(1 day, 10 hours ago)
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The Secretary of State for Environment, Food and Rural Affairs (Emma Reynolds)
With permission, Madam Deputy Speaker, I would like to make a statement on the publication of the Government’s water White Paper, “A New Vision for Water”. The paper sets out once-in-a-generation reforms, putting consumers and the environment first and building a water system fit for the future.
For too long, the last Conservative Government turned a blind eye—perhaps that is why there is not a single Conservative Back Bencher in the Chamber to discuss this issue. They neglected the needs of people and the environment. The result: a whole-system failure, companies profiting at customers’ expense, vital infrastructure left to crumble, record levels of pollution in our waterways and public trust destroyed. It is no wonder that none of them—we may have one of two—has turned up to sit on the Back Benches.
This Government inherited that terrible failure, and we are not shying away from it. Every family in this country deserves clean water from their taps, seas safe for their children to swim in, and bills that are fair and affordable. This Government is turning the page on that Tory failure. Our goal is simple: a water system that delivers safe and secure water supplies, better water quality and a fair deal for customers and investors.
Within weeks of coming into office, this Government asked Sir Jon Cunliffe to lead an independent water commission. Sir Jon met over 150 stakeholders, including environmental groups, investors, Members of both Houses, and local communities. His call for evidence received more than 50,000 responses—there is much more interest from people out there than from the Conservative party. I thank Sir Jon and all those who contributed, including right hon. and hon. Members. The White Paper sets out our response to his recommendations.
The Cunliffe review was vital, but we did not wait for its conclusions to act. In our first year in office, we laid the foundations for the transformation that this White Paper sets out. We passed the Water (Special Measures) Act 2025 to give the regulator the power to ban bonuses for polluting water bosses and issue automatic fines for pollution; we ringfenced the money from consumers’ bills, so that it can be spent only on fixing and upgrading infrastructure and improving water quality, not diverted to pay bonuses or dividends; we secured an historic £104 billion of private sector investment to rebuild the water network; and we established the brand-new water delivery taskforce to get spades in the ground, fast-track the delivery of new infrastructure projects and drive economic growth.
This White Paper builds on those strong foundations and sets out a new vision for water in this country. Our reforms deliver three fundamental shifts. The first is the shift from fragmentation to co-ordination. Today, responsibility for water is scattered across four different regulators. The result is confusion, duplication and regulatory gaps. We will change that. We will abolish Ofwat and create a new and more powerful regulator, integrating economic and environmental regulation. We will hold water companies to account by moving away from a system of self-monitoring, in which water companies have been marking their own homework, to a more proactive and preventive approach.
There will be nowhere to hide for poorly performing water companies. We will introduce an MOT approach for water company infrastructure, requiring maintenance checks on pipes, pumps and water treatment works; we will introduce a chief engineer and ensure that there is engineering capability in the new regulator, so that decisions are grounded in practical understanding; we will take a new supervisory approach, holding companies to account in detail and recognising the different challenges they face; and our new performance improvement regime will give the regulator the power to step in faster and put things right earlier. That is prevention-first regulation.
However, regulation alone will not clean up our rivers, lakes and seas. We need everyone with a stake in our waterways to be pulling in the same direction. New reforms for regional planning will bring councils, water companies, farmers and developers together to tackle local pollution, manage water resources and support housing growth. That will strengthen community voices in the water system and drive greater use of nature-based solutions.
The second shift is from corporate interest to public interest. We must never lose sight of who this reform is for: customers and the environment. We will introduce an independent water ombudsman to resolve consumer disputes fairly. We will keep bills affordable through the wider roll-out of smart meters to help those who need it most. There will be a new water efficiency label on every appliance, so that when customers buy a washing machine or a shower, they will know exactly what it will cost not just to buy it, but to run it—to help bring their bills down. We are also cracking down on pollution at its source. We will tighten agricultural standards, including on sludge spreading. We will double funding for catchment partnerships, harnessing the power of nature to protect our rivers.
The third shift is from short-term thinking to long-term planning. For too long, the water sector has lurched from one five-year price review to the next, with no clear picture of where we are headed. We will publish a transition plan to provide a clear, simple road map for water companies, investors and the regulators. The plan will set out how the next price review will deliver those reforms, how we drive better co-ordination between existing regulators during the transition, and how we will make leadership appointments at the earliest opportunity to the new regulator’s board, including a chair-designate.
For too long the previous Conservative Government turned a blind eye to water system failure. Infrastructure was neglected, pollution went unchecked and public trust was betrayed. This White Paper draws a line under that era. It lays the groundwork for our upcoming water Bill and puts us on a new path; a path where water companies act responsibly, where customers get the service they deserve, where investors can invest with confidence, and where we can all enjoy clean rivers, lakes and seas. The British public voted for change, and we are delivering that change by building a system fit for the future. I commend this statement to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State for Environment, Food and Rural Affairs.
Victoria Atkins (Louth and Horncastle) (Con)
I thank the Secretary of State for an advance copy of her statement. Indeed, I welcome the Secretary of State to the Chamber. It is not often that she puts in an appearance, from the publication of the Minette Batters report to the animal welfare strategy, which was published two days before Christmas eve, to the family farm tax fiasco, the Secretary of State has been noticeable by her absence. Indeed, she intervened on the South East Water crisis only seven days ago, months after Tunbridge Wells, East Grinstead and other areas began suffering from the crisis.
