Amendments made: 5, page 21, line 6, at end insert—

“(aa) section 1 (rules about remuneration and governance);”.

This amendment brings clause 1 into force on Royal Assent.

Amendment 6, page 21, line 16, leave out paragraph (a).

This amendment is consequential on Amendment 5.

Amendment 7, page 21, line 30, leave out paragraph (a).

This amendment is consequential on Amendment 5.

Amendment 8, page 22, line 1, at end insert—

“(aa) section (Special provision in charges schemes);”.—(Emma Hardy.)

This amendment brings NC18 into force two months after Royal Assent.

Third Reading

I beg to move, That the Bill be now read the Third time.

Our rivers, lakes and seas are awash with pollution. The legacy of 14 years of Conservative failure is the highest level of sewage spills on record, economic growth held back by a lack of water supplies and, now, painful bill rises to fix the problems that they left behind. The British public are rightly angry about the state of our waterways. It has been left to this Government to clean up the mess once and for all. The water sector needs a complete reset, reform that puts customers and the environment first, and a new partnership with the Government to invest for the future and upgrade our broken infrastructure. This Government have a three-stage plan to make that happen.

During my first week in post, I met water company chief executives and announced immediate steps to improve the performance of the water industry, including ringfencing money for investment in water infrastructure so that it can never again be diverted to bonuses or dividends, and ensuring that customers who face frequent water outages or contaminated tap water receive more generous and faster compensation.

This evening, I am delighted to open the Third Reading debate on the Bill. Its core provisions will strengthen the powers of the regulators so that they can better hold water companies to account for poor performance. It will give Ofwat new powers to ban undeserved bonuses when water company executives fail to meet the high standards the public rightly demand. It will introduce stricter penalties, including imprisonment where senior executives of water companies obstruct investigations by environmental regulators, and includes provisions for automatic and severe fines for wrongdoing. We have also extended powers so that environmental regulators can recover costs for a wider range of future enforcement measures—the polluter, not the public, will pay. We have also introduced mandatory monitoring of emergency overflows and pollution incidents so the public can hold companies to account.

The Bill has been strengthened and improved in its passage through both Houses. I am thankful to all hon. Members, and all noble Lords in the other place, for their thorough consideration and scrutiny of the Bill, and for the many and varied amendments that have been tabled and debated. Water companies will now be required to include water supply as well as sewage-related incidents in pollution incident reduction plans, and we have created personal liability for chief executives so that there is accountability for these plans at the very highest level. Water companies will also need to produce an implementation report alongside their annual plans so the public can see what action they are taking to reduce pollution incidents.

We have introduced two clauses to consider more nature-based solutions such as reed beds and wetlands in drainage and wastewater management plans, and for Ofwat to track progress against our environmental targets. A further Clause will ensure that measures are in place to support vulnerable customers, as set out by the water Minister, my hon. Friend Emma Hardy, earlier this evening.

I echo my hon. Friend’s commendation for the citizen scientists and the work they have done to highlight the scale of the problem.

The support for the Bill across the House and among the public demonstrates our collective desire to clean up our rivers, lakes and seas. I am proud of the progress we have made through the Bill, but it is not the extent of our ambition.

In October, I announced the biggest review of the water sector in a generation. Sir Jon Cunliffe has appointed an expert advisory group with leading voices representing the environment sector, public health, engineering, customers, investors and economists, and is preparing to launch a public call for evidence within weeks.

Of course, it is an independent commission; it is up to Sir Jon to appoint to the board whom he likes. However, it is a very balanced board, and I hope the hon. Gentleman will recognise that voices from many stakeholder groups are represented, as indeed they should be.

The commission will report to the UK and Welsh Governments this summer, after which both Governments will respond and consult on Sir Jon’s recommendations, including on further legislation.

I thank my hon. Friend for his Intervention and I welcome those investments. From visiting him in his Constituency, I know what a champion he is for cleaning up the water and the beaches in Bournemouth.

I thank the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Kingston upon Hull West and Haltemprice and the noble Lady, Baroness Hayman of Ullock for their expert leadership of the Bill through Parliament, and members of staff in the Bill team and in DEFRA for their hard work and professionalism. I thank Members on all sides who participated in the debates at all stages. I extend my thanks to our colleagues in the Welsh Government and the Senedd for working collaboratively with the UK Government on the Bill. I am delighted that, at the Welsh Government’s own request, the benefits brought about by the Bill will extend to Wales.

Sir Jon Cunliffe’s commission will be reviewing precisely those points, and I hope the hon. Gentleman will take the opportunity to contribute his views when the call for evidence begins in just a few weeks.

The changes the Government have made in a short amount of time show that with collective determination and ambition we can turn the water sector around. The failures of the past are ending. The future of the water sector is full of promise. Our waterways have been poisoned by unacceptable levels of sewage and other pollution for too long. With these changes, finally, we will clean up our rivers, lakes and seas for good.

I thank everyone who has scrutinised and worked on the Bill in both Houses, including the Shadow Minister, my hon. Friend Dr Hudson, our very efficient Whip, my hon. Friend Jerome Mayhew, and the noble Lord Roborough, who led very constructive discussions in the other place. It is a shame that the Government rejected the amendments put forward today. I thank the Doorkeepers, the hon. Members who chaired the Committee and everyone who helped His Majesty’s official Opposition to scrutinise the Bill.

