Water Companies: Executive Bonuses

– in the House of Commons at 4:36 pm on 5 December 2023.

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Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs 4:36, 5 December 2023

I beg to move,

That this House
regrets that 13 years of successive Conservative Governments have broken the water industry and its regulatory framework;
is deeply concerned about the scale of the sewage crisis and the devastating impact it is having on the UK’s rivers, lakes and seas;
believes it is indefensible that executives at UK water companies were paid over £14 million in bonuses between 2020 and 2021 despite inflicting significant environmental and human damage;
condemns the Government for being too weak to tackle the crisis and hold water company bosses to account;
calls on the Government to empower Ofwat to ban the payment of bonuses to water company executives whose companies are discharging significant levels of raw sewage into the UK’s seas and waterways;
and further calls on the Secretary of State for Environment, Food and Rural Affairs to make a statement to this House by 31 January 2024 on the Government’s progress in implementing this ban.

I will continue, Mr Deputy Speaker.

Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs

I will not be that kind to you, Mr Deputy Speaker.

Our beautiful waterways have been polluted by the highest level of illegal sewage discharges in our history under this Conservative Government. Last year, there was at least one spill every 2.5 minutes—and that is just the spills that we know about, because not every spill is properly reported. Over a year ago, Vaughan Lewis, an Environment Agency whistleblower, warned the Government about serious failures of regulation. He said that

“it was impossible for the Environment Agency to know what’s going on” because the Government had

“ceded the control of monitoring to water companies, which ended up being able to mark their own homework. They take their own samples and assess whether they are being compliant.”

Now, we have more evidence that that is precisely what has been going on.

Last night, the BBC’s “Panorama” investigation exposed yet another scandal—exactly what that whistleblower warned about in August 2022, which has been ignored by four Conservative Environment Secretaries since. According to the “Panorama” team, leaked records show that United Utilities deliberately downgraded and misreported severe sewage leaks, including discharges into Lake Windermere, one of the most beautiful places in England. Of 931 reported water company pollution incidents in north-west England last year, the Environment Agency attended a paltry six. It is as clear as day that the water companies are covering up illegal sewage discharges. That is a national scandal.

Photo of Seema Malhotra Seema Malhotra Shadow Minister (Education)

My hon. Friend is making a powerful point. Does he agree that the failure of the Conservatives to prevent illegal sewage leaks has led to a drastic increase in illegal discharges, which has affected our communities, damaged nature, damaged tourism, and put the health of kids and adults at risk?

Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs

As always, my hon. Friend makes an important point very eloquently. I am sure that all our constituents up and down the country are appalled by what they have seen not just on “Panorama” last night, but when they have visited our beautiful waterways up and down the country. Raw human excrement polluting our waterways is not just disgusting; it destroys natural habitats, kills wildlife and damages tourism. Perhaps most appallingly of all, it makes people sick—children most of all—if they swallow parasitic bacteria and chemicals that should be nowhere near our rivers, lakes and seas.

How on earth did we get here? The Conservative Government cut the Environment Agency’s resources in half. That led to a dramatic reduction in monitoring, enforcement and prosecutions, leaving illegal sewage spills to double between 2016 and 2021.

Photo of Simon Lightwood Simon Lightwood Shadow Minister (Transport)

My hon. Friend is making a very good speech. Like me, he will have noted that the Minister is in her place. She was strangely missing yesterday for the Lib Dem amendment on compensation for those harmed by the criminal handling of sewage, though she was present in the Division Lobby just 15 minutes later. Does my hon. Friend think that she was allowed to abstain, or should she be sacked?

Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs

It is hard to know whether discipline has broken down in the Conservative party; its Members seem able to rebel with impunity. When the Minister speaks, I am sure she will enlighten the House about what happened.

Instead of acting on the warnings, the Government have turned a blind eye to what has been going on. Thanks to this Government’s wilful negligence, we see record levels of toxic sewage swilling through our rivers and lakes, pouring into our seas and lapping on to our beaches.

Photo of John Hayes John Hayes Conservative, South Holland and The Deepings

I know that the hon. Gentleman would not want to make a partisan speech; he would want to make a balanced appraisal of the challenges, which we all regard with the seriousness that he has described. He mentioned beaches. Will he acknowledge that the proportion of bathing waters regarded as good or excellent has increased dramatically—from 76% to 93%, to be precise—since 2010, when his party was last in power?

Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs

Heaven forfend that anyone would make a partisan speech in this place. I do not believe that the quality of water on our beaches is acceptable. Many campaign groups, such as Surfers Against Sewage, regularly point out the very low, even toxic, quality of the water that their families and they wish to enjoy. Many constituents of Members on both sides of the House will share those concerns. I hope that this debate is a time for us to come together to collectively identify the problems and move forward with proposals to tackle them. The right hon. Member, just like me and Members from all parts of the House, will share the concern that our once pristine waterways have been polluted by stinking, toxic filth. However, I hold the sewage party opposite responsible. The Prime Minister would not put up with raw sewage in his private swimming pool, so why is he happy to treat the British countryside as an open sewer?

Photo of Flick Drummond Flick Drummond Conservative, Meon Valley

Let me remind the hon. Gentleman that when Labour was last in power, it produced a draft Flood and Water Management Bill in 2009 that aimed to reduce red tape and other burdens on water and sewerage companies. The uproar at the time forced the Labour Government to change their mind. This Government have tightened regulations and made water companies start paying for the pollution.

Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs

The hon. Member can be as much as of an apologist as she likes for the filthy, toxic sewage swilling through our rivers, but her constituents will hear what she says, contrast it with what they see and draw their own conclusions when the election comes, I am sure.

Whistleblowers and leaked documents give us a very clear explanation of why the water companies are behaving in the way they are. If they downgrade and cover up sewage spills, they are rewarded with permission to increase their customers’ bills, which boosts their profits. Fewer reported spills—not actual, but reported—and more profits mean bigger bonuses for the water bosses. Profiteering from covering up lawbreaking is corruption—corruption to which this Conservative Government have turned a blind eye.

Labour will crack down on rogue water companies and strengthen regulation to clean up our waterways. We will place the water companies under special measures. As a first step, Labour will ban self-monitoring by water companies. Instead, we will require water companies to install remote monitors on every outlet, with the result overseen by regulators. That way, we will know exactly what is being discharged into our waterways. Any illegal spill will be met with an immediate and severe fine—no more delays, no more appeals, and no more lenient fines that are cheaper than investing to upgrade crumbling infrastructure. Rogue water bosses who oversee repeated, severe and illegal sewage discharges will face personal criminal liability. And we will stop the Conservatives’ disgraceful collusion in this national scandal by reinstating the principle that the polluter pays.

Photo of Mike Amesbury Mike Amesbury Shadow Minister (Levelling Up, Housing, Communities and Local Government)

I welcome those strong interventions and regulations. One of the companies the shadow Minister is referring to is United Utilities, which made 27 sewage dumps—nearly 3,000 hours of sewage—in my constituency last year. Those are only the 27 that we know about. We need strong intervention and we need to get the referee on the pitch. Ironically, United Utilities is putting bills up by £110, so I welcome those measures.

Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs

My hon. Friend rightly expresses the anger his constituents feel. Their bills are going up to pay bonuses to water bosses who have allowed this situation to continue to deteriorate. As I said earlier, there is a proposal in the motion, which I hope Members of all parties might consider supporting, to deal with the situation and demonstrate to the chiefs of those organisations which are responsible for the sewage outpours that Parliament and the people of this country will not continue to accept what they are doing.

Photo of Munira Wilson Munira Wilson Liberal Democrat Spokesperson (Education)

The hon. Gentleman outlines very effectively all the failings of the water companies and of this Conservative Government to take action. Thames Water has been dumping billions of litres of raw sewage in the River Thames and there are hundreds of millions of litres of water leaks every single day. That has undermined trust in water companies among bill payers and our constituents. Does he agree with me that, when they have extremely controversial proposals in my constituency and in the constituency of my hon. Friend Sarah Olney to take water out of the river and replace it with treated sewage, there is a huge amount of distrust? Given the construction impacts they will cause in the area and the potential environmental impact on the river, how can people trust them when they give assurances about the safety of such schemes?

Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs

The hon. Lady makes a very important point very eloquently. She is a tireless campaigner on these issues and I am sure that many people who care about the state of our rivers will be grateful to her for leading on that work.

I am sure all Members will be concerned about this point as well. Despite some of the highest levels of illegal sewage discharges in history, water bosses awarded themselves nearly £14 million in bonuses between 2021-22. At the same time, they were planning to increase average household bills by £156. All that was signed off by a broken regulator and Conservative Ministers. That is an absolute abuse of consumers and Labour will stop it. Labour will give the water regulator the power to ban bonuses for water bosses until they have cleaned up their toxic filth.

The Conservative dogma that regulation is anti-business is economically illiterate. Fair regulation applied across a sector is pro-business and pro-growth, as well as being pro-nature in this instance. Businesses want certainty and predictability. If they are left to compete against others who undercut regulation and get away with it, we end up with a race to the bottom. Good businesses and investors need and deserve a level playing field, but this Conservative Government have distorted that. A regulator that is too weak to regulate leads to weak self-monitoring, cover-ups, financial corruption, and our waterways awash with stinking sewage.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater and West Somerset

I have been here for quite a long time, and the situation has been the same for the 23 years for which I have been a Member. I accept that things have got worse. What I suspect we need to do is take the main board of each water company and hold them accountable. South West Water, for instance, which serves Devon and Cornwall and the edge of the Minister’s constituency of Taunton Deane, covers up by using a sub-board which runs the company. It is the main board with which we should deal, and the same goes for Wessex Water and every other company that we need to go after. I agree with the hon. Gentleman that action must be taken, although the situation including bonuses has been the same for the past 23 years.

Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs

I am grateful for the hon. Gentleman’s recognition that the situation is indeed getting worse. That should stimulate all of us to find ways of taking action to protect water quality for all our constituents, who really do deserve better.

I was talking about uncertainty in the regulatory field. The current level of uncertainty does not attract much-needed investment in our water industry; on the contrary, it deters it.

Photo of Jim McMahon Jim McMahon Shadow Minister (Levelling Up, Housing, Communities and Local Government)

I congratulate my hon. Friend on the impact he is making on an important issue that affects almost every community in the country. I am glad that he has taken such a robust line on the regulator, because it is the elephant in the room. We have focused our fire on the Government because they have failed and on the water companies because they have taken money and failed, but the regulators have failed as well, because it was on their watch that this has been allowed to happen. In the midst of all that, it cannot be right for consumers to end up paying twice, first for the dividends that have already gone out of the door and then for putting the system right.

Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs

I am grateful for the work that my hon. Friend has led in exposing some of the same problems as my predecessor in this post. He clearly knows an awful lot about these issues, and he makes his point very well.