The Secretary of State talks about this statement. Why does she have so little pride in her own water White Paper? She announced it to the press on Monday, and we were waiting and ready for a statement—there was no statement. The Government were, however, able to cancel their business on the public accountability legislation—that is ironic. We were waiting for a statement yesterday—there was no statement—and today she has finally given a statement on the White Paper because there was an urgent question. When it comes to scrutiny and accountability, I think the Secretary of State should be a little bit careful before she criticises others over their presence in the Chamber.
That being said, we do cautiously welcome elements of these proposals. Indeed, many of the Government’s measures on water match our plans from before the 2024 election. When we entered Government in 2010, only 7% of storm overflows were monitored by the previous Labour Government. Now that figure stands at 100%. The Water (Special Measures) Act last year repackaged Conservative regulatory proposals, such as banning unfair bonuses for water bosses, and we welcome that. The so-called private investment that the Secretary of State keeps referring to is in fact paid for by bill payers, so let us not pretend otherwise. This investment, although it is needed, is being paid for by all of our constituents through their bills.
Talking about delay, in June and July last year Sir Jon Cunliffe and his team published their review of the water sector. That report contained 88 recommendations. How many of those 88 recommendations were accepted by the Government and included in the water White Paper? Given that the Secretary of State for Energy has just announced that £15 billion worth of taxpayers’ money is to be spent on heat pumps and solar bills—to put that in context, it is equivalent to most of the police funding for England and Wales—can the Secretary of State tell us how much taxpayer and bill payer money has been allocated to this White Paper and over what timeframe these taxes and bills will be used to pay for the work in the White Paper?
Can the Secretary of State confirm whether the Government will extend environmental permit regimes to cattle farmers? If so, how does she intend to ensure that the beef sector—which has already been hit by higher taxes under this Government, by the abrupt halt of farm funding, which has not been replaced, and by the family farm tax fiasco—is not sunk by thousands of pounds in extra costs each year? How will the Secretary of State make sure that infrastructure is upgraded to ensure that catastrophic failures, such as those seen under South East Water in the last two months, do not happen again? A glaring gap in the Government’s rhetoric on water is conserving and ensuring water security. That means improving supply. How and when will the Government improve water security?
Given Ministers’ habits of missing their own deadlines, will the Secretary of State give an iron-clad commitment that the transition plan will be published in parliamentary time this year? How long will the transition take? People expect change in the water sector and are beginning to tire of the sloth-like way in which this Government conduct themselves. The Opposition fully support efforts by the Government to hold water companies to account, building on the work of the last Conservative Government to improve water quality and deliver meaningful reform of the sector. We just need the Government to get on with it.
Emma Reynolds
Oh my gosh! Well, I say to the right hon. Lady that I will not take any lectures from the Conservative party. Not only can they not be bothered to turn up for the statement, which shows an absolute disregard for the concerns of the public about the levels of pollution in our waterways—[Interruption.] I will answer her questions. We have done more in 18 months than the Conservatives did in 14 years, so I will not take any lectures from her. I am proud of our water White Paper and that my predecessor, my right hon. Friend the Member for Streatham and Croydon North (Steve Reed), commissioned somebody of the stature of Sir Jon Cunliffe and appointed the Independent Water Commission to do the most fundamental review of our water system since privatisation—a privatisation that happened under their Thatcher Government.
The shadow Secretary of State asked how many recommendations we are taking forward. It is the vast majority and more, because we are also looking at agricultural pollution, which we did not ask Sir Jon to look at. The water White Paper talks about tackling that kind of pollution and I will not shy away from that. We are working in partnership with farmers, the National Farmers Union and others because that it is an important source of water pollution.
Again, I will not take lectures from the right hon. Lady about the environmental land management programme when the Conservatives underspent the farming budget. They could not even be bothered to get the money out of the door. She asked about infrastructure upgrades. The White Paper introduces a system that moves away from water companies marking their own homework to a regulator with teeth that gets a grip on the delivery of the £104 billion infrastructure investment. Under the Conservative Government, the pipes and pumps were left in a shocking state of disrepair because there was not the regulation nor the strong regulator that we need. That is what this water White Paper and the upcoming water Bill will deliver.
The right hon. Lady talks about improving water supply. It is absolutely correct—maybe we can agree on something—that we have seen very poor performance from South East Water in recent weeks, and I was in the area last week to meet constituents of the hon. Member for Tunbridge Wells (Mike Martin)—[Interruption.] The right hon. Lady asked whether I should have gone earlier. Did she bother to go? [Interruption.] Listen, this is a privatised industry because of decisions made in 1989. I called on the regulator Ofwat to examine the licence conditions and whether they had been breached by South East Water. I do not remember her saying any such thing. I have also hauled in the chair of South East Water to ask for an urgent investigation into what happened last week and the week before, as well as for two weeks before Christmas.
This water White Paper is the most ambitious reform in a generation to our water system. It is severely needed because of the blind eye that the Conservatives turned when they were in government and the record levels of pollution in our waterways.
Josh Newbury (Cannock Chase) (Lab)
I welcome the White Paper because customers right across the country have been failed by their water company, and all too often, when turning to Ofwat for support and to hold executives to account, they have been met with bureaucracy and a weak response. Will the Secretary of State confirm that the creation of a new combined, powerful water ombudsman, set out in the White Paper, will finally give customers a route to resolve complaints quickly when companies fail to deliver this most basic of public services?
