Emma Hardy MP: speeches 2025

Speeches

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

  More

  Very briefly, to return to the SAR—our favourite subject—it might be best if we take the conversation out of Committee and sit down with officials to make sure we are both having the same conversation about the same thing and we can clarify that. We will follow up on that, and of course I extend that offer to the shadow Minister. New clause 30 would require Ofwat to establish a public database on the performance of sewerage undertakers. I understand and acknowledge the intent behind the new clause, and I echo the hon. Gentleman’s thanks to all the environmental campaign groups that have been working in this area to make information available. It is vital that the public are able to access and scrutinise information on the performance of water companies. To support this, the Government are focusing our efforts on ensuring that the most salient information is published in a transparent way and is publicly accessible. That is why clause 3 already requires water companies to publish information on discharges from emergency overflows in a way that is readily accessible and understandable to the public. As mentioned, this matches the pre-existing duty for storm overflows. To support the storm overflow duty, Water UK has published a centralised map of discharge data from all storm overflows operated by English water companies on one website. A similar approach is intended for emergency overflows. We have also requested that water companies begin installing continuous water quality monitors for storm overflows in the 2024 price review. This will provide useful information on the impact of sewage discharges on water quality, and we will be working with water companies to consider how best to publish the information in near-real time. That is in addition to the duty to publish information on pollution incidents in clause 2, as well as existing regulatory requirements for the Environment Agency to publish water company environmental performance data. This data includes the annual environmental performance assessment of the water sector, which provides information on the performance of waste water treatment works. Information from flow monitors, as we have discussed previously, is very technical and does not relate to the impact of the discharge, unlike continuous water quality monitoring data. Therefore, we do not think there is sufficient additional value in requiring this data to be published. As the industry is already centralising data on sewage discharges from storm overflows on one website, and given the existing environmental performance reporting, the Government do not believe that an amendment to require further publications by Ofwet—Ofwat—to do the same thing is necessary. I therefore hope that the hon. Member feels able to withdraw his new clause.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

  More

  The point is that competitive tendering processes were introduced back in 2019, including looking at where money is being used and how that money can be used most effectively. As I have just mentioned, we have £50 billion-worth of competitive processes in the next price review determination. Water companies are already actively using competitive procurement processes. This is something that Ofwat already encourages through the price review process. I therefore hope that the hon. Member is content that this amendment is unnecessary.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

  More

  I would like to thank, as I have before, all the environmental groups and activists up and down the country who do so much to champion cleaner air, rivers, lakes and seas for us all. I look forward to seeing hon. Members on Third Reading and Report. As I did before, I will gently push back and say that the Government did work collectively and cross-party in the other House and brought in compromise amendments before the Bill came here. It would be slightly disingenuous to imply that the Government have not accepted amendments or worked with other parties on the Bill. I thank the hon. Member for Westmorland and Lonsdale for tabling new clause 35. We must ensure that companies accelerate action to reduce pollution to the environment, halting the unacceptable harm they have caused in recent decades. That is why we have introduced a new requirement for water companies to produce annual pollution incident reduction plans and the accompanying implementation reports through the Bill. Again, I gently note that the implementation reports and the strengthening of that provision was done cross-party in the other place. The plans will need to set out the actions that water companies intend to take to reduce pollution incidents, and an assessment of the impact that those actions will have. Companies must then report on the progress they have made with measures they committed to in the previous year, and must clearly explain the reasons for any failures to implement their plans and set out the steps they are taking to avoid similar failures in the future. In addition to the new requirements that increase accountability for pollution incidents, the Government are committed to acting as fast as possible to reduce sewage pollution in our waterways and upholding stringent performance criteria for water companies, as evidenced by the significant forthcoming programme of investment in price review ’24. A delivery programme of this scale, improving thousands of storm overflows with billions of pounds of investment, requires clear and robust regulation. The new clause as drafted would unfortunately undermine that. The Government’s storm overflows discharge reduction plan sets stretching timebound targets to eliminate ecological harm from all storm overflows by 2050, and for water companies to significantly reduce harmful pathogens from storm overflows discharging into bathing waters by 2035. This is supported by an ambitious backstop target. By 2050, no storm overflow will be permitted to spill more than 10 times a year on average. Those stretching targets are informed by detailed analysis and extensive engagement. They will drive £60 billion of investment between 2025 and 2050—the largest infrastructure programme in water company history. Almost £12 billion of that investment will begin this year, improving over 2,800 storm overflows by 2029-30. Those targets bolster underpinning legislative requirements to limit pollution from storm overflows. The Environment Agency monitors and enforces against breaches of environmental requirements, utilising monitoring data to support its investigations. Where breaches are identified, it has significant powers to ensure enforcement orders and financial penalties, and where appropriate, to pursue criminal prosecution. The measures in the Bill will further strengthen its powers, including by introducing automatic penalties.

