exmouth. After so many months, South West Water still has not determined where the Maer Road combined sewer overflow spills off Exmouth beach. That is unacceptable.

[Anthony Mangnall]

I apologise for intervening twice, but my hon. Friend has just made an essential point about the impact that water companies are having on our aquaculture businesses. Some of them are based out of Brixham, but some out in Lyme Bay, off his constituency, and they are severely jeopardised by the network that South West Water operates and by its lack of ability to treat the sewage. Does my hon. Friend agree that we need to ensure that South West Water takes into account the businesses that will be affected by those networks?

[Simon Jupp]

I agree 100% with my hon. Friend, who makes a powerful point about the impact of this unacceptable performance on businesses. We need to know the location of the end of the pipe off Exmouth beach, not only because of a potential breach of the Environment Agency’s permit conditions, but for the safety of bathing water users. I remain on the case with South West Water. The saga has gone on for far too long. Both the Environment Agency and I agree that investment to reduce sewage spills in Exmouth is well overdue and I will not relent in my calls for more investment from South West Water in Exmouth and across all parts of East Devon.

Near to Exmouth is the gorgeous town of Budleigh Salterton, at the mouth of the River Otter, with a new national nature reserve that I was privileged to visit a couple of weeks ago. A couple of hours ago I learned that the sewer pipe in Budleigh Salterton burst last night. South West Water were using tankers to transport flows from Budleigh to Maer Lane sewage treatment works. I understand from South West Water, with whom I remain in touch about this recent incident and its impact on the local environment and disruption to local residents, that the repair is now complete. I have already received several emails on the matter. I have asked South West Water for more details on its longer-term plans for Budleigh Salterton and what its investment will mean in terms of spills.

Following my debate in Parliament last year, South West Water announced a new multimillion package to upgrade Sidmouth and Tipton St John’s sewer system and to reduce the number of spills. I have been calling on South West Water to speed up that already announced investment, and I reiterate that call today—I know the company will hear me. We have seen far too many reports of spills off Sidmouth beach in the last few weeks. If it is possible to go further and faster, while balancing the cost to customers, South West Water must not hesitate to do so.

If South West Water believes its sewage systems cannot cope with new housing developments, it must say so. The Government are looking to consult on whether to make water companies statutory consultees on major planning applications. I wholeheartedly support such a move, and I urge the Minister to press ahead with that as quickly as possible.

I firmly believe that applications for new planning developments should only go ahead if it is clear that local water infrastructure can cope. I also urge the Minister to get water companies to install monitors on all emergency overflows. There cannot be any excuses for pollution. I understand that the Government want to do that, and I would be grateful to hear the timescale for when that could happen.

For my part of Devon, South West Water must make its water infrastructure fit for the future. When the new town of Cranbrook, which I am proud to represent, was being built, South West Water opted to upgrade an existing sewage treatment works in Exeter rather than build a new plant. If further development east of Exeter is to go ahead, I strongly urge South West Water to draw up plans for a new plant, with urgency.

Councillors on East Devon District Council very much jumped the gun to sign off a further new town of 8,000 homes in our district—just weeks before the new national planning policy framework was announced, which provides the tools to challenge such housing targets, especially in these circumstances. That was spectacularly short-sighted and risks further challenges for the district’s water infrastructure.

I will not use much more time; I am conscious that other colleagues would like to speak. Outside Parliament, I have been working with East Devon parish, town, district and county councillors—this must be a cross-party endeavour—and with environmental groups. I have raised their concerns with South West Water’s bosses, the Environment Agency and Ofwat. We all want to hold South West Water to account for its plans to invest in East Devon and to fix local problems urgently, as and when they crop up—and they do crop up all too frequently.

I have previously secured compensation for residents of Clyst St Mary after foul flooding in the village and I recently helped local charity Sidmouth Hospice at Home to reach a resolution over a hefty bill from South West Water. I have also facilitated meetings between Sidmouth town and Lympstone parish councils and senior figures in South West Water to look at data and delve into the issues in granular detail.

South West Water has held community meetings in Exmouth and Sidmouth recently and I publicly urge the company to continue to talk regularly with the communities that pay for its services. I also urge South West Water to publish its post-2025 investment plans online as soon as they are finalised. After all, it is we the public who are the billpayers. We have the right to know what is going on.

We all want to protect our stunning coastline, rivers and streams and hold South West Water to account for its failings. We finally have the tools to do so, through targets, fines, monitoring, data and investment plans. I am pleased to have secured this debate on the performance of South West Water and I very much look forward to hearing the contributions of other colleagues and the Minister this afternoon.

[Several hon. Members rose—]

--- 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.

--- Later in debate ---

[Gordon Henderson (in the Chair)]

The hon. Gentleman has one minute to wind up.

[Simon Jupp]

Thank you, Mr Henderson. This has been a really good debate, following on from the debate that I led last year as well. It is clear that people, on a cross-party basis, care about this. We have been paying South West Water bills for decades—I know my family has—and we all want to get value for money. We do not think that we have got that historically. If I may, I will make a point to the Liberal Democrats again. In January, the hon. Member for Tiverton and Honiton (Richard Foord), when talking about the EA and Ofwat, said:

“the Government probably ought to be stepping in and removing those regulators”.—[Official Report, 31 January 2024; Vol. 744, c. 916.]

As ever, Lib Dem policy is as clear as mud.

Question put and agreed to.

Resolved,

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