Emma Reynolds
I agree with my hon. Friend. That is why the main focus of our reforms is to create a single, more powerful and integrated regulator. At the moment, as I said in my statement, we have duplication as well as gaps. We have consumers who are not being served well, so we need a regulator that gets a grip on the investment in maintaining our water infrastructure and on bearing down on pollution incidents. We have already made a start on that, but the new regulator will have more teeth and more power to do that. My hon. Friend is right to say that we need that single, more powerful and integrated regulator to ensure we deliver better outcomes for consumers and the environment.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Sarah Dyke (Glastonbury and Somerton) (LD)
Although some proposals in this White Paper are welcome, it does not go far enough to guarantee the promised fundamental reforms. Record sewage spills of over 45,000 hours were recorded in Glastonbury and Somerton last year. The public are left in the dark as the Government refuse to record the true scale of the volume of sewage dumped, rather than just the duration. Fat cat-retention payments continue as water companies evade the 2025 ban on bonuses, with the former Wessex Water chief executive officer landing a £170,000 bonus through the parent company YTL, with Ofwat apparently powerless to oppose it. Why do the Government refuse to address the failed ownership model that has allowed pollution, under-investment and profiteering to persist for decades? Will the Secretary of State listen to Liberal Democrat calls for water companies to become mutually owned public benefit corporations?
Emma Reynolds
I thank the hon. Lady for, I think, some support for the White Paper and what she has said. We both share real concerns about the status quo. On mutual ownership, I do not really hear a plan from the Liberal Democrats as to how to get to that point—[Interruption.] Hear me out. If it involves wholesale nationalisation, given that these are private companies, that would cost around £100 billion, would be legally complex and take years of wrangling through the courts. My focus is on improving the status quo and ensuring that we are tackling pollution, which she rightly says is still happening. Since January of last year, 100% of storm overflows are being monitored, so we are shining a light of some of the pollution. We still have a way to go, but we are bearing down on the pollution that she rightly talks about.
My solution to this crisis and this issue is to make sure that we have a complete overhaul of regulation, the regulators and the way that consumers are not, at the moment, put at the centre of things. That way, we protect the consumer in a much more meaningful way by introducing a water ombudsman with statutory powers. We are making some progress and we will make more. I know that she and I agree on some things, although we may disagree on some of the details. We are determined to deliver a system that provides better outcomes for consumers and the environment.
Helena Dollimore (Hastings and Rye) (Lab/Co-op)
Those of us in this House who sit on the Environment, Food and Rural Affairs Committee and grilled the water bosses know all too well how broken this industry is, so I welcome the Government’s commitment to addressing the failures of the industry with these important reforms. As the Secretary of State knows, in Hastings and Rye, we have faced major water outages. In May 2024, the main pipe supplying Hastings burst, leaving 30,000 homes without water for days. It also burst this Christmas, leaving people without water on Christmas day.
We have since found out that Southern Water received planning permission in 2007 to replace the pipe but sat on its hands instead. This month, it begins the work to replace the pipe because of the pressure that I and this Government have put on the water industry. The measure of introducing MOTs on broken water infrastructure will also be critical for preventing that kind of thing from happening.
One of the things that I campaigned on is having clear guidance in the event of an outage and on the conditions that water companies must comply with—not just bottled water, but hygiene facilities and portaloos. Indeed, the Committee has also recommended that. Will the Secretary of State look at that request so we can be better prepared if outages occur?
Emma Reynolds
I commend my hon. Friend’s leadership on this issue. I know that she was putting pressure on Southern Water on Christmas eve. She was concerned about the previous outages, but also about those that were likely to occur. She is absolutely right to say that we need more emphasis on ensuring that companies such as Southern Water are investing in the infrastructure that is needed to prevent these outages in the first place. We are moving from a system of “fix on failure” to one of prevention. That is what this White Paper is all about.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I welcome what is in the White Paper, and it should lead to more effective regulation, but I have just a couple of words of caution. First, the Drinking Water Inspectorate is the only part of the set-up that works well, so folding it into a new regulator should not involve it losing that ability. On agricultural pollution, can the Secretary of State work with the farmers to ensure that this does not just become another stick with which to beat them? She has referred to a whole-system failure, and she is right about that. She will have seen from her recent welcome engagement with South East Water, however, that what we have there is corporate failure, not just of management but of non-executive directors and shareholders. As the Select Committee said, this is an industry that has a real problem with its culture, and what we have in the White Paper, welcome as it is, is not going to shift that. When will we hear from the Government about what they are going to do to change the culture in the industry?
Emma Reynolds
I thank the EFRA Committee Chair for his thoughtful reflections. I agree with him on the Drinking Water Inspectorate—it does a magnificent job—and we will ensure that we transfer its strengths into the new single water regulator, as he suggests. I also agree with him that we will work, and we are working, in partnership with farmers to make sure we get this right. We are looking at what we can do with the ELM schemes to ensure that we give them the support they need to tackle the pollution of our waterways from agriculture. He talks about culture. He has a point, but I would say that the leadership of some of these companies is very varied, and we see good leadership in some of the companies. For example, I have visited Severn Trent, and it has a terrific apprenticeship programme. We need to ensure that we see better performance in the water industry across the board, sharing that best practice from those companies that are actually doing the right thing.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
Last night, a 30-inch water main burst at Holland Park roundabout on the boundary of my constituency and that of my hon. Friend the Member for Kensington and Bayswater (Joe Powell). Homes and cars were flooded to a depth of 3 feet, and since the water was diverted away from the burst, thousands of residents across west London have had little or no fresh water, schools are closed and traffic is in chaos. This and hundreds of smaller bursts in the recent cold weather are the legacy of Thames Water’s failure over not years but decades. Can I thank the Minister for her statement? For my constituents, effective inspection and regulation cannot come soon enough.
