Independent Water Commission: Final Report

Jeremy Wright Excerpts

Tuesday 10th February 2026 Westminster Hall

[Several hon. Members rose—]

[Sir Jeremy Wright (in the Chair)]

Order. I remind all Members who wish to speak that they need to continue to bob throughout the debate, so that we know. If everyone sticks to about five minutes, we should get everybody in comfortably.

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[Several hon. Members rose—]

[Sir Jeremy Wright (in the Chair)]

Order. I gently remind Members that if they cannot stick to five minutes or less, those at the end of the list will get a lot less.

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[Rachel Gilmour (Tiverton and Minehead) (LD)]

I thank my hon. Friend the Member for West Dorset (Edward Morello) for securing the debate. I also thank my many constituents who, quite rightly, have grave concerns about this matter and have written to me about it.

My party has made its dissatisfaction with the White Paper clear, and my colleagues are making the case strongly again today. We have been leading the charge in calling for a comprehensive approach to tackling what is nothing short of a crisis in the water sector. The Government made tackling this crisis an important pillar of their election campaign, so it is deeply disappointing that the reforms set out in the water White Paper fall far short of what the situation demands. The system is in dire straits and requires a complete overhaul, but instead the Government offer only the lightest of plans that fail to beef up regulations in a meaningful manner or provide funding provision for enforcement. Although the abolition of Ofwat is welcome, the uncertainty around its replacement is unhelpful.

Farmers need proper support to tackle agricultural run-off, which accounts for around 40% of water pollution. As stewards of the land, they are inevitably stewards of our water as well. How can it be that we have allowed corporate greed to run rampant, and allowed these companies to have presided over the routine pumping of filth into the waterways of this land? It is quite remarkable. All the while, the good people of the west country have seen their bills soar, some by as much as threefold. The Government offer only the lightest of plans: weak regulation, no meaningful enforcement and no funding to ensure compliance.

As my constituency straddles the Somerset-Devon border, we are in the unenviable position of having two water companies: Wessex Water and South West Water. I think it is fair to say that I have made my views on South West Water clear before, and I will once again direct my ire at South West Water, because its behaviour, inertia and refusal to acknowledge the gravity of situations of its own making has been pitiful. Just a week ago, I raised the matter of my poor constituents at Bawdens bakery in Bampton, who have been forced to close and sell up because their property has flooded so many times. I had a most unhelpful meeting with the director of South West Water, who showed only his complete complacence and, I have to say, arrogance, to such an extent that I had to ask him and his staff to leave.

The public health implications are grave. I have heard horror stories from constituents whose children have fallen seriously ill after swimming in local rivers. The beaches at Dunster and Blue Anchor now carry the dreaded brown flag status. It is a shameful state of affairs. Is it really too much for the British public to expect clean water as a basic right?

At the risk of being blunt and somewhat crude, suffice it to say that the Tiverton sewage works absolutely reek every time it rains—and anyone familiar with the west country will know how often that is. It is inexcusable and utterly foul. It is a stench and a situation more in character with the 12th century, certainly not the 21st. I could be more colourful with my description, but I will spare colleagues and preserve my own sanity.

[Sir Jeremy Wright (in the Chair)]

With noble exception of the hon. Member for Tiverton and Minehead (Rachel Gilmour), we have not been entirely successful at sticking to five minutes. I must ask those remaining to keep to below four minutes so that we can try to get everybody in.

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[Jeremy Corbyn]

Absolutely. The state of the infrastructure does need to be examined. Like many Members, my constituents have endless complaints about that. Thames Water is one of the most frequent visitors to my constituency; it digs up the roads frequently. With the resulting road closures—which are absurd—Thames Water is much better at traffic management than Transport for London, actually.

I would also ask that we look much more seriously at river basin management. I remember visiting York with the hon. Member for York Central (Rachael Maskell) during the flooding at that time. We had a long discussion with the Environment Agency about planning for flooding, which would involve restoring peatlands, upland planting, reintroducing beavers and others into rivers—that has an effect on a small scale, with lots of rivers and streams—and restoring floodplains. Those sorts of things are some of the most important things we can do.

Water should be taken back into public ownership—not old-style public ownership, with a board of governors or directors appointed by the Government, but a popular form of public ownership that would involve the brilliant workforce in all those companies, and their knowledge. The directors would come from them, and from local communities, businesses, local authorities and unions, so we would have a locally and popular-based water industry in our society. We could do it. Why don’t we try that?

[Sir Jeremy Wright (in the Chair)]

I call Charlie Maynard, but the bad news is that I can only give him three minutes.

[Charlie Maynard (Witney) (LD)]

It is a pleasure to serve under your chairship, Sir Jeremy. I thank my hon. Friend the Member for West Dorset (Edward Morello).

I am going to move very quickly. I thank Sir Jon Cunliffe and all the campaigners in my constituency. I note that Blake primary school had to close on Friday because of sewage—the fourth time in the last two and a half months. Bills have gone up: we are paying 9.75% interest with Thames Water. I thank Alex Lipp and Jonny Dawe for putting together sewagemap.co.uk—a fantastic website that tracks what is going on and where.

