Independent Water Commission
Steve Reed Excerpts(1 week, 5 days ago)
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The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
Thank you, Mr Deputy Speaker. I have, of course, saved the bulk of my responses for you and the House this afternoon. With permission, I would like to update the House on the Government’s plans to reform the water sector.
The water industry is clearly failing. Our rivers, lakes and seas are polluted with record levels of sewage, and water pipes have been left to crumble into disrepair. I share customers’ fury at rising bills. Right now, hosepipe bans are in place across the country because not a single new reservoir has been built in over 30 years, and the lack of water infrastructure is blocking economic growth. Water companies have been allowed to profit at the expense of the British people when they should have been investing to fix our broken water pipes. They got away with this because of a broken regulatory system that has failed both customers and the environment. The public expressed their fury in last year’s general election and voted for change. That change will now come.
In just one year, we have put in place the building blocks for change. First, we restored accountability by giving the regulators more teeth and introducing a ban on unfair bonuses, severe and automatic penalties for breaking the law, and jail sentences for the most serious offences. Secondly, we are investing £104 billion of private sector funding to rebuild the water network, upgrading crumbling pipes, repairing leaks, building new sewage treatment works and digging out new reservoirs. It is the single biggest investment in the history of the water sector, and it allows me to make a new commitment to the country: this Government will cut water companies’ sewage pollution in half by the end of the decade. That is the most ambitious commitment ever made by any Government about water pollution, and it is just the start. Over a decade of national renewal, we will restore our rivers, lakes and seas to good health.
The third building block for change is today’s final report from Sir Jon Cunliffe’s Independent Water Commission. I express my thanks to Sir Jon, his officials, and all those who have contributed to this outstanding piece of work. I agree with Sir Jon that water regulation has been too weak, too complex, and ineffective. Having four separate regulators with overlapping and conflicting remits has failed both customers and the environment. Ofwat has failed to protect customers from water companies’ mismanagement of their hard-earned money, and it has failed to protect our waterways from record levels of pollution. Today, I can announce that this Labour Government will abolish Ofwat. We will bring water functions from four different regulators into one—a single powerful super-regulator responsible for the entire water sector, with the teeth it needs to enforce the high standards that the public rightly demand.
The new regulator will stand firmly on the side of customers, investors and the environment and prevent the abuses of the past. For customers, it will oversee investment and upgrade work, so that hard-working British families are never again hit by the shocking bill hikes that we saw last year as customers were left to pay the price of failure by the previous Government. For investors, it will provide the clarity and direction required for a strong partnership between Government, the sector and investors to attract billions of pounds of new funding. For the environment, it will reduce all forms of pollution to clean up our rivers, lakes and seas for good. We will work closely with the Welsh Government to devolve the economic regulation of water to Wales.
I will publish a White Paper this autumn giving the Government’s full response to the Independent Water Commission’s final report and launching a consultation on it. Following that, I will bring forward a new water reform Bill early in the lifetime of this Parliament. Ofwat will remain in place during the transition to the new regulator, and I will ensure that it provides the right leadership to oversee the current price review and investment plan during that time. To provide clarity during this period, I will issue an interim strategic policy statement to Ofwat and give ministerial directions to the Environment Agency setting out our expectations and requirements. We will publish a transition plan as part of our full Government response in the autumn.
Today, we are immediately taking forward a number of Sir Jon’s recommendations. First, we will establish a new statutory water ombudsman—a single, free service to help customers resolve complaints such as incorrect bills, leaking pipes or water supply failures. The new ombudsman will have the legal powers to protect customers and will bring the water dispute resolution process in line with other utilities, such as energy. It is part of the Government’s ambition to put customers at the heart of water regulation.
Secondly, we will end the era of water companies marking their own homework. We will end operator self-monitoring and transition to open monitoring to increase transparency and help restore public trust. Water companies are already required to publish data on some sewage spills within one hour. We will roll out real-time monitoring across the wastewater system, and all this data will be made publicly available online. That will ensure that the regulator and, importantly, the public have the power to hold water companies fully accountable.
Thirdly, we commit to including a regional element within the new regulator to ensure greater local involvement in water planning. By moving to a catchment-based model for water system planning, we can tackle all sources of pollution entering waterways, so that they can be cleaned up more effectively and more quickly. This will ensure—for the first time—that water infrastructure investment plans align with spatial planning to support faster regional economic growth. The lack of water infrastructure that held back development around Cambridge and Oxford for so long will not happen again.
The new regulatory framework will recognise the risks investors take and, if they meet their obligations, they will see a fair, stable return on their investment. Just last week, I signed the Government’s new water skills pledge to make sure that the sector has the skills and workforce it needs to deliver this vast investment.
This Labour Government were elected to clean up water pollution and ensure that unacceptable bill hikes can never happen again. We now have all the building blocks in place to make that happen. We are establishing a new partnership based on effective regulation, where water companies, investors, communities and the Government will work together to clean up our rivers, lakes and seas for good.
Robbie Moore (Keighley and Ilkley) (Con)
I am grateful to the Secretary of State for advance sight of his statement. I shall be responding on behalf of the shadow Secretary of State while she meets farmers at the Royal Welsh Show.
Let me begin by recognising the scale and seriousness of the work undertaken by Sir Jon Cunliffe and his team. The review contains 460 pages and 88 recommendations, and represents one of the most detailed examinations of the water sector since privatisation. Indeed, there is much in it that we cautiously welcome, including the merger of the regulators. As we examine the recommendations in more detail, we stand ready to support serious reform if it is done properly. However, I am afraid that what we have seen and heard from the Secretary of State over the past year has not matched the seriousness of Sir Jon Cunliffe’s work, nor has it gone anywhere near the root-and-branch radical reform that he sold to voters before the election. I therefore seek clarity from him on the following points.
First, over the weekend the Secretary of State announced that Labour would cut sewage spills by 50% by 2030, but what he did not mention was the fact that plans submitted under the last Conservative Government were already set to cut sewage spills by even more than that amount. The Times reported yesterday that the Secretary of State’s new pledge would actually see an additional 20,000 discharges of sewage in our rivers, compared with existing plans. Can the Secretary of State explain why, after 88 recommendations and a year-long review of the sector, he has watered down sewage reduction targets rather than massively ramping them up?
Secondly, the Secretary of State took to the airwaves at the weekend telling the public that we needed to go back to the “purity” of our waters that we all remember, but the uncomfortable truth for which Labour still refuses to take responsibility is that when it left office in 2010, just 7% of storm overflows were monitored. Let me repeat that: under Blair and Brown, 93% of sewage discharges were happening with no oversight and no accountability whatsoever. The only reason we can talk tough today is the fact that the last Government pushed monitoring to 100% in 2023. May I therefore ask the Secretary of State to clarify his statement?
Thirdly, the Secretary of State told the public that he had secured £104 billion of investment from the water sector to fund these reductions, but what he did not mention was that £93 billion of that investment plan had already been submitted by water companies in October 2023, nine months before he was even in office. I would know that because I was the Minister at the time, and I have here the letter showing that he had nothing to do with it. Will he comment on that?
Fourthly, the Secretary of State champions the 81 criminal investigations of water companies that have taken place since the election and his ban on water company bosses’ bonuses, but what he does not explain is that these criminal investigations are a direct result of the Conservatives’ policy of quadrupling the number of water company inspections, and that it was our party that launched the ban on bosses’ bonuses. This is all available for the public to see and to fact-check for themselves, as it is a matter of public record.
What all this shows is that, for all their bluster and promises of radical change, the Government have made almost no new progress on the issue over the past year. They have sat on their hands for more than a year waiting for the review. It is no wonder that the campaigners whom the Secretary of State so shamelessly used for votes in the run-up to the last general election are now, today, calling for his resignation. We on this side of the House stand ready to work with the Government on serious reform. We will support any action that genuinely holds water companies to account, delivers cleaner waters and protects the public from paying the price of corporate failure. However, we will not stand by while the Secretary of State rewrites history, waters down ambition, and backtracks on the promises that he made to the public.
Steve Reed
I thank the hon. Gentleman—I think—for his comments, but it is disappointing that the shadow Secretary of State did not consider a matter of this urgency to be important enough for her to show up in the Chamber this afternoon. I am afraid that that really does reflect the importance that their party ascribed to this issue during the 14 years in which it was in power.
I enjoy listening to the hon. Gentleman, but I am afraid that he sounded a little delusional this afternoon. If he really thinks that the Conservatives did so well on sewage, I wonder why he thinks sewage pollution in our waterways increased every single year during their 14 years in charge. The fact is that the Conservatives made the situation far worse, because they instructed the regulator to apply a light touch when they should have told it to get a grip. They stripped out resources from the regulator, reducing its resources by 50% at one point, so it was less able to enforce against sewage pollution. They allowed millions of pounds, if not billions, to be diverted away from investment and to be used instead for unjustified bonuses and dividends for water companies.
It is this Government who have secured £104 billion of investment to upgrade our water system. It is this Government who have banned the unfair bonuses that water bosses were taking. It is this Government who are introducing monitoring of all sewage outlets. And it is this Government who are going to clean up our rivers, lakes and seas, where the previous Government failed abysmally.
Bill Esterson (Sefton Central) (Lab)
My constituents will be very pleased with what the Government have announced today, following 14 years of seeing increases in the dumping of sewage on the beaches, and in the rivers, in my constituency. I could not help but notice that yesterday the leader of Reform, in his answer to every question, said either “I don’t know” or “I’ve no idea.” Of course, he is not here either, but he did say that his answer to this problem is to increase payments to the shareholders and to do absolutely nothing to deal with the problems in our water industry. Will my right hon. Friend confirm that, during his time as Secretary of State, he will make it his priority to ensure that we reduce the sewage being dumped in our rivers, on our beaches and in our lakes?
Steve Reed
I was, of course, on the television show in question with the hon. Member for Clacton (Nigel Farage). I think he told us six times that he had no idea—well, that much we knew. It is this Government who have a plan to clean up our waterways. We have put in place the building blocks for change, and that allows me to stand before this House and commit that by 2030 we will reduce sewage pollution from water companies by 50% as we move towards a decade of national renewal in order to clean up our waterways for good.
Tim Farron (Westmorland and Lonsdale) (LD)
I thank the Secretary of State for advance sight of his statement, and Sir Jon Cunliffe for his report and for his work in producing it. The Liberal Democrats have long argued for the abolition of Ofwat, and for the creation of a new, consolidated and powerful regulator. In fact, we put it to the Public Bill Committee and it was supported by neither the Labour party nor the Conservative party, but today’s proposal seems to include doing just that, so we strongly welcome the statement. It is a reminder to the wonderful volunteers and water campaigners across the country that their work is absolutely worth while and has made a huge difference. My message to them is: thank you so much and keep going, because we still do not know the details and the nature of the new regulator, and we still see no sign in the report of any plan to tackle the toxic nature of the water industry’s ownership structure.
Why is there no plan to change the structure of the industry itself? Even the best regulator in the world will fail if water companies are still owned by those who care nothing for the quality of the lakes, rivers and seas, and who care only about making as much profit as possible in return for very little investment. Is it really acceptable to ask bill payers for a 30% rise when there is no guarantee that the water company will not be siphoning off huge chunks of that money in dividends, pay rises or bonuses? Why is there nothing in the statement that will truly empower the volunteers, citizen scientists and water campaigners I just mentioned? Why are we not giving places on water company boards to the likes of the Eden Rivers Trust, the South Lakes Rivers Trust, Save Windermere, the Clean River Kent Campaign, Surfers Against Sewage and Windrush Against Sewage Pollution, known as WASP? Why is there no mention of monitoring the volume of sewage spills as well as the number of incidences, and no mention of including legally binding pollution reduction targets?
Although the statement is welcome and we rightly celebrate the Liberal Democrat campaign wins that it is full of, our job as a constructive and effective Opposition is to scrutinise the detail and to carry on campaigning to clean up our waterways and our water industry too. That is exactly what we shall do.
Steve Reed
I thank the hon. Gentleman for his questions. I echo and endorse his comments about the volunteers and citizen scientists who carried out fantastic work to ensure that this issue remained where it needed to be, which was right at the top of the political agenda. I hope that they will join us in welcoming Sir Jon’s report.
