Water (Special Measures) Bill [Lords]

Debate between Tim Farron and Catherine Fookes

Consideration of Lords message
Tuesday 11th February 2025 Commons Chamber

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

It is a pleasure to be back talking about the Bill again. In Committee and on Report, the Liberal Democrats put down a grand total of 56 amendments. What is two more? We believe, as the hon. Member for Epping Forest (Dr Hudson) said, that this Bill is a good thing, and we wish to see it on the statute book, but we do not feel it goes far enough, and the two amendments before us today give us the opportunity to consider it a little more.

Through amendment (a) the Government want to introduce financial reporting requirements for water companies. The report, to be required once a year, should be a concise, intelligible and up-to-date overview of the financial position of each undertaker—a water company—including information on share capital and debt, and any significant changes that may have happened in the past 12 months or expected changes in the 12 months to come. We very much welcome the amendment. We tabled many similar amendments that contained aspects of those proposals, both in Committee and on Report. We are bound to say that they were better amendments—more ambitious and far reaching—but as with much of this Bill, these proposals are a decent start and we do not want to stand in their way.

To clarify, we have proposed a variety of amendments to the Bill up to this point, including calling for Ofwat to be made responsible for the financial stability duty on water companies. We called for the banning of bonuses for water company bosses whose companies were performing poorly, and not just on environmental duties but on financial stability and water quality. On the Floor of the House we pushed to a vote, with the permission of the Chair, a ban on water companies making customers pay for their debt at the point of bankruptcy, and instead for investors, who have taken risks, to pay for them. That was right, and we were disappointed that the Government voted against it and the Conservatives sat on their hands and did not support bill payers. This is an important and live issue. In Westmorland in the north-west of England, 11% of bills paid only service the debt of United Utilities, yet in other parts of the country such as the areas served by Thames Water, that figure is around 35% or potentially even more.

We have called for scrutiny not just of the finances of water companies but of other areas. The Bill has moved things in the right direction, but not radically enough. In Committee, we sought to encourage and persuade Labour and Conservative Front Benchers—without success—that it would be wise to have environmental experts on the boards of water companies.

On the Government’s laudable and positive move towards a live database that citizen scientists can scrutinise, we asked that it also be a historical database that is searchable in retrospect. Wonderful organisations in my constituency, which are replicated around the country, such as the Eden Rivers Trust, the South Cumbria Rivers Trust, the Clean River Kent campaign and Save Windermere, would monitor that database, but unless they look at it 24/7 and do nothing else in their lives, some things may get past them. For example, between 2021 and 2023, 120 million litres of sewage were pumped into Windermere lake without United Utilities reporting it. We are reliant on citizen scientists knowing about this stuff, and a great database will do the job only if it is searchable in retrospect. Scrutiny and transparency on finances and environmental matters are vital. We are satisfied that amendment (a) provides increased transparency on water company finances, and therefore we will not make a nuisance of ourselves today.

I turn to the second of the amendments in front of us. The hon. Member for Epping Forest (Dr Hudson) rightly highlights and reminds Members of my distaste for not having stuff in the Bill, and how statutory instruments are not the best way of doing things. Despite that, I am even more of a fan of ensuring that we in this place can properly scrutinise those who are meant to be scrutinising our water companies, namely Ofwat.

Throughout the passage of the Bill, Liberal Democrats have made good, radical, environmentally minded proposals that are in the interests of our constituents and our waterways. Although the Government have understandably stuck to their guns and voted against us, the official Opposition have, oddly enough, abstained on pretty much everything—including, it would appear, on their own amendment today, for which we want to vote, notwithstanding all our reticence about not having important matters in the Bill.

This amendment was proposed in the other place by my former neighbour but one—not the hon. Member for Epping Forest, who is also my former neighbour—the right hon. Lord Blencathra, a former Member for Penrith and the Border, and a very accomplished parliamentarian. In this amendment, he is seeking to require increased parliamentary scrutiny of Ofwat when signing off on water company bonuses. That issue is of huge concern to me, and, I think, to most people around this country—certainly in my constituency—because record bonuses are being paid to senior executives around the country.

[Catherine Fookes (Monmouthshire) (Lab)]

The hon. Gentleman put forward a veritable smorgasbord of amendments in the Bill Committee, and all those issues were discussed. It is so important that Ofwat retains its independence. It is extremely relevant to point out, however, that during the coalition years and the 14 years the Conservatives were in government, no Bills were passed to ban water company bonuses, and this Bill will do just that.

