Water Company Performance

Debate between Rebecca Pow and Caroline Nokes

Tuesday 21st February 2023 Commons Chamber

[Caroline Nokes (Romsey and Southampton North) (Con)]

(Urgent Question): To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on what measures can be deployed to ensure water companies are performing adequately.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)]

First, I thank my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) for bringing the matter of ensuring that water companies are performing adequately before this House. I think we all agree that this is an incredibly important and serious issue. I have been clear that water companies’ current performance is totally unacceptable and that they must act urgently to improve to meet Government and customer expectations. The British people expect better and so do this Government.

We have committed to deliver clean and plentiful water, as set out in the environmental improvement plan, and we have set out clearly how water companies must deliver that. First, our strategic policy statement to Ofwat, the water company regulator, sets out four clear priorities for water companies to protect and enhance the environment, deliver a resilient water sector, serve and protect consumers, and use markets to deliver for our customers.

Secondly, we have set new duties, through the Environment Act 2021, on water companies to monitor their overflows and set new legally binding targets to restore our precious water bodies to their natural state by cracking down on harmful pollution from sewers and abandoned mines, and improving water usage and households.

Thirdly, the storm overflow reduction plan, launched back in the summer, requires the largest investment programme in water company history and builds on the existing statutory duties. Water companies already have a statutory duty to provide a supply of wholesome water under the Water Industry Act 1991 and associated water quality regulations. They must ensure the continuation of their water distribution functions during an emergency.

I will begin by addressing my right hon. Friend’s concerns, because she has been in touch. I appreciate the lengths to which she has gone to hold her own water company to account, particularly over the supply interruptions experienced by Southern Water’s customers following multiple emergency incidents back in December 2022. A more recent incident last week led to approximately 15,000 Southern Water customers being off supply for an extended period, as she will know. Although some supply interruptions cannot be avoided, the repeated failure to properly ensure customers’ continued water supply is totally unacceptable. I will be meeting with Southern Water’s chief executive officer to understand how it plans to address its failings.

The Government and their regulators hold water companies to account in a number of ways, particularly through transparent reporting and performance. As the economic regulator for the water industry, Ofwat tracks performance against performance commitments, which are set at the start of the funding cycle.

The current performance commitments were set for the cycle from 2020 to 2024 and include pollution incidents, treatment works compliance and supply interruptions. Ofwat assesses performance against each of those metrics annually and ranks the companies in the water company performance report according to whether the metrics have been achieved. It reported that five water companies were extremely poor. The Secretary of State and I met them to hold them to account and to make it clear that we need further progress—

[Rebecca Pow]

Thank you, Mr Speaker. I want to be clear that where water and sewage companies are found to be breaking the law, there will be substantial penalties. We have increased all our measures on those penalties, and we are looking at whether we will go ahead with the £250-million cap that has been proposed. We will be consulting on that shortly.

[Caroline Nokes]

Water companies’ performance is not just about finances and Ofwat must not just be an economic regulator. It is about customer satisfaction, consistent supply, treating waste water, investment in networks, and making sure that our constituents have a clean drinking water supply all the time. In addition to compensation, customers need there to be better ways to hold water companies to account for significant outages, such as the three that we have seen in southern Hampshire in just five months, each of which lasted for days.

There is the ignominy of being in the Ofwat category of “lagging behind”, but that does not seem to have improved Southern Water or Thames Water, which have been in that category for two years running—shame does not appear to be effective. There are poor customer satisfaction ratings, but what do they change? There is a requirement to produce an action plan and targeted improvement plans, but by when, and what are the penalties for not delivering on them?

My constituents have gone without water to wash with, to drink, to cook with and to flush the loo with for days on end, with poor and in some instances misleading communications and without access to bottled water stations in my constituency. The only one was accessible on foot only, but water is really heavy to carry. They want significant fines for failure to supply, in the same way that there are significant fines for pollution. They want a requirement for emergency and back-up supplies to be available when parts of the network go down. Is it acceptable that if one part of the Otterbourne water supply works in the constituency of my hon. Friend the Member for Winchester (Steve Brine) is out of action, there is no provision to bypass the problem and continue supply?