There will be a White Paper and a consultation alongside it. We will launch the White Paper in the autumn, giving detailed Government responses to the 450-page report. With 88 recommendations, there is a lot to go through, but the report includes proposals about ownership, which will be consulted on as well. Volunteers and citizen scientists will be able to engage for the first time through the proposed regional structures. We accept that proposal in principle, and the detail of it will be worked through during the consultation. For the first time, there will be engagement on the catchment of entire river systems, and citizens, local authorities and businesses will all have a voice in that, as will members of the farming community operating within those catchments.
I believe that by reducing the number of spills we will also reduce the volume of spills. The hon. Gentleman will be able to monitor that, and he will be able to hold me to account, as will the House and the public, as we work towards the target that I have outlined for reducing sewage spills from water companies by 50% by 2030. He of course is lucky enough to represent one of the most beautiful parts of the country, including Windermere, and we are working with United Utilities to remove all sources of pollution from that beautiful, iconic lake, so that what became a story of decline can become a visible symbol of renewal with this Government.
Several hon. Members rose—
Steve Reed
My hon. Friend makes a very important point. We are currently going through a dry spell and seeing hosepipe bans in many parts of the country, yet in the winter it rained very heavily. The reason we have hosepipe bans is that we do not have the reservoirs to catch the rain when it falls and then use it in drier periods, which is because we have not built a new reservoir for 30 years. That changes now: these plans include the intention to build nine new reservoirs. To speed up the planning process, I as the Secretary of State am taking control of consents for reservoirs, so that they can be approved much faster and go ahead to provide the country with the clean drinking water we need.
Mark Pritchard (The Wrekin) (Con)
The Environment Agency estimates that there are 4 million regular and occasional anglers throughout the United Kingdom, with 1.2 million getting fishing licences last year. Angling across the country is worth about £3 billion to the economy and it is the favourite pastime in this country, as the Secretary of State will know. Will he give an undertaking to all the anglers throughout this country that they will be fully engaged by the new regulator?
Steve Reed
The right hon. Gentleman makes a very important point. Anglers are quite rightly furious about the level of pollution, which is destroying fish and other life in our rivers, but also about the impact of abstractions, particularly from chalk streams, so the new regulator will be engaging with them. Sir Jon has proposed new mechanisms for volunteers and campaigners to engage with the system that were not available previously. We will consult on those in the autumn, and move ahead with legislation following that.
Helena Dollimore (Hastings and Rye) (Lab/Co-op)
I really welcome the water commission. The EFRA Committee has had each of the water bosses in, one by one, and each struggled to explain why their industry prioritises bonuses over fixing broken pipes. I therefore really welcome the action that the Government have taken to ban bonuses, starting with the bonus for the Southern Water boss, Lawrence Gosden. We were, however, disgusted to hear last week that he plans to take a doubling in his salary, an additional £690,000, after overseeing major water outages, flooding in Hastings town centre and massive sewage dumping. Does the Secretary of State agree that that is a slap in the face to my constituents, and that Lawrence Gosden should think very seriously about whether he takes that salary increase?
Steve Reed
My hon. Friend, who is such a strong campaigner on the water sector, makes a very important point, which she puts very well. I consider that pay rise to be outrageous, as does she. It turns out that he is receiving that pay increase under a scheme that was permitted by the regulator under the regime that the Conservatives had in place, and the payment he is getting this year relates to the last year of the Conservative Government. We have changed the law so that no similar payment can be made in future.
Rosie Duffield (Canterbury) (Ind)
South East Water’s Broad Oak reservoir in Canterbury, which will also serve your constituency, Mr Deputy Speaker, is not due to open until 2033. Will my beleaguered residents and businesses in Canterbury and parts of Whitstable have to put up with the droughts and the leaks—in a heatwave, which has been unbearable—for another eight years?
Steve Reed
The hon. Lady is quite right to point to the problems that we are experiencing because of the lack of reservoirs. As I said earlier, we are speeding up the consenting and the building of new reservoirs, so we have the means to catch the rain when it is falling and can use it during drier periods. She refers to leaks. The investment that we have secured will reduce leaks from water pipes, so we can help to conserve water for the purpose for which it is intended.
Samantha Niblett (South Derbyshire) (Lab)
I welcome today’s statement. I am incredibly excited, not least because we have the beautiful River Trent, which separates my constituency from Staffordshire. It is home to the Staffordshire Swooshers, who have members from Derbyshire. They frequently have to avoid a “Trent tan”, but they extol the virtues of open water swimming. Does the Secretary of State agree that by having cleaner waters, we can encourage more great exercise to make the country healthier and improve wellbeing?
Steve Reed
A Trent tan is a very alarming and graphic image, but it captures what has gone wrong with our water sector for so long. The changes that we are announcing today will clean up our waterways across the country so that wild swimmers, as well as many other people who like to enjoy our precious rivers, lakes and seas, can get on and enjoy them without the kind of concern she alludes to.
Claire Young (Thornbury and Yate) (LD)
In my constituency last year there were 2,036 sewage spills, lasting for a total of 28,360 hours. However, contrary to the Secretary of State’s earlier assertion, we do not know the volume of that dumping because it is not monitored. What steps are the Government taking to impose targets to reduce both the duration and the volume of individual spills?
Steve Reed
We are increasing monitoring to 100% of all outlets. I note that representatives from the Conservative party will often try to take the credit for increasing monitoring. That is a good thing to have done, but what is not so good is to use it just to wave hello to the sewage as it floats on by and do nothing about reducing it.
Clive Lewis (Norwich South) (Lab)
I am afraid that the report feels like a missed opportunity for the Government to show the public whose side they are on. It entrenches a privatised model that has already failed economically, environmentally and democratically. With 20% to 50% of bills going on servicing debt, why is public ownership—if it is good enough for rail, GB Energy and renewables—not good enough for water?
Steve Reed
We have to take a rational, not ideological, approach to tackling this problem. Nationalising the water companies would cost £100 billion. Those are not figures, as I have seen my hon. Friend claim, from the water companies; they are provided by officials in my Department under the influence of nobody externally. To pay that money—£100 billion—we would have to take it away from public services, such as the national health service and education, to hand it to the owners of the companies that have been polluting our waterways. That makes no sense to me and it makes no sense to the public. Frankly, I am surprised that it makes any sense to him.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
I warmly welcome the Secretary of State’s announcement that he is going to merge all four water regulators into one. However, I offer a slight note of caution: it is no good moving the deckchairs around the deck unless the situation has been improved. When will he produce the White Paper and what teeth will he give this single new super-regulator?
Steve Reed
I welcome the hon. Member’s support in principle for Sir Jon Cunliffe’s proposal, which I have accepted, to merge the four regulators’ water functions into one single super-regulator. I will publish the White Paper containing the Government’s full response during the autumn. If the hon. Member would like to peruse the 450-page document that Sir Jon has provided, he will find 88 separate recommendations in it, many of which will significantly strengthen regulation so that the new regulator can enforce much more harshly against the kinds of abuses that water companies got away with in the past.
Josh Newbury (Cannock Chase) (Lab)
The Environment, Food and Rural Affairs Committee has heard unbelievable statements from 10 major water companies. We also took a long, hard look at Ofwat, as Sir Jon Cunliffe did, and found a regulator that is too cosy in dealing with water companies and too bureaucratic in dealing with customers. A weak regulator and fragmented powers have let the public down for far too long. Does the Secretary of State agree that while the Conservatives have failed and Reform and the Greens make unachievable, unfunded promises, it is this Labour Government who will call time on failure and protect bill payers?
Steve Reed
My hon. Friend makes a very good point. I believe that one of the reasons why the relationship between Ofwat and the water companies became far too cosy is the instruction that Ofwat received from Ministers in the previous Government to apply only light-touch regulation, when what was needed was a firm grip on what was going on. It is astonishing that the Conservatives thought it was a good idea to strip out resources and tell the regulator to go soft on the companies given the abuses that were taking place. That has ended now, and we are moving to a model of effective regulation that will protect bill payers and clean up our rivers.
Stephen Flynn (Aberdeen South) (SNP)
In expressing his opposition to the nationalisation of water just yesterday, the Secretary of State did not mention the fact that, under Scottish Water, bills in Scotland are £113 cheaper, or the fact that 97% of Scotland’s bathing waters meet the quality standards expected. No—what he said of Scottish Water was that
“pollution in rivers in Scotland is worse than in England.”
I have consulted the House of Commons Library and just 14% of rivers in England meet the quality standards expected, whereas 58.2% of Scotland’s do. Trust in politics matters, so he will correct the record today, won’t he?
Steve Reed
As the right hon. Member correctly points out, Scotland has a nationalised water company—under the control of the SNP Government, of course—and water pollution is worse than in England as a result. I am more than happy to write to him to give him the facts so that he can come back and correct the record in due course.
Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
Yesterday I had a lovely swim in the North sea off Bamburgh castle, and I would like to thank the Safer Seas and Rivers Service for telling me which beaches to avoid due to sewage spills by Northumbrian Water. Not all my constituents swim, but they all tell me that the current situation is disgraceful. They will not be reading a 500-page report, so could the Secretary of State explain to them whether it is: a) their fault for not accepting higher bills, as Tory former Ministers and Water UK say; b) the water companies’ fault for extracting so much more value—in the shape of dividend and bonus payments and loading the companies with debt—than they put into them; or c) because water is a natural monopoly and incredibly difficult to regulate effectively in the private sector? Or is it both b) and c)?
Steve Reed
I was slightly confused by that question, if I am honest. My hon. Friend is very brave to go swimming in the North sea, but I know that many people enjoy that. The changes that we are making will bring about effective regulation and appropriate levels of investment and protect customers from the shocking bill hikes that we saw last year, which were the direct result of 14 years of failure by the Conservative Government. I am sure my hon. Friend’s constituents will welcome that.
Jess Brown-Fuller (Chichester) (LD)
I thank the Secretary of State for his statement. Environment Agency data showed a 60% increase in serious pollution incidents last year, so the target of halving spills over five years would still mean nearly a quarter of a million sewage spills happening annually by 2030. When we drink a glass of water, we measure it by how much we drink, not the time it takes to drink. To make a real difference to places like Chichester harbour and the River Lavant in my constituency, will the Government look at the volume rather than the hours of spills happening?
Steve Reed
The target for reduction uses as its baseline the 2024 figure, not the 2021 figure used by the previous Government, recognising the extent to which sewage pollution increased between ’21 and ’24. I want to recognise the scale of the problem and then work to solve it from that point. We have announced the most ambitious target for sewage pollution reduction of any Government ever, and that is not the end of our ambition; there will be further to go until we restore all our waterways, including the beautiful Chichester harbour, back to purity.
Matt Rodda (Reading Central) (Lab)
I warmly welcome the Secretary of State’s statement and the tough action he has announced. Residents in my community have suffered appalling problems with sewage pollution in the Thames, the Kennet and many other waterways, as well as hours-long interruptions to supply. To make matters worse, residents have also suffered subsidence from a water leak. How will the new ombudsman help me and my residents to tackle these very serious problems?
Steve Reed
The new ombudsman will have statutory powers to provide independent and free support to customers experiencing the kinds of failures that my hon. Friend describes; there are many others, of course. Previously, water was one of the only utilities that did not have that resource available, but it will do from now on. We have also taken steps and introduced measures to increase compensation for people who have experienced failure by their water company, with compensation at least doubling and in some cases increasing tenfold.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
The quality of a river is about not just the water that goes into it, but the maintenance of the river itself. My constituents have been failed over and over again by the Environment Agency in the maintenance of our waterways. Given the Secretary of State’s enthusiasm for breaking apart quangos, will he consider bringing powers away from the EA so that we can manage our rivers properly and effectively?
Steve Reed
The hon. Gentleman makes an important point, but I gently remind him that it was his Government who cut resources to the Environment Agency by 50%, which may well have had something to do with the fact that people were no longer there to enforce against the kinds of failings he talked about.
