Water Companies: Fines

Lord Cromwell Excerpts

Thursday 29th January 2026 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

In March last year, Yorkshire Water agreed to pay an enforcement package of £40 million to address the failures that were found by the investigation at that time. That package is to prioritise work on some of the most problematic storm overflows in environmentally sensitive areas to ensure that they spill less than 20 times a year. Surely that must be our priority.

[Lord Cromwell (CB)]

My Lords, it may have come as a surprise to many water bill payers that payment plans out to 2030 were agreed to pay fines. Will the Minister agree that when fines are imposed in future, a payment plan that goes with them should also be announced?

[Baroness Hayman of Ullock (Lab)]

The noble Lord makes a helpful suggestion, and I am happy to take that back to the department.

Large-scale Waste Crime

Lord Cromwell Excerpts

Wednesday 14th January 2026 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

I am sure the noble Viscount and others know that the Kidlington situation was utterly appalling. It was, as he said, quite extraordinary that it was allowed to happen. It is important to recognise that it was exceptional. We need to concentrate on the fact that waste crime is more and more frequent. It is a serious criminal activity that blights our countryside, which is why, as I said, the status quo is not acceptable, and we are seriously looking at what we can do to make the improvements that are needed.

[Lord Cromwell (CB)]

My Lords, the Minister’s department has confirmed in Answers to a series of Written Questions from me that neither the Government nor local authorities have any responsibility for dealing with the disposal of material dumped by third parties on private land. Criminals are of course aware of this, and target fields and tracks off immediate public highway verges with impunity. Victims typically lack the money or expertise to remove illegal waste yet are told that it is down to them to deal with it. Does the Minister feel that this state of affairs is just? Do the Government have any plans to address it and give practical assistance to the victims?

[Baroness Hayman of Ullock (Lab)]

As I said, we do not think the status quo is working. We need to look at how tidying up and tackling waste crime, both from the start and at the clearing up end of things, are properly resourced, and at how the criminals carrying out this illegal activity are caught and dealt with. As the noble Lord said, that is difficult because of the nature of where it happens but, again, we are working across government to look at the best way to tackle this, because unless we all come together across government, we will not resolve this issue.

Planning and Infrastructure Bill

Lord Cromwell Excerpts

Committee stage
Wednesday 17th September 2025 Lords Chamber

[Earl Russell (LD)]

My Lords, I rise briefly to speak to my Amendment 246 in this group on strengthening the NRF model and, most importantly, on the overall improvement test for environmental delivery plans under Clause 55.

This is a really interesting amendment, and I welcome the speech the noble Lord has just made. We recognise the amendments that the Government have made, but judging by the size and the number of them, and the uniformity of purpose across the amendments and across political parties, I think it is fair to say that concerns remain and that many Members are still looking for further reassurance and guidance from the Government on these matters.

My amendment makes it clear that the conservation measures must not merely mitigate or offset environmental harm but significantly and measurably outweigh it. That is important, because that is about delivering a genuine net gain on the conservation status of our natural heritage. Against that there are two things. First, we have the new policies and plans the Government have put forward. There is a background worry about the disregard for nature and the dangers inherent in some of the Government’s plans, but there is also a worry that the bar is too low and that too often in the past we have seen, with the best will, government intentions and legislation ultimately failing to deliver what they promise, particularly for nature.

It is therefore important to put in those measures, and other Members have picked up on them as well. It gives clarity to developers and those involved that they need to do something more than merely replace. The amendment would enshrine in law a clear principle that any harm caused by development must be more than compensated by concrete improvements. As my noble friend Lady Grender said, that aligns with the Government’s own biodiversity and net gain targets and sets robust, measurable standards.

We are all aware that we are already, famously, one of the most nature-deprived countries in the world and the few precious sites we have left are often not properly looked after and maintained. They are very disparate and very precious. Organisations and Members across the House have raised these issues, so while I welcome “materially outweigh” that the Government have put forward, there is a need to go further. I hope we can have further conversations on this area. These matters are important.

I support most of the amendments in this group. Again, what is important is the sense in this House that on these matters we seek reassurance.