The “ultimate controller” definition is mentioned 16 times in the Independent Water Commission’s final report. I welcome the proposal in paragraph 700, which would allow an enforceable undertaking against ultimate controllers. However, that will work only if Ofwat is doing its job properly and recognising companies as ultimate controllers. As the Minister knows, the equity of Thames Water is now zero, with most of the investors having written down their equity investment in full, and some having taken away their board representation nearly two years ago. That leaves the debt holders—the class A creditors—holding the majority of the company’s debt. They have now set up the London & Valley Water consortium to co-ordinate their interests.

The water sector is a regulated sector, with the ultimate controller designation being critical. To meet that definition, an entity only has to

“materially influence the policy or affairs”

of Thames Water. There is no limit on how many entities meet that criterion or whether there are equity or debt holders. Clearly, the consortium more than meets that definition as it is, in effect, the only significant party left standing across either Thames Water’s debt or equity structure.

As per the regulation, Thames Water must inform Ofwat even of potential changes in its ultimate controllers. Ofwat then requires water companies to obtain legally enforceable undertakings from each of their ultimate controllers. That has not happened in the case of the class A creditors, and I believe this is a rig-up between the Treasury, the Department for Environment, Food and Rural Affairs, Ofwat, Thames Water and the class A creditors. That is not good enough. It is in contravention of our regulations.

I have repeatedly asked Ministers to explain, in the main Chamber, in the Business and Trade Committee, in this Chamber and in the press, why they believe that the class A creditor consortium does not meet the ultimate controller test. I have received either no answer— most recently from the Minister three weeks ago, when she refused point-blank to give me an answer in the main Chamber—or obfuscation. Please, will the Minister now answer the question? Does she consider the London & Valley Water consortium to meet the ultimate controller test with regard to its material influence over Thames Water, and if not, why not?

[Sir Jeremy Wright (in the Chair)]

I am grateful to the hon. Gentleman and to all Back-Bench colleagues for their co-operation. We now come to the Front-Bench speeches, beginning with that of the Liberal Democrat spokesperson.

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[Emma Hardy]

With respect to the hon. Lady, I do not believe that she was in this debate from the start.

[Sir Jeremy Wright (in the Chair)]

I am grateful to the Minister. It is of course up to the Minister to give way to whoever she wishes to, but she is perfectly right. The hon. Member was not here for the vast majority of the debate, and it is not courteous to the House, to this Chamber or to those who have participated in the entirety of the debate for her to seek to intervene at this late stage.

[Emma Hardy]

I turn now to regulation and the case for establishing a new single water regulator. As mentioned, that has to go alongside continuing what we have at the moment. Fundamental reform of water regulation is required, bringing together the economic and environmental planning, and looking at a singular accountable improvement body and enabling a whole-firm view of water company performance. The Liberal Democrat spokesperson, the hon. Member for Westmorland and Lonsdale (Tim Farron), called it phase 2 or round 2 —I am not sure what the right phrase is, but we will be back with further legislation. This is absolutely what we need. We are looking at a chief engineer being embedded in the new regulator, ensuring companies focus on fixing crumbling pipes, treatment works and on engineering expertise—it is shocking that we have not had engineering expertise. We are looking at greater stability, transparency and protection for customers.

Until then, existing regulators must retain their full legal powers and responsibility. However, the Government are determined to ensure that the future regulator does not inherit the problems of the past. Leadership appointments for the new regulator, including a chair designate, will therefore be made at the earliest opportunity, and they will drive the design and direction of the new regulator to support a smooth transition. Before that, early steps are now being taken to look at joining up regulatory activity, particularly between Ofwat and the Environment Agency, until the new regulator is established.

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[Emma Hardy]

Thank you. Where was I? We are putting customers first. We want to end the steep, huge hikes that we have seen in bills and make sure that that never happens again. We have introduced our customer panels. We have just seen the first of those happening in South West Water, and they are being run by the Consumer Council for Water. We are listening to customer voices and making sure that they are at the heart of water companies. We need to do more. The water ombudsman will help to restore the balance, but fundamentally, we want customers to feel that they are listened to, are at the heart of this and are important. Having the customer panels and strengthening the ombudsman will make the processes around customers’ experiences much better.

On bills, we are about to respond to our consultation on WaterSure. How do we make water more affordable for people with disabilities, with large families, and for people who have a health need and therefore need to use more water? We are doubling the social tariff support and holding companies to the commitment to end water poverty by 2030.

Water meters were mentioned, and they can help huge numbers of people save money. I encourage everybody to talk to their constituents about that. I remember speaking to an elderly lady who was on her own, and she told me that she was really worried that her bill would go up with a water meter. I said, “How many bedrooms do you have?” She said, “Three. It is a family home, but the kids have moved out.” I told her that her bill would be less if she got a water meter. The great thing about water meters is that they can not only save money, but help us think about our water use, and they can support the environment.

There is a section in the White Paper on water security—it is an important issue for us—that looks at making sure we deal with the growing demands being placed on our system. How much water do we need for the homes that we want to build and for businesses and growth? How much water do we have? How do we address the gap? There are exciting things around thinking about sustainable urban drainage, water use, building regulations and how we use grey water harvesting. All these things must inform our thinking. In fact, tomorrow I am talking to the Lords Environment and Climate Change Committee about drought, and water management is one thing that is related.

This Government are committed to delivering lasting change, restoring confidence and ensuring resilient, sustainable water systems that work for customers, the environment and future generations.

[Sir Jeremy Wright (in the Chair)]

I call Edward Morello, who has less than one minute.