Marsha De Cordova (Battersea) (Lab)
I warmly welcome the Secretary of State’s statement. My constituents will be relieved as, after 14 years of Tory failure and inaction, water pollution from toxic sewage discharge is a persistent problem in Battersea, and all the while their bills are being hiked. I welcome the Government’s taking the necessary steps and introducing reforms of the water sector and protecting my constituents. Will he say a little more about when he intends to bring forward legislation? I am sure he agrees that he is taking long overdue action.
Steve Reed
I know Battersea very well—it is a beautiful area—and I am aware of the problems with pollution. Of course, she knows all too well the concerns of her residents about escalating bills as a result of the failure of the previous Government to get a grip on the water sector. We will be publishing the White Paper and launching the consultation this autumn, which will be followed by legislation in the first half of this Parliament.
Manuela Perteghella (Stratford-on-Avon) (LD)
My constituents have faced an increase in their water bills without any improvement in the dumping of sewage in their rivers and brooks or upgrade in their infrastructure. What assurances can the Government provide that those increases will not end up in the pockets of water company bosses?
Steve Reed
I hope that the hon. Member will be reassured by the fact that I have ringfenced customers’ money so that it can no longer be diverted for payment of bonuses and dividends, as was commonplace under the previous Government. It will be spent only on what it was intended for, which is investing in better water infrastructure. If that does not happen, it will be refunded to customers.
Catherine Atkinson (Derby North) (Lab)
More than 60 year 4 pupils from Walter Evans primary school in Derby wrote to me and the Secretary of State worried about sewage dumping and plastic pollution in our rivers. I thank the Secretary of State for his clear commitment that the Government will halve pollution in our rivers by 2030. Does he agree that had the Conservatives taken action of that kind when they came to power 14 years ago, my nine-year-old constituents would have known cleaner rivers all their lives?
Steve Reed
I pay tribute to the young people of my hon. Friend’s constituency. Young people famously care about the environment, and they are devastated to see the scale of pollution in our waterways that she described. We have taken all these steps and put in place the building blocks for change within a year of winning the general election. The previous Government had 14 years. They could have done exactly the same thing in any one of those 14 years, but, as is shown by the absence of the shadow Secretary of State, they just did not care enough.
Adrian Ramsay (Waveney Valley) (Green)
This Government-commissioned review looked at how to tinker with the Conservatives’ failed privatised monopoly system, but the truth is that it is a moribund model that has resulted in billions being paid out to shareholders and billions in debt being loaded up, and in crucial infrastructure being neglected, meaning that sewage is regularly pumped into our rivers and seas. Does the Secretary of State accept that the cost of that failure must be part of the calculation of the cost of bringing water into public hands, where it belongs, and that figures like £100 billion are grossly inflated by those who do not think the water industry should pay for its greed and terrible mismanagement of our water system?
Steve Reed
I am afraid that the Green party’s proposals would mean paying £100 billion of taxpayers’ money to the owners of the water companies. That money would have to be taken away from the national health service. It would take years to unpick the current ownership models, during which time pollution in our rivers would get much worse, not better. We know it does not work, and we have only to look north of the border to see it; under the nationalised model in Scotland, pollution is worse, not better. The hon. Member is talking about cutting the national health service, giving £100 billion to the owners of the current water companies and making pollution far worse. That does not sound very green to me.
John Slinger (Rugby) (Lab)
Action to tackle the water companies’ failure on long-standing systemic problems is much needed in my constituency, where I have been working with residents in Brownsover who have faced repeated burst pipes, with some families forced to move out multiple times and not receiving the proper value of damaged property. Severn Trent has now given a timetable for action on the infrastructure. I welcome the introduction of a new statutory water ombudsman to put the public, as the Secretary of State said, at the heart of water regulation. Does he agree that where the Conservatives failed the British consumer, this Labour Government will protect them and put people before profit?
Steve Reed
My hon. Friend is a vocal champion for his constituents. He is quite right to demand more compensation when outages happen, and an ombudsman. That is what the Government will provide, so that we can give better support to customers who are let down by the water companies. We are on the side of bill payers and the environment; the previous Government were on the side of neither.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
Between 2018 and 2022, untreated sewage was released just over 58,000 times from Scottish sewer overflows, and more than half of wild swimming spots in Scotland contain unsafe levels of sewage, so whatever model the Government decide to adopt for the regulation of the water industry in England, will the Secretary of State assure me that they will not follow the Scottish Government’s failed model?
Steve Reed
I completely agree with the hon. Member, who accurately pointed to the failures of both the SNP Government in Scotland and the nationalised model, which does not fix the problems.
Jon Trickett (Normanton and Hemsworth) (Lab)
It is correct to analyse the failure of the regulators and to seek to replace them, but I rather think the Secretary of State, or one of his successors, will be coming back to discuss ownership structures. After all, under Yorkshire Water—the first to pioneer hosepipe bans this year—the pipes are leaking like a Tetley teabag, with more than 95 billion litres of water leaked in the last year alone. What does he envisage, if the new regulatory system fails and the ownership structures continue to produce the kinds of problem we have seen up and down the country? Will he have reserve powers to take action against the owners of the companies themselves, probably to remove them?
Steve Reed
There is a system in place for when licences are breached; it is called special administration. The reason we are strengthening regulation and changing the regulator is so that we can prevent such failures. The £104 billion that we secured at the end of last year will help to upgrade pipes, so that we can reduce the amount of water leaking out of the system, and pay to build and dig out the new reservoirs to catch the rain, so that there is a supply of water in the drier periods.
Jeremy Corbyn (Islington North) (Ind)
I understand the points the Secretary of State makes about the levels of pollution and damage to our natural world and environment by the water industry over the past 30 years, and I understand the need for regulation, but does he not understand that he has not dealt with the fundamental problem? In the future, private enterprise is still going to be making money out of a public water supply. Would it not be better to bring it into public ownership and set a share price based on the costs of pollution and on the exorbitant executive pay and bonuses, so that the public as a whole can control their water supply and no longer be left to the vagaries of the private sector, with all the devastation and damage it has caused over the past 30 years?
Steve Reed
This Government are going to do what works, rather than what is ideologically correct. We are not going to strip £100 billion out of public services like the national health service to give it to the owners of the water companies who have polluted our waterways; we are not going to wait years to get investment in while pollution in our waterways gets even worse; and we are not going to let the pipes deteriorate to such an extent that bill payers are hit with even higher bills in the future. I am going to act to deliver us lower bills and clean water in the fastest way possible.
Clive Efford (Eltham and Chislehurst) (Lab)
What has happened to our waterways is a national disgrace. The state in which the Conservatives left our rivers, our lakes and the seas around Britain epitomises what they did to public services in general. Does my right hon. Friend agree that what has been lacking over the past 35 years of privatisation is a proper consumer representative to protect customers, and will he give a guarantee that that will be at front and centre of the new regulator?
Steve Reed
My hon. Friend makes an important point. In Sir Jon Cunliffe’s final report today, he makes recommendations for how customers can be put at the heart of the new model. There are several recommendations; I will not go through all of them, but one is to set up new regional entities, where customers will have direct representation in taking decisions about how water infrastructure investment will be spent to tackle the priorities in their own areas.
Cameron Thomas (Tewkesbury) (LD)
My constituent campaigners at SafeAvon and Tewkesbury Friends of the Earth will be delighted to see that, at length, the Government have implemented a core Liberal Democrat manifesto pledge: the abolition of Ofwat. Will the Secretary of State now go further and implement a second pledge to put those campaigners on the board of Severn Trent so that they can hold the water company to account, and continue to show my constituents that Liberal Democrat pressure pays off?
Steve Reed
I welcome the Liberal Democrats’ conversion; when they were in government, and when the Water Minister was indeed a Liberal Democrat, they commissioned a report that found there was no need to change the model of regulation.
John McDonnell (Hayes and Harlington) (Ind)
Many people will find it incredible that Cunliffe was not even allowed to look at public ownership. I also say mildly to the Secretary of State that the £100 billion he cites has largely been refuted by independent bodies and economists. Way back in 2014, I raised the example of Northumbrian Water and its use of various complicated devices for tax avoidance. That became endemic within the industry. Can we have a report on the water companies’ role in tax avoidance on a massive scale, so that we can then look at what further action could be taken against them?
Steve Reed
I agree with the right hon. Member on one point—that we should be cracking down on tax avoidance; it is always worth looking into that. On his earlier point, I am much more interested in the purity of our water than the purity of our ideology. The figure of £100 billion as the cost of buying out the water companies if any Government wanted to nationalise them was provided by officials in my Department with no external influence on them. This country cannot afford it, and we also cannot afford the worsening of sewage in our waterways during the years it would take to unpick the current model of ownership.
Dr Andrew Murrison (South West Wiltshire) (Con)
The Minister said he wanted nine more reservoirs, but can he say how many of that number are already under construction or in the planning process, when we can expect to see them and who will pay? Also, is it his view that Sir Jon Cunliffe’s predicted uplift of more than 30% in real terms for water bill payers will be covering the cost?
Steve Reed
I would be more than happy to write to the right hon. Member with the details he is asking for, but as I have said earlier, we are also speeding up the planning process and treating reservoirs as nationally significant infrastructure, meaning that I, as the Secretary of State, will take the consenting decision so that we can do this in months rather than the years or even decades it has been taking up till now.
Dr Allison Gardner (Stoke-on-Trent South) (Lab)
The village of Upper Tean frequently suffers flooding and sewage outflows, and one reason is that the antiquated mains water infrastructure cannot adequately cope with the increased amount of new housing developments, even when the developer meets all the required mitigations. Recommendation 3 in the report states:
“A comprehensive systems planning framework should be introduced”.
The report also states:
“Plans should consider the region or nation’s spatial development priorities, particularly those which are likely to have a significant impact on the water system, such as housing development”.
Does the Minister agree that, given the Government’s plan to build 1.5 million homes, it is vital that privatised water companies ensure that they can adequately meet systems demand without sewage dumping, and that they prioritise doing so over profiteering?
Steve Reed
My hon. Friend makes an important point, because of course water infrastructure is critical for housing development, economic development and economic growth in every single region of the country. Today I have accepted in principle one of Sir Jon’s recommendations that will allow us for the first time to align water infrastructure investment and spatial planning, so that those homes and factories can be built faster for the benefit of local people.
Victoria Collins (Harpenden and Berkhamsted) (LD)
I very much welcome the proposals. Today’s announcement is a step forward in tackling the sewage crisis, but of course the details will be in the delivery. That is important, especially as the River Ver, a precious chalk stream in my constituency, has received nearly 5,000 hours of sewage in the last year—some of that was 3,000 hours non-stop. We do not know the volume, but we know it is terrible. Will the Secretary of State meet me to see how the proposals can help to prioritise the desperately needed upgrade of the Markyate sewage works?
Steve Reed
I know the River Ver very well because I used to walk over a bridge across it every day on my way to school while I was growing up. I would be very happy to make sure that the hon. Member has an appropriate meeting with a Minister to discuss her concerns.
Anna Dixon (Shipley) (Lab)
I was pleased to see today’s report. I believe it has a picture of the Bingley five rise locks in my constituency on the front cover, so I thank the Minister for that. The creaking and leaking water infrastructure, the current drought restrictions and the dumping of sewage in our rivers, including the Aire and the Wharfe, are evidence of a failing industry and of the failures of previous Tory Water Ministers, one of whom is sitting on the Opposition Front Bench.
I welcome today’s report and also give credit to campaign groups like the Ilkley Clean River Group and the people’s water commission. It is right that the Secretary of State has said that he will abolish Ofwat and strengthen oversight and regulation, but Yorkshire Water has a labyrinth of holding companies that have built up debt, taken out dividends and interest payments, put up customer bills and failed to invest in upgrades. Does the Secretary of State agree that it is time for radical action, not only to merge the regulators but to restructure failing companies like Yorkshire Water?
Steve Reed
I cannot take credit for the picture—that was Sir Jon—but I can join my hon. Friend in crediting the campaign groups who have done such a fantastic job at keeping this issue at the top of the political agenda. Sir Jon makes proposals in his report about those labyrinthine structures that she is talking about. We need clarity and transparency, and that is what we will now work towards.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
Between 2001 and 2023, there were over 4,600 incidents of sewage overflows in Dewsbury and Batley, amounting to over 28,000 hours. Bills for my constituents and Yorkshire Water customers have gone up by 40% in the last five years and by nearly 30% in the last 12 months. Some £84 billion has been taken in dividends by all the water companies in the UK, with £74 billion of that saddled on to the companies themselves. What steps is the Secretary of State taking to reduce the bills of my constituents and residents of the whole United Kingdom, and what steps will he take to claw back that £84 billion so it can be invested to fix the pipes?