[Lord Cromwell (CB)]

My Lords, this is my first intervention today and, of course, I am speaking personally. I wholeheartedly support what the Government Whip said about this being Committee stage and how it should be conducted, but this is a big Bill and it needs proper scrutiny. As the Minister has told us today, there are lots of things still to clarify and many questions still to be answered. Some speakers may need reining in, and I am sure the House will support the Whips when they attempt to do that, but I put it on record that I thought the crude attack yesterday in Oral Questions was inappropriate and unhelpful.

I support most of the amendments in this group, particularly Amendments 286 and 300 and others that have been raised such as those by the noble Baroness, Lady Grender, a few moments ago. These all seek to introduce some quantification, comparison and accountability into the EDP process. There will always be a temptation for implementing bodies, be it Natural England or those that it subcontracts, to introduce subjectivity—or, shall we say, optimism—into their results and reporting. Openness with data and debate will be essential to enable candour, challenge and particularly third-party professional scrutiny. EDPs are a new adventure, and lessons will need to be learned early and fully. I therefore support, as Amendment 300 puts it,

“a high degree of certainty based on an objective assessment”.

I also support Amendment 264 in this group from the noble Earl, Lord Caithness, and, to save time, Amendment 275 in the next group from the noble Earl, Lord Russell. Both seek to introduce some discipline and accountability via mitigation hierarchy and a stepped approach.

Finally, I have two related questions for the Minister. Will there be an independent audit process of Natural England and EDPs—not just of their finances but of the outcomes and results? If so, who will select these auditors and evaluators?

[Baroness Bennett of Manor Castle (GP)]

My Lords, I will speak to Amendment 290 in my name, which was tabled as Amendment 119 in the other place by my honourable friend Ellie Chowns. I agree with the noble Earl, Lord Russell, that the noble Lord, Lord Lansley, has clearly identified where this group has taken us, and we have heard powerful expositions from the noble Baroness, Lady Grender, and the noble Lord, Lord Gascoigne.

This amendment specifically addresses European sites, European marine sites, European offshore marine sites and Ramsar sites, so we are talking about the overall improvement test, but in a limited subset. Again, we are talking about the nature of the overall improvement test.

These sites are, of course, hugely precious and terribly important, and Ramsar sites are described as internationally important places. Amendment 290 says that the Secretary of State has to be

“satisfied that there would be no adverse effect on the integrity of the relevant site”.

That is part 1 of the test. Paragraphs (ii) and (iii) state some offsetting allowances if there is no alternative and if appropriate measures are taken, but the amendment sets a very high standard for these terribly important places, which is crucial for them.

I note that in Monday’s debate, the noble Baroness, Lady Hayman, talked about how, under Clause 89, Ramsar sites were previously protected by guidance rather than legislation. This is indeed legislation, but if the test is not sufficiently strong then it is not any kind of protection at all. Also on Monday, the noble Baroness said that SSSIs have protection under the Wildlife and Countryside Act. I have not had time to really absorb what this morning’s letter says. It refers to that protection, but I would be interested to hear from the Minister on how that interacts with the changes that the Government have made and how Clause 55 works.

It is worth focusing for a second on what we are talking about. When I think of Ramsar, I always think of Rutland Water. I am sure that many noble Lords have visited it and seen the amazing birds at that site—I am looking at the noble Lord, Lord Randall. I also think of the Inner Thames Marshes SSSI, which is part of the Rainham Marshes Nature Reserve. I think of that because I was there in 2018 on Hen Harrier Day, when we had the wonderful and amazing pleasure of a marsh harrier swooping over to inspect our event for defending their cousins. I can remember the sense of wonder and amazement in the crowd, many of whom were local people. It is important to stress how important those SSSIs are to nature but also to local communities. We might think, “That will always be all right. That will always be protected”, but in the 1990s, the site was a candidate location for a Universal theme park, which, happily, was not built.

--- Later in debate ---

The noble Lord, Lord Cromwell, raised the issue of an independent audit process for Natural England, which will be subject to audit, as all public bodies are. I will revert back to him on the issue of who selects the auditor. I do not have the answer to that in front of me, but I will come back to him on that.