Let me move on to the broader issue of nature. The destruction of nature that this Government have encouraged is unacceptable. As a party, they increasingly position themselves against nature. On their watch, we now have one of the most nature-depleted countries in the world, yet they have rowed back on their net zero commitments. They have broken their promise to fund farmers fairly to maintain environmental schemes on their land; they have tried to weaken environmental standards relating to nutrient neutrality to allow building alongside estuaries where the increased pollution would tip habitats beyond the point of recovery while refusing to build where the environmental impact could more easily be mitigated; and now they are turning a blind eye while our rivers are turned into sewers.

Economic growth does not have to stand in opposition to protecting and restoring nature. The two must go hand in hand. Labour’s mission to make this country a clean energy superpower will create thousands of good, well-paid, secure jobs, and part of it is a national mission to restore nature, including our polluted waterways. It seems that the longer the Tories are in power, the more nature suffers. They have little concept of the pride that the British people take in our countryside, of its importance to our sense of who we are as a nation and to our sense of belonging.

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark

My hon. Friend is making an excellent speech. Were the British people not told by Minister after Minister in this Government that environmental standards would be enhanced and improved as a result of Brexit, and have they not been betrayed again by this shabby Administration?

Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs

My hon. Friend makes an accurate observation. People were promised one thing but the Government then tried to do the opposite.

Photo of John Hayes John Hayes Conservative, South Holland and The Deepings

I share the hon. Gentleman’s passion for wildlife. We need a diverse countryside of the kind that he describes and I make the case, as he does, for hedgerows, trees and so on. Among the things that blight the countryside, however, are onshore wind turbines, which kill bats and birds and which are anchored by hundreds of thousands of tonnes of concrete, and widespread onshore solar, which eats up agricultural land and turns the countryside into an industrial place. Would he oppose those things?

Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs

The right hon. Gentleman’s intervention started off well but it tailed off towards the end. If we can shift to a reliance on clean energy rather than on fossil fuels, we will support, enhance, protect and conserve nature, which is what we should all be seeking to do.

There can be no more graphic a metaphor for 14 years of Conservative failure than the human excrement now swilling through our waterways—the visible desecration of our countryside and the toxic legacy of Tory rule. It has often been the case in history that Labour has had to clean up the Tories’ mess, but rarely quite so literally. It is time to turn the page on 14 years of decline and to embrace a decade of national renewal with nature at its heart. That is why Labour has a plan to clean up our waterways by ending self-monitoring; introducing severe and automatic fines for illegal sewage dumping; criminal liability for water bosses who repeatedly and severely break the law; and no more bonuses for water bosses who profit from pollution. Conservative Ministers have sewage on their hands. This debate—and the vote that I hope follows—is a chance for them to show whose side they are on: the water companies or clean water. If they refuse, the next Labour Government will clean up their mess and restore pride in our rivers, our lakes and our seas.

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs 4:57, 5 December 2023

I would like to thank Steve Reed for raising this important issue. As I have said constantly, all sewage in our waterways is completely and utterly unacceptable. I am pleased to have this opportunity to put on record the huge strides that we have made to deliver clean water for customers and the environment. We are the party for nature. We are the party that brought forward the Environment Act 2021, although many of the measures in it were not supported by Opposition Members. It is a globally leading piece of legislation. If the hon. Gentleman went out on to the global stage, he would realise that we are revered for it, and we now have the whole framework in place to deliver what it states. There are many measures in it to tackle water.

I am genuinely proud to have instigated and driven through our plan for water, which was supported by hundreds of people. It had a huge amount of expertise put into it to deliver it, and we are delivering it. It sets out a genuinely holistic plan to deliver more investment, stronger regulation and tougher enforcement, and make no mistake, it is cross-party. I would like to make the hon. Gentleman an offer. Would he like me to give him a copy, because I am not sure that he has actually looked at it? I would be happy to do that after the debate.

Photo of Jesse Norman Jesse Norman Conservative, Hereford and South Herefordshire

My hon. Friend mentions the plan for water, but she will be aware that the previous Secretary of State came to Herefordshire, where she attended a roundtable in Hereford and promised that a plan for the River Wye would be brought to us by 15 September, three months after that meeting. We have yet to see it. I have to say, on behalf of the people of my county, that we are starting to run out of patience. When can we expect this plan to come through?

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I am well aware that the previous Secretary of State came to the River Wye, and my right hon. Friend Jesse Norman will know that I came to the River Wye some time before her visit—he could not make my visit—so I have some knowledge of the area, and I understand his concerns. The action plan is under way. As my right hon. Friend knows, we have had a few changes but the new water Minister, my hon. Friend Robbie Moore, is here, and the action plan is very much on the cards. I thank the people who did all that work on the Wye, because it is not just about water and sewage; it is a very complicated issue that also brings in farming and farmers along the river, as my right hon. Friend is well aware from his involvement.

Whatever the Labour party might say, many of the problems that were vociferously raised by the shadow Minister actually started on Labour’s watch. We are where we are because of Labour’s failure to do anything about it. There was virtually no monitoring. In fact, it was Labour that allowed the water companies’ self-monitoring that the shadow Minister criticises. It was his party that started the self-monitoring.

To set the record straight, I remind the shadow Minister that the Labour Government were given legal notice by the EU on sewage discharges from overflows in Whitburn. Labour certainly did not have a glowing record when it had its opportunity.

Photo of Mike Amesbury Mike Amesbury Shadow Minister (Levelling Up, Housing, Communities and Local Government)

A whistleblower made serious allegations against United Utilities on “Panorama”, and the Minister mentioned monitoring. It was clearly gaming the system. What robust intervention has she so far made with United Utilities, which operates in my constituency and beyond?

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

The hon. Gentleman is right to be concerned. As I go through my speech, he will hear all the measures that we have put in place for all the water companies, not just United Utilities.

As I said at the beginning, I want to be clear that the current volume of sewage discharged by water companies is utterly unacceptable. They must act urgently to improve their performance so that they can meet both Government and public expectations, but it is because of the monitoring that this Government required the water companies to put in place that we now know what is happening and the scale of the challenge that we face.

We have upped the pressure on the water companies so that, by the end of this year, 100% of all storm sewage overflows will be monitored. We are taking the most ambitious action in water company history to tackle sewage pollution, including using new powers and new responsibilities in the landmark Environment Act 2021, which I was proud to take through Parliament—many of the shadow Ministers obviously engaged with the Act’s passage—and there is also the additional £60 billion storm sewage overflow discharge reduction plan.

Despite saying that they care about our precious water, many Opposition Members did not vote for all these measures so that the people of this country—including you and me, Mr Deputy Speaker—can have the wonderful water and the beautiful environment that we deserve. It is through our measures that we are now holding water companies to account, in a way that has never been seen before, with more investment, stronger regulation and tougher enforcement. We will continue to go further in holding the industry accountable for its actions.

Photo of Kerry McCarthy Kerry McCarthy Shadow Minister (Climate Change and Net Zero)

The Minister knows perfectly well that we opposed some of these measures during the passage of the Environment Bill because we did not think it was strong enough. The Bill was very weak in places, hence our opposition. Given that the Minister’s constituents are covered by Wessex Water, does she think it is right that the company is asking its customers to pay an extra £150 a year towards funding work on infrastructure, when the chief executive took home pay of £982,000 in 2021-22? I do not think my constituents, who are also customers of Wessex Water, should have to pay that extra money. Does she?

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

That is an important point, and it is why we have made so many changes to the regulator—I will go into detail in a minute. It is quite clear that customers will not be paying for water company bonuses. Ofwat and its board now have very strong powers to oversee all of this.

I am going to go through the points one by one. I will start with more investment. We are ensuring that our regulators have the investment and the powers they need, and we are ensuring that the water companies deliver the infrastructure improvements that we urgently require. Since privatisation we have unlocked over £215 billion of investment in England, with £7.1 billion in environmental improvements by water companies over the period 2020 to 2025. It includes £3.1 billion in storm overflow improvements; and £1.9 billion of that is for the incredible Thames tideway tunnel, which is on track to transform tackling sewage pollution for the people of London. I am sure that our Liberal Democrats present will welcome that, because it is a game-changing project.

In addition, over 800 storm overflow improvements countrywide have been set in motion. They are under way and will be completed by 2025. It is because of all our monitoring that we were able to pinpoint where all this work needs to take place.

Photo of Seema Malhotra Seema Malhotra Shadow Minister (Education)

Could the Minister perhaps say a bit more about consumer protection? We all want this problem to be dealt with, and she is laying out some of the actions that she is saying the Government will take forward, but with my constituents having seen a £175 increase and expecting that to continue, there is a real question about consumer fairness and what customers are actually paying for. It would be helpful to know what discussions she has had with water bosses about their increased bills and what they are going towards.

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

That is a very sensible and important point. That is why the price review process is under way, and all the water company plans are being forensically analysed, with requirements that we have put on them to deliver all this infrastructure, but also always to be mindful of the costs to the bill payer. We have to get investors in to invest in this, but we also have to be mindful of what goes on the bill, which is essential, and that is what Ofwat will be considering. Members will be hearing a lot more about those price plans shortly. There is also a system for vulnerable customers. We have upped the number of customers that water companies have to help if they are struggling with their bills, so there is a clear plan for that.

Our storm overflows discharge reduction plan goes even further. It requires water companies to deliver the largest infrastructure programme in water company history, amounting to £60 billion of investment over 25 years.

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I will carry on for a minute, because I know that you, Mr Deputy Speaker, will be urging me to speed up. For information, I wanted to say that in a recent High Court judgment it was found that our storm sewage overflows discharge reduction plan actually goes over and above the requirements of existing regulation. It would be nice if the Opposition recognised that, because it was specifically highlighted.

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark

Will the right hon. Lady give way on that point?

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I am going to carry on for a bit.

Ensuring that our regulators are fit for purpose, to enforce our new regime, is absolutely crucial. With that in mind, we have increased the Environment Agency’s overall grant-in-aid funding by over 40% and capital funding by 80% since 2010. We have also provided an extra £2.2 million per year specifically for water company enforcement activity. In May we did even more: we provided £11.3 million of funding increase to Ofwat to treble its enforcement activity, because both EA and Ofwat have enforcement powers. In June, in recognition of the urgency of action, Ofwat approved a further £2.2 billion of accelerated infrastructure, which included £1.7 billion of investment, in reducing sewage discharges, including a major project to reduce sewage discharges in Lake Windermere.

The shadow Minister mentioned automatic fines. That idea would backfire, because if the regulators found evidence of criminal misdemeanours, it would prevent them from going through the courts and we would effectively end up with even higher fines. So the system of automatic fines would not work, but we have just brought in our unlimited penalties for the environment, so the regulators could use that option, but we still need the option for them to go to the courts if necessary.