Emma Reynolds
I am being kept regularly updated on the issue in Holland Park that my hon. Friend has raised. I understand that 2,000 households are off supply. That is unacceptable, and the regulator, DEFRA and I are working closely with the water company to ensure that we get on top of the issue.
Josh Babarinde (Eastbourne) (LD)
Not only are the likes of South East Water and Southern Water failing Eastbourne, with yet another outage last week, but shipping companies are also damaging our water quality. Thousands of bags of oven chips have washed up on Eastbourne beach, and their decomposition will have a serious impact on marine wildlife and the local ecosystem. I know that Sussex MPs along the shore have experienced a similar thing, whether with onions, bananas or body lotion from the White Company. However, shipping companies are not mentioned at all in the White Paper. Will the Minister meet me and Sussex MPs with constituencies on the coastline to address this issue, to ensure that the shipping companies pay their fair share towards cleaning up our seas?
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Much shorter questions, please.
Emma Reynolds
Either myself or the Water Minister would be happy to meet the hon. Member. I heard about the incident of the chips on the beach. In the White Paper we are looking more broadly at other sources of pollution, including those from transport and agriculture, but we would be happy to have a meeting with him to discuss the issue.
Clive Lewis (Norwich South) (Lab)
After 18 months and an independent inquiry, the Government’s answer is more regulation, not enforcing the law as it is. Not one water company has lost its licence, yet we think that more bureaucracy and more regulation will make a difference. More bureaucracy will not fix our water. I am afraid the Secretary of State needs to know that the problem is ownership. Private monopolies with guaranteed incomes have asset-stripped, polluted rivers and paid themselves billions. Until that changes, nothing will change. Will the Secretary of State meet me and other water campaigners to discuss this document? We cannot see any public consultation in the White Paper, so will she at least commit to that, please?
Emma Reynolds
I am always happy to meet with hon. Friends, as my hon. Friend well knows, but Sir Jon met many stakeholders and members of the public and we had 50,000 responses to the Independent Water Commission. It is right that the Government now get on with things, set the direction and lay the foundations for the water White Paper. I disagree with him on introducing more regulation. We need a regulator with more teeth and more powers to enforce the law as it stands, and that is what we are getting on with.
Bobby Dean (Carshalton and Wallington) (LD)
I welcome many of the measures in this White Paper. More regulation will help, but—let’s be honest—it does not get to the heart of the problem: the failure of the privatisation of the water industry. We need to be talking about ownership, but that is absent from the White Paper. I have heard the conversations in the Chamber today about nationalisation, and I agree with the Secretary of State. There would be some drawbacks to a model of nationalisation. It would put substantial liabilities on the book and would put sewerage infrastructure investment up against investment in schools and hospitals in every Budget. But there is another model, which the Liberal Democrats are putting forward: the co-operative or mutualisation model. Will the Secretary of State take that into serious consideration?
Emma Reynolds
This Government care deeply about mutuals. We have pledged overall to double the number of mutuals. I do not have a problem with mutual ownership. The problem I have is that the Liberal Democrats have not got a plan together.
James Asser (West Ham and Beckton) (Lab)
My constituents are not receiving the service they deserve. Many are facing real issues over water pressure, which is intermittent, unreliable and on some days non-existent. This issue has even been raised with me by primary school children when I am on school visits. Can the Secretary of State reassure my constituents that the White Paper will begin to force the water companies to take action on these day-to-day issues that really affect people’s lives? If they do not do so, will the regulator give weight to those complaints and will it have the kind of teeth that forces the companies to act, so that my constituents can get the service they deserve and, frankly, are already paying for?
Emma Reynolds
Yes, indeed. The new water regulator, when we are able to legislate for that and set it up, will indeed look at these issues and put consumers at the heart of what it is doing.
Cameron Thomas (Tewkesbury) (LD)
I was supposed to meet representatives of Severn Trent at a local treatment works in my constituency in December. That meeting was cancelled at short notice after heavy rainfall. They said they did not want me to get my feet wet. I smell a cover-up. The Government’s well-intentioned White Paper is doomed to fail, though, if they do not mandate water companies to measure their sewage outflows by volume. Are the Government going to do that?
Emma Reynolds
We are absolutely determined to bear down on pollution. We are looking more at the number of incidents and ensuring that we have a better picture of the coverage of storm overflows. We have 100% coverage from January last year, and we are looking to increase the amount of coverage for emergency overflows. The White Paper will ensure that the new, more powerful regulator has the teeth and the powers to crack down on pollution and to shine a light on pollution incidents so that there is nowhere to hide when it comes to the illegal use of overflows that we have seen in the past.
Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)
I thank the Secretary of State for this White Paper, and I concur with many of the comments from colleagues. I attended a community meeting last week on the Kennington Park estate in my constituency to hear from residents of Blythe House, Alverstone House and Lockwood House. Many of them have not had water since Christmas. The responsibility fell on the housing association, and I want to give credit to Hyde Housing for responding and providing water to the residents, especially as many have children, many are elderly and many have mobility issues. We have a situation whereby Thames Water thinks it is not its job to inform councils and housing associations when it is going to lower the pressure on the estates when it is doing works. Can we please ensure that the new regulator will have the right teeth to go after these companies? They ignore everything—all the fines and the warnings. This regulator needs to have teeth. If it does not, this is going to be a slap in the face for all our hard-working constituents.
