Environmental Audit Committee

Theo Clarke Excerpts

Thursday 13th January 2022 Westminster Hall

[Philip Dunne]

Thank you very much, Chair; I certainly would. I thank the hon. Member for Blaydon (Liz Twist) for her contribution to this issue. I attended a debate, I think in this Chamber, in which she raised issues about the Tyne. She has been a strong champion in her area, trying to make sure that that river is cleaned up. In response to her specific query, the Environment Agency took the view that water companies could be relied on to self-monitor. It is palpable that that has failed, so we are calling for the Environment Agency to be adequately resourced so that it can perform its functions appropriately.

I do think there is help on the way through technology. Technology now exists, to an extent that it has not in the past, that allows for continuous monitoring of water quality within water bodies, and for that information to be passed through telemetry back to a database. That information can then become available to the public and the water companies themselves so that if there has been a sudden incident, they can pick up on it. There might have been a breakdown in a system, and if that information is available in real time, those companies will catch it much quicker than they have been able to do hitherto. That will not involve as many employees of the Environment Agency being on hand to do the testing themselves physically and then go back to their laboratory, so it will speed up the whole process of identifying problems in the system. I think that will ultimately be to the benefit of all of us, our rivers and all the species that rely on them as arteries of nature. I am hopeful that there are solutions and that the Environment Agency will receive a good settlement from the Department for Environment, Food and Rural Affairs. I hope that the Minister will take that on board.

In response to the right hon. Member for Hayes and Harlington (John McDonnell), I reciprocate by offering him my thanks for supporting my private Member’s Bill 18 months ago. He will not be surprised to hear that I take a slightly different view from him on the issue of ownership of the water companies. In the 10 years before the water companies were owned by the state—as they were up until 1991, I think—the collective capital investment of the water companies into water treatment capital expenditure was of the order of half a billion pounds a year. In the next 10 years, it was of the order of £1 billion a year, so under private ownership there was around double the investment in water treatment specifically.

Having said that, there are issues about the nature of current ownership and the fact that several of the companies have been leveraged through private equity ownership, which has caused some challenges regarding available capital expenditure. At least one of those companies has suspended dividends for the last three years, I think. There is recognition on those company boards that they need to change some of their behaviour.

I am sure that the right hon. Gentleman will seek to promote the report’s recommendation that, in the event of persistent material breaches of permit conditions, it would be inappropriate for water company boards to pay themselves significant bonuses without taking proper action to remedy those breaches. I am sure he will agree with that and not regard it as timid.

[Theo Clarke (Stafford) (Con)]

As the Member of Parliament for Stafford, which has a number of significant waterways, including canals and rivers, I welcome this Environmental Audit Committee report. Does it address whether the recent Environment Act 2021 has done enough to tackle storm overflows and specifically water pollution?

[Philip Dunne]

That is an excellent question, which gives me the opportunity to highlight some of the things that have happened through that Act and beyond it, which the Government are doing to get on top of some of these issues.

First, amendments about monitoring and other amendments were made to the Act during the course of its passage, in particular the requirement on water companies to reduce sewage discharges progressively over time. That was added in the House of Lords and I very much welcome it, because it reflected the core of my private Member’s Bill.

Secondly, as we have just discussed, the Government will issue—as they usually do—a new strategic policy statement to Ofwat. We do not yet know what that statement will say, but we have seen a draft of it and all the indications are that the Government will consider adjusting the prioritisation of capital expenditure, so that at least some more, I hope, will go towards water treatment. We are currently at about £1 billion a year being spent on these issues through the water industry national environment programme. Personally, I would like to see that amount doubled, but we will have to see where the Government come out on that.

The Government have also set up a storm overflows taskforce, which is doing important work in advising the Government on other things that can be done. One of the elements in the Environment Act is a requirement for a report to be published by September of this year that will give the Government an opportunity, and a focus within DEFRA, to require an update and to get all the actors in this area—all the different water companies and the regulators, as well as the campaign groups that are helping the Government—to pull together to come up with other measures that can be taken outside of legislation.

There are other matters—as the Minister might prompt, there are a lot of other issues—but those are the ones that leap to mind. As I said at the outset, she has put a great deal of personal commitment behind this process and I hope that, for her own sake and that of the rivers, during her tenure we start to put in place the building blocks to transform the quality of rivers across the country.

Sitting suspended.

Backbench Business