Water Companies: Executive Bonuses

Neil Coyle Excerpts

Tuesday 5th December 2023 Commons Chamber

[Steve Reed]

I am grateful for the work that my hon. Friend has led in exposing some of the same problems as my predecessor in this post. He clearly knows an awful lot about these issues, and he makes his point very well.

Let me move on to the broader issue of nature. The destruction of nature that this Government have encouraged is unacceptable. As a party, they increasingly position themselves against nature. On their watch, we now have one of the most nature-depleted countries in the world, yet they have rowed back on their net zero commitments. They have broken their promise to fund farmers fairly to maintain environmental schemes on their land; they have tried to weaken environmental standards relating to nutrient neutrality to allow building alongside estuaries where the increased pollution would tip habitats beyond the point of recovery while refusing to build where the environmental impact could more easily be mitigated; and now they are turning a blind eye while our rivers are turned into sewers.

Economic growth does not have to stand in opposition to protecting and restoring nature. The two must go hand in hand. Labour’s mission to make this country a clean energy superpower will create thousands of good, well-paid, secure jobs, and part of it is a national mission to restore nature, including our polluted waterways. It seems that the longer the Tories are in power, the more nature suffers. They have little concept of the pride that the British people take in our countryside, of its importance to our sense of who we are as a nation and to our sense of belonging.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

My hon. Friend is making an excellent speech. Were the British people not told by Minister after Minister in this Government that environmental standards would be enhanced and improved as a result of Brexit, and have they not been betrayed again by this shabby Administration?

[Steve Reed]

My hon. Friend makes an accurate observation. People were promised one thing but the Government then tried to do the opposite.

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[Rebecca Pow]

I will carry on for a minute, because I know that you, Mr Deputy Speaker, will be urging me to speed up. For information, I wanted to say that in a recent High Court judgment it was found that our storm sewage overflows discharge reduction plan actually goes over and above the requirements of existing regulation. It would be nice if the Opposition recognised that, because it was specifically highlighted.

[Neil Coyle]

Will the right hon. Lady give way on that point?

[Rebecca Pow]

I am going to carry on for a bit.

Ensuring that our regulators are fit for purpose, to enforce our new regime, is absolutely crucial. With that in mind, we have increased the Environment Agency’s overall grant-in-aid funding by over 40% and capital funding by 80% since 2010. We have also provided an extra £2.2 million per year specifically for water company enforcement activity. In May we did even more: we provided £11.3 million of funding increase to Ofwat to treble its enforcement activity, because both EA and Ofwat have enforcement powers. In June, in recognition of the urgency of action, Ofwat approved a further £2.2 billion of accelerated infrastructure, which included £1.7 billion of investment, in reducing sewage discharges, including a major project to reduce sewage discharges in Lake Windermere.

The shadow Minister mentioned automatic fines. That idea would backfire, because if the regulators found evidence of criminal misdemeanours, it would prevent them from going through the courts and we would effectively end up with even higher fines. So the system of automatic fines would not work, but we have just brought in our unlimited penalties for the environment, so the regulators could use that option, but we still need the option for them to go to the courts if necessary.

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[Rebecca Pow]

I have heard about this incident. I refer DAERA to our plans on water to see how we are tackling such issues. Farming is a big cause of some of the pollution. We have launched our slurry infrastructure grant and a range of measures to work with farmers to cut down that pollution, so lessons could be shared.

[Neil Coyle]

On that point, will the Minister give way?

[Rebecca Pow]

I just wanted to say that we want to continue to drive down nutrient pollution from the water sector, which is why we have set a legally binding target to reduce phosphorus loads from wastewater treatment—

[Neil Coyle]

On that point, will the Minister give way?

[Neil Coyle]

The hon. Gentleman might be interested in this. We have set targets to reduce phosphorus loads from wastewater treatment works by 80% by 2038, relative to a 2020 baseline. In areas where protected habitat sites are particularly impacted by nutrient pollution, which I am sure interests the hon. Gentleman, we are going even further. In the Levelling-up and Regeneration Act 2023, we placed a new requirement on water companies to upgrade wastewater treatment works in designated areas to the highest technically achievable standards by April 2030.