Emma Reynolds
I can promise my hon. Friend that that is exactly what we are going to deliver: a new, more powerful regulator with teeth. I am concerned about the incident that she describes, so the Water Minister or I will be happy to meet her to discuss it.
Carla Lockhart (Upper Bann) (DUP)
I broadly welcome the White Paper and its evidence-based recognition that sewage and waste water failures are central to poor water quality, rather than defaulting to blaming agriculture. That approach is entirely absent in Northern Ireland where the Agriculture Minister, Mr Muir, is advancing an extreme, one-sided environmental agenda in the form of a nutrients action programme and blaming farmers alone while Northern Ireland Water pumps over 20 million tonnes of sewage into rivers and loughs each year. Will the Secretary of State agree to engage with the Northern Ireland Executive and share the learning, so that they can learn from what is happening here in GB?
Emma Reynolds
I would not like to get involved in Northern Irish politics—that is not for me to do. I can reassure the hon. Lady, however, that we are working in close co-operation with all the devolved Governments. I met Andrew Muir at the Oxford farming conference, and we discussed water. Early last year, at an interministerial group meeting, we discussed different sources of pollution and how the different devolved Governments are dealing with them.
Mr Jonathan Brash (Hartlepool) (Lab)
Hartlepool is a coastal community home to some of the most beautiful beaches in the north-east, but they are too often polluted by water companies to the detriment of my constituents. I absolutely agree with the Secretary of State that this Government have done more in 18 months to fix this mess than any other Government in history, but does she agree that once we have forced these failed water companies to get their house in order and clean up our waters, we should get them out of the ownership of foreign nationals, hedge funds and private equity, and reverse the worst privatisation in British history?
Emma Reynolds
I would like to see longer-term investors, such as pension funds—I am a former Pensions Minister—being more attracted to invest in the water system. We need a more stable, long-term regulatory approach to get more of those investors involved. I met the Maple Eight when I was in Toronto last year, and there is great interest in investing in our water system, but we have to get the regulatory system right first.
Lisa Smart (Hazel Grove) (LD)
I am lucky enough to represent the constituency of Hazel Grove, which includes the junction of the Macclesfield and Peak Forest canals. My constituents value our canals because they are green veins throughout our area and a link to our industrial heritage, but they are concerned about the sustainability of funding for our canal network, given what has happened recently with the breach at Whitchurch and a few years ago at the Toddbrook reservoir. The Secretary of State will know the role of the Canal and River Trust when it comes to water management; it looks after 74 reservoirs nationally. She will also know that the ownership model means it cannot pass on the uplift in costs to customers in the way that water companies do. Could the Secretary of State meet me to talk about the funding given to CRT to ensure that our canal network is sustainable for the future, and that we treat it as the asset it is and not a liability to be managed?
Emma Reynolds
I know Whitchurch quite well—I grew up not too far away. The Water Minister or I will happily meet the hon. Member to discuss that matter.
Mohammad Yasin (Bedford) (Lab)
I welcome the Government’s action to reform water regulation after years of neglect during which my constituents have endured leaks, outages and sewage pollution for far too long. Can the Secretary of State confirm that the new independent water ombudsman will deliver swift, binding redress for consumers, and that it will be fully operational in time to oversee the 2029 price review, which will set household bills and company investment plans through to 2035?
Emma Reynolds
We will set up the water ombudsman; we need the primary legislation to do that. The ombudsman will have statutory powers and will be able to take forward consumer complaints and disputes.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr iawn, Dirprwy Lefarydd. I would say to the Secretary of State “Cofiwch Dryweryn”, because water has always been political in Wales. The White Paper suggests that the UK Government may finally devolve additional powers over water to the Welsh Government. Considering that could have happened years ago under section 48 of the Wales Act 2017, which was delayed—incredibly—at the request of the Labour Welsh Government, can she now set a timeline for when the people of Wales will have power over our own water?
Emma Reynolds
As the right hon. Member will know, there is already a big degree of devolution and we work closely with the Welsh Government. I saw the Deputy First Minister recently, and we discussed the water White Paper that we are publishing today, but also the Green Paper that the Welsh Government are bringing forward in the next few weeks. We are working in lockstep with them, aligning our approaches. We have to do that because, as she says, there are some real cross-border problems, and lots of people—on either side of the border—are affected.
Abtisam Mohamed (Sheffield Central) (Lab)
The chief executive of Yorkshire Water said her bonus may
“feel like it’s a lot of money”
and that she gets “paid what the board decide” she “ought to be paid”; £1.5 million through an offshore company feels like a lot of money because it is a lot of money. She was rewarded for failure, and as my constituency still deals with burst water pipes, it feels like her board decides she should be rewarded for failure. Will the Secretary of State confirm that the new water ombudsman will enforce the prevention of these hidden bonuses, and that infrastructure development will not just end up in higher bills for customers?
Emma Reynolds
This will be an issue for the new regulator, rather than the ombudsman. As a result of the Water (Special Measures) Act, 10 water bosses last year were denied £4 million in bonuses, but there is still more to do. I urge companies to respect the spirit as well as the letter of the law. Ofwat is considering further action to hold these companies to account.