Across the House, we can all agree that there are fundamental problems facing the water and sewerage industry. Since 2010, the number of designated bathing waters has increased; we have seen a significant improvement in water quality ratings, with more water rated as excellent or good; and an increase in blue flag beaches. But of course we want to see more. We were, in fact, the first Government in history to set out that storm overflows must be reduced, and our landmark Environment Act 2021 gave stronger powers to regulators and imposed strict demands for tackling pollution. We set legally binding targets to improve water quality and availability, and to reduce nutrient pollution. We rolled out catchment-sensitive farming to all farms in England. We stepped up the requirements for investment, including investment from water companies and storm overflow improvements, and nationally significant infrastructure projects such as the Thames tideway tunnel super sewer. When we came into government, just 7% of storm overflows were monitored. When we left government, we had increased that to 100%.

We support the Bill, but we do so with some disappointment at its lack of ambition. Frankly, as we have said before, much of what the Bill tries to do, including monitoring, blocking bonuses and fines, was brought in by the Conservatives in government. We say that the primary legislation is not necessary, but we will of course support the Bill.

I am especially disappointed that the Government have declined to accept our amendments. In particular, it is woeful that they have failed to put the water restoration fund into legislation. [Interruption.] I will deal with the Minister’s comments in a moment. The public rightly want to see the Government addressing water quality, but rather water company fines being used to restore water bodies, that money will be going into the gaping hole of the Treasury’s coffers, presumably in an attempt to undo some of the damage caused by the Chancellor’s disastrous growth-blocking, tax-hiking, job-cutting, investment-plummeting Budget.

Now I am going to correct the Minister, and I will do so from the Dispatch Box rather than through a point of order. Last summer it emerged that Thames Water, Yorkshire Water and Northumbrian Water would be fined a record £160 million between them for a “catalogue of failure” over illegal sewage discharges, subject to consultation. However, in August—when this Government were in power—the Treasury held back those fines, which were due to go into the water restoration fund to help clean up affected areas. The Minister gave figures earlier, but it is her Government’s fault that money was not paid into that fund. We on the side of the House believe that the polluters should pay for their mistakes, rather than their fines paying for pay rises for the Government’s trade union buddies. [Interruption.] Yes, I am sure that the train drivers are very grateful.

I will give way, with great interest.

I do love being mansplained to by Labour Back Benchers. I suppose it is part of the Labour party’s women problem. The hon. Gentleman is now throwing his thumbs up at me—goodness me!

What I will say is that throughout the passage of the Bill, we have said, “We have made some progress, but there is more to do.” That is precisely why we are supporting the Bill tonight, although we will try to improve it and strengthen it.

I will not, because I want to allow others to speak.

The Government have also sadly failed to recognise the importance of chalk streams, refusing to confirm the continuation of protections put in place by us Conservatives. I am afraid that warm words about rainforests, much as we agree with them, will not protect these vital habitats. We want to see improved water quality, and I urge the Government to take stock and seek to adopt a more rounded approach that cleans up our rivers and seas, treats bill payers and taxpayers properly, and builds on our work to construct the water systems of the future.

Let me say, without going through all the flowery stuff that we did earlier, that I am grateful to Members in all parts of the House for what has been a broadly collegiate debate. However, the Shadow Secretary of State said something that is worth reflecting on. I think she was talking about what I am about to mention, namely the fines of £164 million that Ofwat had indeed proposed should be levied against the very three water companies to which she referred. For what it is worth—and I am not here to defend the Treasury—this was not a Treasury decision at all. It was because of Ofwat’s weakness, and a culture of timidity that is evident when it comes to gathering money from the water companies, that the money was not collected. That information is 100% correct, because it was given to me in response to one of my Freedom of Information Act requests.

In any event, the key feature is my disappointment in the Bill. I will certainly support it should it come to a vote, and I support it anyway, but its weakness lies in the fact that it is not radical enough. It does not go far enough, and it does not tackle the weakness in regulation to which, in a roundabout, accidental way, the Secretary of State has referred .

We will engage with the Cunliffe water review and recognise it as independent. My reflection is simply this. The Labour party has been in Opposition for a long time. They were a well-funded Opposition through short money—we could only dream of such things—and surely had the capability to come up with a set of plans that meant they could get on with it straightaway, rather than kicking it to halfway into the Parliament. This is an unambitious Bill, but it is good enough, and it will have our support.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.

On a point of order, Madam Deputy Speaker. I need some assistance in understanding how the House can express its displeasure at the Government’s manipulation of the business of the House to stop proper consideration of this Bill. Water was at the heart of the last General Election—it is really important to our constituents—and yet the Bill’s Report stage was limited to less than one and a half hours, and not a single Back Bencher has been able to contribute on Third Reading. Is there a way that we can express our disapprobation of the Government putting forward two non-urgent statements today on Gaza and on Sudan and the eastern Democratic Republic of the Congo—both of them important in their own right but, I suspect, designed to eat up time?

I thank the hon. Member for his prior notice. While that is not a matter for the Chair, his comments are now on the record.

Further to that point of order, Madam Deputy Speaker. May I gently refute what Jerome Mayhew just said? Two important statements were made today. It is for the Chair to decide on Urgent Questions, of which there were two today, with both running for a considerable time. It was not the Government’s intention at all for this debate, which is on a matter of great importance to many people across the House, to be curtailed. I will certainly take on board what he says, and there will potentially be further opportunities with the Bill. [Interruption.] There will be statements tomorrow, and there were statements earlier this week; there are lots of important matters. We take great care to ensure that important Government announcements are made to the House through oral statements, and we are criticised when we do not do that.