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I will talk about stronger regulation now. We are bringing in even tougher regulations than ever before to hold water companies to account. In the summer, Ofwat confirmed new plans to ensure that customers no longer fund executive bonus payments where companies have not met Ofwat’s expectation on environmental performance. Using new powers granted to Ofwat by this Government in the landmark Environment Act 2021, Ofwat announced in March that it will take enforcement action against water companies that do not link dividend payments to environmental performance. As I said, we have also legislated to bring in unlimited penalties on water companies that breach their environmental permits. The changes will provide the Environment Agency with the tools it needs to hold water companies to account.

Photo of Claire Hanna Claire Hanna Social Democratic and Labour Party, Belfast South

The Minister may be aware of the evolving environmental catastrophe in Lough Neagh, which is the largest lake in these islands and a key biodiversity asset for Northern Ireland. It is dying in front of our eyes because of blue-green algal bloom related to agricultural run-off and sewage discharge from Northern Ireland Water, which is entirely Government owned. In that context, does she agree with me that Northern Ireland desperately needs an independent environment agency, to try to reconcile the competing priorities of the Department of Agriculture, Environment and Rural AffairsDEFRA’s sister Department in Northern Ireland—which is responsible for both swelling agricultural assets and protecting the environment? Clearly, in this context the environment is being failed.

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I have heard about this incident. I refer DAERA to our plans on water to see how we are tackling such issues. Farming is a big cause of some of the pollution. We have launched our slurry infrastructure grant and a range of measures to work with farmers to cut down that pollution, so lessons could be shared.

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I just wanted to say that we want to continue to drive down nutrient pollution from the water sector, which is why we have set a legally binding target to reduce phosphorus loads from wastewater treatment—

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark

The hon. Gentleman might be interested in this. We have set targets to reduce phosphorus loads from wastewater treatment works by 80% by 2038, relative to a 2020 baseline. In areas where protected habitat sites are particularly impacted by nutrient pollution, which I am sure interests the hon. Gentleman, we are going even further. In the Levelling-up and Regeneration Act 2023, we placed a new requirement on water companies to upgrade wastewater treatment works in designated areas to the highest technically achievable standards by April 2030.

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark

It seems apt that this is debate No. 2 this afternoon. If the Minister has so much faith in the measures she is talking about, why was she absent last night from the vote on new clause 10 in the Victims and Prisoners Bill on the sewage illness victim compensation scheme, despite voting just 15 minutes later?

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

We have such a strong plan and it will be fully operational. I completely support the Government with the line they took last night. I am lined up with what we were dealing with last night and I support the Government position. I was dealing with some particularly urgent business last night. In my view, the new clause was superfluous because we already have powers, including those on criminal conduct, for people to act if they have been affected by pollution. They can already seek compensation when there is evidence of personal injury, loss or damage.

To get back to my speech, I am now on the bit about tougher enforcement. We recognise concerns about enforcement. We are working closely with Ofwat and the new leadership at the Environment Agency to ensure that regulators are holding the water industry to the highest possible standards. That includes bringing fines against water companies that do not comply with their permits and publishing the environmental performance assessment of water companies in England, giving a clear picture of company performance. Where that is insufficient, action will be and is being taken.

I had been meeting all the lagging water companies highlighted through that assessment to challenge them on their performance, and I am pleased that the new water Minister, my hon. Friend the Member for Keighley, is continuing to do that. I believe he met Yorkshire Water yesterday and South East Water last night, so we are continuing our unstinting drive with the water companies.

The regulator has launched the largest criminal and civil investigations in water company history into sewage discharges at more than 2,200 treatment works, following new data that has come to light as a result of increased monitoring at waste water treatment works. We have taken robust enforcement action against illegal breaches of storm overflow permits. Since 2015, the Environment Agency has concluded 59 prosecutions against water and sewage companies, securing fines of more than £150 million.

I cannot miss the opportunity to say that in Labour-run Wales sewage discharges are double what they are in England, so it is hard to take any lessons from the Opposition. They have the opportunity to step in and sort that out but they have not taken it.

The Government have launched the revolutionary storm overflows reduction plan, which prioritises action on the overflows that cause the most harm, to make the biggest difference as quickly as possible. Our strict targets will see the toughest ever crackdown on sewage spills and, as I have already stated, will require water companies to deliver that huge infrastructure programme worth £60 billion. Our plan will protect biodiversity, the ecology of our rivers and seas, and the public health of water users for generations to come.

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

No, because I am moving on to bonuses and dividends.

The Government have taken unprecedented measures to bring into balance the remuneration of water company executives. This summer, Ofwat confirmed new plans to ensure that customers no longer fund executive bonus payments if companies have not met Ofwat’s expectations on environmental performance. Ofwat will regularly review executive bonus payments and, when companies do not meet expectations, step in to ensure that customers do not pick up the bill. That answers the point made earlier by Kerry McCarthy. There is no need for the Labour party’s proposals, because we are already doing really strong work on bonuses and dividends.

I want to be really clear that bill payers come first. For the 2022-23 period, no water and sewage company in England and Wales is paying a chief executive officer bonus out of customer money, while half of CEOs are taking no bonus whatsoever. This is the first time that has ever happened in the history of the water industry, reflecting the industry’s recognition that the public expect better.

In March 2023, Ofwat announced new measures on dividends that will enable it to take enforcement action against companies that do not link dividend payments to performance. I remind the House that in each year since privatisation, investment has actually been much greater than the dividends paid out.

I am going to conclude—

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I have given way enough; we want to get on and hear other speakers.

This Government will leave no stone unturned in tackling all aspects of water pollution and poor water company performance. That is why we have introduced the most comprehensive costed plan for water that delivers more investment, stronger regulation and tougher enforcement. By contrast—

Photo of Rebecca Pow Rebecca Pow The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

The hon. Gentleman has had his chance.

By contrast, the official Opposition and the Liberal Democrat party do not have credible plans to reduce discharges—we cannot just switch off storm overflows overnight, as some suggest—and their mixed bag of proposals would actually add hundreds pounds to customers’ bills. That addresses the point made by Seema Malhotra. Labour’s proposals would involve the digging up of enough pipes to go two and a half times around the globe. [Interruption.] That is actually correct.

As I said, I am really happy to share our plan for water with the shadow Secretary of State so that the Opposition can see exactly what is in place—our comprehensive, costed plan—and see that we are delivering now.

Photo of Grahame Morris Grahame Morris Labour, Easington 5:19, 5 December 2023

I am really pleased to speak in a very important debate for me and my constituents. The east Durham coastline is a huge asset to the region and to the country. From Seaham to Blackhall, I represent the most stunning coastline in Great Britain. We have amazing beaches, with an abundance of sea glass, sand dunes and limestone caves. Our seas are home to a formidable group of open water swimmers, braving the North sea at all times of the year. Our marina at Seaham provides access to various water sports, including canoeing, paddleboarding and windsurfing. Crimdon Dene visitor hub and café is encouraging more people to visit and enjoy our east Durham coastline.

On the sea front and the clifftops of east Durham, there is also an array of art, iconic locations and national heritage. Seaham has a newly decommissioned field gun, a further attraction, and is home to Tommy, a Ray Lonsdale world war one sculpture, an artwork that was voted the Sky Arts No. 1 public artwork and attracts a large number of people to our coastline. From Easington, the site of the former colliery, the views stretch from County Durham to North Yorkshire.

A nature reserve sits at the centre of the once thriving industrial heart of the community, and it is also the site of a memorial garden that honours the 83 miners and rescuers who lost their lives in the terrible disaster at Easington colliery in 1951. Blackhall is another site of special scientific interest. The wildflowers and grass of the clifftops offer peaceful views, with easy access to Blackhall’s beach caves. The coastline is also home to a unique music and film heritage. My constituency was the backdrop to the iconic “Who’s Next” album cover and the location for a number of films, including “Get Carter”, “Billy Elliot” and, most recently, “The Old Oak”.

That is why I am passionate about protecting our precious coastline. Industrial spoil from coal mining once blighted it and the beaches were blackened with coal dust and abandoned colliery infrastructure, but we reclaimed the coastline for nature. The “Turning The Tide” project removed industrial pollution from the east Durham coastline, and the improvement has made the environment more enjoyable for everyone.

Coal spoil was once a visible scar on the environment, but water pollution represents a more insidious and more discreet risk to our health, welfare and environment. I was interested by the Minister’s comments about personal injury, because water pollution hit the headlines recently when we had the ironman world triathlon championship series at Sunderland. There are three elements to the event, cycling, running and swimming, and after the swimming element, 88 of the athletes fell ill from swimming in waters contaminated with E. coli. I do not know what redress there was for personal injury, but we know the source of the problem.

Northumbrian Water, once a publicly owned authority but now under Chinese ownership, pollutes our seas whenever it rains. I looked yesterday at the Safer Seas & Rivers Service app, which I recommend to all hon. Members; we have had some terrible weather in the north-east, and as the snow thawed Northumbrian Water was polluting our seas at three sewage overflows in my constituency. That is just one of 164 incidents of Northumbrian Water dumping raw sewage in my constituency.

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark

My hon. Friend is making a powerful point about degradation. The Minister seemed to suggest that her Government were revered for their work on this issue. Do his constituents share my constituents’ view that, on the contrary, this is a Government of the effluent for the effluent?

Photo of Grahame Morris Grahame Morris Labour, Easington

What an excellent intervention, if I may say so. The suggestion that things are getting better is not the experience of my constituents—and as for the Minister’s commitment to addressing the issues, my feeling is that she is simply going through the motions.

We need a solution. I am an old-school socialist. Clean water, rivers and seas are very important, and private water companies have failed in their duty of care. Those companies enjoy a privileged position: no competition, a weak regulator and a compliant Government. I want to end those private monopolies—we should control and run water in the national interest—but I am a realist: the Tories and my own party do not have the appetite for nationalisation, so I will propose an alternative.

Private water companies have extracted huge dividends since privatisation, which they have secured through higher bills and a failure to invest, and by ramping up debt. In December 2022, The Guardian reported that water companies have paid £69.5 billion in dividends. Over the same period, they have racked up £54 billion in debts. Companies promise to invest in infrastructure, but only by passing on higher costs to consumers. Why do we accept water companies ripping us off, polluting our waters and telling us to pay to clean up their mess? The Government must take control of the situation.

I support the following: the Government must block all future dividend payments until water companies meet set standards including clean water targets, debt targets, investment targets and low consumer bills; we need a zero dumping policy—sewage overflows must be an exception, not the normal practice; we need a sustainable water industry, which means an end to the practice of borrowing in order to pay dividends; and new and modern infrastructure must be prioritised before dividends.

The promise of privatisation is always better service and lower costs, but we have seen worse service and higher bills every time. Private companies are driven by profits. The proposals that I have set out are a means of delivering the public interest. Dividends and profits should be awarded only when private companies deliver the promised services. If we cannot spend in the next Parliament, we need to regulate and reform. If privatised water is to remain, we must ensure that it works and benefits the people we all represent.