[Lord Cromwell (CB)]

All the amendments in this group are basically trying to answer the question: what would success look like, and how do we measure it? I guess it is the old consultants’ cliché, I guess. The point I was concerned about was not just a financial audit but measuring the performance of EDPs. Environmental change is fantastically difficult and subjective to measure, so is there a commitment to use external third-party expertise to evaluate their success, or will Natural England mark its own homework?

[Baroness Taylor of Stevenage (Lab)]

As if by magic, I have the answer for who audits Natural England, so I can answer the noble Lord’s question. The accounts of Natural England are audited by the Comptroller and Auditor-General under the Natural Environment and Rural Communities Act 2006. It is the National Audit Office, so I hope that is helpful.

[Lord Cromwell (CB)]

That is helpful, and I am sure that it will look deeply into the financial performance, but I am worried about how the actual performance of the EDP will be measured.

[Baroness Taylor of Stevenage (Lab)]

I was just coming to that. The performance of EDPs will be monitored in the ways that have been set out. There will be oversight from the department and a process for monitoring the EDPs. It might be helpful if, between Committee and Report, the noble Baroness, Lady Hayman, and I can set out exactly how that process will work, and we will aim to do that.

The noble Baroness Coffey talked about the environmental principles policy statement, and I can confirm that the Bill must have regard to that statement, in line with the Environment Act 2021. With all those comments, I hope that noble Lords will not press their amendments.

--- Later in debate ---

[Lord Cromwell (CB)]

I will speak very briefly in support of Amendment 293 on the annual report. Put simply, if the department is not required to produce an annual report, will it do so and, if not, how is Parliament to be made aware of progress or difficulties, unless, perhaps by chance, a Select Committee calls in Natural England to tell it?

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank noble Lords for introducing their amendments and for the wider debate. I will speak first to Amendment 293, tabled by the noble Lord, Lord Roborough. That requires Natural England to produce annual reports on EDPs rather than just at the mid- and endpoint of an EDP’s lifespan. We think that our Amendment 325C, on the new reporting requirements, partly speaks to this issue. Our concern is that Amendment 293 would bring a disproportionate burden, given the strengthened reporting requirements that we have introduced in government Amendment 295A.

The noble Lord asked whether we were happy with these levels of reporting. It is important that the frequency of reporting strikes the right balance. Natural England will still be carrying out appropriate monitoring throughout the EDP’s life cycle and will retain the power to publish a report at any time. Similarly, requiring EDPs to include an assessment of their impact on the local economy and community in the relevant area, as is proposed by the noble Lord’s Amendment 295, would add a significant burden to the reporting requirements for EDPs. Of course, communities will be involved during the consultation process; I wonder whether it might be an idea to circulate the consultation guidelines to noble Lords, because obviously the consultation process is an important part of what we are proposing.

On Amendment 285A, I hope I can satisfy the noble Lord, Lord Randall, that requiring a biodiversity survey of an EDP area is already accommodated in the existing drafting to an extent that such a survey is not necessary. I was pleased to hear about his love of birds. He may be interested to know that I am a member of the RSPB, so perhaps I could be described as a minor “birdo” alongside him. Clause 57 already requires an EDP to describe the conservation status of each identified environmental feature at the EDP start date, setting out the relevant baseline. In doing so, as is the case for all duties carried out in relation to Part 3, Natural England will be required to take account of the best available scientific evidence. It is also important to remember that these are targeted plans to address the impact of development on a specific environmental feature. Requiring a full survey of all the biodiversity in an EDP area risks adding cost and burden that go far beyond what is required to consider the impact of development on the environmental feature.

Amendment 258C, tabled by my noble friend Lady Young, would add a series of additional requirements for Natural England when preparing an EDP. I know from discussions with my noble friend that she wishes to ensure that the NRF is as rigorous as possible while ensuring that it is an effective tool to support development to come forward. Specifically in respect of the supporting evidence base for EDPs and the consideration of the environmental principles, I assure my noble friend that these matters are already captured through the drafting and amplified by the Government’s amendments to Part 3.