• 15 Jan 2025 · Rivers, Lakes and Seas: Water Quality · Hansard source

  More

  It is a pleasure to serve under your chairmanship, Mr Dowd. I thank my hon. Friend the Member for Monmouthshire (Catherine Fookes) not only for securing this debate but for her work on the Water (Special Measures) Bill. I thank all the campaigning groups and environmental groups that have been mentioned throughout the debate for the work they do in our communities. The number of MPs who have attended the debate—or at least, the number on the Government Benches—shows how popular and important it is. As I listened to the comments from the shadow Minister, the hon. Member for Keighley and Ilkley (Robbie Moore), I felt a little confused, because he does not seem to recognise or understand the level of anger and resentment towards his Government on this issue. He listed all the amazing achievements of the previous Government. I wonder how those stack up against the facts we have heard in the debate about the level of sewage that is being pumped into our rivers, lakes and seas, the ecological standard of many of our rivers, lakes and seas and the fact that people are so angry about the situation. I gently suggest that, rather than try to rewrite history or place alternative facts on to the record of Hansard , he would do better to acknowledge the fact that his Government got this issue so dreadfully wrong. That is why—as we have in many Departments and on many issues—we have had to come and, in this case, literally clean up the mess we have been left with. The quality of our rivers, lakes and seas and our water is essential for supporting ecosystems, providing clean drinking water and producing our food, and of course, as Members have said, our beautiful rivers, lakes, seas and beaches are a source of pride for our communities, and we want to restore them to that. Maintaining healthy and clean water sources is vital to achieving this Government’s mission for economic growth, and the £104 billion of investment in the next five years in the water sector will help to clean up our waters and with very important job creation up and down the country. Water systems are under massive pressure, no thanks to the 14 years of mismanagement that they have just gone through, and water bodies such as the River Wye and the River Usk in Monmouthshire face significant challenges due to agricultural run-off from intensive poultry farming, leading to high phosphate levels in our water. More broadly, my hon. Friend the Member for Monmouthshire is right to question the quality of our water due to increasing pressures from pollution, climate change and unsustainable practices. The Government are prioritising water quality as a key element of their environmental and public health agenda. Significant steps are being taken to address pollution, enhance infrastructure and ensure clean and sustainable water sources for future generations. In his first week in office—it is slightly amusing that we are criticised by the Opposition for not solving all the problems in our first six months—the Secretary of State secured agreement from water companies and Ofwat to ringfence money for vital infrastructure upgrades, so that it cannot be diverted to shareholder payouts and bonus payments. The Government’s Water (Special Measures) Bill, which has been in Committee this week, sets out measures to crack down on water companies failing their customers, and the independent commission on the water sector regulatory system was launched by the UK and Welsh Governments in October 2024, as the third stage of this Government’s water strategy to clean up the mess we have inherited. I will quickly respond to some of the contributions from my hon. Friends. My hon. Friend the Member for Bracknell (Peter Swallow) is right to share his upset and anger at the number of sewage spills damaging his constituency, which have continued for the past 14 years. I thank him for his support for the Water (Special Measures) Bill. Monitors will be installed and then verified independently. My hon. Friend the Member for Carlisle (Ms Minns) is a brilliant champion for her area, on both flooding and sewage, and I agree that we are blessed with many beautiful rivers, lakes and seas. I quite like the sound of that hidden river cabin; maybe that is worth a visit. My hon. Friend the Member for Mid Cheshire (Andrew Cooper) mentioned the chronic under-investment in sewage infrastructure, and he is absolutely correct. That is why we need the £104 billion investment, to clean up and deal with the mess we have inherited. I will speak to the farming Minister, my hon. Friend the Member for Cambridge (Daniel Zeichner), and get a precise answer to the question asked by my hon. Friend the Member for Strangford (Jim Shannon)—I count him as an hon. Friend. My hon. Friend the Member for Shrewsbury (Julia Buckley) talked about how appalled she is by sewage coming up through manhole covers. That sounds dreadful and I am happy to discuss that with her after the debate. I like the sound of Up Sewage Creek—that is a catchy name for a local campaign group. I thank her for her work, not just in this area. We have had many conversations and she is standing up for her community, as has been noticed and recognised. My hon. Friend the Member for Hexham (Joe Morris) is right to highlight the damage to tourism in his beautiful constituency, and the work being done by local campaign groups. I thank him too for his support for the Water (Special Measures) Bill that will bring forward the reforms we desperately need. My hon. Friend the Member for Scarborough and Whitby (Alison Hume) highlighted the decline in fish stocks, in an area near my constituency that I like to visit, and the need to tackle sewage and pollution. I thank her for her support. My hon. Friend the Member for Reading West and Mid Berkshire (Olivia Bailey) highlighted the important issue of phosphate pollution, and I am happy to support her work pushing Thames Water to tackle that. My hon. Friend the Member for South East Cornwall (Anna Gelderd) championed her beautiful area of the country and highlighted the damage done by sewage. Having listened to the speeches given by Conservative Members, one might have imagined the problem had already been solved, but in reality it has not and it is damaging her beautiful area. She also raised the dangers caused by PFAS. My hon. Friend the Member for Lichfield (Dave Robertson) talked about an incredibly concerning serious pollution incident. I am happy to look into the issue and find out what is happening with the EA investigation. The theme of agriculture came up during the debate. Working with farmers to reduce agriculture pollution is key to delivery against the Government’s priority to clean up our rivers, lakes and seas. The Environment Act 2021 set a legally binding target to reduce nitrogen, phosphorus and sediment contribution from agriculture by at least 40% by 2038. Alongside developing a new statutory plan to restore nature and meet those targets, this Government are enforcing key regulations, such as the farming rules for water, and have carried out thousands of advice-led inspections through the Environment Agency. Investment is directed to environmental land management schemes, including the sustainable farming incentive, and supported by the catchment sensitive farming programme, which are designed to help farmers protect water quality and adopt sustainable practices while maintaining viable businesses. The Secretary of State announced just last week at the Oxford farming conference that we will ensure permitted development rights work for farmers, so we can support them to reduce water pollution through improved slurry stores, anaerobic digesters and small reservoirs. In my remaining time, I will respond to the main points raised about the River Wye. This Government are actively progressing the next steps for the River Wye, including building stronger ties and working collaboratively with the Welsh Government, the Environment Agency and Natural England, as well as local MPs, farmers and ENGOs who are already doing great work to tackle pollution. Indeed, when I held a meeting with the River Wye partnership, which the hon. Member for North Herefordshire (Ellie Chowns) and others attended, and mentioned that we would not be continuing with the previous Government’s plan, those present applauded, such was their condemnation of that plan. I do not wish to test hon. Members’ knowledge of geography, but one of the main problems with the previous Government’s plan was that it did not involve the Welsh Government. I would suggest that any plan to tackle the River Wye’s problems ought to include consulting the Administration responsible for where the river starts and ends.