[Neil Coyle]

On that point, will the Minister give way?

[Rebecca Pow]

The hon. Gentleman is so unrelenting that I will give way.

[Neil Coyle]

It seems apt that this is debate No. 2 this afternoon. If the Minister has so much faith in the measures she is talking about, why was she absent last night from the vote on new clause 10 in the Victims and Prisoners Bill on the sewage illness victim compensation scheme, despite voting just 15 minutes later?

[Rebecca Pow]

We have such a strong plan and it will be fully operational. I completely support the Government with the line they took last night. I am lined up with what we were dealing with last night and I support the Government position. I was dealing with some particularly urgent business last night. In my view, the new clause was superfluous because we already have powers, including those on criminal conduct, for people to act if they have been affected by pollution. They can already seek compensation when there is evidence of personal injury, loss or damage.

To get back to my speech, I am now on the bit about tougher enforcement. We recognise concerns about enforcement. We are working closely with Ofwat and the new leadership at the Environment Agency to ensure that regulators are holding the water industry to the highest possible standards. That includes bringing fines against water companies that do not comply with their permits and publishing the environmental performance assessment of water companies in England, giving a clear picture of company performance. Where that is insufficient, action will be and is being taken.

I had been meeting all the lagging water companies highlighted through that assessment to challenge them on their performance, and I am pleased that the new water Minister, my hon. Friend the Member for Keighley, is continuing to do that. I believe he met Yorkshire Water yesterday and South East Water last night, so we are continuing our unstinting drive with the water companies.

The regulator has launched the largest criminal and civil investigations in water company history into sewage discharges at more than 2,200 treatment works, following new data that has come to light as a result of increased monitoring at waste water treatment works. We have taken robust enforcement action against illegal breaches of storm overflow permits. Since 2015, the Environment Agency has concluded 59 prosecutions against water and sewage companies, securing fines of more than £150 million.

I cannot miss the opportunity to say that in Labour-run Wales sewage discharges are double what they are in England, so it is hard to take any lessons from the Opposition. They have the opportunity to step in and sort that out but they have not taken it.

The Government have launched the revolutionary storm overflows reduction plan, which prioritises action on the overflows that cause the most harm, to make the biggest difference as quickly as possible. Our strict targets will see the toughest ever crackdown on sewage spills and, as I have already stated, will require water companies to deliver that huge infrastructure programme worth £60 billion. Our plan will protect biodiversity, the ecology of our rivers and seas, and the public health of water users for generations to come.

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[Rebecca Pow]

I have given way enough; we want to get on and hear other speakers.

This Government will leave no stone unturned in tackling all aspects of water pollution and poor water company performance. That is why we have introduced the most comprehensive costed plan for water that delivers more investment, stronger regulation and tougher enforcement. By contrast—

[Neil Coyle]

rose—

[Rebecca Pow]

The hon. Gentleman has had his chance.

By contrast, the official Opposition and the Liberal Democrat party do not have credible plans to reduce discharges—we cannot just switch off storm overflows overnight, as some suggest—and their mixed bag of proposals would actually add hundreds pounds to customers’ bills. That addresses the point made by the hon. Member for Feltham and Heston (Seema Malhotra). Labour’s proposals would involve the digging up of enough pipes to go two and a half times around the globe. [Interruption.] That is actually correct.

As I said, I am really happy to share our plan for water with the shadow Secretary of State so that the Opposition can see exactly what is in place—our comprehensive, costed plan—and see that we are delivering now.

[Grahame Morris (Easington) (Lab)]

I am really pleased to speak in a very important debate for me and my constituents. The east Durham coastline is a huge asset to the region and to the country. From Seaham to Blackhall, I represent the most stunning coastline in Great Britain. We have amazing beaches, with an abundance of sea glass, sand dunes and limestone caves. Our seas are home to a formidable group of open water swimmers, braving the North sea at all times of the year. Our marina at Seaham provides access to various water sports, including canoeing, paddleboarding and windsurfing. Crimdon Dene visitor hub and café is encouraging more people to visit and enjoy our east Durham coastline.