My noble friend also asked about further evidence collection. Where it is necessary to gather additional ecological evidence to prepare and monitor an EDP, the associated costs may be recovered through developer contributions. Clause 57 already requires an EDP to set out why conservation measures are considered appropriate, and new Clause 87A(2) requires the Secretary of State and Natural England to take account of the best available scientific evidence when exercising functions in relation to EDPs. Clause 57 also requires an EDP to describe the conservation status of each identified environmental feature, again with regard to the best available scientific evidence. This means that there is already a requirement for Natural England to ensure that there is a solid base of scientific evidence, including adequate baseline data, to inform the preparation of the EDP. My noble friend asked why Natural England is required to have regard to environmental principles as it refers to Ministers. I reiterate that the Environment Act requires the Secretary of State to take them into account when making their decision to approve or make an EDP.

I recognise the desire to ensure that EDPs deliver as much for the environment as possible, but we must also ensure that we are not asking developers to address more than is reasonable or that we are allowing EDPs to replace the important wider programme of work which is under way to protect important sites and species as part of our ambitions in the overall environmental improvement plan. We have to get that balance right. We have to make sure that the environment supports development and at the same time does not stop important development where we need it.

The noble Lord, Lord Lucas, asked quite a lot of questions about the baseline and other things. It is probably helpful if I put my answers in writing to the noble Lord. I hope that with these explanations and assurances, noble Lords will not press their amendments. I beg to move.

Independent Water Commission

Lord Cromwell Excerpts

Wednesday 23rd July 2025 Lords Chamber

[Lord Cromwell (CB)]

My Lords, the Minister and I have a long and mainly happy history of trying to reform the water industry, including the replacement of Ofwat. I read with interest the 88 recommendations in this very timely and useful report. There is a lot to discuss, much of it welcome, but for now I will focus on two questions.

First, the report underlines the need to recognise the very long-term nature of water infrastructure investment. It says that the strategic policy statements have been too short term and that water company plans, typically of five years, encourage short-term thinking. I have often asked successive Ministers to make it clear that there is no quick fix here. This will be very disruptive to consumers, cost billions of pounds and, crucially, will take at least 25 years to implement. That is five parliamentary terms. The Government need to be honest with the public on this, so I ask the Minister to underline this and to make clear the likely timeline for this refurbishment of the water and sewerage infra- structure.

Secondly, the report summary on page 29 calls for more

“senior engineering and financial expertise”

on its board. I agree with that, but a key problem at Ofwat was that it lacked the financial engineering skills to grasp what private equity investors were up to, which led to so many of the debt problems and other issues in the finances of the water companies that we see today. Will the Minister be pressing for expertise in financial engineering in this area to be included in any new board?

[Baroness Hayman of Ullock (Lab)]

Any new board must have the right expertise if it is to deliver what we want for the industry. The noble Lord makes a very important point that whatever that expertise is, we must ensure that any future regulatory systems are set up to do the job they are supposed to do and that they have the knowledge, ability and skills to do that effectively. Otherwise, we will end up with a regulator that is, again, ineffective, which is not how we want to move forward.

The noble Lord makes a good point—this will take a long time. I hope the general public recognise that this is a long-term rebuilding programme. We are rebuilding a lot of a very old system, and we must get it right. This is also why will be bringing out the White Paper in the autumn, as quickly as we can, following the publication by the committee. From that, we will do the consultation, which must inform the public of what we are looking to achieve and what the timescales will be.

We want to bring in new legislation as swiftly as practically possible following that White Paper. That will also be part of the discussion on how we bring people with us, because people want to see the water industry cleaned up.

Agriculture (Delinked Payments) (Reductions) (England) Regulations 2025

Lord Cromwell Excerpts

Wednesday 30th April 2025 Lords Chamber

[Lord Roborough (Con)]

My Lords, I thank the Minister for a thorough introduction to this SI. I have tabled a regret amendment on behalf of my Benches, but, in reality, it is on behalf of all English farmers. Regret is too gentle a word to describe the mood among the farming community.