Steve Reed
I am grateful to the hon. Member for making that important point. His constituents, just like people right across the country, were last year forced to pay the price of 14 years of Conservative failure, because the Conservatives allowed the companies to pay out millions in dividends and bonuses when that money should have been invested in upgrading infrastructure. I have ringfenced customers’ money so that it will now only be spent on the purposes for which it was intended; otherwise, it will be returned to customers.
Leigh Ingham (Stafford) (Lab)
On Crooked Bridge Road in my constituency of Stafford, Eccleshall and the villages, it has taken the county council far too long to accept responsibility for faulty pipes. The buck has been passed between the council and Severn Trent, and the investigative work will not even start till 1 August. Will the commission consider intervening in cases where the buck is repeatedly passed back and forth in order to ensure that urgent works can get under way?
Steve Reed
My hon. Friend makes an important point: buck-passing should not be allowed to continue. We are moving to new regional structures that will bring together the regulators, customers, advocacy groups, businesses and local authorities—to a place where those kind of issues can be resolved.
Helen Maguire (Epsom and Ewell) (LD)
We welcome the Government’s commitment to cutting water bills by 50% in the next three years. However, given the stark increases that consumers have paid because of failed water company finances, this commitment will not touch the sides, especially for the most vulnerable customers. Will the Secretary of State do what Conservative Ministers failed to do: commit to implementing a single social tariff for water bills to help eliminate water poverty?
Steve Reed
Of course, social tariffs already exist within the individual water companies—Sir Jon has made recommendations about that. We will consult on that later in the year and then take decisions as we bring forward legislation in the new year.
Luke Akehurst (North Durham) (Lab)
It is a shame that no one is here from the Reform party to explain its proposals for the water companies; its Members might have managed to be more eloquent than their leader was on TV yesterday. Reform’s unfunded spending commitment would send mortgages through the roof and take money away from the NHS, schools, police and our armed forces. Will the Secretary of State tell us how much he thinks Reform’s proposals would cost, and comment on whether he thinks Reform has a clue about this policy area as its Members cannot even be bothered to be in the Chamber?
Steve Reed
I agree with my hon. Friend; it is a shame that no Reform Members have turned up, although perhaps it is not surprising because they did not bother mentioning this issue in their manifesto either. We did hear at the weekend that their leader, the hon. Member for Clacton (Nigel Farage), wants to hand £50 billion of taxpayers’ money to the owners of water companies. If we add that to its existing £80 billion of unfunded commitments, it comes to £130 billion. By my reckoning, that is almost double the amount that Liz Truss bet and lost on the economy when she crashed it and sent mortgages, prices and rents skyrocketing. Reform wants to double down on the bad bet.
Greg Smith (Mid Buckinghamshire) (Con)
I am genuinely all ears for any practical steps that can be taken to build on the Environment Act 2021 to clean up our waterways, but may I pick up the Secretary of State’s comments on the role, as he put it, of citizen scientists and local communities? In my constituency, water heroes like Doug Kennedy, who I joined in Nether Winchendon testing the River Thame a few weeks ago, have decades of real local knowledge on our waterways, as do the volunteers of the River Thame Conservation Trust. That powerhouse of local knowledge will be replicated up and down the country. Rather than just involving them as consultees, will the Secretary of State reflect on how they can get properly locked into local solutions to clean up our waterways?
Steve Reed
I support what the hon. Gentleman says about the Environment Act, which is a worthwhile piece of legislation passed by the previous Government. I also support what he says about ensuring that people have more involvement at community level. I will certainly take that on board as we work through the consultation.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
My constituents want to know that their drinking water is safe and that waterways such as the River Trent are clean and looked after. I welcome all the Secretary of State’s commitments on the new regulatory body, but he will know that the power of a regulator is not just in its powers, but in its ability to enforce them. Will the regulator have the resources to enforce the new rules that he proposes? It needs to be more than the sum of the parts of its predecessors, which failed, as so many of my constituents have seen.
Steve Reed
I thank my hon. Friend for important question. We have already introduced the “polluter pays” principle, so where there are successful prosecutions and enforcement action against water companies, they pay the price for that enforcement. That funds the additional resources to allow further investigations—and, if necessary, prosecutions—to go ahead. What a contrast with the previous Government, who slashed those resources in half.
Sarah Olney (Richmond Park) (LD)
From Saturday night to Monday morning, a mains burst on Richmond Hill in my constituency went unattended, resulting in residents being left without gas supply as water leaked into the gas pipeline. Burst-pipe sewage-dumping following storm overflows has now become customary. Last year alone, 119 hours’ worth of sewage was discharged into rivers and waterways in my constituency. Thames Water has been allowed to get away with such negligent and environmentally hazardous practices for far too long while Ofwat has stood by and watched. Earlier this year, a freedom of information request uncovered that Ofwat had not recouped a single penny from the financial sanctions it has placed on Thames Water. Now that the Government have finally realised that Ofwat must be replaced, will the Minister set out a timeline for the implementation of the review’s recommendation of a new regulator?
Steve Reed
I agree with much of what the hon. Lady says. Her constituents are experiencing what constituents across the country are experiencing. It is not acceptable and it will not continue. We will publish the White Paper in the autumn, with a consultation alongside it, and we intend to move to legislation during the first half of this Parliament.
Claire Hazelgrove (Filton and Bradley Stoke) (Lab)
Cleaning up our rivers, lakes and seas could not be more important. Having served on the Water (Special Measures) Bill Committee, I was glad that our Government have moved so quickly to begin that vital work. I welcome the further measures announced today. Will my right hon. Friend confirm that he will bring in the next changes as quickly as possible?
Steve Reed
I agree: it is important that these changes are brought in as quickly as possible. The state of our water sector, given the levels of pollution in our waterways and the unacceptable bill hikes that customers experienced last year, is a national scandal. We cannot allow things to continue. We will move at the greatest possible speed, and I am sure that my hon. Friend will hold our feet to the fire.
David Reed (Exmouth and Exeter East) (Con)
As the Secretary of State and the Minister for Water and Flooding will know, sewage is a major issue in my constituency. As we have heard, the Government plan to build 1.5 million new homes, tens of thousands of which will be in my area. Lots of people are understandably concerned that South West Water will not keep pace with development, so what guarantees can the Secretary of State give that South West Water will put in the required infrastructure?
Steve Reed
The hon. Gentleman makes an important point. The recommendation that I have accepted will create new regional structures under which water infrastructure investment will align with spatial planning, so that we can guarantee that in the future. However, that legislation is not yet in place, so I have set up a water infrastructure board in the Department. It will ensure that water companies are putting in infrastructure where opportunities for housing development and other forms of economic growth can take place.
Jim Dickson (Dartford) (Lab)
I welcome the statement. Residents in Dartford will be impressed by the Government’s ambitious commitment to halve sewage pollution in our lakes, rivers and seas within five years. They have had to put up with the poor performance of Thames Water for too long. Does the Secretary of State agree that, unlike the Conservative party, which had 14 years to fix this, and unlike Reform, which appears to have no idea how to fix it, when the Labour Government say that we will clean up our water and protect the British bill payer, we mean it?
Steve Reed
My hon. Friend rightly points to sewage getting worse and bills rising every year for 14 years under the previous Government. We are turning the tide on Tory sewage today, and over the next five years residents in Dartford and elsewhere will see reductions in sewage until we meet our target.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State very much for his statement. Yesterday on the Laura Kuenssberg show he showed positivity in relation to the new strategy, and the steps to be taken certainly make sense. However, water in Northern Ireland is still publicly owned, yet we still have the same difficulties that the Government are seeking to combat here. So my question to the Secretary of State is a simple one: will he do me a favour and speak to the relevant Minister at the Northern Ireland Assembly, Andrew Muir, to ensure that we in Northern Ireland have the same result as what is going to happen here with the required changes to infrastructure, giving more responsibility and outputting the changes that are made? With the positivity the Secretary of State has shown, that would take care of some of our difficulties in Northern Ireland.
Steve Reed
I thank the hon. Gentleman for his question. I speak regularly with my counterparts in Northern Ireland and am more than happy to convey his message to them the next time I speak to them.
Ms Julie Minns (Carlisle) (Lab)
As someone who enjoys swimming in Cumbria’s lakes, rivers and tarns, I welcome the Secretary of State’s ambitious commitment to halving sewage pollution in them. Can he say more about how—unlike the Conservatives who did nothing for 14 years, and unlike Reform’s moon-on-a-stick approach to reform—when he says he has a plan to protect water consumers and protect water users, he actually means it?
Steve Reed
I thank my hon. Friend for her question. Voters want to see action, not just words. That is why I am so proud that that £104 billion of investment that we have secured started to be spent in April. It is already being invested; people will see the change as a result of this. That will help to restore their confidence and their trust in politics, so shattered after 14 years of the Conservatives.
Tessa Munt (Wells and Mendip Hills) (LD)
Can the Secretary of State publish the data that quantifies the amount lost in leaks, so that the public can understand exactly how much water and how much of their hard-earned money is lost? It will also help the water companies to focus on fixing their pipes; it is no good just building another reservoir, as they might do in my area, if the water just continues to be lost en route to where it is needed.
Steve Reed
The hon. Lady is right: transparency is always very important. I believe that data is available and am happy to write to direct her to it so she can share the information with her constituents.
Alison Hume (Scarborough and Whitby) (Lab)
For far too long families in Scarborough and Whitby have been paying the price of failure. Yorkshire Water was recently forced to pay out £40 million due to serious failings yet a few days later customers’ bills rose by almost a third. Will my right hon. Friend say a little more to reassure my constituents that a national social tariff is now on the cards for those on low incomes?
Steve Reed
We always want to support those on lower incomes and those who may be experiencing water poverty; nobody should be worried about their water bill because their income is too low. Social tariffs already exist in every region. We will be consulting on the proposal for a national social tariff, which the Independent Water Commission has proposed in its final report.
Ayoub Khan (Birmingham Perry Barr) (Ind)
Citizens and families in my city of Birmingham are currently paying an average of £400 a year for their water bills—increasing to £800 by the end of this Parliament term. We know that the cost of living is spiralling out of control, and while families struggle with the cost of living, big bonuses are being taken by chief executives and shareholders. Will the Secretary of State consider bringing water back into public ownership, given that more than 60% of the British public are asking for that?
Steve Reed
Nationalising the water companies would, as I have already said, cost £100 billion—money that we would have to strip out of the national health service and education in order to hand to the people who own the water companies that have been polluting our waterways. It is not an idea that commends itself to me, I am afraid.
Josh Fenton-Glynn (Calder Valley) (Lab)
Calder Valley has seen near-floods and a hosepipe ban. Meanwhile, in 2024, Yorkshire has seen 68,186 sewage spills lasting over 430,000 hours. Does this mean an end to a useless regulator that is presiding over a failing industry?
Steve Reed
Well, the answer to that question is very quick: yes, it does.
Calum Miller (Bicester and Woodstock) (LD)
I draw the House’s attention to my entry in the register as I am an office holder on the all-party parliamentary water group. Last year, at the first Prime Minister’s questions of the Session, I drew the Prime Minister’s attention to the fact that Thames Water had pumped sewage into the River Evenlode for 2,600 hours in the previous year. I called then for the scrapping of Ofwat, and I am delighted that the Secretary of State has listened to my party and so many campaigners by doing so today. Thames Water has pumped a further 1,000 hours-worth of sewage into the same river in the intervening period, however, which is why the Evenlode Catchment Partnership has taken to citizen science to try to measure those figures. The Secretary of State set out that he wishes to halve the number of spills, but why is he not seeking to halve their volume and quantity, for that is what is killing our rivers?
Steve Reed
Our target for sewage reduction is the most ambitious target put forward by any Government in our country’s history, and I am very proud of that. It is an important stepping-stone to restoring our rivers, lakes and seas to the good health and purity that many of us will remember from when we were younger.