Alison Bennett (Mid Sussex) (LD)
I thank the Secretary of State for her statement, in which she talked about new reforms for regional planning supporting housing growth. Right across the south-east, we have both very high housing targets, but a totally unreliable fresh water system, as I know the Secretary of State experienced herself when she visited Tunbridge Wells recently. How can these two things be realised when fundamentally we are dealing with, as she puts it, whole-system failure?
Emma Reynolds
We do think these two objectives can be realised. Far too many people in their 20s and 30s are denied the dream of home ownership because of the failure of the previous Government to build the homes we need, but we have also seen a failure to build reservoirs and to maintain the infrastructure we had in the first place. We have not built a reservoir in this country for 30 years, so I am glad that there are now plans to build nine of them. The hon. Member is right that we need water supply to underpin the growth we need in our housing as well.
Catherine Atkinson (Derby North) (Lab)
I have seen at first hand the brilliant work that the volunteers of the Earl of Harrington’s angling club and the Midland canoe club do to test water quality and to clear up and look after our waterways, including our beautiful River Derwent. How will the action that this Government are taking ensure that river pollution and sewage are tackled, and not left to volunteers to clear up, while also bringing down water bills?
Emma Reynolds
I pay tribute to those volunteers. The new regulator will take a more supervisory approach to water companies. We will look at pre-pipe solutions to reduce the volume of rainwater and pollutants entering the sewage system in the first place, trying to move away from a system where we are fixing on failure and towards prevention. That is the right way to ensure that we clean up our waterways as my hon. Friend suggests.
Dr Ellie Chowns (North Herefordshire) (Green)
The Office for Environmental Protection said in its progress report last week
“Government have made it a priority to clean up our rivers, lakes and seas”,
but there is
“a lack of coherent, detailed delivery plans to address all major pressures”,
especially agricultural water pollution. Agriculture is the source of at least 40% of water pollution, and yet it seems to merit only one page in the White Paper. In my constituency, agriculture accounts for 70% of the issue. I ask the Secretary of State the same question that the Prime Minister dodged earlier: why on earth does it not have adequate attention here? Will she work with farmers to support river-friendly farming methods, and will she meet me and MPs across the House from the Wye catchment to address how we can tackle this major problem?
Emma Reynolds
I agree with the hon. Lady that the water pollution we see in the River Wye is completely unacceptable. That is why we are working closely with the Welsh Government, such as through the £1 million research grant to look at the sources of pollution affecting the River Wye. We are also doubling funding for the Environment Agency to inspect farms so that we have a clearer picture and can better enforce the regulations we already have, and we are streamlining those regulations so that farmers can comply.
The hon. Lady is right that there is a real problem here. I do not count it in the number of words, but there is real action in the document. It sets out what we are going to do to work in partnership with farmers, strengthen regional planning and better target our environmental land management schemes. She will have seen that the environmental improvement plan contains a comprehensive plan to tackle agricultural pollution. I refer her to the document we published before Christmas.
Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
I see that Tory MPs are too scared to turn up to hear how we are cleaning up their mess. As a Newcastle MP, as an engineer and as a cold water swimmer—the North sea is very cold—I welcome the Government’s new vision for water, which will deliver the water my constituents deserve at a price they can afford. I am, quite frankly, tired of the continual chorus that whatever the failure, whatever the fault, the costs must be passed on to the consumer. In a competitive market, consumers can go elsewhere if they do not like the service they are receiving. With water, we have no choice. Will the Minister confirm that if there is a failure or a mess-up by the companies, either they, their shareholders or their management will pay for it, not my constituents?
Emma Reynolds
I admire my hon. Friend for swimming in the sea at all times of the year, by the sound of it. This new approach, the overhaul we are announcing in the White Paper, will establish a more powerful, integrated regulator that has more teeth, and a system that puts an end to the water companies marking their own homework—a system in which there is nowhere to hide for poor performance.
Jess Brown-Fuller (Chichester) (LD)
Last year, Southern Water’s chief executive saw their pay double to over £1 million a year, while my constituents in Chichester face rising water bills, sewage outflows that continue for days at a time and the continuing over-abstraction of our chalk streams. What are the Government going to do about these water companies that are evading the bonus ban? Does she agree that a public interest model is the overhaul that we actually need?
Emma Reynolds
As I said, we have already blocked 10 company bosses from taking £4 million-worth of bonuses. I am urging them to respect both the spirit and the letter of the law, and Ofwat is considering further action to hold these companies to account.
Steve Race (Exeter) (Lab)
This is the second major programme of business we have seen in this Parliament, which shows that the Government are getting on with cleaning up our rivers and sorting out the water sector. That will be very welcome in Exeter, where the River Exe has borne the brunt of agricultural run-off and pollution over the last few years.
Exeter is also home to the Centre for Resilience in Environment, Water and Waste, which works with partners to explore some of the new challenges that have come up, including better upstream water management, microplastics and pollutants. What would the Minister say about making sure that all water companies work in partnership to look at innovative solutions to the bigger water challenges that we face? Will she visit to see the centre’s fantastic work?
Emma Reynolds
I am always very happy to visit my hon. Friend. I know that the Nature Minister, my hon. Friend the Member for Coventry East (Mary Creagh), visited last year.
My hon. Friend the Member for Exeter (Steve Race) is absolutely right that we have to strengthen the system. We will strengthen the regional planning system and we are doubling the funding for catchment partnerships. We have to bear down on all sources of water pollution because, as he said, we have to protect our beloved rivers—the one in his constituency and many across the country—that saw record levels of pollution under the previous Government.