Before I address the issues, I first draw the House’s attention to my registered interests as a farmer and landowner. I am directly impacted by this SI, with a 90% reduction in my delinked payments. I am at least sheltered by the SFIs that I have signed up to; that is not the case for the majority of farmers.

When in government, we replaced the basic payments scheme with delinked payments based on historical BPS claims. This was intended to be gradually phased out by 2028 in favour of environmental land management schemes, where farmers and landowners receive payments only for public goods. The reductions we put in place put these delinked payments on a gradual glide path to zero in 2028. This Government have dramatically accelerated that decline. This effectively ends the seven-year transition that English farmers had been led to expect three years early, upending their budgets.

The Government promised that this abrupt reduction would release more funding for sustainable farming incentives, Countryside Stewardship schemes and large-scale landscape recovery schemes—collectively known as environmental land management schemes. Despite a commitment to give up to six weeks’ notice of a planned closure of SFI applications, the Secretary of State abruptly closed applications with 30 minutes notice at 6 pm on 11 March, as the noble Baroness, Lady Grender, has said, apparently breaking two commitments at once.

Only a minority of farmers who were previously receiving BPS had actually signed up to SFIs. Today, I am speaking particularly for two cohorts of farmers who are bearing the brunt of this SI’s excessive reduction. The delinked payments cut is particularly painful for those who were unable to apply for SFIs as they were already in environmental schemes that were less profitable but designed to work alongside this phased reduction in delinked payments. Those farmers were simply abandoned, with no compassion from anyone.

When the SFIs were closed to new applications, this affected another cohort of farmers, who were expecting to replace old environmental schemes and the delinked payments with SFIs but who had not yet completed their SFI applications. These farmers are simply in despair. There is no transparency over the timing of the payments under new SFIs, nor what their nature will be. There is certainly no confidence that they will enable these farmers to continue delivering environmental goods as they had planned, or even, potentially, to remain in business.

The Minister earlier stated that the details of revised SFIs will be released this summer. Many farm businesses are in crisis after delinked payments and the cut of SFI applications. Could the Minister please indicate how much has been identified within the existing farming support budget for these new SFIs?

Our actions in government demonstrated our commitment to paying farmers with public money for the public goods they delivered, as well as allowing them to plan ahead financially with certainty. This Government have acted in a way that allows for no financial planning by farmers and have created incentives for those farmers now so disadvantaged to compromise environmental principles and push for greater output in order to remain in business.

Farming is a competitive industry. Food production is largely commoditised, and our farmers compete not just against their neighbours but also against farmers across our country, our continent and the world. Although many of our farmers are capable of competing effectively, smaller farms, particularly in less-favoured areas, can find this competition too much. When we rightly include our high demands for animal welfare and environmental protection, this competitiveness is further undermined. Is it any great surprise that the average age of farmers is 60, and there appears to be limited interest in the next generation engaging?

Farmers in Wales, Scotland and the rest of Europe continue to enjoy much higher levels of financial support. Even the great prairie farmers of the US enjoy heavily subsidised crop insurance and the massive ethanol blending mandate supporting corn prices. Where are the hedgerows, wild birdseed belts and woodlands on these prairies, protecting and enhancing the environment? How does the Minister expect our farmers to be able to provide competitively priced food, protect and enhance the environment, and provide all the other public goods, as well as supporting their families, when the Government slash support and environmental payments at a moment’s notice?

In answer to my question on Monday in your Lordships’ House, the Minister said that diversification and improvements in the environment are two of the three central pillars of the 25-year road map that the Government are developing for farming. Cutting SFIs at a moment’s notice seems a strange way to demonstrate that commitment. My question was about how nature restoration levies in the Planning and Infrastructure Bill as drafted will go to Natural England, rather than farmers and landowners, and be used for developing its environmental development plans, potentially on land that it will compulsorily purchase. This is a prime opportunity for the Government to help farmers diversify and supplement ELMS. Why does the Minister not want this opportunity to be offered to farmers?