On the sea front and the clifftops of east Durham, there is also an array of art, iconic locations and national heritage. Seaham has a newly decommissioned field gun, a further attraction, and is home to Tommy, a Ray Lonsdale world war one sculpture, an artwork that was voted the Sky Arts No. 1 public artwork and attracts a large number of people to our coastline. From Easington, the site of the former colliery, the views stretch from County Durham to North Yorkshire.

A nature reserve sits at the centre of the once thriving industrial heart of the community, and it is also the site of a memorial garden that honours the 83 miners and rescuers who lost their lives in the terrible disaster at Easington colliery in 1951. Blackhall is another site of special scientific interest. The wildflowers and grass of the clifftops offer peaceful views, with easy access to Blackhall’s beach caves. The coastline is also home to a unique music and film heritage. My constituency was the backdrop to the iconic “Who’s Next” album cover and the location for a number of films, including “Get Carter”, “Billy Elliot” and, most recently, “The Old Oak”.

That is why I am passionate about protecting our precious coastline. Industrial spoil from coal mining once blighted it and the beaches were blackened with coal dust and abandoned colliery infrastructure, but we reclaimed the coastline for nature. The “Turning The Tide” project removed industrial pollution from the east Durham coastline, and the improvement has made the environment more enjoyable for everyone.

Coal spoil was once a visible scar on the environment, but water pollution represents a more insidious and more discreet risk to our health, welfare and environment. I was interested by the Minister’s comments about personal injury, because water pollution hit the headlines recently when we had the ironman world triathlon championship series at Sunderland. There are three elements to the event, cycling, running and swimming, and after the swimming element, 88 of the athletes fell ill from swimming in waters contaminated with E. coli. I do not know what redress there was for personal injury, but we know the source of the problem.

Northumbrian Water, once a publicly owned authority but now under Chinese ownership, pollutes our seas whenever it rains. I looked yesterday at the Safer Seas & Rivers Service app, which I recommend to all hon. Members; we have had some terrible weather in the north-east, and as the snow thawed Northumbrian Water was polluting our seas at three sewage overflows in my constituency. That is just one of 164 incidents of Northumbrian Water dumping raw sewage in my constituency.

[Neil Coyle]

My hon. Friend is making a powerful point about degradation. The Minister seemed to suggest that her Government were revered for their work on this issue. Do his constituents share my constituents’ view that, on the contrary, this is a Government of the effluent for the effluent?

[Grahame Morris]

What an excellent intervention, if I may say so. The suggestion that things are getting better is not the experience of my constituents—and as for the Minister’s commitment to addressing the issues, my feeling is that she is simply going through the motions.

We need a solution. I am an old-school socialist. Clean water, rivers and seas are very important, and private water companies have failed in their duty of care. Those companies enjoy a privileged position: no competition, a weak regulator and a compliant Government. I want to end those private monopolies—we should control and run water in the national interest—but I am a realist: the Tories and my own party do not have the appetite for nationalisation, so I will propose an alternative.

Private water companies have extracted huge dividends since privatisation, which they have secured through higher bills and a failure to invest, and by ramping up debt. In December 2022, The Guardian reported that water companies have paid £69.5 billion in dividends. Over the same period, they have racked up £54 billion in debts. Companies promise to invest in infrastructure, but only by passing on higher costs to consumers. Why do we accept water companies ripping us off, polluting our waters and telling us to pay to clean up their mess? The Government must take control of the situation.

I support the following: the Government must block all future dividend payments until water companies meet set standards including clean water targets, debt targets, investment targets and low consumer bills; we need a zero dumping policy—sewage overflows must be an exception, not the normal practice; we need a sustainable water industry, which means an end to the practice of borrowing in order to pay dividends; and new and modern infrastructure must be prioritised before dividends.

The promise of privatisation is always better service and lower costs, but we have seen worse service and higher bills every time. Private companies are driven by profits. The proposals that I have set out are a means of delivering the public interest. Dividends and profits should be awarded only when private companies deliver the promised services. If we cannot spend in the next Parliament, we need to regulate and reform. If privatised water is to remain, we must ensure that it works and benefits the people we all represent.