Economic Growth (Regulatory Functions) (Amendment) Order 2024 - Motion to Approve (Continued)

Part of the debate – in the House of Lords at 7:02 pm on 15 April 2024.

Alert me about debates like this

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business) 7:02, 15 April 2024

My Lords, the Minister is the latest government Minister to wade into the sewage debate, but having previously tried to crack a joke about wading into sewage, I will not do it again.

Having had that interlude, we have had a chance to reflect on some of the comments that the Minister made. Some of the tricks of good government are timing and self-awareness. Those two things are absent from the extremely maladroit introduction of this order. At the centre of it is the conflation of Ofgem, Ofcom and Ofwat. As we heard from the noble Duke, the Duke of Wellington, these are very different markets. The communications market and the energy market are distinctly different from the privatised regional monopoly system which is the water industry. Because of that, the role of the regulator is substantially different. The idea, for example, of causing competition in the water market is irrelevant—there is no competition in the water market. This puts into focus the problem that is central to this order: it is inappropriate in the markets that it is seeking to address. That is at the heart of what your Lordships have said today.

We look forward to the Minister’s White Paper on competition. When the Truss Administration had their brief flurry, a whole bunch of stuff was said about growth and the “anti-growth coalition”. I am sure the Minister is smarter than the people who were using that language then. The role of growth in amongst the role of regulation is an important issue; the Minister is right to have broached it. On its seeking to influence the water market at this time—coming back to timing—this is not the moment to seek to rein back on regulation. This is the moment when we need to target regulation in the places where it is quite clearly breaking down.

The Minister sought to calm us about the effect of growth on environmental enforcement. Again, the noble Duke gave the lie to that issue by very clearly pointing out what I was going to point out in this document: that the two are very much conflated.

I will suggest a hypothetical issue: I am a regulator. I am about to implement an environmental order. This will undoubtedly affect the growth prospects of some companies in the region. Am I now inhibited by this order? The answer is: it seems so. Moreover, can the companies that receive the downside of this environmental order take it to judicial review? I believe they can. The Minister can confirm that or otherwise. So, at the very least, the environmental order is delayed.

We do not have a problem with the water industry restricting growth; we have the opposite. I cite my home river, the River Wye, as evidence of that. The unrestrained growth of the poultry industry has killed part of that river—not polluted it or made it a little bit dirty but killed it biologically. That is the effect of unrestrained growth. We need the opposite of what the Minister is talking about.

With these thoughts, I am very pleased that my noble friend has brought this amendment, and I am pleased to hear the contributions of your Lordships today. I hope the Minister will stand up and say, “We will set this aside”. If he does not say that, I hope he will say that these rules will be rewritten to make sure that the number one priority for the water industry is to solve the environmental crisis that is currently in our midst.