Flood Recovery Framework

Debate between Emma Hardy and Robbie Moore

Wednesday 17th April 2024 Westminster Hall

[Robbie Moore]

I thank my hon. Friend for consistently raising that point and others with me in my role as Minister. I assure him that all measures and schemes will be reviewed. Having requested a visit from me to come and see some of his businesses in Stapleford, I look forward to coming very soon to address the flooding issues that he and his constituents have experienced.

As my right hon. Friend the Member for Ludlow is aware, Shropshire County Council, which includes his Ludlow constituency, is eligible to receive funding following Storms Babet and Henk. The Government have recently opened the farming recovery fund, currently in nine areas, to support farmers who have suffered uninsurable damage to their land as a result of Storm Henk. Farmers will be able to receive grants of up to £25,000 towards reinstatement costs for farmland adversely affected by exceptional flooding. I fully recognise right hon. and hon. Members’ concerns about the announcement that the Department made last week. I assure all Members, and indeed those outside this place, that Ministers are actively reviewing the Department’s announcement last week.

My right hon. Friend also voiced some important questions about the schemes. He rightly raised the concern that holding the eligibility count at the lead local flood authority level, which is unitary or upper-tier councils, poses a problem for some local authorities, and that the threshold of 50 internally flooded properties as an eligibility criterion could be considered unfair to smaller local flood authority areas. I assure right hon. and hon. Members that that will be reviewed.

Let me address the concerns raised by the shadow Minister, the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) that the threshold was actually increased. Following flooding in 2020, and on the back of representations from local authorities, the flood eligibility criterion was reviewed. Previously, the eligibility criterion set by DLUHC for the flood recovery framework to be activated was 25 internally flooded residential units over a district local authority area. Following feedback, that was reviewed and reduced to a threshold of 50 properties, whether commercial or otherwise—not just residential properties—over a unitary authority area, which is a bigger geographical area. The threshold was therefore reduced, not increased, as the hon. Member wrongly claimed.

[Emma Hardy]

I believe that that was the point I made: the threshold had gone from 25 to 50. I am happy to check Hansard and correct any mistake if I made one— I am not sure that I did—but that does not resolve the point that I was making, which was about where the arbitrary number of 50 came from. If there are 49 properties on each side of a border, there will be no actual impact. It has been increased, and there has not been a consultation to explain exactly why.

[Robbie Moore]

I reassure all Members that the threshold was changed so that we could get much more support out to business and households. As I have already said, however, I have asked for alternative geographical boundaries to be considered for future activations, and discussed with the Department for Levelling Up, Housing and Communities the appropriate threshold for future events. That is under review with stakeholders, including the National Farmers Union. I spoke to the president of the union at several events in previous weeks, so the union is aware. Unfortunately, I think that the shadow Minister slightly misquoted that.

My right hon. Friend the Member for Ludlow also asked about extra funding to staff local authorities so that they can deliver framework schemes. The Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for North Dorset (Simon Hoare), is considering that matter as part of the post-activation review that is currently under way.

I thank all Members for their contributions. I look forward to further conversations with Members regarding this important matter, to ensure that the Government are getting as much support as possible to those impacted by flooding.

Draft Water Industry (Special Administration) Regulations 2024 Draft Water Industry Act 1991 (Amendment) Order 2024

Debate between Emma Hardy and Robbie Moore

Tuesday 6th February 2024 General Committees

[Robbie Moore]

I am grateful to the hon. Members for Kingston upon Hull West and Hessle and for Bath for their important contributions, although I must say it was good that they eventually came back on to the script, so to speak. The statutory instruments will enable the Government to facilitate a more effective and efficient water industry special administration regime, ensuring that they are prepared in all eventualities to ensure uninterrupted provision for vital public services.

Let me briefly address some of the questions and points raised by the hon. Member for Kingston upon Hull West and Hessle. Before I get into the detail, I should say that I was pleased to hear her reference self-monitoring, because that was brought in by the Labour party when it was in power, in a water industry Act. We have increased the amount of monitoring that we are doing from 7% in 2010 to the 100% that we saw rolled out in 2023.

I will get back to the point. We are taking clear and decisive action to improve water quality. Our plan for water is delivering more investment, stronger regulation and tougher enforcement for our water system, and we are clear that water companies must not profit from environmental damage. Through that plan, we will transform our management of water systems, deliver cleaner water for nature and people, and secure a plentiful water supply.

The hon. Member for Kingston upon Hull West and Hessle made reference to storm overflows, so let me clarify the amount of investment going into them. Our plan for water sets stringent targets on companies to improve storm overflows, which will drive the largest infrastructure programme in water company history, with £60 billion of capital investment over 25 years. We are clear that the volume of sewage being discharged into our waters is utterly unacceptable. However, storm overflows cannot just be switched off, as some have suggested; they are an automatic feature designed to stop sewage backing up into our properties.

We introduced the statutory instruments to update the existing regulations set in place under the 1991 Act so that, should we get to a scenario in which we need to utilise the special administration regime, we are in a position to do so. I will clarify that since privatisation the private water sector model has unlocked about £215 billion of investment; I raise that point because the hon. Member for Kingston upon Hull West and Hessle referenced nationalisation. Since privatisation that has been equivalent to about £6 billion being invested annually, which is almost double the pre-privatisation level.

[Emma Hardy]

Will the Minister give way?

[Robbie Moore]

I will carry on for now.

The hon. Lady quite rightly asked how customers may be impacted should a special administration regime be put in place. We will always act to protect customers as a priority, and any intervention that would put pressure on the public purse would be considered seriously and as a last resort. Dividends are an important part of the investor return and should provide an adequate return that reflects company performance. If a company did not pay its dividends, it would struggle to access the finances to fund investment, impacting on the service for future customers.

In each year since privatisation in 1989, investment has been greater than the dividends paid, but a sustained level of investment in the water industry will continue only if the shareholders of companies can expect a fair return. Companies must pay for new investment up front, so need to secure a large amount of funding to pay for that. To avoid customer bills increasing drastically to pay for that, companies may secure money by raising debt or equity, or through shares in the company or investors.

The hon. Lady also asked whether a company in special administration will have to adhere to the same standards as the rest of the sector. The answer simply is yes. The special administrator will manage the affairs, business and property of the company according to the same statutory obligations as any other water company.

To build on that, the hon. Lady also asked for clarity on whether a water company could be placed in special administration. In general, special administration can be applied for on insolvency grounds, when the company might be unable to pay its debts or when liabilities are greater than its assets—as I said in my opening remarks—or in instances where water companies are in serious breach of their principal statutory duties or an enforcement order.

[Emma Hardy]

The Minister mentioned the failure to fulfil statutory duties, but will he confirm whether a violation of environmental law constitutes a failure to fulfil statutory duties?

[Robbie Moore]

Every water company is specifically regulated by the Environment Agency, as well as Ofwat. The Environment Agency will have powers if water companies are owned and operating under the regime they operate under now, or should they enter special administration.

On the hon. Lady’s point about Ofwat, it is clear from Ofwat’s performance report that there has been marked decline in performance over the past year. That has been driven by company-specific factors, but also by the effects of extreme weather, including the unusually hot and dry summer we had. The Environment Agency and Ofwat have powers of enforcement, and those powers will not change under a special administration regime.

I have addressed the points that were made, so I commend the draft statutory instruments to the Committee.

Question put and agreed to.

Draft Water industry Act 1991 (Amendment) Order 2024

Resolved,

That the Committee has considered the draft Water Industry Act 1991 (Amendment) Order 2024.—(Robbie Moore.)