Photo of Steve Double Steve Double Conservative, St Austell and Newquay 5:26, 5 December 2023

It is a real pleasure for me to take part in this debate. I was born and raised in the heart of Cornwall, have lived there my whole life, and have always enjoyed the sea. Members who follow me on any my private social media platforms will know that I am found in, on or beside the sea at just about every possible opportunity. Therefore, I have taken a very keen interest in the whole issue of water quality, particularly bathing water and sewage discharge, throughout my life, long before I was first elected to this House.

We have to start by saying that this is not a new issue. Let us remember that Surfers Against Sewage was started in 1990 specifically to raise awareness about it and deal with it. At that time, less than 25% of UK bathing waters were at a minimum acceptable standard for bathing, whereas there is now only one beach in my constituency that does not meet that standard. I am sorry, but pretending that things are worse than they have ever been is absolute nonsense. We have seen incredible progress on this issue over many years.

I remember very clearly that the Labour Government did absolutely nothing in 13 years to address the issue—zero. When we came into office in 2015, we were the first ever Government to take this matter seriously and start to address it.

Photo of Jerome Mayhew Jerome Mayhew Conservative, Broadland

What my hon. Friend has just said is not actually accurate. Labour did not just do nothing; in 2006, it cut a deal with the water companies to agree self-assessment on their environmental performance. Does he agree that that is worse than nothing?

Photo of Steve Double Steve Double Conservative, St Austell and Newquay

My hon. Friend makes a good point. Labour actually made the situation worse—so much so that in 2009, the Labour Government was taken to court by the EU for failing to deal with the issue—so I am sorry, but we will take no lectures whatsoever from the Opposition Front Benchers about dealing with it. We are the first Government who have ever taken this matter seriously and taken action to start addressing it. We do not even have to think back in history, because we have a living example right before us today: in the one part of the UK where the Labour party is in government, the situation is far worse than in England. Wales is responsible for 25% of sewage discharges for the whole of England and Wales, yet it has only 5% of the population, so again, we will take no lectures from the Opposition.

It was this Government who first introduced substantial monitoring of storm overflows. When Labour left office, 7% of storm overflows were monitored; that figure is now 91%, and it will reach 100% in the next few weeks. I place on record my thanks—and, I believe, our thanks—to one of my Cornish colleagues, my right hon. Friend George Eustice, who started the process of dealing with this issue when he came into DEFRA. I do not believe we would be in the position we are in today with monitoring, or with any of the other measures, if he had not initiated that work when he first became a DEFRA Minister.

Photo of Jerome Mayhew Jerome Mayhew Conservative, Broadland

The Liberal Democrats often claim that they are very interested in sewage, yet they fail to mention that the water Minister between 2013 and 2015 was the former Member for North Cornwall, a Liberal Democrat. What did he do to improve the situation? Nothing.

Photo of Steve Double Steve Double Conservative, St Austell and Newquay

My hon. Friend makes an excellent point. It was not until 2015 that the Government started to take this issue seriously and take action; it did not even happen under the coalition Government. Therefore, all the crowing from the Liberal Democrats that they regard this as a really important issue is nonsense, because when they were in government, they initiated nothing to address it.

It is clear that there is now far greater public awareness and concern about this issue, and it is much higher up the political agenda than ever before, and rightly so. Some of us, particularly in Cornwall, have been pushing for that to be the case for a very long time, so I welcome the fact that sewage discharges are now a much bigger priority and there is much greater public awareness of them. However, again, let us be frank: people are only aware of what is going on because of the increased monitoring that we have introduced. For 13 years under Labour, all of this sewage was being discharged into the sea, but no one knew about it because there was no monitoring. It is only because of the increase in monitoring over the past few years that we know what is going on.

The first step towards dealing with an issue is to know what is happening. The first step that the Government took was to introduce monitoring, and we now have the data that enables us to hold the water companies to account. Before we had that monitoring and that data, we could not hold them to account because we did not know what was going on; now, we are holding them to account. Since 2015, there have been 58 prosecutions of water companies for failing to fulfil their obligations, and £141 million has been secured in fines. That money is being invested in environmental improvements and in reducing pollution. We must always remember that under this Government, it is the water companies that get taken to court; under Labour, it is the Government who get taken to court.

We now have a plan to reduce storm overflows, which I had the great privilege of launching during my brief time as water Minister. I acknowledge that my hon. Friend Rebecca Pow put in most of the legwork to produce that plan; I just had the glory moment of crossing the t’s, dotting the i’s and launching it. We now have a plan to invest £56 billion in upgrading the infrastructure to reduce sewage discharges, but we have to be honest with the British public. We hear comments from Opposition Members like, “Let’s stop sewage immediately; we could do it straightaway,” but that is nonsense. We are talking about Victorian infrastructure that has been in place for over 100 years: it is going to take an awful lot of money and an awful lot of time to upgrade and improve that infrastructure to address this issue. However, we now have a plan to make sure that it will happen, and we can hold the water companies to account to ensure that they make that investment and deliver on that plan.

There is also a myth—I am sure Labour Members will mention it today—that somehow Conservative Members voted to allow water companies to continue to discharge sewage. It is a lie: it is not the truth. Actually, we were the ones who brought forward the Environment Act 2021, which contains all the measures that enable us to hold the water companies to account. The Opposition did not support the Act so, if anything, they were the ones who tried to stop us taking action against the water companies, and we were the ones who voted for the Act and all the measures it contains. We need to be absolutely clear that we are the ones taking action and we are the ones taking this matter seriously.

The motion mentions directors’ bonuses. It is absolutely right that directors of water companies who fail to keep their obligations when it comes to sewage discharge and other forms of pollution should not be rewarded because of that, but we are already doing it. Ofwat has confirmed that it has the power to review both dividend payments and bonuses where water companies fail to keep to their environmental obligations. I know it is difficult for Labour Members, because they probably sit there looking at all the things we are doing and thinking, “Why on earth didn’t we do this when we were in government for 13 years?” I know it must be difficult for them, because they did absolutely nothing. They made things worse, not better, and it is this Government who are delivering on this issue.

I take this issue seriously. I have taken this issue seriously for many years—long before I came to this House—and it is right that the public are now much more aware of how important it is, but let us get real: we are dealing with it. We are taking the necessary steps to reduce the amount of sewage that will be discharged, and I welcome that. I believe that this Government will continue to deliver on our plan, and we will see things continue to improve in the years ahead.

Photo of Andrew Slaughter Andrew Slaughter Labour, Hammersmith 5:36, 5 December 2023

I will try to do better than that.

I want to talk for a few minutes about Thames Water, which has the job of supplying water and sewerage services to about 17 million people in London and the south-east. I will speak, first, about my constituents’ experience of Thames and, secondly, about the company itself and the people who run it.

Last night, as is often the case, my constituents were on social media talking about Thames, because a large number of people in West Kensington had been cut off without water for a day or so. This was the exchange:

“How long until we have water as it has been a day without supplies for many and people need drinking water”?

The answer from Thames was:

“Sorry for that. I have checked with my system there no timeframe mentioned in this issue. This is an unplanned event our team has hardly working this issue you are water is back to normal.”

The exchange went on:

“So will they give us bottles of drinking water please”?

The answer from Thames was:

“I have checked with my system right now there is no bottle water available. Your water is back to soon normal our team has working hardly this issue.”

That is typical, I am afraid, of its communications, and of the contempt, frankly, with which Thames treats its customers.

About a month ago, the whole of Shepherd’s Bush—that is tens of thousands of people in East Acton—did not have water for three days. There was no communication from Thames whatsoever. I was on the phone to it the whole weekend. I was getting reports, I visited where the leaks and the breaks were, and I put it on social media. I believe that is Thames’s job, but it does not do that. It simply does not do it, for whatever reason—whether it is unable to or it just does not care, I do not know. These massive breaks in pipes happen all the time. I think I know why they happen: it is because Thames does not maintain its pipes, and the pressure means that they burst. We often get a number of bursts at one time, and then it can spend up to a month or more repairing them, which involves digging up the road and shutting off roads. In that way, it is a law unto itself.

That is equally the case with sewer flooding. Two and a half years ago, there was heavy rain in London, and hundreds of my constituents’ homes, basements and ground floors were flooded with raw sewage. For some of those properties, it was the third or fourth time it had happened. When it happened back in the 2000s, there was the Counters Creek flood alleviation scheme. It cost several hundred million pounds and was going to relieve sewer flooding in west London. I spent many hours in many meetings talking to Thames Water and constituents about how it was going to relieve the problem. Frankly, I cannot think of a much worse problem someone could have than to live with the risk of their house being flooded with raw sewage, whether it comes through the front door, up through the toilet, or whatever.

The Counters Creek flood alleviation scheme was comprehensive, but at that point, Thames said that it was not going to do it, and that instead it would fit non-return valves or FLIPs—flooding local improvement processes. Non-return valves are simply valves that stop the sewage going back up a pipe when there is heavy rain. FLIPs are slightly more sophisticated and are pumps that are buried under the roadway. They cost a fraction of the cost of a major renovation scheme and would therefore have saved Thames Water a considerable amount of money. Ten years on, and two and a half years after the last significant floods, very few of those things have been fitted. When residents apply for them, the answer is that they are low risk, even though some of the people who are at a low risk have had their homes flooded more than once. To my mind, that is no more than a cost-saving exercise and doing the bare minimum.

Typically, floods tend to happen in the summer, but they can happen in winter. When we have the next floods—as we undoubtedly will—perhaps the same houses will flood again, or perhaps those houses will have been lucky enough to get a FLIP or a non-return valve, in which case the neighbouring properties that do not have them will be flooded with even more sewage. Does the Minister really think that Thames Water is a responsible public utility when it acts in such a way?

The Minister mentioned Tideway. I agree that that is a good project, and it has been broadly well handled, despite being built during the covid period. It is mainly on time and to budget, and it will relieve about 95% of the raw sewage going into the Thames. One of the worst outflows is at Hammersmith pumping station, and I will be delighted if we have no more spouts of raw sewage going up next to Hammersmith bridge, as we did a couple of years ago. It was not Thames Water who built that; it was a separate company and not part of Thames Water.

As I have said, Thames Water does not appear to be able to run a tap, to flush a toilet or to manage its own finances. The company is partly owned by the Governments of China and Abu Dhabi. Last summer it summarily got rid of its chief executive, despite paying her £1.5 million a year. The company announced with a fanfare that it had managed to obtain £500 million of new investment from its shareholders, but according to the Financial Times last week—this is reported again today—the actual status of that money may well be a loan rather than equity or new investment. That, I hope, is something the Government will want to look into.

There have been a series of asset-stripping, incompetent, careless owners of Thames Water during the period of privatisation, the worst of which was probably Macquarie, which owned it for 11 years and paid out an estimated £3 billion in dividends. Its senior executives took huge payments in the tens of million over that time, and are now living a life of luxury as a consequence. That is the legacy of privatisation and this Government’s record on private utilities.