I am pleased to see that the party to my left have followed my regret amendment by tabling a fatal amendment. It is good to see noble Lords from many, if not all, Benches working together to support our farming community. As is the long-standing custom of this House, we on these Benches will not support the fatal amendment. In this case, this would undermine the Government’s power to control their finances and, as the Minister rightly pointed out, undo the previous transition from delinked payments to ELMS. However, I strongly urge the Minister and all members of her Government to understand the terrible position this SI is putting many farmers in, and to act quickly to help those affected. Either moderate the impact of this SI or reinstate the existing SFIs. I intend to test the opinion of the House.

[Lord Cromwell (CB)]

My Lords, I declare an interest in this matter, as I have been involved in UK agriculture for my whole life. Normally, I try to be helpful and even occasionally to inject some humour into my remarks—with varying degrees of success, admittedly. But I am sorry to say that, tonight, I am cross—not with the Minister, for whom I have great respect and indeed affection. But the fatal amendment and regret amendment in the names of the noble Baroness, Lady Grender, and the noble Lord, Lord Roborough—which they have so devastatingly put to us tonight—highlight the frankly chaotic and opaque financial position for UK agriculture. SFI, Defra’s flagship scheme, ran out of money and slammed shut without any warning. The House of Commons Minister called this a “cause for celebration”. I wonder what would happen if DWP ran out of money and tried announcing something like that to the House.

The Minister mentioned the existing higher-level stewardship agreements, of which my family holds one. These were acknowledged by the Defra House of Commons Minister as having punitively low rates, and it was announced weeks ago that these would be updated before now, but nothing has been heard since. I am afraid that the Minister was wrong when she told us earlier that they have been increased. I have just checked the Defra website, which says that we agreement holders will be written to “by April” with increased rates. I ask noble Lords to check their diaries: today is 30 April, and nothing has been received.

The next iteration of the SFI, we are told, will be after the spending review, which probably tells us all we need to know about it. Meanwhile, the accepted tapering down to zero, over time, of payments under the BPS, as UK agriculture exited EU support, has been out of the blue cut by a totally unexpected 76% for smaller farmers—all of this while speechifying about environmental schemes, food security and a grand-sounding 25-year plan for UK agriculture, which no farmers I have spoken to have even heard of.

I am sorry to say this, but Defra’s credibility—and I have been involved in agriculture my whole life—has never been lower in the eyes of the sector it is supposed to support, and what little trust remained has now evaporated. All that said, while these Motions are both accurate and justified, I shall, given my involvement in the industry, with great sadness abstain if they are put to the vote.

Ancient Trees: Protections

Lord Cromwell Excerpts

Thursday 24th April 2025 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

That is a really good question. I do not know the reason why the council has put a TPO on it, but common sense suggests that the tree may not actually be dead. You could say that it has been extremely heavily pollarded, as opposed to chopped down at the base, as was the case with the Sycamore Gap tree. On that basis, it could potentially sprout again. It will not exactly recover quickly to its former glory, but that is potentially the reason that the TPO has been put on it.

[Lord Cromwell (CB)]

My Lords, can the Minister tell the House whether TPOs are easy to find online through digital mapping? That would remove the excuse for cutting down a tree with a TPO; it would also give people in the local community the opportunity to identify trees that perhaps do not have TPOs but they feel should, as part of the local plan.

[Baroness Hayman of Ullock (Lab)]

The noble Lord asks an interesting question, to which I do not actually know the answer. I shall look into it and get back to him.

Sustainable Farming Incentive

Lord Cromwell Excerpts

Tuesday 18th March 2025 Lords Chamber

[Lord Cromwell (CB)]

My Lords, the Minister in the Commons told the House of Commons that he knew for five years that the money was going to run out, but he said nothing. Instead, he waited until the money ran out and slammed the door— overnight—on more than half of English agricultural holdings, in breach of the six-week notice period that was cynically, overnight, airbrushed off the Defra website. His only reason for this was that there might otherwise have been a rush of applications. His only advice to farmers was to apply immediately for any new SFI that is opened, which is surely itself a recipe for a precipitous rush. It also ignores that inquiries to Defra by farmers seeking to get their applications right take months to get a reply. It took me three years to get answers, and those were still incomplete when the scheme was shut in the face of my family farm.