Ms Polly Billington (East Thanet) (Lab)
I welcome my right hon. Friend’s statement, which is detailed, practical and focused on outcomes. That is in stark contrast to the ludicrous, back-of-a-fag-packet policy of the hon. Member for Clacton (Nigel Farage), who claimed yesterday that he would simultaneously nationalise half the water industry, without knowing how much it would cost, and bring in more business people to run it—the people who have been free to run up debts, force up bills, dump sewage, and leave pipes broken, reservoirs dry and our lakes, seas and rivers filthy. Such people include, of course, the chief executive of Southern Water, Lawrence Gosden, who has a £1.4 million pay package that he should hand back, as my hon. Friend the Member for Hastings and Rye (Helena Dollimore) pointed out. However, how will the Government answer the people who say that these proposals do not go far enough and will still leave our precious water, lakes and seas in the hands of shysters and spivs?
Steve Reed
My hon. Friend is right to point out that the hon. Member for Clacton (Nigel Farage), by his own admission, has “no idea” and no clue about this issue. My hon. Friend is also right that the proposals are detailed. Sir Jon provided a 450-page report with 88 separate recommendations that we will consult on. When we implement a final version, it will be the biggest overhaul to our water sector in more than a generation. We will reset it from top to bottom, so we have a water sector that works on the side of customers, the environment and investors, rather than the serial failure that we witnessed under the previous Government.
Baggy Shanker (Derby South) (Lab/Co-op)
The Derwent runs through the heart of Derby, but thanks to the polluting water companies and the Tories, its health is in serious doubt. Can the Secretary of State reassure my constituents that this Labour Government are committed to taking the robust action that is desperately needed to restore the river and preserve it for our communities to enjoy safely?
Steve Reed
The state of the River Derwent is, alas, similar to many other rivers, lakes and seas up and down the country. That is why we are launching a water revolution today to completely reset the water sector from top to bottom so that the failings of the past can never happen again.
Alice Macdonald (Norwich North) (Lab/Co-op)
Norfolk is home to many beautiful beaches and rivers but, as in many areas, people are concerned about the state of their waters. The Cow Tower Dippers in Norwich are applying for designated swim status, which would mean that Anglian Water is obliged to monitor the water. That is one specific example, but can the Secretary of State expand on how the reforms will help local groups to hold water companies to account and speed up such processes?
Steve Reed
By monitoring every single outlet and making that visible to people across the country—campaigners and residents—we will open up the system with far greater transparency than has previously been the case.
Tom Rutland (East Worthing and Shoreham) (Lab)
Last week, it was revealed that the chief executive of Southern Water was awarded an egregious, enormous pay rise worth hundreds of thousands of pounds, despite the company continuing to oversee sewage spills and infrastructure failures that affect my constituents. Does the Secretary of State agree that water bosses should not profit from overseeing catastrophic failure?
Steve Reed
I absolutely agree with my hon. Friend and share his sentiment that the payment is outrageous. It was possible as part of a scheme that was permitted under the regulatory regime allowed by the previous Government. We have changed the law; it will not happen again.
Douglas McAllister (West Dunbartonshire) (Lab)
I commend the Secretary of State on the action in his statement to hold water companies to account, not least with the new regulator and ombudsman. Scotland’s widespread water pollution challenges are far greater than England’s, particularly the sewage-related pollution in our rivers and on our beaches. Scottish Water is publicly owned, but Scottish Ministers are failing to take the problem seriously, with inadequate monitoring. Does the Secretary of State agree that Scotland needs to take similar urgent action, which only a new direction under Scottish Labour can deliver?
Steve Reed
I agree with my hon. Friend. We had an example earlier of the complacency with which the SNP treats these kinds of issues. There is only one chance now in Scotland for a reset: the election of a Scottish Labour Government in Holyrood to work to clean up pollution from our rivers, lakes and seas, as we are doing.
Claire Hughes (Bangor Aberconwy) (Lab)
My constituents have been hit by a massive rise in bills, which is a real kick in the teeth given that thousands of them were without water after a major burst earlier this year. I warmly welcome the Secretary of State’s commitment to devolving the economic regulation of water to Wales, which will allow the Welsh Government to move forward with the commission’s recommendation on having an independent economic regulator in Wales. Does he agree that that demonstrates the value of two Labour Governments working together for bill payers in Wales?
Steve Reed
I agree with my hon. Friend. I understand that the Welsh Deputy First Minister has laid a statement before the Senedd today giving his comments on Sir Jon’s report.
Naushabah Khan (Gillingham and Rainham) (Lab)
I thank the Secretary of State for everything he is doing to transform water companies across our country. My residents in Gillingham and Rainham have suffered astronomical hikes in their bills and have been exposed to pollution and sewage dumps in our water, yet the chief executive of Southern Water thinks that he deserves a bonus of approximately £700,000 on top of his salary. Does the Secretary of State agree that that is an absolute disgrace? Will he ensure that any loophole used to bring forward those bonuses is shut down under his reforms?
Steve Reed
I agree with my hon. Friend that that is disgraceful. I am afraid that these problems arose because the previous Government instructed the regulators to apply only a light-touch approach to regulation, when they really needed to get an absolute grip on this failing sector. The previous Government failed to do that, but this Government will ensure that that happens.
Alistair Strathern (Hitchin) (Lab)
Many of my constituents share my utter disgust at the way in which water companies have been able to profit from degrading our rivers and chalk streams. It is fantastic to see bonuses already banned at polluting Anglian Water and to see that we are following up by taking action and sacking regulators that were asleep at the wheel. As we start on really ambitious reforms to halve sewage spills over the coming years, how can we ensure that we are tightening up some of those monitoring procedures so that my constituents can see clearly and transparently whether we are feeling the benefits locally?
Steve Reed
Monitoring will now be compulsory on every single outlet, not just some of them. That data will be published in near real time so that consumers know exactly what is going into the waterways in the area where they live or where they are on holiday.
Amanda Martin (Portsmouth North) (Lab)
I warmly welcome the statement and the work of the Government. Portsmouth, as an island city, is well aware of the damage done; we see it, we smell it and we feel it in our pockets every day. More than 100 of my constituents have raised their fury and disappointment at the way that the Tories allowed firms to extract billions and pump raw sewage. Abolishing Ofwat and having an independent water commissioner is another brilliant step that will have real teeth and serve customers. Will the Secretary of State confirm that this Government will ensure action—that we do not just monitor, we take action; that there is no light touch and we take action; that our actions ensure that fair water companies serve the public interest first? Will he meet me and my resident David Taylor, a brilliant campaigner and inventor, to explore how we not only stop sewage pumping, but reduce leaks?
Steve Reed
I assume that is not my hon. Friend the Member for Hemel Hempstead (David Taylor), but another David Taylor. I am happy to ensure that my hon. Friend the Member for Portsmouth North (Amanda Martin) gets that meeting. Let me take this opportunity to thank her for being such a champion for her residents and her constituency. I have had the honour of visiting a couple of times, and I have seen how strongly she fights for clean water in her community.
Yuan Yang (Earley and Woodley) (Lab)
I very much welcome the Secretary of State’s focus on protecting water customers, because my constituents and I have seen our Thames Water bills go up dramatically. We want to know that those bill increases are going towards improving the infrastructure and customer service, as opposed to payouts to bosses that happened so much under the regulator’s watch. I have a meeting with Thames Water bosses in their Reading headquarters next week. Following that meeting, will the Secretary of State meet me and fellow Labour MPs working on the issue to discuss how we can better hold Thames Water to account on behalf of all our constituents?
Steve Reed
I am more than happy to make sure my hon. Friend gets a meeting with an appropriate Minister. I am sure she will be pleased to know that this Government have ringfenced customers’ money so that it can only be spent on the purposes it was intended for, including upgrading broken and leaking pipes, and will no longer be diverted to pay for bonuses and dividends, as used to happen under the previous Government.
Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
What a pleasure it was to welcome the Secretary of State to the water meadows in Bury St Edmunds. The Lark and the Linnet in Bury St Edmunds and the Gipping in Stowmarket are disgracefully neglected, and my own laboratory tests reveal dangerously high ammonia levels, for I too have become a citizen scientist. I welcome the decision to scrap Ofwat, but does the Secretary of State agree that our precious Suffolk chalk streams must be protected?
Steve Reed
I absolutely agree with my hon. Friend, and it was indeed a pleasure to visit Bury St Edmunds—he is very lucky to represent such a beautiful part of the country. In becoming a citizen scientist, he has joined a very proud movement, and I am sure that he will make an important contribution to its work.
Josh Dean (Hertford and Stortford) (Lab)
I welcome the Secretary of State’s statement and these ambitious reforms. Around 10% of the UK’s chalk streams run through Hertfordshire, and we are lucky that Hertford and Stortford is home to many of them, including the River Stort and the River Lee. As the Secretary of State announces further action to clean up our water and the water sector, will he reassure residents of my community that this Labour Government will protect our precious local chalk streams?
Steve Reed
I am happy to give my hon. Friend that reassurance. The changes we are bringing about through this water revolution will reduce levels of pollution in chalk streams, and they will also reduce the need for abstractions from those chalk streams, which has been one of the most damaging features causing such distress to residents of his constituency, across Hertfordshire, and of other parts of the country.
Ben Coleman (Chelsea and Fulham) (Lab)
I very much welcome the Secretary of State’s announcement, which means that Thames Water will no longer be able to treat my constituents with contempt—as it did under the previous Conservative Government—by diverting many millions from the bills paid by local residents to shell out dividends to its shareholders and pay itself bonuses, all the while pumping loads of sewage into our river. The Secretary of State has talked about ringfencing; can he clarify what will happen if Thames Water does not now invest enough of its income in stopping the spills and clearing up our river? Is it fair to say that Thames Water and its directors are still drinking in the last chance saloon?
Steve Reed
The new regulatory regime will allow for much closer supervision of the water companies, and will be able to intervene much earlier if there is any sign of those companies failing to invest in the priorities that they have committed to invest in.
Louise Jones (North East Derbyshire) (Lab)
Just this morning, I was absolutely disgusted to see reports of a sewage leak in the River Hipper in my constituency, so I welcome the Secretary of State’s ambition to tackle this issue. That leak is particularly galling, because it comes after massive hikes to the bills of those who, like myself, live in North East Derbyshire. Can the Secretary of State explain how the new water ombudsman will help us when we seek to challenge unfair bills?
Steve Reed
People will have the right to go to the ombudsman to take up complaints such as that one, or any other complaint. Previously, there was no statutory ombudsman that water customers could have recourse to when they faced problems. We will bring one in, and it will operate alongside the much-increased levels of compensation that we have already introduced through the Water (Special Measures) Act 2025, which my hon. Friend supported.
Dr Scott Arthur (Edinburgh South West) (Lab)
I congratulate the Secretary of State on the scale of ambition he has shown today. Although there are many issues in the water sector in Scotland—not least the combined sewer overflow discharges into the Water of Leith at Colinton Dell—one thing we understand is that to reduce CSO spills, we have to reduce the amount of rainfall going into our combined pipes, which is done through planning in Scotland. The Cunliffe report makes clear that it is time to enact schedule 3 to the Flood and Water Management Act 2010, which would do the same in England. Will the Secretary of State take that recommendation forward?
Steve Reed
In my view—and Sir Jon Cunliffe also makes this point—it is very important that we align water infrastructure investment with spatial planning, so that we can tackle the kinds of problems that my hon. Friend has referred to. We intend to go ahead with that in England; I have already accepted that recommendation in principle, even ahead of any consultation. Of course, the situation will be different in Scotland, because it has a SNP Government who have not really taken these issues seriously.
Chris Bloore (Redditch) (Lab)
Residents of my constituency often ask me how we got to a situation in which water company CEOs can oversee record levels of sewage spillage, let our infrastructure crumble and charge hard-pressed customers even more, yet enjoy extortionate bonuses. Does the Secretary of State agree that if this is to be the moment when we turn the page on 14 years of failure, we must never again abandon bill-paying water customers like the previous Government did?