Photo of Jerome Mayhew Jerome Mayhew Conservative, Broadland

The hon. Gentleman is right: in my view there was a failure of regulation in the noughties, because during that period the financial engineering took place to load those businesses with debt. Does he accept that that manipulation of debt was completed by 2009? If he does, what does he have to the say about the Labour Government in power at the time? Were they asleep at the wheel?

Photo of Andrew Slaughter Andrew Slaughter Labour, Hammersmith

I accept that the debt has been loaded and that the gearing is completely out of proportion. Under Macquarie, Thames Water’s debt went from £4 billion to £10 billion, but it is now at £14 billion under the current owners. I do not know whether the hon. Gentleman was listening to the radio or has read the media this morning, but Thames appears to be asking for a 40% rise in bills. It has £14 billion-worth of debt, and according to press reports, it might run out of money by next April. That would be the second scare within a year. This is a company that almost has a licence to print money. It has 17 million customers, all paying their bills every year. Its job is obviously not straightforward, but it is not the most difficult job in the world. It cannot perform any part of that function well, and it cannot run its own company well, and that is the parlous state into which it has descended. I therefore understand that the Environment, Food and Rural Affairs Committee has called Thames Water before it tomorrow to answer some questions.

If the Select Committee can do that, what are the Government doing? I heard an extraordinarily wittering, complacent speech from the Minister Rebecca Pow just now. There was no grasp of the risks. A major company could go under, with a failure to supply a basic service. What more basic service is there than the supply of water and sewerage services to a large part of the population in this country? There was no understanding of the risks or what the remedies need to be.

This is another area where this Government have failed completely. It is their job, which I do not believe they will do in the small amount of time they have left, to take this issue seriously. They will have to, because otherwise my constituents and those in London and the south-east will not be able to have any realistic purveyor of water and sewerage services going forward. I hope that when the Minister Robbie Moore winds up, he shows some awareness of those needs.

Several hon. Members:

rose—

Photo of Roger Gale Roger Gale Deputy Speaker and Chairman of Ways and Means

order. A significant number of Members still wish to participate. I will not put a time limit on at present, but it would be helpful if Members could keep their contributions to about seven minutes.

Photo of Ruth Cadbury Ruth Cadbury Shadow Minister (International Trade), Shadow Minister (Justice) 5:47, 5 December 2023

My constituents are not only bill payers and users of Thames Water, but they live with its decades-long failure to plan and invest. The River Thames flows alongside Chiswick, Brentford and Isleworth, where we walk, kayak, row and paddleboard. Too often, the Thames is polluted with dilute sewage just about every time it rains. Mogden sewage treatment works, covering 55 acres, sits in my constituency. For decades, Mogden has been a regular source of pungent sewage smells and a virulent subspecies of mosquito.

In February 2020, the streets and parks of Isleworth and the pristine Duke of Northumberland’s river was flooded with raw—not even dilute—sewage, because the main sewage intake into Mogden backed up and punched a hole through into the river. That was a direct result of maintenance failure and that issue not appearing on the risk assessment register. This debate matters to my constituents.

In October 2020, 2 billion litres of dilute sewage was discharged into the River Thames at Isleworth Ait over just two days. That was two thirds of the total discharges in 2020. In 2022, that same sewer storm outflow spilled 20 times for a total of 164 hours, discharging again into the River Thames. Just across the river at Petersham, another outfall regularly discharges. All of that is 10 years after Mogden sewage treatment works had its treatment capacity almost doubled.

I am struggling to find any evidence of any fines that Thames Water has received for the discharges I have just described. That is because they are planned. They are permitted discharges. The discharges of which we are notified are the only ones we know about, because, as the BBC “Panorama” investigation found, water companies appear to be covering up illegal sewage discharges, making sewage pollution disappear from official figures.

The water companies not only process our sewage and storm run-off, but supply fresh water. As other Members have already said, however, too much of that fresh water is wasted through pipe leaks. After too many water main bursts flooded shops and homes, we had, as my hon. Friend Andy Slaughter described, a programme to replace the Victorian fresh water pipes across the Thames Water area, but it seems to have stopped and we are just supposed to wait until the next burst happens. There is so much more that Thames Water could be doing to stop the leakages.

The overall picture of our water situation in the Thames Water area is a failure of oversight—a failure to upgrade the water and sewage infrastructure continually as London’s population grows, and as drought and heavy rain become regular aspects of our weather. For over 20 years—first as a councillor, and as an MP since 2015—I have been pressuring Thames Water to take action, as have the Mogden Residents’ Action Group, Hounslow London Borough Council and other residents. As a result of a legal challenge by residents, Thames Water was forced to increase the capacity of the sewage treatment works, to improve its reporting and to do continuous mosquito eradication.

Thames Water has also done some other work. We have had to put up with recent roadworks locally, because it has now installed a pipe to pump excess methane into the main gas grid, which is to be welcomed. We have had the multibillion-pound tideway project to take sewage out of the Thames, but it does not benefit those of us who live upstream of Hammersmith, so we are now faced with another expensive tunnelling project: the Teddington direct river abstraction scheme, which will address not high rainfall periods but periods of drought.

The Teddington DRA is designed to take millions of litres of water from the Thames, pump it across London to the Lee valley, and then replace that water with treated effluent from Mogden. That means a new pipeline and access shafts, so we are going to have a building site the size of half a football pitch on the Ivybridge estate, a low-income council estate in my constituency. The project will involve tunnelling beneath homes. It will also potentially impact on biodiversity in the River Thames and on riverside walks, and impact on river users as well. Are there really no alternatives to this three-year construction project across my constituency and those neighbouring it? The Environment Agency certainly raised doubts about the scheme when it wrote to Thames Water in March this year. The Teddington DRA will save only a 10th of the 630 million litres lost per day through leaks.

What are the rewards for this managed incompetence? Thames Water’s chief executive, Sarah Bentley, received a £496,000 pay-out last year. At least she had the good grace this year to say that it

“just did not feel like the right thing to take performance-related pay this year.”

I support the Opposition’s motion calling on the Government to enable Ofwat to block company bosses’ bonuses where high levels of sewage are being pumped into rivers; to end self-monitoring and force all companies to monitor every single water outlet; to ensure that water bosses face personal criminal liability for extreme and persistent lawbreaking: and to introduce severe and automatic fines for illegal discharges that bosses cannot ignore. We should not be dependent on whistleblowers to find out about failures. With a boost in the powers of the water regulator, water bosses who fail to meet high environmental standards on sewage pollution must be met with significant sanctions to ensure that they cannot profit from damaging the environment.

Photo of Jerome Mayhew Jerome Mayhew Conservative, Broadland

I am grateful to the hon. Lady for giving way and apologise more generally for jumping up and down like a jack-in-the-box. Is she aware of Ofwat’s press release of 29 June entitled “Ofwat delivers decision on executive pay”? In that, it says that it has recently announced

“new powers that will enable it to stop the payment of dividends” directly and in full if a company does not meet its performance targets, including environmental targets. It goes on to say:

“In line with the new guidance”,

which it published that day,

“Ofwat expects water company remuneration committees to take full account of performance for customers and the environment”,

and that, if they do not, Ofwat will intervene on every single basis. Does she not accept that the powers are already in place and being used?

Photo of Ruth Cadbury Ruth Cadbury Shadow Minister (International Trade), Shadow Minister (Justice)

I would like to see them—I find that Ofwat is just too powerless. On dividends, Thames Water has not paid them for five years—so it keeps telling me—but that did not stop it until this year paying its senior executives very high dividends.

Why should my hard-pressed constituents face an average increase of £39 in their water bills? They have lost trust in Thames Water after years and years of scandal, putting up with smells, mosquitoes, building works, flooding and sewage through their streets and parks. Having met and talked to Thames Water for almost 20 years as a councillor and an MP, it is clear to me that it still has a lot to do to clean up its act. Bills are rising, service standards remain poor, and we continue to see raw sewage being pumped into the Thames.

Several hon. Members:

rose—

Photo of Roger Gale Roger Gale Deputy Speaker and Chairman of Ways and Means

Order. I have looked at the clock again. After the next speaker, I will have to put a six-minute time limit on speeches.

Photo of Simon Lightwood Simon Lightwood Shadow Minister (Transport) 5:57, 5 December 2023

Like every MP across the House, I receive emails and postcards every week from constituents about the state of our environment, our nature and our planet. It is clear why our communities care so much about this: we are one of the most nature-depleted countries in the world and we are living in a dirty water emergency. The two main rivers in the Wakefield district, the River Calder and the River Aire, are the second and third most polluted rivers in the country. Last year, there were 1,316 discharges of raw sewage into Wakefield’s rivers and waterways, totalling 5,816 hours—the equivalent of eight months non-stop. It is no surprise that that is happening under the Tories’ watch. The Government see action on nature and pollution as something they must do rather than something they want to do.

This is not the first Opposition day debate where Labour has called for tougher action on polluters— but, time after time, the Conservatives block it. We have seen the Environment Agency’s budget cut, leading to less monitoring and enforcement of the law. We have seen the Office for Environmental Protection launch an investigation into whether the Government and the water companies may have broken the law over sewage discharges, and we have seen mealy-mouthed statements and weak plans from a Conservative Government in denial. Labour is clear that the polluters should pay.

Earlier this year, we saw water companies asking for more money from customers to fix the problem. With a £111 increase for constituents in Yorkshire, it is no wonder that they faced such a backlash. If companies do not improve, the money should come from dividends going to shareholders, not from increasing people’s bills. Those bosses who continue to break the rules repeatedly should face professional and personal sanctions for their behaviour. The soft-touch approach has to end. To allow us to get the information we need about the sewage being pumped into our lakes and rivers, we need mandatory monitoring of all sewage outlets as well as proper resourcing for the Environment Agency so that the law can be enforced. We will solve this problem only with tougher action and by sticking to our commitments. I do not want my kids to think that the current state of our waterways is normal. We owe it to future generations to sort this out once and for all, which is why I urge Members to support Labour’s motion.

Photo of Matt Rodda Matt Rodda Shadow Minister (AI and Intellectual Property) 6:00, 5 December 2023

I am grateful for the opportunity to speak in this debate in support of the motion. I will raise the issues in my constituency and the part of Thames Water that covers south-east England outside London. I thank my hon. Friends the Members for Hammersmith (Andy Slaughter) and for Brentford and Isleworth (Ruth Cadbury) for talking about many other issues affecting Thames Water. Their speeches relate more to customers in London, but they made some excellent general points about the company’s financing, the weak regulation and the Government’s failure to act, which I will also highlight.