Finally, the Minister then tells hard-pressed rural communities that his department running out of money should be “a cause for celebration”. I cannot help but recall the rustic expression, “Don’t piddle down my back and tell me that it’s raining”. Can the Minister tell the House what lessons have been learned from this latest disaster for so many family farms?

Water (Special Measures) Bill [HL]

Lord Cromwell Excerpts

Consideration of Commons amendments and / or reasons
Wednesday 5th February 2025 Lords Chamber

Moved by

[Lord Cromwell]

1A: Leave out from “House” to end and insert “do disagree with the Commons in their Amendment 1 and do propose Amendment 1B to the words so restored to the Bill—

1B: Clause 1, page 2, line 8, at end insert “, and to present such information on structuring and debt prominently, including on the website of the undertaker, in a format that can be readily accessed and understood, including by bill payers.””

[Lord Cromwell (CB)]

My Lords, I will speak to Motion 1A and Amendment 1B together and would like to put on record how very grateful I have been for the discussions with the Minister and her team, her recent letter to all Peers about my amendment and the nice things she has said today—although I thought there was a bit of a threat to the noble Lord, Lord Blencathra, at the end there.

Although there is much that we agree on in principle, and what the Minister has outlined today is not obstructed in any way by Motion 1A and Amendment 1B, it is my firm belief that the amendment as presented today in Motion 1A and Amendment 1B, in plain language, needs to be included in the Bill. I suggested that the Government bring forward their own amendment setting out what she has suggested today, but they have chosen not to do so.

The original amendment required water companies to report annually on their financial structuring or restructuring and their debt levels and associated risks. I therefore regret its deletion by the Commons which, as I will address in a moment, perhaps misunderstood the need for and purpose of the amendment. That is why I have added the further wording at Amendment 1B to ensure that the information is sufficiently prominent and accessible.

The background to the amendment remains the same. The water industry and, in particular, several companies within it have both failed to invest sufficiently and got into financial difficulties because of distorted financial engineering, including overloading with debt and what I might politely call accounting sleight of hand. This has come to light not because of the regulator Ofwat, which went along with these corporate behaviours either because it simply did not understand them or, so long as the water kept flowing and the prices were low, chose not to look closely at what was going on. What was going on was an almost complete failure to invest at anything like the rate that was needed to secure a sustainable water and sewerage management system, while at the same time extracting moneys conveniently rebadged so that they were not classed as dividends. It was not Ofwat that blew the whistle on this but rather civil society, individuals and some in the media. The Industry and Regulators Committee of this House, on which I had the honour to serve, also played a part in highlighting the matter in its critical report on the water industry.

Noble Lords will be familiar with the rest: polluted rivers, excessive executive bonuses and some water companies close to bankruptcy. Once the scale of underinvestment came to light, we were told that the water companies would raise money from investors and the City to catch up—albeit over a 25-year period—on the neglect of the water and sewerage infrastructure, but we have seen that protestation fail to reach anything like the scale of money needed. Indeed, in the case of Thames Water, different classes of bondholders have fallen out with each other and the company is in court seeking £3 billion more of expensive debt, in part from hedge funds, to add to its existing £19 billion of debt, to which should be added an estimated bill of £800 million to £900 million in interest by next year.

--- Later in debate ---

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank all noble Lords for their further contributions to this debate. I am grateful to the noble Lords, Lord Cromwell and Lord Blencathra, for providing further detail around their concerns. I would like to make it clear that the Government have carefully considered all non-government amendments tabled throughout the passage of the Bill, and that, where we agree with the intent behind a given amendment, we have worked hard to find an appropriate way forward.

It is in that spirit that I reviewed Motion 1A and Amendment 1B, tabled by the noble Lord, Lord Cromwell. As previously explained, the Government agree that it is of utmost importance to ensure that members of the public can easily access and understand information on water company finances. However, I do not agree that the approach proposed by Motion 1 A and Amendment 1B is the most effective way of achieving this outcome. I am disappointed that, after considerable engagement on the Government’s alternative approach, the noble Lord, Lord Cromwell, is still dissatisfied with the suggested way forward.