• 15 Jan 2025 · Rivers, Lakes and Seas: Water Quality · Hansard source

  More

  I thank the hon. Lady, but I have been told I have 15 seconds left. We will develop a plan for the River Wye and I will let hon. Members know about it as soon as possible. The unacceptable destruction of our waterways should never happen again and we are working to tackle the challenge. Efforts are already underway locally and nationally that will support restoration of rivers. The independent commission will report in June 2025. I look forward to working with hon. Members to take this important agenda forward and clear up the mess that we have been left.

• 15 Jan 2025 · Farmland Flooding · Hansard source

  More

  That sounds like an excellent example. I note that the hon. Member for Glastonbury and Somerton intervened earlier on the hon. Member for Broadland and Fakenham so, if she does not mind, I will use the last five minutes of the debate to respond to some of the comments made earlier. We are looking at reviewing the flood funding formula, which was brought up by farmers during many of the visits that I made when I was in a shadow ministerial position. I want to work with all the various stakeholders on that, and I recognise that, in my opinion, at the moment the flood funding formula disincentivises investment in rural areas. I want to have a serious look at that. I hate to see an outbreak of, almost, unity—although that is nice to have sometimes—but there is much love among Labour Members for natural flood management, so I welcome the comments made by the hon. Member for Broadland and Fakenham. The Government champion and support natural flood management, and I am keen to explore how we can encourage more of it, throughout England. I have therefore convened a roundtable on Monday to explore opportunities and challenges in the delivery of natural flood management. It will include experts and those directly involved in the projects, and will help inform our delivery of natural flood management. I look forward to hearing from farming representatives as part of that discussion, and have invited the National Farmers Union, the Nature Friendly Farming Network and the Country Land and Business Association. I am keen to hear how their views can feed into Government work. As has been mentioned, various natural flood management methods can be used to protect flooded farmland, such as planting winter cover crops, soil management, matching grazing density to the capability of the land, avoiding growing certain crops on steep slopes, and blocking drainage ditches to slow down run-off and create wetland habitats. There will be measures that benefit flood mitigation in all three of the environmental land management schemes: the sustainable farming incentive, countryside stewardship and landscape recovery.

• 15 Jan 2025 · Farmland Flooding · Hansard source

  More

  I will give way to my hon. Friend the Member for Reading Central (Matt Rodda) and then to the hon. Member for Glastonbury and Somerton (Sarah Dyke), but I have only six minutes.

• 15 Jan 2025 · Farmland Flooding · Hansard source

  More

  To reassure the hon. Gentleman, the Government are committed to the environmental land management programme and are looking at funding natural flood management on farmland. As I said, we are having a meeting on Monday to discuss, with farmers, what more we can do for natural flood management. Part of our vision for farming is a sector that recognises that restoring nature is not in competition with sustainable food production—on this point I agree with the hon. Gentleman—but actually essential to it: restoring nature helps food production. We will provide farmers and land managers with the support they need to help restore nature, which is vital to safeguard our long-term food security, support productivity and build resilience to climate change. That means continuing the transition away from payment for land ownership towards payment for delivering public goods for the environment, and continuing to use regulation to require minimum standards that will—importantly—be designed in partnership with farmers, and have sufficient lead-in times for change. The countryside stewardship scheme already has specific flood resilience options, such as “making space for water”. I also flag that our land use framework will be coming out at some point, and that this year we will introduce new actions with flood mitigation benefits to our combined environmental land management offer, including actions to reduce flood risk, restore and enhance floodplains, and provide better storage of floodwater. To sum up, I reiterate that the Government are dedicated to exploring ways that nature-based solutions to flooded farmland can be delivered for the benefit of farmers and others. We have already taken decisive action with the first steps to reviewing the outdated funding formula, the creation of the new, multi-agency floods resilience taskforce, and the updating of flood options under the environmental land management schemes. I look forward to continuing to engage with farmers on these incredibly important matters. I am grateful for this important debate, and grateful to have heard the views of Members in the room. Question put and agreed to.