Serious and persistent problems affect wildlife and thousands of residents in the Thames Valley, particularly Reading and Woodley. We have seen things in our area that are truly shocking and deeply concern many residents. I have run a community survey, which hundreds of people have filled in to raise their concerns. This is a widespread issue for many local residents, which differs slightly from those described further downstream in London but relates to the level of concern and the impact on local people.

I will go slightly upstream from Reading towards Oxford, where there has been a well-known series of incidents linked to pollution in the Wolvercote stream. All the sewage pollution further upstream of the Thames, from many tributaries in Oxfordshire and Buckinghamshire, flows through Berkshire into London and, ultimately, out to the Thames estuary. Residents in my area are suffering the direct result of that pollution. The simply appalling levels of pollution are monitored by people in Oxford. I pay tribute to local campaigners there, including my hon. Friend Anneliese Dodds. However, Thames Water does not seem to be fully addressing these matters. I hope that the company, the Government, the Environment Agency and the regulator are listening to the debate and will look into this further.

Of the issues affecting tributaries in our area—an important and environmentally very sensitive issue—is pollution in chalk streams. Very close to Reading, the River Pang tributary is a particularly beautiful chalk stream, which used to be in pristine condition. There is a beautiful landscape, with rolling hills on the edge of the downs in Berkshire and gentle footpaths next to the river. When I walked along there some time ago, I noticed that the riverbed had no apparent life in parts of it. Local anglers, many of whom live in Reading, have raised serious concerns about the Pang, and about other chalk streams across southern England. They are a unique ecosystem found only in the south of this country, where water comes up from the chalk aquifer into streams and flows into major rivers such as the Thames. I hope the Minister will take note of the specific issues affecting chalk streams. I would appreciate it if he or his colleague could write to me about them and the other specific issues in the Thames Valley and Thames catchment. I thank the Angling Trust for its excellent work on this matter.

Another appalling local issue is the long-standing pollution incident in a tributary called Foudry brook, which comes from a spring in the northern part of Hampshire and flows under the M4 motorway, through the outskirts of Reading, and ultimately into the Kennet and the Thames. I saw the pollution when I was running the Reading half-marathon this year. There were pools and little tributaries of water that smelled pungently, and were a lurid neon green colour that one would see in an artificial and lifeless place, completely out of place next to the willows and bushes near the river. It should never have happened, and clearly was linked to the pollution incident upstream a few miles away.

I hope that the Minister is noting the level of revulsion that people like me have exhibited when we have seen that. It is an offensive thing to see when trying to enjoy a walk next to a river or, like many thousands of local residents, when living near a river. People who live along several miles of banks of the Kennet, the Thames and the Loddon have to put up with sewage floating past their houses. There has been a series of other terrible incidents, and I could go on and on. Many are happening all the time and, as we heard earlier, they are not properly monitored.

On Saturday, on a family walk, I experienced yet another such incident. Imagine the scene: frosty countryside just outside Reading—absolutely beautiful—with heavy frost on hedges and wildlife in abundance, walking down the hill through a nature reserve to the River Thames. I could see a heron on the bank of the river spying for fish and there was a cormorant diving into the Thames. In the middle of the river was what I thought were either flecks of snow—it was very, very cold—or rain or leaves. In fact, they were bubbles from sewage pollution. I could see banks of foam building up around small islands in the river, sometimes nearly a foot high, with white, brown creamy foam which was clearly linked to sewage pollution. The river was very high and I could tell that the outlets had been opened upstream. It was absolutely disgusting. That is the type of pollution affecting people’s enjoyment of beautiful countryside, riverside walks, and their own gardens and homes in the south of England just upstream from London. I hope the Minister will note that and look into it.

I am aware of time and I do not want to overstep my limit. I commend the action plan put forward by my hon. Friend Steve Reed. I hope the Minister is listening and paying attention to what we are saying, because this is a very serious problem and I hope he will look at it again.

Photo of Sarah Dyke Sarah Dyke Liberal Democrat, Somerton and Frome 6:06, 5 December 2023

Yesterday in Somerset, 67 millimetres of rain fell in 24 hours and 10 flood warnings have been issued at the time of speaking. This is not a one-off event. Flash floods in May flooded nearly 100 homes in my constituency alone. Yesterday I had a call from a constituent in her 80s with significant mobility issues. The entire ground floor of her home was flooded and she was struggling to leave safely. The water is not clean. The flash floods included raw human waste from an outdated local sewage system that failed to cope after decades of neglect. In 2021, all of Somerset’s five rivers were rated poor by the Environment Agency. It has been left to volunteers, such as the Friends of the River Frome, to take action. Half of Somerset’s bathing sites are rated poor and plenty of areas across the country, such as Farleigh Hungerford in my constituency, urgently need Government investment and attention to help clean up that pollution.

The Liberal Democrat amendment to the Environment Bill, now the Environment Act 2021, called for a sewage tax on pre-tax profits of water companies to fund cleaning our rivers. Statistics from the Environment Agency show that 0% of rivers in England are classed as good. An ambassador to the Rivers Trust, Imogen Grant—an Olympic rower as well as a qualified medic—told me that she has rowed past used nappies, used tampons and even a fridge on the River Thames. The board of Thames Water, which is causing most of that pollution, should resign today.

The risks to human life are bad enough and my constituents have their MP to speak loudly for them. My hon. Friend Tim Farron rightly spoke up in this place last night for victims of sewage pollution. My colleagues and I are extremely disappointed that the Government voted not to provide compensation. We hope they will listen to our campaign for a new blue flag standard for rivers in England and Wales. Imagine how constituents in Westmorland and Lonsdale feel today after that treachery from the Government, and after the BBC’s “Panorama” investigation showed the duplicity of the water companies. The Government have led our constituents up the creek, taken away the paddle, and then sold the boat to water company bosses.

I am sure the Chamber is aware of the “Panorama” report yesterday, which alleged that United Utilities misreported sewage pollution events and downgraded incidents to the lowest level so that they were not counted as pollution incidents. The BBC alleges that United Utilities, by doing that, was awarded the right to raise £5.1 million by increasing bills for their 7 million customers next year. The Liberal Democrats are calling for a criminal investigation to be opened immediately. The Government must support us.

I am concerned about the impact that this scandal will have on my constituents’ finances. It is simply not fair that we should pay higher bills because water firms continue to pump out raw sewage. Water firm executives paid themselves £30.6 million in bonuses in 2020-21, and even the Environment Agency has described their behaviour as criminal. The Government should listen to Liberal Democrat policies and replace the friendly goldfish Ofwat—a harmless decoration with a poor memory—with a fierce and determined new regulator, a tiger shark.

It is shocking that water firms are not only polluting our waterways but using dodgy sewage monitors, the number of which actually increased this year. I was shocked to hear reports that in areas such as Eastbourne in Sussex, there are concerns that Southern Water’s monitoring service, Beachbuoy, is not updating until days after sewage discharges on to a beach. Swimmers are taking their last moonlight swim before the great white attacks—but the great white is a patch of human waste with Weil’s disease and dysentery dripping from its teeth.

Our waterways can recover, but they need action now, before it is too late. We need a tax on sewage water companies, not huge holiday bonuses. We need a tough, toothed tiger shark of a regulator. We need our environment to have long-term protection from a serious and committed Government. Liberal Democrats support a public benefit company model for water companies so that particular economic and environmental policy objectives must be considered explicitly in the running of the companies. This Government need to listen to the people speaking up for our silent water. The clock is ticking.

Photo of Kerry McCarthy Kerry McCarthy Shadow Minister (Climate Change and Net Zero) 6:11, 5 December 2023

As toxic sewage spills into our lakes, rivers and seas, it is clear that the Government are up to their neck in it—and this is not a stand-alone scandal. It perfectly encapsulates 13 years of Tory misrule by a Government who do not believe in governing, who see regulation only as a burden and who think that businesses always know best, allowing privatised utilities to make huge profits at their captive customers’ expense and the bosses to line their own pockets, and ignoring the need for investment in our public realm and the infrastructure that we need.

In 2022, as we have heard, not a single river in England was free of chemical contamination, just 14% had “good” ecological status, and 75% of UK rivers pose a serious risk to human health, the single biggest cause of pollution being untreated sewage. However, we need to look at other causes of pollution as well. The Environmental Audit Committee warned in January 2022 of a “chemical cocktail” from plastics, slurry and farm run-off that threatens water quality, and criticised the outdated, underfunded and inadequate monitoring regimes that make it difficult to determine the health of England’s rivers. CHEM Trust welcomed that report as

“a vital call to arms to improve the quality of water in our rivers”,

and called for action to tackle chemical pollution at source.

As we heard from Jesse Norman, whose frustration was clear, industrial-scale agriculture is also an increasing problem. The River Wye has a massive problem with phosphate pollution linked to intensive poultry production. There are about 20 million chickens in the Wye catchment at any one time, and much of the manure is spread on surrounding fields, with nutrients leaching into the water supply. It is estimated that even if the source of the pollution were removed now, it would take between 10 and 20 years for the soil pollution to be reduced.

For now, however, I will stick to the subject of sewage, in which regard Wessex Water is a particularly bad offender. We have seen numerous cases of sickness among swimmers at popular local wild-swimming spots in areas around my constituency, such as Conham River Park and Warleigh weir. In 2021, Bristol Cable reported that between the beginning of January and the end of August, Wessex Water had dumped raw sewage into our local rivers 14,000 times, and sadly things have not improved: just yesterday, it dumped revolting raw sewage into the River Avon for more than seven hours.

Water companies are supposed to dump untreated sewage only during “exceptional” weather, but as “exceptional” is not even defined, they feel that they can dump untreated sewage whenever it rains—and, of course, in the UK rainy weather is far from exceptional. The BBC found that in 2022 Wessex Water dumped raw sewage into our rivers for 1,527 hours on dry days. That is meant to be illegal, yet Wessex Water, like fellow dry spillers Southern Water and Thames Water, was allowed to keep operating.

I have already mentioned the massive £982,000 take-home pay of the Wessex Water CEO in 2021-22. He has been with the company a very long time—since the 1990s—and if his pay then was adjusted for inflation, he would be on about £120,000, so he has had about a 700% pay rise. As I said, Wessex Water is now looking to its customers and wants to put up bills by £150 a year to pay for planned investment. I would argue that that money should already have been spent on maintaining infrastructure.

Last night’s BBC “Panorama” programme exposed the failures of self-regulation, where water companies get to mark their own homework and cheat the system with ease. It is telling that we had to rely on whistleblowers from the Environment Agency telling “Panorama” what was going on at United Utilities, rather than the Environment Agency taking enforcement action itself. In the last three years—2020, 2021 and 2022—931 serious pollution incidents were reported in north-west England but the Environment Agency went to inspect only six of them. We are not blaming the Environment Agency for that. We know that it is under-resourced, and we know how little respect this Government have for our regulators and the protections they provide. Its environmental protection budget was halved by DEFRA between 2010 and 2020.