Mr Adnan Hussain (Blackburn) (Ind)
The White Paper does not go far enough. It leaves water in private hands while prices rise, pipes rot, rivers are polluted and shareholders profit. Why should my constituents have to pay for the consequences of private mismanagement? Does the Secretary of State accept what many across this Chamber have already said: that the only meaningful change or reform is to bring water back into public ownership?
Emma Reynolds
I understand the frustration that the hon. Gentleman expresses. Like him, I am really frustrated with the levels of pollution in our waterways, and with some of the poor consumer service we see. I do not think the right answer is to embark on a hugely expensive and legally complicated nationalisation, because it would detract from the good work we are doing to get a grip on regulation and to set up a new regulator. He may think it is the right answer, but where would the money come from? Does he want less spending on schools and hospitals as a result?
Anna Dixon (Shipley) (Lab)
There is much to welcome in the White Paper, including the MOT for assets, the increase in funding for community and catchment partnerships, and the greater say for communities in regional planning. However, my Shipley constituents have been let down by Yorkshire Water over many decades, through its blatant profiteering at the expense of customers, leveraging debt of some £6.2 billion. I may have missed it, but will the Secretary of State please assure me that the regulator will have powers to step in when companies such as Yorkshire Water, and more importantly its owner Kelda Holdings, have consistently failed customers?
Emma Reynolds
I thank my hon. Friend for her interest, and indeed for her submission to the Independent Water Commission. On the financial management of our water companies, we have set out in the White Paper that the new regulator will have the power to step in to ensure that unmanageable levels of debt are not taken on by water companies. We have seen some very poor financial dealings in the past, which have led to poor performance and poor maintenance of water assets.
Martin Wrigley (Newton Abbot) (LD)
I welcome the White Paper and a more effective regulator, which is really good. However, I am concerned by the lack of urgency on clean water supply capacity. The report talks of a shortage of 5 billion litres a day by 2050. Meanwhile, we read warnings that seven English regions will be in serious water stress by 2030, and gov.uk and the NFU have warned of potential droughts this summer if not enough rain is captured over January, which has been dry until now. Will the Government accelerate plans for more clean water supply before the 2050 and 2055 dates?
Emma Reynolds
First, I thank the hon. Gentleman for welcoming the White Paper and the work on the new regulator. He is right to underline the importance of water capacity. My hon. Friend the Water Minister has really got a grip on this and is looking at how we prepare for events such as droughts. Perhaps I could set up a meeting for both of them to discuss that.
Neil Duncan-Jordan (Poole) (Lab)
Wessex Water, which serves my Poole constituency, was previously banned from paying bonuses to its company bosses. However, it was able to get around the ban by calling the payments something else or using other mechanisms to pay for failure. Will the Secretary of State therefore explain whether the new White Paper will finally clamp down on these unacceptable practices?
Emma Reynolds
I agree with my hon. Friend that it is unacceptable. These companies should respect both the spirit and the letter of the law. As I have said, Ofwat is considering what further action it can take to ensure that these companies obey the law that this House passed last year.
Charlie Maynard (Witney) (LD)
I welcome the White Paper and thank the Secretary of State and her team for their work. I am keen to understand how it will work in practice. As the Secretary of State will know, Thames Water’s largest equity shareholder wrote down its shareholding to zero in May 2024, so the equity is widely regarded as worthless. That leaves the debt, three quarters of which is held by the London & Valley consortium, the class A creditor. Does she agree that, given that the equity is worthless, leaving only the debt, the consortium obviously has material influence over the company?
Emma Reynolds
I am sorry, but I cannot get into the specifics of Thames Water at what is quite a sensitive moment. What I can say is that it is financially stable, but the Government are prepared for all eventualities, including a special administration regime if one were needed, but I cannot go into the detail of what is happening.
Yuan Yang (Earley and Woodley) (Lab)
Earlier this week, my team and I secured a £12,000 refund from Thames Water for one of my constituents whose pipes had been left to leak for almost half a year. Half a year ago, when I first met Thames Water bosses, I asked them to explain how they would be using higher bills to pay for better pipes and infrastructure in my constituency. It is now almost the end of the financial year and they have set out no explanation. What more can the Secretary of State do to ensure that my constituents are getting their money’s worth out of Thames Water?
Emma Reynolds
Before we legislate for the new regulator, we are encouraging and working with Ofwat to see what can be done to move to a more supervisory approach—similar to what we do in financial services, of which my hon. Friend is well aware—so that we can have a much more tailored and targeted approach. Different water companies are in different situations: some are performing better than others, and some are performing very poorly. I am really sorry to hear what she said. This Government have more than doubled the compensation that consumers will receive if there are outages and problems, which is to be welcomed.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
I welcome the statement from the Secretary of State and the White Paper. Some £7.6 billion has gone from the pockets of my constituents in Dewsbury and Batley, and all other customers of Yorkshire Water, into the pockets of shareholders in the form of dividends. In addition, there has been £1.4 billion in interest payments on money held by the company, yet bills have risen by an eye-watering 28% to 34% in the past year, and are predicted to rise by a further 30% between now and 2030. What steps will the Secretary of State and the Government take, and will they consider retrospective penalties for past failures to claw back dividends that went to shareholders instead of being invested in pipes or used to reduce customers’ bills?