Ofwat has said that it will push the “lagging behind” companies, but how hard, and what is the Department for Environment, Food and Rural Affairs doing to make sure that that happens? What is the penalty for not delivering on improvement plans? Last year, only 68% of the forecast improvement moneys were spent. At what point will DEFRA step in and recognise that the current situation is not working for the companies, the regulator or the poor customer?

We heard last week that there were plans to “water down” excessive fines, but a record £90 million was levied on Southern Water a few years ago, and that was not enough to convey the message. Rather than fines, can we therefore ensure that money is levied to force investment in the network, because current performance suggests that, so far, it simply has not worked?

[Rebecca Pow]

I thank my right hon. Friend for reiterating the situation that we have just witnessed with Southern Water, which was completely and utterly unacceptable, particularly following the incidents in December. I have communicated with the chief executive and I am asking again for an urgent meeting as a result of the situation last week.

My right hon. Friend raises some pertinent points about holding water companies to account. She knows that there is a system whereby water can be credited back to the billpayers, and I urge that that will be looked at and followed up. She also asked about the action plans for different companies. The Secretary of State and I had the five worst-performing water companies in before Christmas to talk about their failures, including leakages. We are taking swift action against them: they all have to produce an updated action plan to say what they are doing.

We have done a great deal to ensure that there is enforcement, which is critical, because everybody wants water companies to be held to account for what they do. The Environment Agency already has powers to issue unlimited fines through the criminal courts, but that can take a long time, as my right hon. Friend knows. It also needs data, but because of all the monitoring that the Government are doing, we are getting more of that, so we will be able to take more enforcement action. DEFRA is currently consulting on plans to raise the cap on fines and to make it quicker and easier to issue fines when we know things are not working correctly.

Waste Incineration Facilities

Debate between Rebecca Pow and Caroline Nokes

Tuesday 11th February 2020 Westminster Hall

[Caroline Nokes]

Will the Minister give way on that point?

[Rebecca Pow]

Very briefly.

[Caroline Nokes]

I respectfully point out that the Minister has 12 more minutes. This issue is important. We heard the comment in the October 2018 Budget statement, and we have heard the Minister’s comments on it now. Is she prepared to put a timescale on that?

[Rebecca Pow]

No. Processes will be followed. So much of what is coming down the tracks, through the resources and waste strategy and the Environment Bill, should introduce a paradigm shift in the way we treat waste. The intention is that a tax may never need to be introduced, but one will have to watch the direction of travel and whether we are really cutting down on waste, because that is the intention before we ever have to introduce a tax.

As Members pointed out, incinerating has a carbon impact, but the evidence available is that the carbon impact of most mixed waste streams commonly sent to energy-from-waste plants is lower than if we sent it to landfill. Every day that passes brings new advances in carbon capture, and I am pleased to report that the Government will invest £800 million in this technology to deploy the first carbon capture clusters by the mid-2020s.The technology could potentially be applied to energy-from-waste plants to capture the carbon emissions from incinerating waste, thereby reducing carbon dioxide emissions even further. I point out, because the shadow Minister mentioned this issue, that all municipal waste incinerators are combined heat and power-enabled. Only nine deliver heat, but they all supply electricity.

The Government are clear that energy from waste should not compete with greater waste prevention, reuse or recycling. Currently, England has enough operational energy-from-waste capacity to treat about 38% of residual municipal waste, including a proportion of commercial and industrial waste. The majority of the 40 or so existing plants use conventional incineration with energy recovery, as that is tried and tested, but other technologies, such as pyrolysis and gasification, could achieve greater efficiencies, reducing environmental impact and delivering outputs beyond electricity generation. This is a changing space, and science is obviously benefiting the sector. Nevertheless, for the foreseeable future, conventional energy from waste will continue to have an important role in diverting waste from landfill, and it is the best option for most waste that cannot be reused or recycled.

