Water and Sewage Regulation (Industry and Regulators Committee Report)

Baroness Jones of Moulsecoomb Excerpts

Monday 16th October 2023 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I congratulate the noble Lord, Lord Hollick, and the members of his committee on the most fantastic report. I have really enjoyed this debate so far and I look forward to the Minister’s replies on all these crucial issues of public health and the health of nature and the environment. It has been quite a slog to get this issue on to the agenda, but finally it is on the agenda and the public know about it. They are fully aware of it. I do not want to give any hints to the current Government on how to perhaps claw back some of the votes they have lost so far, but this is going to be an issue on doorsteps for the general election, so the faster the Government act, the better for them. Obviously they are going to lose big time, but we do not have to worry about that too much at the moment.

Ofwat, the water regulator, has said repeatedly over the years that water companies have had all the money they needed to do the necessary investment—so we have to ask where it has gone. Ofwat allowed our bills to rise by more than 40% in recent decades in order to fund investment, but the investment largely did not happen. Most of it went to shareholders at the average rate of £2 billion a year for the past 27 years. That money is our money; it is taxpayers’ money. I do not want to pay higher bills; I want a refund, and I think a lot of people will agree with me.

We are all fed up with pollution in our rivers and on our coastlines, with sewage floating past swimmers and surfers, and with businesses suffering when signs are put up saying, “Please don’t swim here”—not to mention environmentalists despairing at the loss of ecosystems because of the filthy rivers. We have to ask what the regulators have actually been doing over the last three decades, and whether it is possible to create an enforcement regime that will hold a private monopoly to account. I suspect that many of the public are no longer asking about regulations and regulators; they are probably asking about the prison sentences that ought to be given out. I am not a big fan of increasing the prison population, particularly at the moment, so if we are to penalise the people who have put us in this position—for example, the CEOs who are personally responsible for polluting our rivers—we should issue community service orders so that they can work on the ground to fix the pollution that they have created.

Water companies themselves should be fined if they dump sewage. Instead of those fines adding to the water bill, the money should be found by selling shares to the Government. If they keep getting fined, the public will get their water companies back into public ownership at no extra cost. Certainly, no water bill should go up until there is a guarantee that no money will go into shareholder bank accounts, be siphoned off to parent companies or be taken out by CEO or senior staff bonuses. I want the CEOs of these water companies put on notice that they will be taken to court if the problems are not fixed.

There are a lot of options for cleaning up this mess but they all involve a lot of money and some understanding from the Government that this is an urgent situation that has to be fixed. I very much look forward to the Minister telling us what the Government are going to do. Quite honestly, the petty, rather dismissive response from the Government to the report from the noble Lord, Lord Hollick, is shameful. I do not understand how any Government could be so petty and almost vindictive.

--- Later in debate ---

[Lord Benyon (Con)]

Multi-million pound infrastructure projects are being done by water companies; I will come on to talk about reservoirs. Some are doing them better than others; it would be a very strange world if they were all the same. The Government watch this matter very closely. We require investment and we want it done in the right way.

The noble Baroness, Lady Jones, who is shaking her head before I have even said anything, said that water companies should be fined; they are being fined record fines. One was fined £90 million last year.

[Baroness Jones of Moulsecoomb (GP)]

My Lords—

[Lord Benyon (Con)]

Perhaps the noble Baroness would allow me to finish. We passed more legislation in the Moses Room just the other day to ensure that unlimited fines can be imposed on water companies. I do not know where she has got the idea from that we do not.

[Baroness Jones of Moulsecoomb (GP)]

I thank the Minister for his response. My point was that water companies can pay those fines very easily; they just pay and they do not care. We should assess the amount of the fine and then take shares from the company to that amount. That would make much more sense.

[Lord Benyon (Con)]

We make sure that the money comes not from customers but from shareholders so that it is fair.