Steve Reed
Not only should we never abandon bill payers, but we never will abandon them. We are revolutionising the entire water sector so that customers’ interests are right at the heart of it in a way they have never been before.
David Burton-Sampson (Southend West and Leigh) (Lab)
I congratulate the Secretary of State and his team on their steadfast commitment to cleaning up our waterways, and on today’s welcome announcements. My constituents care greatly about cleaning up the scourge of sewage being pumped into our waters—our beautiful estuary—after years of neglect by the Conservative party. I also note the Government’s commitment to banning wet wipes that contain plastic, which we discussed at our recent water summit in Southend. Will the Secretary of State meet me to discuss the concerns that were raised about the actual flush-ability of some wipes that are marked as being flushable?
Steve Reed
I share my hon. Friend’s concerns, as does the Water Minister, my hon. Friend the Member for Kingston upon Hull West and Haltemprice (Emma Hardy). We would be happy to make sure he gets his meeting.
John Grady (Glasgow East) (Lab)
I welcome the independent water commission’s report—it is a serious piece of work. The water companies were privatised with no debt, yet following years of dividends, excessive debt and opaque financial structures, the financial stability of the water sector is a cause of very serious concern. Recommendations 56 to 59 engage substantially with that topic, as do other recommendations. Will the Secretary of State commit to carefully reviewing whether the implementation of many of the recommendations dealing with financial stability can be accelerated ahead of legislation, to protect both resilience and bill payers?
Steve Reed
Yes, we are looking at what recommendations we can bring forward early; others will be part of the consultation.
Peter Swallow (Bracknell) (Lab)
Thames Water has spent thousands of hours dumping sewage into the River Blackwater in Sandhurst and the Cut in Bracknell. Under this Government, it has been hit by the largest fine ever and its bonuses have been blocked, but now it seems to think that it should be allowed to get away with giving its bosses bonuses—that it has a special right not to have to pay those fines. Will the Secretary of State tell Thames Water to jog on?
Mr Deputy Speaker (Sir Roger Gale)
That concludes the statement. I thank the Secretary of State and the shadow Secretary of State for their presence throughout a lengthy session.
Independent Water Commission
Steve Reed Excerpts(1 week, 5 days ago)
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The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
On 23 October, we asked the former Deputy Governor of the Bank of England, Sir Jon Cunliffe, to undertake the biggest review of the water sector since privatisation. The Independent Water Commission was tasked with producing recommendations to fundamentally transform how our water system works.
We are delighted that today the Independent Water Commission has published its final recommendations. We are grateful to Sir Jon, his officials and all those involved for the outstanding work they have done to review the regulation of our water industry.
The report has clearly set out the ways in which the current system is broken, and is failing the environment, customers and investors.
The Government will now act quickly, turning the page on a broken system with root-and-branch reform to revolutionise the water industry and clean up our rivers, lakes and seas for good.
The commission has highlighted the complexity and failure of current water regulation. The current fragmented approach of four separate regulators splits up economic, environmental and regulation of drinking water. This complex web of regulators has led to contradictory and competing priorities.
These regulatory arrangements have failed to deliver for customers, while allowing companies to pay out huge dividends and bonuses.
Subject to consultation this autumn, Ofwat is to be replaced by one single water regulator responsible for the entire water system. The Government will abolish Ofwat and merge its functions with water functions across the Environment Agency, Natural England and the Drinking Water Inspectorate to form a new regulator.
This single powerful regulator will be responsible for the entire water system. It will provide the clarity and direction required for a strong partnership between Government, the sector and investors to attract billions of pounds of new investment. It will have the power to balance different priorities in the national interest, overseeing investment and maintenance and protecting customers from massive bill hikes. It will be responsible for the entire water sector, restoring public faith and investor confidence in our water industry. And it will ensure all forms of pollution are reduced to clean up our rivers, lakes and seas for good.
We will work with the existing regulators and the unions to ensure a smooth transition to the single new regulator. Ofwat will remain in place during the transition to the new regulator and we will ensure they provide the right leadership to oversee the current price review and investment plan during that time.
We will work with our colleagues in the Welsh Government to ensure these reforms protect water customers across both England and Wales.
The Government’s full response to the Commission’s recommendations will be outlined later this year through a White Paper, on which we will invite views via a consultation. The proposed reforms will then form the basis of a new water reform Bill which we will introduce early in this Parliament.
We are establishing a new partnership where water companies, investors, communities and the Government will work together to deliver the change we all want to see.
[HCWS865]
Oral Answers to Questions
Steve Reed Excerpts(1 month, 2 weeks ago)
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Catherine Fookes (Monmouthshire) (Lab)
The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
My hon. Friend will be aware that we inherited record levels of sewage pollution in our waterways from the previous Government. Since the election, we have launched the biggest crackdown on water pollution in history: unfair bonuses have been banned for water company executives, and water bosses who cover up pollution crimes now face up to two years in prison. We will also invest a record £104 billion of private funding to upgrade crumbling sewage pipes and reduce discharges by nearly 50% within five years.
Catherine Fookes
I remain extremely grateful for the £100 million of support the Government have given to the River Wye action plan—a pioneering joint effort between the UK and Welsh Governments—but we must do more, including using sustainable farming initiatives to support farmers to look at their stocking rates. I am concerned by reports of Thames Water seeking regulatory easements. Can the Secretary of State assure me that this Government will continue to crack down on water pollution from all sources, in the Wye, the Thames and all across the UK?
Steve Reed
I thank my hon. Friend for her question, and I understand her concerns. I reassure her that the Government will always act in the national interest on these issues. Thames Water must meet its statutory and regulatory obligations to its customers and to the environment—it is only right that the company is subject to the same consequences as any other water company. The company remains financially stable, but we have stepped up our preparations and stand ready for all eventualities, as I have said before, including a special administration regime, if that were to become necessary.
Ellie Chowns (North Herefordshire) (Green)
As the Secretary of State knows, my constituency of North Herefordshire is very seriously affected by water pollution in the Lugg and the Wye. I confess that I am disappointed that, in both his answers to the hon. Member for Monmouthshire (Catherine Fookes), he did not mention agricultural pollution at all. That is despite the fact that agriculture is the main source of water pollution in the country, as is shown in the report of the Independent Water Commission, which unfortunately was not allowed to look into it in any detail. I pay tribute to River Action, which this week won a court case forcing planning authorities to consider the cumulative impact of industrial agricultural development, and to Greenpeace, which last week pointed out the impact of toxic sewage sludge. Will he confirm whether he is updating the farming rules for water? Given that he has cut the budget of the Department for Environment, Food and Rural Affairs—
Steve Reed
The hon. Member will be aware that we are supporting work in the Wye catchment area to deal with those problems, but she is quite right in what she says. The environmental land management schemes support farmers to reduce agricultural run-off. We are making the announcement that she just mentioned today, and we are also supporting the ELM schemes, which help farmers to improve their soil quality so that the soil holds more water, and to use less fertiliser and pesticides, which reduces the amount of run-off. Therefore, we are taking action on agricultural pollution, and the announcement that she asked for is being made today.
Luke Taylor (Sutton and Cheam) (LD)
The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
Last week, the Minister for Water and Flooding and I attended the United Nations ocean conference in Nice. We announced that the Government will introduce a Bill by the end of the year to ratify the high seas treaty, delivering on our commitment to protect 30% of the ocean by 2030. This agreement will provide the first legal mechanism to create protected areas in international waters. The UK reiterated our commitment to agreeing an ambitious plastic pollution treaty in Geneva this coming August, and we have outlined our plans to ban bottom trawling across more of our English seas in marine protected areas. These measures will protect sensitive seabed habitats and important species from the destruction caused by this damaging practice.
Luke Taylor
The Beddington energy recovery facility has an outstanding request to increase its annual permit tonnage to 382,000 tonnes from the originally approved 300,000 tonnes when planning was approved. I know the Secretary of State is familiar with this, as the facility is a mere 100 metres from his constituency. May I ask him whether the Environment Agency will listen to local residents, including his own, and to councils across Sutton, Merton, Croydon and Kingston and refuse the permit expansion, as sufficient incinerator capacity already exists in London?
Steve Reed
As the hon. Member says, I do know of this situation because the facility is adjacent to my constituency as well. He will know that I cannot comment on what the Environment Agency is intending to do, because it is its decision. None the less, I certainly agree with him that the EA must listen to constituents and people living in the local area who will be affected by this decision.
Josh Newbury (Cannock Chase) (Lab)
Robbie Moore (Keighley and Ilkley) (Con)
It is a pleasure to cover for the shadow Secretary of State, who is speaking to farmers at the 140th Lincolnshire Agricultural Show. Having visited many such shows myself, including North Sheep 2025 and Cereals 2025 just last week, may I say how disappointed I am by the Secretary of State’s lack of attendance at these crucial farming events?
At a time when our farmers are going through some of the most extraordinary pressures in a generation, we have now learned that this Government have chosen to slash the farming budget. To make matters worse, Ministers have spent the past week trying to sell cuts of more than £100 million a year in real terms as a historic deal for farmers. If the Secretary of State has secured such a historic deal for his Department, where does DEFRA rank compared with others in terms of cuts in the spending review?
Steve Reed
First, I remind the hon. Gentleman that I attended the Royal Cornwall Show with him just a few days ago. I am surprised he has forgotten that, because we sat together in the same tent and enjoyed a very pleasant lunch. I do not know what is wrong with his memory, but anyway.
The funding for ELM schemes paid to farmers will increase from £800 million in the last year of the Tory Government to £2 billion by 2028-29—that is a 150% increase under Labour compared with what the Tories were paying. No wonder the hon. Gentleman is so angry.
Robbie Moore
It is a shame that the Secretary of State did not do any media at the Royal Cornwall Show and pulled out of speaking events. I can tell him that DEFRA is ranked the third biggest loser of any Government Department in the spending review, and that is his failure. In reality, we are now looking at cuts to the farming budget of about 20% in real terms over the next three years, at a time when farmers need more support and certainty than ever. It gets worse: we now hear that the Government have issued further statutory guidance on farming rules for water, with more to follow, effectively aiming to ban—
Robbie Moore
This is effectively going to ban the spraying of organic manures in the coming months. Is the Secretary of State categorically ruling that out?
Steve Reed
I am happy to send the shadow Minister the list of media coverage I got from the Royal Cornwall Show. He does not seem to be any better at googling than remembering who he sat down with at lunch. I am delighted that the spending review was welcomed by the environmental NGOs and the National Farmers Union as it funds activities that include the ones he referred to. It seems that everyone is delighted with the review apart from him.
Lorraine Beavers (Blackpool North and Fleetwood) (Lab)
David Williams (Stoke-on-Trent North) (Lab)
Compensation has been given to Severn Trent customers in Norton and Packmoor who had suffered discoloured water supplies, and to another resident who had sewage flooding their garden. While I welcome recent investment to upgrade the pipes in Smallthorne, Burslem and Tunstall, will the Secretary of State please outline how he will hold water bosses to account, so that residents finally see real improvements?
Steve Reed
My hon. Friend is of course an outstanding champion for his constituents in Stoke-on-Trent North. During 2024-25, more than 800 compliance inspections were conducted at Severn Trent Water sites. The Environment Agency will be attending more minor pollution incidents and will continue to attend all serious pollution incidents. We have, of course, given Ofwat the power to ban the payment of bonuses to water bosses who damage the environment and let customers down. I congratulate my hon. Friend on supporting those tough new measures.
Protecting Our Oceans
Steve Reed Excerpts(1 month, 3 weeks ago)
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The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
The Government are committed to protecting the ocean. Marine protected areas are pivotal to our ambitions to preserve and improve our seas. They are central to our international commitment to protect 30% of global seas by 2030. We have built a comprehensive network of 181 MPAs covering 40% of English waters. Now we are focusing on making sure they are properly protected.
MPAs are protected from the point of designation by the planning and marine licensing regimes that cover activities such as dredging for aggregates and construction of offshore wind farms. Some fishing methods, especially bottom trawling, can have a significant impact on our MPAs, and the Government are legally obliged to address this. Fishing is of course an important source of food, and is critical to our coastal communities. We want to support fishing, encourage it to become more sustainable, and ensure it does not damage protected species and habitats.