The noble Lord has previously spoken to me about the need to specify how data is presented. I want to be clear that the specific metrics that he wants to see in reports are already required to be included through licence conditions. Indeed, he has pointed that out himself; the information appears in the annual Water Company Performance Report. What is missing, and what we agree with him on, is better formatting and clearer presentation with this information readily available right at the front of these reports, which is exactly what we propose can be achieved through regulatory accounting guidelines.

The noble Lord’s amendments require only that the data is presented in a format that can be “readily accessed and understood”, which is arguably open to interpretation by water companies. Having listened closely to him, we agree that data should be presented in this way, but the approach proposed by government would be more specific and could include, as I mentioned before, a summary table of financial information right at the front of the annual Water Company Performance Report. As such, while I am grateful to the noble Lord for bringing this important matter to the attention of the House, I maintain the view that primary legislation is not the most effective means by which to achieve the intended outcome. I therefore urge Members of the House to support Commons Amendment 1 and the non-legislative proposal put forward by government and Ofwat.

I am also grateful to the noble Lords, Lord Roborough and Lord Blencathra, for continuing to raise the need for sufficient parliamentary oversight of Ofwat’s rules. These rules will be central in driving improvements in the culture of water companies, which of course we all want to see. As such, it is right that we, as parliamentarians, do what we can to ensure the rules are robust, without compromising the regulatory independence of Ofwat. That is why I was pleased to receive Ofwat’s offer of a drop-in session, which would give noble Lords and MPs an opportunity to further understand and raise concerns on the rules before they are finalised. I therefore urge all members of the House to support Commons Amendment 2 and enable Ofwat to move forward with arrangements for that session.

To finish, I reiterate that the Government strongly agree with the need to ensure increased transparency and accessibility of water company data and ensure sufficient scrutiny of Ofwat’s rules on remuneration and governance. I believe that the approaches that I have outlined today demonstrate the commitment of government and Ofwat to effectively and comprehensively address the concerns raised by noble Lords on these topics. I therefore ask that all noble Lords support Commons Amendments 1 and 2 and, in conjunction, the non-legislative proposals put forward by the Government.

[Lord Cromwell (CB)]

My Lords, the hour is late. I thank the Minister for her kind, helpful and almost persuasive words. I do not think that anything that she has proposed is precluded by my amendment—in fact, it could be a way of implementing it. Had I put it down in such detail, I would have been told that it was too prescriptive. However, for the reasons I set out earlier, I am afraid that my amendment needs to be in the Bill, and I wish to test the opinion of the House.

Thames, Yorkshire and Northumbrian Water: Ofwat Proposed Fines

Lord Cromwell Excerpts

Wednesday 29th January 2025 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

The Government have been clear that we urgently need to restore public trust in the water sector, and the bonuses issue is an important part of that. We have been completely clear that, where company performance is poor, executives should not be receiving large bonuses, which is why we are giving Ofwat the power to prohibit bonuses where performance is poor. Like my noble friend and other noble Lords, I have read the reports that Thames Water is saying that it would put up executive pay if this came to pass. We are bitterly disappointed that a water company would react like that. It should be taking responsibility for its behaviour and the standard it sets, so we will be taking this extremely seriously and looking at how we can manage such situations.

[Lord Cromwell (CB)]

My Lords, I am even gladder than usual that I came in, only to find my previous amendment being debated without any advance notice to me. I say to those who have raised it that I am in fruitful discussions with the Minister, but I am certainly not ruling out bringing that amendment back again, when the House will have its chance to express its views.

Foot and Mouth Disease

Lord Cromwell Excerpts

Thursday 16th January 2025 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

The current policy reflects our experience of responding to past outbreaks and is in line with international standards of best practice for controlling the disease. Alongside culling and immediate movement controls, we are now looking at deploying vaccination as a control option. In order to achieve that, we now have a vaccine bank for a range of foot and mouth disease stereotypes.

[Lord Cromwell (CB)]

My Lords, this is a highly infectious disease and no respecter of borders. The illegal meat trade has already been referred to. Is the Minister satisfied that limiting these restrictions entirely to Germany is appropriate, rather than also including its bordering countries?