Independent Water Commission: Final Report

Tim Farron Excerpts

Tuesday 10th February 2026 Westminster Hall

[Tim Farron (Westmorland and Lonsdale) (LD)]

It is a pleasure to serve under your guidance, Sir Jeremy. I thank everyone who has taken part in this debate so far, which has been interesting and thoughtful, but especially my hon. Friend the Member for West Dorset (Edward Morello) for securing another really important debate on this broad issue.

As a party, we made this issue the centrepiece of our campaign in the 2024 general election, so all of us on the Liberal Democrat Benches feel that we are here with a mandate to fight for change. It is a joy and a pleasure to work alongside others from all parties in trying to achieve that. It was an honour to meet and present evidence to Sir Jon Cunliffe as he put together his report, and to work with the Minister and others, whom I enjoyed spending time with on the Water (Special Measures) Bill Committee—I suspect a sequel to come, and we all look forward to it.

We all agree that—as the Independent Water Commission’s final report correctly identifies—the system is very badly broken, not only in the performance of water companies but in the basic, deep injustice of a water industry that seems to be self-serving, not serving the community. In 2024, 3.6 million hours of sewage dumping took place in our lakes, rivers and seas. At the same time, Ofwat failed to enforce a single fine over a four-year period.

Water companies are getting collective bonuses worth £20 million in the last full year of data, and yet those are not rewards for success, because only 14% of our rivers are meeting a healthy standard, with more than half a million sewage spills into our waterways just last year. Bills are rising and yet, as we have heard from others, in so many cases a massive chunk of those bills—11% if people live in the United Utilities area in the north-west of England, in my constituency—is going to pay off service debt. In the Thames region, people pay more than 30% of their bill just to service the debt.

While the Government have often taken action to try to ban bonuses, the water companies shamelessly shimmy their way around that. We have heard a couple of examples today already: Southern Water’s chief executive had his pay double to £1.4 million, largely through a two-year, long-term incentive plan; and we heard the outrageous story of the chief executive of Yorkshire Water, paid £1.3 million through the company’s holding company. That is breaking the ban in spirit, and surely in reality, too—certainly in the eyes of our constituents.

In my communities of Westmorland, water matters massively. We are home to Windermere, Ullswater, Coniston, Grasmere and Rydal Water, and to many rivers, but from the Eea to the Eden, from the Crake to the Kent, last year alone we had 5,000 sewage discharge incidents and 55,000 hours of raw sewage pumped into our rivers, lakes and coastal areas. The commission has mostly been on the money, so to speak, when it has assessed the problem. This is an industry that performs appallingly on the pollution of our waterways, and it behaves appallingly in response to its own failure.

We agree with much of what is in the final report. We agree with having a single regulator, for which the Liberal Democrats have been calling for years. We should merge Ofwat, the regulatory parts of the Environment Agency, and others to create a powerful regulator that the water companies will actually be afraid of, and that the public respect. We would call it the clean water authority. We hope that the Government will copy our homework further.

Some failures and submissions, however, we are deeply concerned about. The Government fail to grasp that while stronger regulation is really important, ownership is also important. The failure of Thames Water, a cause which my hon. Friend the Member for Witney (Charlie Maynard) champions—as do many others—is an outrage, but it is also a massive opportunity for the Government to use the special administration regime and move that company into a mutual form of ownership, so that it is owned by its customers. That could create a new model of ownership for the whole industry—one that leverages capital investment to ensure that environmental and social concerns, and clean water, are absolutely at the pinnacle of the purpose of those companies, not rapacious profiteering.

Such a model would provide the opportunity for water campaigners and environmental groups to find their way on to those boards. In my community, there is the Save Windermere campaign, the Clean River Kent campaign, the Eden Rivers Trust and the South Cumbria Rivers Trust, but citizens, societies and volunteers across all of our constituencies would have a part to play in those new, mutually-owned water companies. That would make a difference.

The Government have made no attempt, either in the White Paper or through the report, to look at the problem with volume that we are all concerned about. We often talk about the number of hours of discharge into our lakes, rivers and seas, and that is an important measurement, but the reason we mention that and not volume is because we are not allowed to know the volume. The Liberal Democrats believe passionately that volume should also be measured, but the water companies do not want that, which is a reason to ensure that we force it to happen.

On bathing waters, the Government should have a mandate to end the sewage dumping in bathing sites by 2030, and we should be testing them throughout the year and more regularly—not just the often inaccurate snapshots that we have at the moment. On bonuses, we call for the law to be strengthened further, so that water company bosses cannot carry on dodging losing their bonuses via the back door.

The commission’s final report rightly identifies many of the problems that our constituents believe are serious and need to be addressed. However, while it contains many worthwhile proposals, such as a united regulator, it does not face up to the desperate and obvious need for a transformation of the ownership model, for deeper and stronger regulations, and for a bonus ban that actually bans bonuses.

When Water UK, the industry body that represents the water companies, comes out as it did to endorse the Government’s approach to water reform, that is all the proof we need that this Government’s approach continues to be, I am afraid, a bit wet. We need a plan for a radical transformation of the water industry, but so far, I am sad to say, this is not it.