• 15 Jan 2025 · Farmland Flooding · Hansard source

  More

  It is our secret. I enjoyed the hon. Gentleman’s thoughtful contributions on the importance of using soil in the right way and how farming practices can be updated, which were valuable. As I mentioned to the House last week, and as I am sure people have heard me say before, I am fully aware of the impact of flooding on households, people’s mental health and, importantly, farmland. I have deep sympathy with farmers, so much of whose crop has been underwater this season, which has impacted yield. The storms this winter highlight the urgent need for many of us to adapt to the threats of climate change, not least farmers, who often feel the impact directly. As climate change leads to more extreme rainfall, as has been mentioned, the number of people at risk from flooding and coastal erosion will continue to grow. I therefore want to make it abundantly clear that this new Government are committed to tackling this challenge, which is one of the top five core priorities for the Department for Environment, Food and Rural Affairs. The good news is that work has already begun. Recognising the significant impact of flooding on farmers, the Government are bolstering England’s resilience to flooding by confirming an additional £50 million for internal drainage boards to improve assets. That is on top of the existing £25 million, and takes total investment to £75 million. That transformational investment will put IDBs on a firm footing to deliver their vital role in flood and water management. It will benefit projects that will improve, repair or replace IDB assets, including flood barriers, embankments and, as has been mentioned, the maintenance of watercourses. Projects will reduce risks and impacts from flooding for farmers and rural communities across England. To ensure that we protect the country from the devastating impact of flooding, we are investing £2.4 billion in 2024-25 and 2025-26 to improve flood resilience by building, maintaining and repairing flood defences. However, I gently point out to the hon. Member for Broadland and Fakenham that this Government inherited our flood defence assets in the worst condition on record. We have had to come in and deal with the maintenance backlog.

