Water Companies: Executive Bonuses

Toby Perkins Excerpts

Tuesday 5th December 2023 Commons Chamber

[Mr Toby Perkins (Chesterfield) (Lab)]

Sometimes we witness revelations that are incredibly shocking, yet simultaneously not surprising at all. And so it was with the exposure of this week’s “Panorama” investigation that United Utilities, one of Britain’s largest water companies, had been systematically falsifying its environmental performance to mislead consumers and regulators and to push up profits.

Although Labour had decided to use one of our precious Opposition day debates to discuss water companies and directors’ bonuses in advance of those revelations, they have clearly added to the urgency and salience of the debate. Several Members commented on the fact that the issue has a much higher profile that it did. I pay tribute to Feargal Sharkey, who has done some amazing campaigning and played a significant role in raising the issue of water quality. He has proved that he has not just “a good heart”, but a switched on head as well.

It has been a good debate; what was said was important, as well as what was not said. The demeanour of Government Members spoke more loudly than the words we heard from them. My hon. Friend the Member for Birkenhead (Mick Whitley) mentioned the number of Secretaries of State there have been—we have had six Secretaries of State for the Environment, Food and Rural Affairs since 2019. Interestingly, the newest one, the right hon. Member for North East Cambridgeshire (Steve Barclay), could not be bothered to turn up and respond to the debate. The Minister who did respond, the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Taunton Deane (Rebecca Pow), could not wait to race away and has not returned to this important debate, despite having spoken at its start.

Even more powerful was the row upon row of empty green Benches behind the Minister during the debate. It is clear that Conservative Members of Parliament do not want to be anywhere near here to speak up for their Government’s record on this issue. I have great affection for the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Taunton Deane, but she appeared to inhabit a parallel universe when it came to the state of our water industry. Had she been here to listen to the debate, she would have heard Member after Member reflect the fury of their constituents and of a raft of organisations including the Environment Agency, which last year described the performance of English water companies as “very disappointing”, saying it was

“simply unacceptable to see a decline in this vital metric”,

in reference to the increase in pollution incidents.

Members have reflected what Surfers Against Sewage has said, and the Rivers Trust has slammed the Government’s performance, yet the Minister—[Interruption.] She marches back into the Chamber just as I was saying that if she had been here, she would have heard about a very different reality in respect of our water industry from the one that she appeared to inhabit. She described the “wonderful water” that we deserve and are all experiencing. She seemed to believe that she and this Government had brought forward strong measures that Labour and the Liberal Democrats had stood against. She said that if we introduced automatic fines, it would somehow be good for the water companies because it would prevent other kinds of action from being taken.

I am afraid it was really quite bizarre to listen to that depiction of what has happened, but there were many other, very relevant, contributions to the debate. They started with the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger), who cut through the word that might be used to describe some of what we heard and what is also in our rivers. He clearly admitted that in the 23 years he has been a Member of Parliament, the situation has got worse. He did not buy the idea that we are living in some golden age of river hygiene.

My hon. Friend the Member for Bermondsey and Old Southwark (Neil Coyle) spoke about the broken Government promises on environmental standards; the right hon. Member for Hereford and South Herefordshire (Jesse Norman) spoke of his frustration at the Government’s failure on this issue; and my hon. Friend the Member for Easington (Grahame Morris) gave us a passionate and evocative description of the beautiful coastline in his area, and accused the Minister of—just like, unfortunately, the surfers in the constituency of the hon. Member for St Austell and Newquay (Steve Double) —going through the motions.

[Steve Double]

rose—

[Mr Perkins]

I will come to the hon. Gentleman in a moment.

The hon. Member for Broadland (Jerome Mayhew) made an interesting contribution. He slated the record of the Liberal Democrat Minister between 2013 and 2015, apparently forgetting that that Minister served under a Conservative Secretary of State, in a Conservative-led Government who were implementing policies as a result of the Conservative austerity programme. I stand behind no one when it comes to condemning Liberal Democrats for their record between 2010 and 2015, but even I thought that was a bit rich.

My hon. Friend the Member for Hammersmith (Andy Slaughter) spoke about the performance and failure of Thames Water. He said that the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Taunton Deane had given an extraordinarily complacent speech. I think he spoke for many when he said that.

My hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) spoke about 2 billion litres of sewage outflow in two days in her area in 2020; my hon. Friend the Member for Reading East (Matt Rodda) spoke about the appalling levels of pollution in his constituency; and the hon. Member for Somerton and Frome (Sarah Dyke) spoke of the duplicity of water companies on self-monitoring. It is important to say that although some Members gave credit for the increased amount of monitoring, the “Panorama” programme has called into doubt whether we can believe any of the figures we see.

My hon. Friend the Member for Bristol East (Kerry McCarthy) rightly referred to the other causes of river pollution—another important factor, which was not covered as much in this debate. She also spoke about the lack of capacity in the slimmed-down Environment Agency to take on those alternative causes of river pollution. My hon. Friend the Member for West Lancashire (Ashley Dalton), in a very good speech, mentioned the Environment Agency saying in 2010 that we had the healthiest rivers since the industrial revolution, and its frustration that we are seeing that progress stall under this Government.

[Steve Double]

I take note of what the shadow Minister says. He mentions both Surfers Against Sewage and surfers in my constituency. Will he acknowledge that when Surfers Against Sewage began its campaign in 1990, less than 25% of the beaches in the UK met the acceptable minimum standard for bathing water quality, and today that figure is over 90%?

[Mr Perkins]

The first thing to say is that the hon. Gentleman is absolutely right: the state of the beaches back in 1990 was even more disgraceful than it is today. The vast majority of the progress was made between 1997 and 2010, almost—[Interruption.] Yes, it was. It was almost up to 80% by then. If we read its reports, the Environment Agency expresses its frustration that the significant progress made in that period has slowed since then.

[Steve Double]

Can the shadow Minister explain to me why it was that the Labour Government were taken to court by the European Union in 2009 for failing to address the issue?

[Mr Perkins]

The hon. Gentleman should listen to what the Environment Agency has said. It has said the improvements in water quality have slowed under this Government and it has expressed its frustration that we are plateauing.

The hon. Gentleman said in his comments that Ofwat already has the power to ban bonuses. If he had listened to the Minister, he would have known that that is not true. What Ofwat has at the moment is the power to ensure that those bonuses are not paid from the money paid by bill payers. That is not the same as what we propose. Our proposal is very different, so he was incorrect to say that the powers we are proposing are those that currently exist.

My hon. Friend the Member for Birkenhead (Mick Whitley) summed up the difference between the behaviour of bosses and the experience of his constituents. As my hon. Friend the Member for Croydon North (Steve Reed) made clear earlier, the Government have been complicit in this disgraceful practice, through the funding cuts that my hon. Friend the Member for Wakefield (Simon Lightwood) referred to. They have cut the Environment Agency’s funding in half, leading to the dramatic reduction in monitoring, enforcement and prosecutions that in turn has led to the dramatic increase in illegal sewage discharges.

Now, to make matters worse, the Government are simply ignoring the BBC’s investigation. It was shocking that the Environment Agency did not provide anyone for that programme; it is a Government regulator and should be answering for the performance of the water companies. While Tory Ministers claim that they have a grip on this issue, even the Environment Agency has been forced to admit that the water companies’ performance in the most recent year was “completely unacceptable”.

Britain cannot afford years more of the decline in its natural habitat and of worsening water quality, but these years of failure may finally be at an end. Soon, people across Britain will have an opportunity to bring down the curtain on what by then will be 14 years of failure, and to elect a Labour Government to address this shocking situation. The Labour party’s DEFRA team have already met with water company bosses and, while the meetings were cordial, the message was unmistakable: the days of a Government turning a blind eye to the failure and corruption of self-regulation will be at an end under Labour.

That starts with punishing the worst actors. We will give the water regulator the power to ban bonuses for water bosses until they have cleaned up their filth, but that is only the first step to clean up the water industry. Labour will go further, putting the industry under special measures. We will end the pointless practice of self-monitoring, and will require water companies to install remote monitors on every outlet overseen by the regulators and the Government. Any illegal spill will be met with an immediate and severe fine—no more delays, no more appeals, no more lenient fines that are cheaper than paying to upgrade crumbling infrastructure. Rogue water bosses who overseer repeated severe and illegal sewage discharges will face personal criminal liability.

The days of failure under this Government are now coming to an end. A Labour Government will get our water cleaned up and resolved.