I mentioned on 28 January that the Government are working to drive greater efficiency of energy-from-waste plants. That is largely through Department for Business, Energy and Industrial Strategy initiatives and it includes encouraging use of the heat that the plants produce, in addition to the electricity generated. The Government have in place other, wider measures that help to draw waste away from landfill and incineration. There is an opportunity to deliver significant greenhouse gas savings by converting the wastes into transport fuel, for example. Through the renewable transport fuel obligation—that is quite a mouthful—the Government incentivise the use of organic waste such as cooking oil and food waste to produce renewable fuels. The Department for Transport is examining the potential to support innovative waste-to-fuel technologies that have the capacity to produce advanced fuels, including even jet fuel.

Many hon. Members touched on regulation. Energy-from-waste plants in England are regulated by the Environment Agency and must comply with the strict emission limits set down in legislation. That includes plants using gasification technology. Every application for a new plant is assessed by the agency to ensure that it will use the best available techniques to minimise emissions and that it will not have a significant effect on local air quality. The Environment Agency will not issue an environmental permit if the proposed plant will have a significant impact on the environment or will harm human health.

--- Later in debate ---

[Rebecca Pow]

I am going to plough on, because I want to get some of the points across that I could not make last time.

As the planning application referred to by the hon. Member for Washington and Sunderland West is subject to an appeal, it is the role of the Planning Inspectorate to consider all the material planning considerations that are relevant to the case, and from all parties, including the local planning authority, the applicant and those who might have made representations on the application—and of course all those people who signed the petition. However, I note the request made to my right hon. Friend the Secretary of State for Housing, Communities and Local Government for him to recover the appeal for his determination. As it is a live planning appeal, I am sure the hon. Member understands that it would be inappropriate for me to comment further.

Once operational, energy-from-waste plants are closely regulated through a programme of regular inspections and audits carried out by the Environment Agency, which also carefully considers the results of the continuous air emissions monitoring that all plants must do to meet the conditions of their environmental permit.

The hon. Member for Edmonton (Kate Osamor) raised the issue of air quality in particular, but air quality is of course devolved to local authorities, and the Greater London Authority is responsible for what happens in London. However, energy-from-waste plants must report any breaches in respect of emissions to the EA within 24 hours, so there are strict controls.

Health issues were touched on in particular. As part of the permitting process, the Environment Agency consults Public Health England and the local director of public health on every energy-from-waste application that it receives and takes their comments into account when deciding whether to issue a permit. I must point out that our clean air strategy has been commended by the World Health Organisation, and there are aims in it to halve any harm caused to human health by air quality. We therefore have strict controls coming down the tracks, and local authorities are all becoming engaged with them. Hon. Members should note that the position of Public Health England-remains that modern and well run and regulated municipal waste incinerators are not a significant risk to public health. That is what that body itself has said.

[Caroline Nokes]

Will the Minister give way?

[Rebecca Pow]

Very briefly.

[Caroline Nokes]

My hon. Friend appears to have only one page of her speech left, so I am sure we have plenty of time for her to read that out. I am conscious that she has made many comments about municipal waste facilities, but unfortunately the proposal in my constituency is not for a municipal one but for an entirely commercial one. Although I accept her reassurances about current standards and EA monitoring, does she think that that goes far enough?

[Rebecca Pow]

Of course there is a place for commercial waste incinerators, which is what my right hon. Friend refers to. We have in place an entire system of structures, permits, and checks and balances, but it is essential that they are seen to function properly and that they are monitored closely and conducted in the right way.

To conclude, I thank the hon. Member for Washington and Sunderland West for bringing forward this debate. This clearly is a heated issue, which has raised a lot of concerns, but I hope I have made it clear that harnessing energy from residual waste has its place as part of a wide, holistic waste management system. That will deliver value from waste as a resource. I wanted to be very clear, and I hope it has come out in what I have said, that the measures in the resources and waste strategy and the Environment Bill will enable a paradigm shift, in relation to reducing, reusing and recycling our waste, that should limit the amount that ever has to go to incineration and landfill. I hope that, from what I have said, hon. Members understand what is happening, the direction that the Government are absolutely committed to, and the move to a circular economy.