We see this time and again, with the Tories railing against red tape and bureaucracy and slashing costs, then wondering why everything has gone to pieces, when in effect they have created a wild west where companies can pollute at will. Companies do sometimes get caught. In 2020, for example, Severn Trent was fined £800,000 for letting 3.8 million litres of raw sewage enter a Shropshire stream, but these fines seem to be little or no deterrent because the companies try to pass the cost on to their captive customer base instead.

As foul waste poisons our waterways, killing fish, destroying habitats, seeping into our soil and making people sick, it is clear that self-regulation is not sustainable. We need water companies to face the consequences of their failures, and that is what Labour is calling for: criminal responsibility. Water bosses should face personal criminal liability for law breaking related to pollution, with severe and automatic fines for illegal discharges. It is time to clean up the filth.

Photo of Imran Hussain Imran Hussain Labour, Bradford East 6:17, 5 December 2023

The right to clean water is one of the most fundamental, and that is why this debate is very important to my constituents. I rise to support the excellent case put forward from the Opposition Front Bench today. It is interesting to note that, in a debate as important as this, only one or two Government Members have bothered to turn up, and that the majority of their contributions, including those of Ministers, have focused on what happened 13 years ago under the Labour Government. When they start with that, they have already lost their case. It is convenient for them to somehow forget the 13 years that this Government have been in charge. They seem to forget the 13 years of a lack of regulation and inspection, the 13 years in which they hollowed out the Environment Agency and Ofwat, the 13 years of halving the funding, the 13 years of millions in bonuses being paid to water bosses and the 13 years in which families in our constituencies have had rises in their water bills effectively to support that.

Labour Members have spoken about how, in recent years, our rivers, coastlines and waterways have been polluted by the dumping of raw, untreated sewage, with over 800 sewage dumps a day across the country last year. In Bradford, sewage was dumped 5,200 times in 2022, putting us in the top 10 regions for sewage dumping.

Although we are wholly landlocked, one of Yorkshire's major rivers, the River Aire, runs right through the Bradford district, and it is here that the majority of dumping incidents take place, according to the Rivers Trust. In the constituency of the Minister, Robbie Moore—I welcome him to his place—an outlet near Riddlesden recorded 96 spillages totalling more than 1,000 hours, and an outlet near Bingley recorded 69 spillages totalling more than 800 hours. In my own constituency, an outlet at Apperley Bridge recorded 96 spillages totalling almost 600 hours.

Although dumping directly into rivers has sadly become expected under this Government, the scale of dumping into smaller tributaries, becks and streams in my constituency is particularly alarming. In 2022, sewage was dumped 59 times into Fagley beck, 41 times into Bolton beck, 110 times into East brook, 36 times into Haigh beck and 75 times into Carr beck, all of which are watercourses that run through or along the back of residential estates. And that is just what has been recorded—the actual number of incidents in which sewage has been dumped in Bradford is potentially far higher.

Given the scale of sewage dumping across Bradford, my constituents are asking just what Yorkshire Water is doing to tackle it. The answer? Hiking water bills by an average of £111 in 2023-24, to pass the cost of the urgently needed sewer upgrades, following years of failing to invest properly, directly on to families in my constituency, even as it paid out £62 million in dividends to other businesses in its parent group.

Although the chief executive of Yorkshire Water has reported that she will voluntarily refuse a bonus that would have been as high as the eye-watering figure of £800,000, she still receives a staggering base salary of £515,000 on top of £140,000 in relocation expenses. This makes it clear that, in the week that Yorkshire Water has been forced to pay a record £1 million civil sanction by the Environment Agency, this public relations decision is not as principled as it first seems.

When water company chief executives and directors have presided over an unprecedented wave of sewage dumping while pocketing huge salaries and bumper payments, and when the Government have proven themselves completely incapable of tackling the crisis and holding water companies to account, it is obvious that something has to change. They should start by empowering the water regulator, Ofwat, to ban the payment of bonuses to the bosses of water companies that pollute our rivers, lakes and seas, and they should end by shutting down the monopoly and stranglehold of privately owned water companies on our water network by taking them into public control and ownership, where they belong.

Photo of Ashley Dalton Ashley Dalton Shadow Minister (Equalities Office) 6:23, 5 December 2023

Despite what Conservative Members would have us believe, this Government inherited some of the cleanest rivers and waterways in Britain’s history when they came to power almost 14 years ago. [Interruption.] It is true. When Labour left office in 2010, the Environment Agency stated that our rivers were healthier than they had been at any point since the industrial revolution. Two years earlier, 80% of water quality tests in the Thames were found to be very good or good, compared with only 58% in 1990.

So what has changed? Thirteen and a half years of Tory government have polluted our coasts and our waterways, and we arrive at the appalling situation where over 800 sewage dumps are taking place across our country every single day. This is a green and pleasant land, but in the last seven years alone over 1,200 years’ worth of raw sewage has been dumped into British waters.

My constituency of West Lancashire has a proud history of growing communities, but how can the farms and nurseries of West Lancashire have any confidence in the water they use to grow the food that ends up on Britain’s plates? The growers in my constituency care about the quality of food they produce. If only they had a Government who cared about the quality of water used to produce it. Not one single river in Britain is classed as being in a healthy condition—not one.

It is not even true that the Government can be accused of inaction. It is worse than that: they have blocked amendments to the Environment Act 2021 brought forward by Labour to bring an end to sewage dumping scandals. My constituents expect bonuses to be paid only when people deliver and perform above and beyond how they are expected to. Other than the air we breathe, which is another sticky wicket for this Government but a topic for another day, is there anything more vital than water? My constituents do not expect bonuses to be awarded for polluting our rivers and seas while bosses’ and shareholders’ pockets are lined with cash.

To add insult to injury, water companies are asking customers to pay an extra £156 a year to pay for problems caused by the chronic under-investment in the network, while £14 million of bonuses were paid in just one year to the very people who have failed to maintain the system adequately. Under no circumstances is that acceptable.

Ofwat must have the power to ban the payment of bonuses to water bosses who allow significant levels of raw sewage to be pumped into our precious rivers, lakes and seas. If that had been in place over the last year, six out of nine water bosses’ bonuses would have been blocked. They were not.

Labour will put the water industry into special measures and ensure change. We will end the farce of companies self-monitoring and require all companies to monitor all—all—water outlets. Water bosses that persistently allow their companies to break the law on sewage dumping will face personal criminal responsibility.

The current system for imposing fines simply is not working. Long drawn-out, expensive court cases are no credible deterrent for water companies and the Government know it, so Labour will introduce severe and automatic fines for illegal discharges. My constituents have a right to expect to be able to enjoy our rivers and coasts without fear of contamination from raw sewage—and they have a right to expect water polluters not only to pay the price where contamination does occur, but not to be rewarded for allowing it to happen. Labour’s plans will shift the burden on to the water companies, rather than expecting the British public to carry the can.

Under the Government’s plans, the Tory sewage scandal will continue for decades to come, but the next Labour Government will build a better Britain, where water bosses are held accountable for their negligence and the British public can have confidence that our waterways are clean and safe to enjoy.

Photo of Mick Whitley Mick Whitley Labour, Birkenhead 6:28, 5 December 2023

Thank you very much for calling me, Mr Deputy Speaker. I congratulate my party on securing this important debate.

Last year, in my constituency of Birkenhead alone, there were the ominous number of 666 sewage discharges, running for a total duration of over 8,000 hours. The effect for businesses and families in coastal communities like ours is devastating: it denies young people, many of whom are from deprived areas with little access to nature outside of our borough, of the natural spaces that by rights belong to them, while jeopardising the many businesses that rely on tourism.

Elsewhere across the country the situation is even graver, particularly for our precious chalk streams—which can be found almost exclusively in Britain—many of which now face an existential threat. Meanwhile, water company bosses continue to pay themselves millions of pounds in inflated salaries and bonuses, while the Government seem content to look away, even as evidence emerges of water companies covering up sewage discharges and making evidence of sewage disappear from official records.

The motion my party laid before the House today seeks to tackle the perverse injustice at the heart of our broken water system—a system that guarantees private profits for the water bosses and public squalor for the rest of us. The motion signals a clear and welcome change from the attitudes of successive Secretaries of State for the Environment, Food and Rural Affairs, who all too often, when speaking from the Government Dispatch Box, have acted as if their job is to defend the interests of the water companies and their shareholders, rather than the constituents who elected them to this place.

From the hundreds of messages I have received from my constituents on this issue, it is clear that the people of Birkenhead expect us to go much further. They are sick to death with the decades-long rip-off that began with the privatisation of the water industry in 1989. They have had enough of pernicious standing charges and their bills rising year on year—they are set to rise, on average, by another 35% by the end of this decade—while water bosses who preside over crumbling infrastructure pocket millions in bonuses.

My constituents want to see water returned to public ownership. According to research conducted by Savanta, on behalf of the publication Left Foot Forward, 70% of the British public share that view. We need to deal with the practical and deep-rooted issues facing the water industry here and now, and confront the simple truth that seems self-evident to the vast majority of the British public: the three decades in which we have treated water as a private commodity have been a manifest failure.

There has been much discussion in recent days about the entrepreneurial spirit that the Thatcher Government are said to have let loose with their policy of privatisation and deregulation. Today, that spirit can be seen most clearly in the tide of sewage swelling our rivers and lakes and drowning our beaches. We must prepare to face the challenges to come, because as we confront a future that will be increasingly defined by climate breakdown, drought, water scarcity and extreme weather events, the question of how we most effectively marshal our shared natural resources will be crucial.

I remind the House, as I have before, that the chief executive of the Environment Agency warned that large parts of the country are now staring into the “jaws of death”—the point at which we will not have enough water supply to meet our needs. To allow the profit motive to continue to dictate the management of a resource as vital as water, and to perpetuate a system in which shareholder profits take precedence over much-needed investments in infrastructure improvements, would be not just short-sighted, but an absolute dereliction of duty.

Photo of Toby Perkins Toby Perkins Shadow Minister (Nature and Rural Affairs) 6:32, 5 December 2023

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 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, 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, 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 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 Neil Coyle spoke about the broken Government promises on environmental standards; Jesse Norman spoke of his frustration at the Government’s failure on this issue; and my hon. Friend 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 Steve Double —going through the motions.

Photo of Toby Perkins Toby Perkins Shadow Minister (Nature and Rural Affairs)

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

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 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 Ruth Cadbury spoke about 2 billion litres of sewage outflow in two days in her area in 2020; my hon. Friend Matt Rodda spoke about the appalling levels of pollution in his constituency; and 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 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 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.

Photo of Steve Double Steve Double Conservative, St Austell and Newquay

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%?

Photo of Toby Perkins Toby Perkins Shadow Minister (Nature and Rural Affairs)

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.

Photo of Steve Double Steve Double Conservative, St Austell and Newquay

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?