We use an evidence-led process to identify the specific measures needed to safeguard our MPAs. We have made good progress. Currently, 60% of English MPAs are protected by byelaws that limit the use of damaging fishing gear, but we need to do more.
The Marine Management Organisation is undertaking a programme to roll-out byelaws to protect all our offshore MPAs where needed. The first two stages of this programme have been completed, with byelaws covering 17 offshore MPAs. Today it is starting a consultation on the third stage, the largest by far.
The proposed byelaws are to protect coarse, sandy and muddy seabed habitats and the species that live on and in them. These include: ocean quahog—which can live up to 100 years old; fan mussel—one of Britain’s largest and most threatened molluscs; and sea pens—part of the soft coral family, which can look like large feathers sticking up out of muddy seabeds. This is a substantial package of proposed measures. It covers a further 42 MPAs and includes proposals to stop bottom trawling over approximately 30,000 sq km, approximately 13% of English waters.
We appreciate that these potential measures would impact fishing fleets, both domestic and European. We encourage them to respond to the consultation, and everyone else who cares about supporting our coastal communities and protecting our seas should also have their say. We recently announced a £360 million fishing and coastal growth fund, in part to help modernise Britain’s fishing fleet.
[HCWS690]
Independent Water Commission
Steve Reed Excerpts(1 month, 4 weeks ago)
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The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
Today, the Independent Water Commission has published an interim report setting out its preliminary conclusions on water sector reform.
In October 2024, the UK and Welsh Governments appointed Sir Jon Cunliffe, former Deputy Governor of the Bank of England, to chair the commission and make recommendations to reset the water sector in England and Wales.
The Government set the Independent Water Commission a considerable task in reviewing the water sector in its entirety. Our water system must serve both its customers and the environment, but we inherited one that did neither. I thank Sir Jon for his interim report.
Today’s report focuses on five key areas:
Strategic direction and planning
Legislative framework
Regulatory reform
Company structures, ownership, governance and management
Infrastructure and asset health.
I remain of the view that transformative change across the water sector is needed. We need to create the conditions to attract future long-term investment, ensure resilient finances and contribute to economic growth, while supporting affordable customer bills.
The Government will review Sir Jon’s interim findings in detail and look forward to receiving his final recommendations later this summer.
We will respond in full later this year following the commission’s final recommendations. This will include a detailed transition plan for the water sector. This will form the basis of further legislation to reset the sector and attract the investment we need to ensure its resilience for decades to come.
[HCWS677]
Thames Water
Steve Reed Excerpts(1 month, 4 weeks ago)
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Victoria Atkins (Louth and Horncastle) (Con)
(Urgent Question): To ask the Secretary of State for Environment, Food and Rural Affairs if he will make a statement on Thames Water’s financial situation.
The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
I thank the right hon. Lady for securing this urgent question. I want to begin by making clear that Thames Water remains stable, and the Government are carefully monitoring the situation. Customers can be assured that there will be no disruption to water supply.
Thames Water is a commercial entity currently engaged in an equity raise, and KKR pulled out of that process earlier today. As Thames Water has said, the company will continue to work with its creditors as part of the equity raise to improve its financial position. There remains a market-led solution on the table, and we expect the company and its directors to continue the process that is under way and fix the financial resilience of the company in the interests of its customers. I want to be clear that the Government are prepared for all eventualities across our regulated industries and stand ready to intervene through the use of a special administration regime, should this be required to ensure the continued provision of vital public services.
The situation facing Thames is taking place within a wider context. Only last year, we saw record levels of pollution in our rivers, lakes and seas. It is clear that our water system is broken. We have already passed legislation so that the regulator can ban the undeserved multimillion-pound bonuses that so outraged the public, and we have further strengthened accountability through the introduction of up to two years in prison for polluting water bosses who break the law. We have increased the regulator’s resources and launched a record 81 criminal investigations into water companies, and we have followed the “polluter pays” principle, meaning that companies that are successfully prosecuted will pay for the cost of that prosecution so that further prosecutions can follow. We have worked with the water companies to secure £104 billion of private sector investment to rebuild our broken water infrastructure. That means new sewage pipes, fewer leaking pipes, and new reservoirs across the country, as we work to end the sewage scandal that we inherited from the previous Government.
I launched the Independent Water Commission, under Sir Jon Cunliffe, so that it could outline recommendations for a once-in-a generation opportunity to transform our water industry and ensure that it delivers the service that the public deserve and our environment needs, and today Sir Jon published an interim report setting out the commission’s preliminary conclusions. The Government will respond in full to the commission’s final report in due course, and will outline further steps to benefit customers, attract investment and clean up our waterways.
Whether we are talking about Thames Water or about other companies serving other parts of the country, the era of profiting from pollution is over. This Government will clean up our waterways for good.
Victoria Atkins
Thank you, Mr Speaker, for granting this urgent question. May I begin by correcting the Secretary of State? When he refers to private sector investment, he is in fact referring to the bill increases that each and every one of us will pay—£31 a year—so when he talks about private sector investment, he means bill payers’ investment.
Some 16 million residents and bill payers will have been concerned by this morning’s news that the private equity firm KKR has pulled out of its rescue deal with Thames Water. According to a source close to KKR, one of the reasons it pulled out was its concern about negative rhetoric directed at Thames Water and the rest of the industry in recent weeks by the Secretary of State and other Ministers. In other words, the Secretary of State and his Ministers have talked themselves out of this rescue deal. I am bound to say, if only they could do the same thing with the Chagos islands deal.
On which date did the Secretary of State discover that KKR was thinking of pulling out of this deal, and what involvement did he have in the phone calls over the weekend between KKR and No. 10 spads to try to rescue it? I ask because in recent weeks there have been briefings to the press that he is considering temporary renationalisation. The Treasury has apparently instructed him that he will need to find up to £4 billion from the budget of the Department for Environment, Food and Rural Affairs to cover the cost of this manoeuvre. Let me put that in context: the entire farming budget for this year is roughly £2.5 billion.
Can the Secretary of State therefore explain the options to which he has just referred, and do they include a plan for temporary renationalisation? From which budget would a temporary renationalisation come: DEFRA or central funds? That question is particularly relevant in view of the upcoming spending review, on which there has been detailed briefing, including the suggestion that the DEFRA budget is to be slashed.
The Secretary of State referred to the Cunliffe report, which we will of course look at very carefully, but can he confirm—this recalls yesterday’s shambolic defence review announcement—that there is no funding for this latest review, and that it will do nothing to resolve the immediate issue of Thames Water’s solvency, which he has mishandled, just as he has mishandled the family farm tax, the fishing industry and the sustainable farming incentive?
Steve Reed
I am grateful to the shadow Secretary of State for making it clear to the House that she does not understand the principles of private sector investment, and neither is it particularly clever to stand at the Opposition Dispatch Box and make up figures to attack.
This Government stand ready for all eventualities, but I will make no apology for tackling the poor behaviour of water companies and water company executives that took place under the previous Government and that we are correcting. We even heard stories, which have been confirmed to me by water companies, of previous Conservative Secretaries of State shouting and screaming at water company bosses but not actually changing the law to do anything about the bonuses that they were able to pay themselves. This Government are taking action, working with customers, water companies and investors to ensure that we have a successful water sector that works for the environment, customers and investors in a way that it completely failed to do under the previous Conservative Government.
Clive Lewis (Norwich South) (Lab)
Let me begin by drawing Members’ attention to my entry in the Register of Members’ Financial Interests.
Let us be clear that the collapse of KKR’s rescue deal is not a blip; it is a reckoning—a moment that exposes the complete bankruptcy of the privatised water model. This morning’s interim Cunliffe review of the water sector confirms the scale of the crisis. It describes our water system—a regulated statutory monopoly—as being too risky for investors now. It did not seem to be too risky when shareholders were siphoning off billions in dividends while letting the pipes rot, the rivers choke and the debt pile up. The only people truly at risk now are bill payers, who face a 35% real-terms price hike in the next five years—and not just to fund clean water or climate resilience, because half of it is to boost investor return. So I ask my right hon. Friend again: when will the Government stop fiddling, put Thames Water into special administration, strip out the debt, and begin the job of returning our water system—not just Thames Water—to public ownership?
Mr Speaker
Order. Mr Lewis, I was very generous in bringing you in so early, but I did not expect you to make a statement yourself.
Steve Reed
I thank my hon. Friend for his question. I reassure him that the Government stand ready for any eventuality and will take action as required. We are not looking at nationalisation because it would cost over £100 billion of public money, which would have to be taken away from other public services, such as the national health service, to be given to the owners of the water companies. It would take years to unpick the current model of ownership, during which time pollution would get worse. We know that nationalisation is not the answer, because we need only look at the situation in Scotland to see that.
Tim Farron (Westmorland and Lonsdale) (LD)
Under the Conservatives, Thames Water was allowed to pile up nearly £20 billion of debt while pumping sewage into rivers and lakes for 300,000 hours just last year, but rewarding its shareholders with £130 million of dividends. Today, Thames Water’s customers have been left in the lurch, and the Conservatives seem to think it is because we have all been a bit too mean about Thames Water.
The price must not be paid by the customers. Will the Secretary of State ensure that those who were responsible for making dreadful decisions rightly bear the cost instead? Is it not right for the company now to go into special administration, and to emerge from administration as a public interest company? Is it not also right that all water companies, including the likes of United Utilities in the north-west, move to a public interest model, so that caring for the environment matters more than profit?
My hon. Friend the Member for Witney (Charlie Maynard) has done more to hold Thames Water to account than Ofwat, this Government or their predecessor. Does that not prove that regulation has failed, and that Ofwat should be abolished, with a new, powerful clean water authority given the power to clean up our lakes and rivers, and our industry?
Steve Reed
I thank the hon. Member for his question. There is a procedure to be followed for special administration, and we stand ready should that be required, in this case or any other case involving the regulated industries. He may have had a chance today to look at the interim report, on which Sir Jon Cunliffe is inviting comments ahead of the final report in about a month. That report will form the basis of future legislation to fix the regulatory mess we inherited from the Conservative party.
Clive Efford (Eltham and Chislehurst) (Lab)
Only the Conservatives could come here and defend Thames Water. The rest of the country has seen what an appalling performance this company has given during the 35 years since privatisation. I think it is time we put this company out of its misery, but we must do so in a way that does not bring the debts it has run up on to the taxpayer or the bill payers. Can my right hon. Friend say whether one of his options is preparing for that eventuality?
Steve Reed
I thank my hon. Friend for his question. We are prepared for every eventuality, as I have outlined, and we will take whatever action is necessary to ensure the continuing supply of water to customers in the Thames Water region and elsewhere.
Mr Speaker
I call the Chair of the Environment, Food and Rural Affairs Committee.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Under the £3 billion loan that Thames Water has negotiated, the first drawdown of £1.5 billion will be on 30 June, which is less than four weeks away. That is contingent on Thames Water having a lock-up agreement in respect of a recapitalisation transaction, but it now has no partner to provide that. It of course chose to proceed with just one option, which has now walked away. Who does the Secretary of State think that Thames Water will now turn to—it is not exactly going to be negotiating from a position of strength—and what are the Government going to do if it cannot meet that 30 June deadline?
Steve Reed
There remains a market-led solution on the table, and we expect Thames Water to follow through with the process to ensure it is able to fix the problems it is currently facing.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
My constituents and other Thames Water users are fed up to the back teeth with having to pay more to help this company, which has failed them so badly. Obviously, the Secretary of State has to have special administration on the table, but we know that would be hugely costly to the taxpayer. I know it is hard to talk about hypotheticals, but if he does go down that route, will he have the cost to individual customers front and centre, so they do not actually have to pay more for that process?
Steve Reed
Yes, I absolutely agree with my hon. Friend. I share her anger at the fact that bill rises were so high this year, but that is because the Conservative party did not take the necessary action to ensure that the water system was properly maintained. As anyone who has ever owned or lived in a house will know, if people see a crack in a wall and leave it for 10 years without fixing it, the problem gets much worse and the cost of repairing it is much more. In a very real sense, the public have been left to pay the price of Tory failure.