Water (Special Measures) Bill [ Lords ] (Fifth sitting)

Debate between Tim Farron and Catherine Fookes

Committee stage
Thursday 16th January 2025 Public Bill Committees

[Tim Farron]

I will say a brief word on the new clause. This is important, and I would like to add to the detail that my hon. Friend the Member for Witney has set out. Essentially, we have two problems here, one of which is that water companies are not statutory consultees, and they should be. I take the point that it could be more clearly stated, but the new clause does say “When participating” more than once, not “If participating”.

Without pointing fingers—well, maybe a bit at water companies in certain parts of the country, including mine—the key thing is that there is an incentive for a water company, when giving its advice to a planning committee, whether it be in the national parks, the dales, the lakes or a local council, basically to say that everything is fine, and why would it not? If a water company says, “We have no capacity issues. You can build those 200 houses on the edge of Kendal and it won’t cause any problems for our sewer capacity,” two things happen, do they not? First, the water company is not conceding the need to spend any money on upgrading the sewerage network. Secondly, it is guaranteeing itself 200 households that pay water bills, in addition to the ones it already has, so it has a built-in incentive—maybe not to be dishonest, but to not really give the fullest and broadest assessment of the situation.

[Catherine Fookes (Monmouthshire) (Lab)]

I would like to give the hon. Member a practical example of where the absolute opposite has happened in Wales. In my constituency of Monmouthshire, Welsh Water was very clear that, because of the phosphate levels in the River Wye, there could be no development whatsoever in my area of the constituency—Monmouth—for several years. It absolutely stopped all development and seemed to be very honest in doing so. Now the problems have cleared up somewhat, and Monmouthshire county council has put forward a proposal in the local development plan to build houses. We also have a sustainable drainage systems regime, which means that absolutely nothing will be built without those systems. By the way, 50% of the homes will be affordable and they will be 100% net zero, so I commend Monmouthshire county council for putting that forward. I just wanted to say that there are examples where the opposite has happened to what the hon. Member for Westmorland and Lonsdale is saying.

[Tim Farron]

I thank the hon. Member for the intervention; I am sure that is the case, and the two are not mutually exclusive. I want to see houses built. The great frustration in our communities in the lakes and dales and just outside is that we desperately need homes that are affordable, and we want homes to be zero carbon. We want to be in a situation where the local community is able to hold developers to account. The danger is that developers who are going to build stuff on the cheap that is not affordable to potential buyers or renters are able to get themselves off the hook because the water companies will not really test the resilience of the existing infrastructure.

It is true that both things can happen. We feel that this is about giving planning authorities the power to say, “The developer is seeking to do this, but the community as a whole does not have the resilience or the capacity to cope with 200 extra bathrooms; so what resources will the developer or the water company put in to ensure that the facilities are upgraded to make that possible?” This is about ensuring that planning does its job.

Water (Special Measures) Bill [ Lords ] (Fourth sitting)

Debate between Tim Farron and Catherine Fookes

Committee stage
Tuesday 14th January 2025 Public Bill Committees

[Catherine Fookes (Monmouthshire) (Lab)]

I think we can safely say that Ofwat is already under review. In my mind, it has until 2030 to deliver everything that we want. We have an independent commission coming up, so I would say that the hon. Member’s new clause is not necessary. We should let the commission report and say what extra steps are necessary.

[Tim Farron]

I thank the hon. Member for her very reasonable intervention. In the extremely unlikely event that the Committee rejects my new clause today, we will of course submit our ideas to Sir Jon Cunliffe and take part in the review, which we welcome. Nevertheless, my point is that the division of responsibility and division of attention, particularly in the Environment Agency as a regulator dealing with flooding and so on, means that it does not have the resource; I know that we will talk about that later. Also, the fact that the regulatory set-up is so fragmented means that the water companies simply run rings around the various regulators.

One final point arising from new clause 20 is that we must outline a potential way forward. We are not convinced at this stage that renationalisation would be affordable or wise. I am not saying that I am opposed to it in principle; it just does not seem wise at this stage to do something that will cost the taxpayer a vast amount and put money in the hands of people who have fleeced us once already. Unless people can come up with a different model, that does not feel like the right way of doing it.

At the same time, the current model of ownership has clearly failed. We suggest a not-for-profit, a community benefit company model or looking at mutuals, but there may be a way of migrating the system towards that model of ownership via what happens at the end of the administration.