• 15 Jan 2025 · Farmland Flooding · Hansard source

  More

  It is a pleasure to serve under your chairmanship, Dr Murrison. I am delighted to contribute to this debate with the hon. Member for Broadland and Fakenham (Jerome Mayhew), although I feel that we are spending more time together at the moment than I am with my own family, what with the Bill Committee and other debates. I look forward to round 3—or is it 4?—tomorrow.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I thank the hon. Gentleman for tabling new clause 26. The Government agree that we need to rebuild trust in the water sector and that executives should be firmly held to account for companies’ serious failures to meet environmental standards. That is why clause 1 will give Ofwat new powers to issue rules on remuneration and governance. The legislation requires Ofwat to set rules that make the payment of bonuses contingent on companies achieving high environmental standards. It is more appropriate for Ofwat, as the independent regulator, to determine the performance metrics to be applied when setting the rules for performance-related pay. As outlined in the initial policy consultation, Ofwat is currently considering prohibiting bonuses where companies have had a serious category 1 or 2 pollution incident in the preceding calendar year. That is not on the face of the Bill, but it is very clearly in Ofwat’s consultation. It is looking to consult on prohibiting bonuses after a category 1 or 2 pollution incident, as my noble Friend outlined. That provides an early indication of the direction of travel on the environment metric. Ofwat would be able to use its direction-giving power and wider enforcement framework to hold companies to account where it has reason to believe that they are in breach of the rules. However, banning bonuses, even in cases of unwanted but legal spills, would effectively ban bonuses for all companies. That could unnecessarily threaten the sector’s ability to attract and retain talent. I refer the hon. Member for Westmorland and Lonsdale to the consultation that Ofwat has launched so that he can see for himself the pollution metric that I have mentioned. On that basis, I hope that he feels able to withdraw new clause 26.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I respect the hon. Gentleman’s contributions on matters of finance, and I recognise his knowledge in this area. However, I think he would probably acknowledge—even if not publicly—that using a new clause to determine the level of debt that we think is appropriate is not the best way to make legislation for our country, or for the financial resilience of the water sector. I am entirely confident that the best way to look at this seriously, taking contributions and recommendations from all the wider stakeholders, is through the water commission. The commission might draw similar conclusions but it is not for us to pre-empt them now, without having first taken on board the opinions of many other stakeholders. I trust that the hon. Member for Epping Forest is reassured by the steps being taken by the Government, and by Ofwat, and I ask him to withdraw the clause.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I thank the hon. Member for Westmorland and Lonsdale once again for his thorough consideration of the Bill. I will turn first to new clause 7, which was tabled in his name and which proposes the abolition of Ofwat. As the hon. Member will be aware, and as he already mentioned in October ’24, the UK and Welsh Governments launched the independent commission to fundamentally transform how our water system works. The commission, led by Sir Jon Cunliffe, will be broad-ranging and will make recommendations in line with eight objectives, which include specific objectives considering the role, structures, responsibilities and powers of the regulator. It is right that the commission, rather than this Water (Special Measures) Bill, is the vehicle for considering the water regulator’s roles and responsibilities. This Bill focuses on strengthening the powers of the regulators to drive improvements in performance. The Bill will not, and cannot, fix all the sector’s problems. The commission is the right place to consider the long-term future of the regulatory system and the role of the regulator. Indeed, I would argue that the Labour Government want to move away from sticking-plaster politics to fundamentally reset and transform the problems facing our country for good. I hope therefore that the hon. Member for Westmorland and Lonsdale is content that this new clause is unnecessary. New clause 20 was also tabled by the hon. Member for Westmorland and Lonsdale. It sets out requirements for a water review that is undertaken by the Secretary of State. I think we are all agreed that we have seen years of water company underperformance, and we all agree that there is a clear need to fundamentally reset the water sector. Although I understand that the hon. Member is seeking to ensure that any review of the water sector is sufficiently thorough, the Government are confident that the commission’s scope is broad and comprehensive. Sir Jon will be supported by a range of experts from the regulatory, environment, health, engineering, customer, investor and economic sectors to effectively examine this sector as a whole, including the regulatory framework. By setting out considerations for a water review in primary legislation, we risk prejudicing or pre-empting the outcome of the current commission, as well as its independence. The sector is facing complex challenges that require the support of customers, environment groups, investors and companies alike to address. An independent review is best placed to find solutions to those challenges, and it is critical that its independence is preserved. The commission will report its findings in summer 2025, and the Government will consider them in full before outlining the next steps. I therefore hope that the hon. Member for Westmorland and Lonsdale understands that to avoid duplication and, importantly, maintain the independence of the commission, the Government will not accept the new clause.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I will quickly note the constructive and nice way in which the hon. Member for Epping Forest is taking part in these debates. I also want to come up with more dentistry analogies, so I will be thinking of those as we keep going. The Bill will drive meaningful improvements in the performance and culture of the water industry. In line with that, it will introduce many measures to disincentivise pollution. For example, it will provide Ofwat with legal powers to ban bonuses where companies fail to meet standards on environmental performance, financial resilience, customer outcomes or criminal liability. The Bill will also enable automatic and severe fines, allowing regulators to take swift action. It will enable the public to hold companies to account through a new requirement for water companies to produce annual reports on pollution incident reduction. Collectively, these measures will strengthen enforcement, improve transparency and disincentivise water company pollution. The Committee and the wider public are able to see a more detailed assessment of the expected impact of the Bill via the published impact assessment. I reassure the Committee that my Department is committed to post-legislative scrutiny of primary legislation. The Department for Environment, Food and Rural Affairs will work with the cross-party Select Committee on Environment, Food and Rural Affairs to assess the impacts of the Act three to five years after Royal Assent as part of the standard practice for all new legislation. I welcome that scrutiny. The Government therefore cannot accept new clause 6. Although we agree on the importance of understanding the impact of the Bill on environmental pollution, adding further reporting requirements to the Bill would be duplicative and unnecessary.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I understand the intent of new clause 11. The location and health of a water company’s assets is key to ensuring their maintenance and improvement. Under section 199 of the Water Industry Act, companies are required to keep records of the locations of many of their sewers, natural drains or disposal mains. Members of the public are able to request this information from water and sewerage companies in map form. Furthermore, the Environment Agency hosts a public register of information relating to all sites and assets permitted under the environmental permitting regulations. As of 1 January—this month—all water companies are required to publish discharge data from their storm overflows. Water UK’s centralised map shows that near real-time data for water companies across England in a publicly accessible format.