Photo of Toby Perkins Toby Perkins Shadow Minister (Nature and Rural Affairs)

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 Mick Whitley summed up the difference between the behaviour of bosses and the experience of his constituents. As my hon. Friend Steve Reed made clear earlier, the Government have been complicit in this disgraceful practice, through the funding cuts that my hon. Friend 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.

Photo of Robbie Moore Robbie Moore The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs 6:45, 5 December 2023

The Government welcome the opportunity to set out the scale of our action to tackle water quality. We have been consistently clear that the failure of water companies to reduce sewage discharge adequately is completely unacceptable. We made that clear throughout the debate and in the opening remarks from the Treasury Bench. I thank the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend Rebecca Pow, who previously held the water quality brief and did a lot of work to bring forward the Environment Act 2021.

The Government have clearly set out that we are taking strong and decisive action to reduce sewage discharges that harm our rivers and coastlines. I am aware of and recognise the many concerns that our constituents raise regarding water quality. They, like all of us in this House, rightly want to see the quality of our waters improve. That is why the Conservative Government are taking action.

We introduced the Environment Act, which introduced legally binding targets for water quality and a new requirement for water companies to publish data on storm overflows, and gave Ofwat new powers to clamp down on dividends and bonuses. Those are the actions of this Conservative Government in introducing the Environment Act. Many Opposition Members did not vote for many of the measures included in that Act. That is what this Government are doing in taking action.

Photo of Munira Wilson Munira Wilson Liberal Democrat Spokesperson (Education)

I welcome the Minister to his new role. I thank him for giving way, given that the Under-Secretary of State for Environment, Food and Rural Affairs, Rebecca Pow, who opened the debate, repeatedly refused to take any interventions from me.

The Minister talks about the importance that our constituents place on water quality, so I have one request for him. Sitting on the Secretary of State’s desk—as the hon. Member for Taunton Deane knows, because she responded to my debate on this topic in September—is the water resources management plan for the south-east. It contains the highly controversial proposal for the Teddington direct river abstraction, which will see recycled sewage put into the River Thames and water taken out. There are real concerns in the Environment Agency about water quality. Moormead Park in my constituency, and Ham Lands in that of my hon. Friend Sarah Olney, face being ripped up to build the scheme. The Secretary of State has to make a decision, so will the Minister ask him to take that scheme off the table?

Photo of Robbie Moore Robbie Moore The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I noted that the hon. Lady was not here for the whole debate to listen to the many positive contributions from the Conservative Benches. However, we have already spoken about this, and we have a meeting in the diary next week to discuss it, which I look forward to.

Our plan for water focuses specifically on increased investment, which includes £2.2 billion from water companies to spend on improving infrastructure; stronger regulation, including more Environment Agency inspections of waste water treatment works; banning the sale of wet wipes; proposals for new restrictions on forever chemicals that can be found in waters; and tougher enforcement, including bigger penalties for water companies and tighter control over their dividend payments. Let me be clear: the Government will hold the water sector and enforcement agencies to account. The Secretary of State and I are working closely with the new leadership of the Environment Agency to ensure and reiterate to them and the water industry the expectation that they will be held to account and to the highest possible standards.

I will be glad to respond now to the many points that have been made by Members from across the House, starting with storm overflows, which many Members talked about. The Government are taking steps to prioritise storm overflows. We have now launched the most ambitious plan to address storm overflow sewage discharges by driving the largest infrastructure programme in water company history. We have been consistently clear that the failure of water companies to reduce sewage discharges adequately is totally unacceptable, and our new strict targets, which were brought out through the Environment Act, will see the toughest ever crackdown on sewage spills.

However, that all starts with monitoring—monitoring is absolutely key if we are to carry out enforcement. Ashley Dalton may claim that water was previously better quality, but how on earth does she know? In 2010, under the Labour Administration, just 7% of storm overflows were being monitored; now, in 2023, we have driven that figure up to 91%, and by the end of this year we will be at 100%. The Opposition may make these ridiculous claims, but how on earth do they know? Under their watch, only 7% of storm overflows were being monitored. These monitors will allow us to understand the impact of sewage discharges in more detail than ever before, so we will hold water companies to account and target improvements where they are most needed.

To pick up on the point that was made by my hon. Friend Steve Double, it was the Labour Administration who introduced self-monitoring. It is Labour’s plan now to overturn one of the rules that it itself brought in. This Government have passed the Environment Act, which has required a landmark £6 billion investment through the storm-overflow reduction plan. We have instructed water companies to deliver more than 800 storm-overflow improvements across the country, and we are delivering Europe’s largest infrastructure project through the Thames tideway tunnel to reduce storm overflows by 95% in the Thames Water region.

I will now turn to the performance of regulators, which has been mentioned by many Members from across the House, including Sarah Dyke. We are working with regulators to ensure they have the tools and resources they need to hold water companies to account: we have provided an extra £2.2 million per year to the EA specifically for water company enforcement activity, and in May 2023, we provided a £11.3 million funding increase to enable Ofwat to treble its enforcement capacity. We have legislated to introduce unlimited penalties for water companies that breach their environmental permits and to expand the range of offences for which penalties can be applied. Those changes will provide the Environment Agency with the tools it needs to hold water companies to account. I only hope that the Opposition welcome the unlimited penalties that this Conservative Government are bringing in.

As for what we are doing to focus on performance, in 2022, Ofwat announced provisional financial penalties of almost £135 million for underperformance, applying to 11 water companies. That money is rightly being returned to customers through water bills during the 2024-25 period. This Government are taking the polluter pays principle seriously—that is exactly what the provisions of the Environment Act bring into play. However, the answer is not a lengthy bureaucratic process carried out at the taxpayer’s expense to create an entirely new regulator, as the Opposition have proposed. That sums up what the Labour party is about: process, not progress. This Government are absolutely committed to ensuring that progress is made on improving water quality.

The issue of dividends has been raised by many Members, and I will pick up on some of the points that the hon. Members for Wakefield (Simon Lightwood) and for Easington (Grahame Morris) have mentioned. In March 2023, Ofwat announced new measures that will enable it to take enforcement action against water companies that do not link dividend payments to performance. That change will require water company boards to take account of their performance when deciding whether they make dividend payments; if the payment of dividends would risk the financial resilience of a company, Ofwat now has the power to stop that payment.

As a result of this Government’s giving more power to Ofwat, it has increased power to take enforcement action if dividends paid do not reflect performance. As for some of the points that have been made about Thames Water, we have seen today that Ofwat is investigating Thames Water, which shows that the powers this Government gave to Ofwat are already being utilised.

Photo of Robbie Moore Robbie Moore The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I will pick up on the points made about Thames Water by the hon. Members for Hammersmith (Andy Slaughter) and for Brentford and Isleworth (Ruth Cadbury) in relation to penalties. Since 2015, 12 prosecutions have been instigated against Thames Water, amounting to £37 million. Ofwat will rightly hold companies to account where they do not clearly demonstrate the link between dividend payments and performance. That has been made possible through the Environment Act.

I want to turn to bonuses. Quite rightly, picking up on the point made by my hon. Friend the Member for St Austell and Newquay, in June Ofwat confirmed new plans that will ensure customers no longer fund executive directors’ bonus payments where they have not been sufficiently justified. Ofwat will regularly review all executive bonus payments, and where companies do not meet expectations, it will step in to ensure that customers do not pick up the bill, which is incredibly important to this Government. These new rules have already placed pressure on water companies to take action.

This Government will always prioritise bill payers, which is why in 2022-23 no water or sewage company in England and Wales is paying a CEO a bonus out of the money from customers’ bills, while half of CEOs are taking no bonuses whatsoever. This is the first time that has happened in the water industry, and it reflects the industry’s recognition that the Government and the public expect better. The Labour party, however, would simply raise taxes on water companies, which would send household bills rocketing sky-high. This Conservative Government have been absolutely clear that the polluter must pay, and that is exactly what we are doing by giving Ofwat more powers to regulate the industry and hold water companies to account.

Turning to debt in the industry, which was a point made by the hon. Member for Hammersmith—

Photo of Robbie Moore Robbie Moore The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I will give way in a second.

Ofwat is monitoring companies’ gearing levels closely and has encouraged water companies to de-gear, with the average gearing across the sector falling to 69%, down from 72% in 2021. In March 2023, Ofwat announced new powers that will strengthen the financial resilience of the sector, including powers to stop water companies making dividend payments earlier this year. Those powers are already being put in place by Ofwat, despite what the Opposition may say.

Many Members across the House made the point about bathing water quality, including my right hon. Friend Sir John Hayes and my hon. Friend the Member for St Austell and Newquay. Bathing water has improved significantly over time. In 2010, the proportion of areas with good or excellent bathing water, meeting the highest standards in force at the time, was 76%. Now, in 2023, 90% are classified as good or excellent, which is a significant improvement. It has to be noted that Labour actively did nothing in its time to improve bathing water quality, but this Conservative Government are delivering on that point.

Photo of Steve Double Steve Double Conservative, St Austell and Newquay

Would the Minister acknowledge that the reduction in bathing water quality is often to do not with sewage, but with water run-off from agriculture?

Photo of Robbie Moore Robbie Moore The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

Picking up on that point, the quality is not only to do with sewage. Of course, that is one of the factors, but there are many other factors to do with agricultural run-off, as well as with faeces from birds and from dogs, particularly in beach environments. I have to be clear that where water companies are significantly contributing to the poor designations that have been identified for bathing water, we will take action.

The Labour party is all talk when it comes to protecting our water, but look no further than Labour-run Wales, where sewage is discharged into waterways more frequently. Just remember that this is what the Leader of the Opposition wants as a blueprint for a Labour Government in England. Look at Labour’s record in government, when it managed to monitor only a tiny fraction of storm overflows—only 7% in 2010—and we are now at nearly 100 % this year. If we do not monitor, we cannot enforce. Look at its voting history. Labour and the Lib Dems voted against reducing pollution in the Agriculture Act 2020. Look at their faces now. They know deep down that this Conservative Government are taking action.

Photo of Alan Campbell Alan Campbell Shadow Chief Whip (Commons)

claimed to move the closure (Standing Order No.36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

Resolved,

That this House
regrets that 13 years of successive Conservative Governments have broken the water industry and its regulatory framework;
is deeply concerned about the scale of the sewage crisis and the devastating impact it is having on the UK’s rivers, lakes and seas;
believes it is indefensible that executives at UK water companies were paid over £14 million in bonuses between 2020 and 2021 despite inflicting significant environmental and human damage;
condemns the Government for being too weak to tackle the crisis and hold water company bosses to account;
calls on the Government to empower Ofwat to ban the payment of bonuses to water company executives whose companies are discharging significant levels of raw sewage into the UK’s seas and waterways;
and further calls on the Secretary of State for Environment, Food and Rural Affairs to make a statement to this House by 31 January 2024 on the Government’s progress in implementing this ban.