Emma Reynolds
I thank the hon. Member for the kind words with which he started his question. Within days of taking office, my predecessor ringfenced the money that should be invested in maintaining the water infrastructure he talks about. If it is not spent on that, it will go back to customers. We took that action as soon as we got into government.
Alex Mayer (Dunstable and Leighton Buzzard) (Lab)
This week, work begins on storage tanks to stop raw sewage pouring into the River Ouzel during periods of heavy rainfall—I know that my constituents and residents welcome that, as I am sure do the fish in the river. Does the Secretary of State agree that since we have had a Labour Government, it really has been all cisterns go on issues such as this?
Emma Reynolds
I could not agree more with my hon. Friend. We must look at the pre-pipe solutions that she talks about, and the water White Paper emphasises the need to ensure that we reduce the volume of rainwater and pollutants entering the sewerage system in the first place.
Edward Morello (West Dorset) (LD)
The White Paper says that, along with the Ministry of Housing, Communities and Local Government, DEFRA will implement a new “plan-making system”—a term I have frankly never heard before. I do not know what it means, but it says that water companies will be designated a consultation body for this new plan-making system. Separately, it says that the Government will only consider making water companies statutory consultees in planning applications. Meanwhile, the White Paper says that the Government will ensure that the “right to connect” supports their house building targets. Does the Secretary of State understand that if water companies are not statutory consultees, and we keep building more housing and connecting it to the system, we will simply get more sewage?
Emma Reynolds
The Water Minister chairs a water delivery taskforce, and she is getting a grip on the investment in water assets and infrastructure that water companies have promised. That will ensure that there are fewer leaks and that there is less pressure on the system. We believe there is a way to ensure that we boost water capacity and build more homes in our country.
Connor Naismith (Crewe and Nantwich) (Lab)
Incredibly, last year saw the fifth incident of agricultural pollution in just three years in the River Weaver, which runs through the centre of Nantwich in my constituency, resulting in thousands of dead fish and a stench that permeated our town centre. I pay tribute to Stuart Mitton from the Restore the Weaver action group, local angling groups and local ward councillor Anna Burton for the work they are doing on this, and I welcome the White Paper. How will its proposals ensure that we tackle agricultural run-off into rivers such as the River Weaver and, crucially, that where pollution does occur, we see swift justice?
Emma Reynolds
As I have said, the environmental improvement plan that we published before Christmas sets out a comprehensive plan to tackle agricultural pollution. We are building on that in the White Paper, and we will consult on options to reform how sludge use in agriculture is regulated—that is one measure in the White Paper. We are also doubling the funding for the Environment Agency so that it can increase the number of farm inspections and work in partnership with farmers to get this right.
Calum Miller (Bicester and Woodstock) (LD)
At the first Prime Minister’s questions of this Parliament I had the opportunity to invite the Prime Minister to scrap Ofwat, so I am delighted to see that in the White Paper.
The Minister has said that Ofwat will now protect consumers better. We had terrible floods in my constituency in September 2024 from surface water. The lead local flood authority investigated those and, as is its responsibility, produced section 19 reports. I was shocked to learn that the LLFA has no powers to compel water companies to act on the recommendations—Thames Water had failed to inspect a critical pump for over 20 years. Will the Secretary of State set out how the new regulator will ensure that section 19 recommendations are taken forward to protect consumers better in future?
Emma Reynolds
The hon. Member is right to say that we need to abolish Ofwat—we might have had that idea previously too, by the way. As he knows, at the moment we have four regulators, and sometimes there are duplications or regulatory gaps. That is why the focus of our reforms is on ensuring that we integrate the environmental regulation and the economic regulation of water, because for too long those things have been separate. I would be happy to write to him to respond on the specific issue that he raises.
James Naish (Rushcliffe) (Lab)
My constituents in Rushcliffe, notably in East Leake, have faced sewage spills for far too long, so I am pleased to be working with Severn Trent Water to ensure that new pumping stations and rising mains are installed in East Leake, Wysall and Willoughby-on-the-Wolds over the current price period. How will having a new single water regulator, with real teeth, ensure that that commitment is delivered in the current price period?
Emma Reynolds
I thank my hon. Friend for his question and the opportunity to mention that we will be publishing a transition plan which, as I mentioned in my statement, will set out a road map from where we are now to having the opportunity to legislate. I want to make progress before that Bill is in the House, so that we can start to shift the dial, build on what we did last year in the Water (Special Measures) Act 2025, and move towards that supervisory system that will give the regulator more teeth. We need that new regulator and those new powers in legislation to bear down on incidents such as the one my hon. Friend is talking about.
Richard Foord (Honiton and Sidmouth) (LD)
I welcome the abolition of Ofwat, but I wish to let the Secretary of State know about one of my constituents. Marion from Axminster is aged 85. Her direct debit to South West Water this month is £45, but next month it will nearly treble to over £118. Residents who I represent are fed up with being ripped off by these profiteers. Will the Government look again at Liberal Democrat proposals for a new ownership model, whereby water companies such as South West Water are mutually owned by customers?
Emma Reynolds
As I said previously, I do not have a problem with mutual ownership—I think it is a good thing—but the question the Liberal Democrats have to answer is how they will get there.
Finally, may I say a big thank you to my officials? The water White Paper was a very heavy lift, and there is more detail to come in the transition plan and the water Bill. I also thank Members for the interest we have had across the House, other than from the Conservatives.