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I thank the hon. Member for Westmorland and Lonsdale for the intent behind new clause 19. As highlighted, it seems in parts to contradict new clause 18, which was also tabled in his name. It is important to highlight that Ofwat already has a core duty under section 2 of the Water Industry Act 1991 to ensure that water companies are able to finance the proper carrying out of their statutory obligations. Ofwat already monitors information it receives about companies and their financial positions on an ongoing basis. That includes carrying out a detailed review of the financial information published by companies in annual performance reports, statutory accounts, interim accounts, investor reports and other sources. Ofwat also directly engages with companies where it sees an increased level of risk. Additionally, Ofwat has recently updated water company licences to require companies to take account of service delivery for customers and the environment, as well as financial resilience when deciding whether to pay a dividend. More broadly, the independent commission into the water industry will look at long-term, wider reform of the water sector, as I have mentioned. Company financial structures are one of a number of areas that could be explored under the commission, and we do not want to pre-empt the outcome of the commission through this new clause. The former deputy governor of the Bank of England, Sir Jon Cunliffe, chairs the commission. As mentioned, he has decades of financial, investor and regulatory experience. His appointment demonstrates the Government’s ambition to fix the foundations of the industry. As I have mentioned previously, there will be a call for evidence, and the hon. Member will be able to make his points to Sir Jon Cunliffe and the commission. Given the existing monitoring of the financial resilience of the sector and the forthcoming recommendations of the independent commission, we do not believe that the new clause is appropriate, and I ask the hon. Member to withdraw it. Turning to new clause 23, which was also tabled by the hon. Member for Westmorland and Lonsdale, a special administration regime enables a company that provides vital public services—water, energy or rail—to be put into administration in certain circumstances to ensure that the public service will continue to be provided pending rescue, via a means such as debt restructuring or transfer, via a sale, to new owners. There is no need for a company exiting a SAR to be placed under an enhanced regime regarding its debt levels. Water companies are allowed to raise debt to fund the delivery of their services, and it is for companies to decide their financial structures. I will resist the urge to repeat my previous comments about the water commission looking at the financial structures of all the water companies, and I hope the hon. Member will take what I outlined previously as read. In relation to capital expenditure during a SAR, it is not necessary to establish a statutory process for agreeing that expenditure, as that would be agreed under a court-appointed special administrator in the lead-up to a SAR. The Government can provide funding support to a special administrator. Any company under a SAR will still be subjected to the same regulatory regime and expected to meet its statutory obligations. I hope the hon. Member understands why we cannot accept his new clauses, but I repeat the offer made: he will be able to talk to Sir Jon Cunliffe and present to him the evidence he has just presented to the Committee, so that he can consider it as part of the wider evidence gathering. I therefore ask the hon. Member not to press his new clauses.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I thank the hon. Gentleman for tabling new clause 15. We fully support greater involvement of citizen science to hold water companies to account. I thank them for all the work that they have done in this area up and down our country. Local people know their rivers best, and their campaigns on pollution issues have been crucial in bringing the scale of the issues to light. The Bill already includes several amendments to support transparency to make it easier to scrutinise water companies. Clause 2 will enable the public to scrutinise the measures that water companies are taking to reduce pollution incidents. Clause 3 will make information on discharges from emergency overflows available in near real time. This data, in addition to the near real-time information already available on storm overflow discharges, will be provided in a way that will enable citizens to identify trends and key issues. That will supplement the significant information that the Environment Agency already publishes. The Environment Agency also operates a 24-hour environmental incident hotline to enable the public to report incidents that they observe in their local area. The Environment Agency shares the enthusiasm and values the expertise and local knowledge of citizen scientists. It has recently funded an internal project supporting citizen science, which will run until March 2025. I welcome the hon. Gentleman’s approval of the Government’s work on this issue. The question is whether we require primary legislation to continue doing something we are already doing successfully. This project, along with many others that are being supported by the Government or the Environment Agency, is considering how to facilitate better engagement with citizen scientists. The Government believe that the existing measures are more effective for supporting citizen science than creating a fixed legislative duty on the Secretary of State. We are already doing work in this area, so we will not support the new clause.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I thank the hon. Member for tabling new clause 17. It is clear that consumers are concerned about their bills, and this Government want to do everything they can to help and support people who are struggling, particularly given that water bills are due to rise following Ofwat’s final determinations. Although this Government do not consider it suitable to adopt the new clause at this time, we will continue to consider all measures available to best support vulnerable customers, and we are exploring options to improve social tariff arrangements and improve fairness and consistency in who is eligible for support and in the levels of assistance provided. There are already customer assistance schemes in place. WaterSure caps water and sewerage bills for vulnerable customers who have the higher essential water use requirement for family or health reasons. Under the scheme, £66 million of support was provided to 230,000 households in ’23-24, with an average bill discount of £286. That sits alongside debt measures, water efficiency measures and company social tariffs, which are all targeted at supporting customers who are struggling to pay. Company social tariffs, which water companies design themselves and offer to customers who are struggling to afford their water bills, are forecast to provide an average of £640 million a year in support between 2025 and 2030. Prior to the introduction of any new support scheme, in-depth research and analysis must be completed to ensure a properly designed policy. Therefore, the Government are continuing to work with the water industry to explore options to improve affordability arrangements, including by holding the sector accountable for its public commitment to end water poverty by 2030. For that reason, I ask the hon. Member for Westmorland and Lonsdale to withdraw new clause 17.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I thank the hon. Member for Epping Forest for tabling new clause 3, which would require a water company to reduce customer bills by an equivalent amount to the total monetary penalties paid in the previous year by that company. I will start by clarifying that we expect the cost of the penalties to be borne by the companies, not by the customers. However, I would also like to reassure the hon. Member that there are existing procedures in place to ensure that customers are reimbursed for a water company’s poor performance. As the independent economic regulator of the water industry, Ofwat is best placed to ensure that customers are reimbursed appropriately if water companies perform poorly. Ofwat already sets specific performance targets for water companies in the five-yearly price review. Those performance commitments hold water companies to account for the outcomes that customers pay for. Where they are not met, companies must reimburse customers through lower water bills in the next financial year. Those performance targets take a holistic view of water company performance and consider wider factors beyond companies receiving penalties. Performance targets include customer-facing commitments, such as water supply interruptions; environmental commitments, such as pollution incidents, storm overflows and bathing water quality; and commitments related to asset health, such as repairs to burst mains. As a result of underperformance in the last financial year, Ofwat is currently requiring 13 companies to return £157 million to customers. The hon. Member’s new clause is therefore not appropriate for this Bill, given that it would overlap with existing procedures. However, there is simply not enough improvement in performance across the water industry. That is why we have launched the independent commission, which will look at issues, including performance, and make recommendations on how to transform the water sector. I hope that the hon. Member for Epping Forest is reassured about how customers will be reimbursed for poor performance, and about the steps that we are taking to improve performance. On that basis, I ask him to withdraw his new clause.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I thank the hon. Members for Witney and for Westmorland and Lonsdale for the intention behind their new clauses. The water sector is facing multiple challenges and growing pressures. Resolving them will require transformational change. The Government agree that it is crucial to conduct a fundamental review of the water industry regulatory system. We want to ensure that we have a system that supports strategic planning and investment, with fairness to customers and environmental improvement at its core. I reassure the hon. Member for Witney that such a review is already under way—I might have mentioned this once or twice before—through the independent commission, led by Sir Jon Cunliffe. That comprehensive review is addressing the three elements that the new clause raises: planning, financing and investment. It is taking a holistic approach to assessing the system, and it will make recommendations to ensure that the water sector is better equipped to ensure clean rivers, lakes and seas and a sustainable water supply for the future. The commission will report to the Government by the second quarter of 2025, ahead of the timeframe recommended in the new clause. I trust that the hon. Member for Witney is reassured that the requirements of the new clause are already being addressed through the work of the independent commission. On new clause 29, which was also tabled by the hon. Members for Westmorland and Lonsdale and for Witney, I reassure them that the Government are fully aware of the scale of damage that pollution is causing to our waterways. We are committed to working with the water industry regulators to address that. As a regulator, Ofwat has a range of primary duties, including ensuring that companies properly carry out their functions and can finance the delivery of their statutory obligations, including environmental obligations. Ofwat sets the total spending envelope for companies through its price review process and it reviews company business plans to ensure compliance with statutory obligations. I am pleased to inform the Committee that Ofwat published its final determinations for the 2024 price review on 19 December, which included confirmation of £104 billion-worth of expenditure over the next five years. That is the highest level of investment in the water sector since privatisation and will fund reducing the number of spills from storm overflows by 45% through upgrading 2,800 storm overflows. In addition, companies will improve river water quality by improving more than 1,700 waste water treatment works. Furthermore, Ofwat has increased the number of outcome delivery incentives against which companies must deliver, including targets on reducing serious pollution incidents, such as a reduction in storm overflows and operational greenhouse gas emissions. That means that serious pollution incidents will lead to clear and robust financial penalties for companies. I trust that the hon. Member for Witney is reassured that his new clause is not required, as pollution targets are already closely factored into the current price review model, and I ask him not to press it.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  The hon. Gentleman is right to highlight that the pollution caused in the Norfolk broads and in many other areas does not come from water companies alone. As has been discussed, it comes from the environment, road run-off and various other places. “High ecological status”, as we have stated, could involve not being able to fish in those waters at all, which I know is a recreational activity in his area. It may also restrict planning for housing developments with any minor effects on the water quality of water bodies in national parks. The Government therefore cannot accept either new clause, although I recognise the intention behind them. I hope that the hon. Gentleman feels able not to press both.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I thank the hon. Member for Westmorland and Lonsdale for tabling the new clauses. It is always nice to have a conversation about the beautiful chalk streams and national parks in our country. New clause 12 would have significant implications for existing legal frameworks and operational delivery, and would not necessarily result in environmental improvements for chalk streams, for which there are already established objectives to conserve and restore their ecological health. Under the water environment regulations, the default objective is to achieve good ecological status for all chalk streams in England. Good ecological status is a high standard that represents a thriving aquatic environment with only minor disturbances from natural conditions. High ecological status equates to water that is almost entirely undisturbed from its natural conditions. If we set high ecological status as the objective for all chalk streams, overriding cost-benefit assessments, it would have wide-ranging impacts on future planning developments and human interaction with chalk streams, including by restricting farming and fishing. Any planning for housing developments that would have even a minor impact on the water quality of chalk streams would be restricted without impractical and disproportionately costly mitigation measures. The new clause would place achieving that demanding objective on water companies only, as the hon. Member for Broadland and Fakenham highlighted, regardless of the pressures that are actually impacting chalk streams. This would not allow for the consideration of technical feasibility or costs, which would ultimately be borne by water bill payers. The new clause would necessitate amendments to the water environment regulations and habitat regulations, creating complexity and difficult delivery implications.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I thank the hon. Members for Westmorland and Lonsdale and for Witney for tabling new clause 22. As the hon. Member for Witney says, we have already had a debate on this issue. I hoped that we had made the situation quite clear about what the special administration regime is and what it is not, but here we go again. I must reject the new clause, because it would jeopardise the main purpose of the water special administration regime: the continued provision of vital public services. The role of a special administrator does not include a power to cancel debt, and the purpose of the administration is not to bail out water company creditors or shareholders. The new clause is therefore unnecessary. It would divert from long-established insolvency principles of treating creditors equally according to their rights as commercial entities. When a water company enters special administration, creditors are unable to enforce their debt repayments unless they seek leave of the court or receive permission from the special administrator. When a water company exits from special administration either by rescue, such as debt restructuring, or by transfer, such as a sale, the special administrator determines the level of repayment to credits. That will be calculated according to the statutory order of priority. It is very unlikely that all debt would be repaid at the end of a special administration, because of the order in which payments are required to be made. Debts can be cancelled only according to a restructuring plan or under court supervision. The Government do not directly or indirectly make any decisions relating to the exact quantity of debt recouped by creditors or equity recouped by shareholders. I must reject the new clause, because the changes that we are making align the water industry special administration regime with regimes in other sectors. We do not intend to alter the regime’s relationship with the existing framework of insolvency legislation.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  I thank the hon. Member for proposing new clauses 13 and 14 on this incredibly important issue, and for highlighting the importance of PFAS monitoring. I want to reassure everybody that the quality of drinking water in England is exceptionally high and among the best in the world. It is important to me that it remains that way. Across Government, we are working to assess PFAS levels occurring in the environment, as well as their sources and potential risks, to inform future policy and regulatory approaches, safeguard the current high drinking water quality and ensure our regulations remain fit for purpose. Water companies have a statutory obligation under the Water Supply (Water Quality) Regulations 2016 to carry out risk assessments to identify anything that could pose a risk to health or cause the water supplier to be unwholesome. That includes the risk of PFAS. I will explain which PFAS are tested for in drinking water. The Drinking Water Inspectorate issued a series of information letters to water companies to set out a risk-assessment methodology and associated monitoring strategies for up to 48 individual PFAS compounds. The guideline values of PFOS, or perfluorooctane sulfonic acid, and PFOA, or perfluorooctanoic acid, are agreed with the UK Health Security Agency, and have been applied to 48 individual PFAS. The DWI guidance will be reviewed and updated where necessary. The Drinking Water Inspectorate has provided guidance on PFAS to water companies since 2007 and, as I explained, that is regularly updated as new research emerges. In July 2024, DEFRA announced a rapid review of the environmental improvement plan to deliver on our legally binding targets to save nature. That includes how best to manage chemicals, including the risks posed by PFAS, and we are working closely with the DWI on all matters, including PFAS. I reassure the hon. Member for Westmorland and Lonsdale that the Water Industry Act 1991 already provides the necessary powers to amend existing regulations to deal expressly with PFAS, should the Government wish to do so. I will have a meeting with his hon. Friend, the hon. Member for Twickenham (Munira Wilson), on this issue. I hope that the hon. Gentleman is reassured that this new clause is not suitable for the Bill, so I ask him to withdraw it. New clause 14 focuses on chemical contaminants entering our waterways. I agree with the hon. Member for Westmorland and Lonsdale about the importance of the issue, which is why, as I announced, we will have the rapid review of the environmental improvement plan to deliver on our targets to restore nature. That includes looking carefully at the risks posed by PFAS. The review will consider and set out effective measures to mitigate harmful chemical substances entering our water through the environment. Through the chemical investigations programme, we are working with the water industry to understand how levels of contaminants in treated waste water affect our water environment. The programme will provide valuable information to understand the effectiveness of different measures to tackle chemical contamination of our rivers. Significant costs are associated with end-of-pipe technologies at sewage treatment works to manage the more challenging chemicals, such as PFAS. We therefore need to prevent contaminants entering the water system in the first place, before they get to the waste water treatment works, where the cost for treatment will be unfairly borne by water customers, rather than the polluters. Work continues across Government to help us to assess the levels of PFAS occurring in the environment, their sources and the potential risks, so that those can inform future policy and regulatory approaches to safeguard our high drinking water quality and to ensure that regulations remain fit for purpose. The DWI expects water companies to plan to reduce PFAS concentrations in treated water progressively by implementing a reactive and systematic risk-reduction strategy. That is why we need to need to prevent them entering the water in the first place. I hope that the hon. Member is reassured by the actions that we are taking and will not press new clause 14.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

  More

  May I say—often said, not always meant—that it is indeed a pleasure to serve under your chairwomanship, Dr Huq? I thank the hon. Member for Westmorland and Lonsdale for the intention behind new clause 8. Ofwat has a range of primary duties, including protecting the interests of consumers, ensuring that companies properly carry out their functions and ensuring that companies can finance the delivery of their statutory duties. Removing Ofwat’s duty to ensure that companies are appropriately financed would put at risk companies’ ability to deliver for customers and the environment. The new clause also seems to contradict the others tabled by the hon. Member. For example, new clauses 19 and 23 seek to increase regulation around water company financial resilience, but new clause 8 seems to aim to reduce it. Ofwat must continue to ensure that water companies can finance the proper carrying out of their statutory obligations, in line with the outcome the new clause seeks. Ofwat already has a primary duty to seek to ensure that companies deliver their statutory obligations, including environmental obligations. Ofwat’s existing duties, combined with the strengthened power for regulators provided by the Bill, will therefore drive the desired outcome sought by the new clause and ensure that the environment is at the heart of water companies’ activities. That is something on which we all agree. In addition, the independent commission on the water sector will look at wider long-term reform of the water sector, including considering and clarifying the role of regulators, and we do not wish to prejudice the outcome of the commission by implementing the new clause. I hope that the hon. Member is reassured that Ofwat’s existing core duties capture the intent behind it, and that the independent commission will consider the duties of Ofwat more broadly. For those reasons, we will not accept the new clause.