Joy Morrissey (Beaconsfield) (Con)
Will the Secretary of State confirm that the Government will ensure that Thames Water stands by its commitment to upgrade our sewage network in South Buckinghamshire? Specifically, will he ensure that the upgrade promised for the Little Marlow sewage treatment works in my constituency is delivered on time?
Steve Reed
I am happy to give the hon. Member that reassurance. The Government expect Thames Water to carry through on the full range of programmes agreed as part of the last price review process.
Helen Hayes (Dulwich and West Norwood) (Lab)
My constituents have been comprehensively failed by Thames Water for many years. We saw the catastrophic flood in Herne Hill in 2013, when many local businesses had to close permanently. Vulnerable customers were let down during the “beast from the east” freeze-thaw event, being left without water for days and days at a time. There are endless roadworks in the same locations where it has repeatedly failed to invest adequately in its infrastructure. Now my constituents are seeing bills go up by way more than the Ofwat determination. It is clear that this organisation is not fit for purpose. What options is my right hon. Friend considering to bring this misery to an end, and to put customers back at the heart of Thames Water’s operations?
Steve Reed
I thank my hon. Friend for her question. I am sure that she will have seen today the interim report from Sir Jon Cunliffe’s water commission, which outlines his initial thoughts on how to fix the broken regulatory system. The Government have also increased compensation from what we inherited from the previous Government, so her constituents who suffer from the kinds of problems she outlined can expect far better compensation as a result of this Government’s actions.
Richard Tice (Boston and Skegness) (Reform)
I declare an interest as a Thames Water customer. The reality is that Thames Water is bankrupt. It cannot pay its debts and it cannot meet its legal obligations to Ofwat, the state and its customers. Therefore, surely the right thing to do is to put it out of its misery, and put it into special administration for £1. The shareholders and the debt holders know—caveat emptor—that they have all blown their dough. If the Government buy it for £1, which would be a good deal for the taxpayer, it will not have to pay huge, egregious rates of interest and taxpayers and customers will be the beneficiaries.
Steve Reed
I respectfully point out to the hon. Gentleman that Reform cares so much about the problems facing our water system that it did not mention it even once in its general election manifesto. What he is proposing—nationalising the water sector—would cost in excess of £100 billion, which is money that Reform would have to take away from the services, such as the national health service, on which his constituents rely. I think they would be very ill-served by him if he were to take away that funding, and push up the waiting lists we have just started to see coming down as a result of this Government’s investment.
Liam Conlon (Beckenham and Penge) (Lab)
As a neighbouring MP, the Secretary of State will know the level of outrage in my constituency at the continuous failures of Thames Water, including the five-day period earlier this year during which residents were left without water. Given that this Labour Government have introduced measures to make polluting water company executives criminally liable and to ban unjustified bonuses, does he agree that we are finally seeing accountability brought back to the water sector?
Steve Reed
I thank my hon. Friend, and indeed neighbour, for his question, and I know what a strong water champion he is on behalf of his constituents. His constituents, much like everybody else’s, will now benefit from increased compensation when there are failures. I agree with him that one of the problems we inherited from the previous Government was having a failing system with no accountability at all, so it is quite right that we have introduced new criminal liabilities and potentially prison time for polluting water bosses, and that we have given the regulator the power to ban the unfair and undeserved multimillion-pound bonuses they got away with under the Conservatives.
Charlie Maynard (Witney) (LD)
Does the Secretary of State agree with Thames Water’s own expert adviser Teneo—on page 193 of the expert advice report—that the ultimate cost to the Government if the company goes into special administration will be zero?
Steve Reed
The point is that there is a market-led solution on the table and I expect Thames Water to follow through on that.
Yuan Yang (Earley and Woodley) (Lab)
It is possible for an American private equity company to walk away from Thames Water, but my constituents cannot. When water company bosses fail, it is our residents who pay: in sewage discharged into rivers and in their crumbling pipes and drainage. I am therefore glad that the Government have taken bonuses off of failing bosses, but what more can the Government do to tilt incentives towards investment in our infrastructure so that my constituents get some relief?
Steve Reed
The problems that my hon. Friend points to are to do with a lack of investment throughout the entire period of the previous Government, so I was delighted that just before Christmas we secured a commitment to £104 billion of private sector investment. That is the single biggest investment in our water sector in its entire history and will be the second biggest private sector investment into any part of the economy under this Government. We are serious about clearing up the Conservatives’ sewage mess.
Lincoln Jopp (Spelthorne) (Con)
Thames Waters is a massive stakeholder in my constituency, and the biggest landowner. We have half of London’s drinking water in four raised reservoirs and we have a fair chunk of the Thames, from Staines to Sunbury. For 11 months now, I have been trying to get a meeting with Thames Water. I appreciate that it has had one or two other things on its mind recently, but can the Secretary of State use his good offices to encourage Thames Water to meet me?
Steve Reed
I agree with the hon. Gentleman; the water companies—Thames Water and all the others—should of course engage with MPs who are seeking to represent the interests of their constituents. I would be very happy to approach Thames Water on his behalf to ensure that he gets the meeting he seeks.
Daniel Francis (Bexleyheath and Crayford) (Lab)
My constituents, like those of my colleagues, are gravely concerned about the increase in their water bills, but I am also as concerned as them about the impact on business. Crayford town centre was closed again last month—the third year on the trot—because of rotting infrastructure. What assurances can the Secretary of State give to my constituents that no matter what happens, we will continue to invest in infrastructure to ensure that those kinds of closures finally end?
Steve Reed
My hon. Friend will be aware of the action we have taken through the Water (Special Measures) Act 2025 to give the regulator the power it needs to ban the unjustified bonuses that water bosses were able to pay themselves under the previous Government. The era where they could profit from pollution ended when that Government ended.
Ellie Chowns (North Herefordshire) (Green)
The Green party has campaigned for the public ownership of water since the year dot, unlike certain cynical opportunists behind me on the Reform Benches. We know allowing privatised monopolies to control water leaves infrastructure crumbling, waterways running with sewage, sky-high bills, and shareholders laughing all the way to the bank. Given this obscene and fundamental failure, why will the Government not even consider bringing water back into public hands, where it belongs?
Steve Reed
The problems facing the water sector are to do with failures of governance and regulation. We need to tackle the actual problems, not the imagined ones. If we were to seek to nationalise the water sector, that would cost in excess of £100 billion that would have to be taken away from services such as the national health service or education. It would take years to unpick the current model of ownership, during which time there would be no investment and water pollution would get worse. From the example of Scotland, we know that nationalisation is not the answer, because there are also problems with pollution there. We will ensure that our priority is pure water, not the purity of the hon. Lady’s ideology.
Peter Swallow (Bracknell) (Lab)
As Thames Water dumped sewage into the Cut and the Blackwater in my constituency, the Conservative Government washed their hands not in it, but of it. This Government are acting to ban bonuses, to issue the biggest fine we have seen from Ofwat and to bring in criminal liability. As we seek more action to get to grips with the Thames Water crisis, will the Secretary of State commit to putting two things at the forefront of his mind: first, our environment and cleaning the sewage; and, secondly, making sure that customers and our constituents get a fair deal?
Steve Reed
I am sure my hon. Friend will be pleased to know that we have launched 81 criminal investigations into water companies for pollution and other failings—a dramatic increase on what we inherited from the previous Government. I am sure he will recall that they cut the resources to the regulator in half. Despite the appalling financial inheritance, we increased resources by 9% at the Budget and we have now introduced the polluter pays principle, so that where there is a successful prosecution of a water company, that company will pay the price of the investigation, so that further investigations and prosecutions can follow.
Munira Wilson (Twickenham) (LD)
Thames Water is teetering on the brink, investors are running for the hills and my constituents are paying the price for its mismanagement through soaring bills. All the while, it is spending hundreds of millions of pounds on a proposed sewage recycling project at Teddington lock on the River Thames in my constituency, which will at best be used every two years and which some cynics suggest is designed entirely to boost its balance sheet. This morning, the Secretary of State committed to my constituent Ian McNuff that he would come and visit the site to look at the impact of the proposed project. Will he reiterate that commitment today? My hon. Friend and neighbour the Member for Richmond Park (Sarah Olney) and I would be delighted to welcome him.
Steve Reed
As I said to the hon. Lady’s constituent, I would be happy to visit if my diary allows. In any case, I would be very happy to ensure she gets a meeting with the Minister for Water to discuss her concerns around Teddington.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Does the Secretary of State agree that it comes to something when the Opposition seem to be suggesting that Thames Water should maybe not be sanctioned, because that may put its preferred bidder at risk, when it had rejected others? Jon Cunliffe suggested stronger regulation, not weaker. Is it not clear that the direction that this Government are going in must be the right one?
Steve Reed
I agree. The whole mess we inherited was due to the previous Government letting the water companies get away with it; people were paying themselves multimillion-pound bonuses as they profited from pollution. That ended when the Conservative Government were defeated. We are putting the water companies under tough special measures and we will focus them on serving their customers and the environment, not themselves.
Sir Julian Lewis (New Forest East) (Con)
Does the Secretary of State think that the situation might improve if Thames Water executives were obliged to sign up to performance-related pay?
Steve Reed
That is a very interesting proposal. I hope the right hon. Gentleman will suggest it to Sir Jon Cunliffe, who is currently looking at a better way to regulate.
Rebecca Long Bailey (Salford) (Lab)
I note the Secretary of State’s reluctance to entertain public ownership, but I draw his attention to research from the University of Greenwich that shows that bringing water into public ownership would pay for itself within about seven years and that, after that, it would save the public purse up to £2.5 billion a year. Is the Secretary of State aware that immediately bringing Thames Water into special administration and permanent public ownership would cut the company’s massive debt mountain in half, stop the payment of huge dividends and debt payments into the future, and within just several years actually start turning a profit for the people of this country?
Steve Reed
I beg to slightly correct my hon. Friend. Special administration is not nationalisation and nationalisation would cost in excess of £100 billion—money we would have to take away from other public services to hand to the bosses of the water companies who caused this mess in the first place. I do not think taxpayers would welcome that.
Freddie van Mierlo (Henley and Thame) (LD)
I received a note in my inbox today from the Government engagement lead for north Thames valley that says that Thames Water will run out of money in summer 2026. Will the Government commit to taking Thames Water into special administration and unburden the company of its debt via its creditors, or will Members be required to block their diaries for summer 2026 for another recess recall?
Steve Reed
As I am sure the hon. Gentleman is aware, there are procedures to follow that would require any regulated company to go into special administration. As things stand, Thames Water remains stable and there is a market-led solution on the table. We expect Thames Water to follow through on that.
Josh Fenton-Glynn (Calder Valley) (Lab)
This is another example of the previous Government’s failure to get a grip of our water system. Meanwhile, just last week this Government fined Yorkshire Water £350,000. My constituents are really upset to see their water bills going up. Can my right hon. Friend assure me that he will never let our national infrastructure get as bad as those on the Conservative Benches did?
Steve Reed
Absolutely; we intend to clear up the mess the previous Government made. The fine that my hon. Friend refers to—indeed, there have been others—is the result of the additional criminal investigations we have launched, which follow on from the additional resources we have given the regulator so that it can investigate what is going wrong and then take action. What a difference between this Labour Government, who are putting our water companies under special measures, and the previous Government, who let them get away with it and line their pockets.
Jeremy Corbyn (Islington North) (Ind)
I find it deeply depressing to hear the Secretary of State say that somehow or other there is a market solution there for Thames Water. We have had 35 years of excessive profits, pollution and rising bills. He knows he will have to take Thames Water into public ownership at some point. He quotes this strange figure of £100 billion in compensation, but surely if we took it into public ownership, Parliament would set the price at which we would purchase the company, taking into account excessive profits, pollution, damage and the destruction of so many people’s lives through the way Thames Water has behaved. Will the Secretary of State be tough with it for once and say that water is a human right, and that it should be publicly owned and publicly run?
Steve Reed
Water is indeed a human right, which is why this Government are taking every step necessary to sort out the broken water system that we inherited from the previous Government.
Perran Moon (Camborne and Redruth) (Lab)
The situation at Thames Water is deeply disturbing, and in my constituency of Camborne, Redruth and Hayle—the home of Surfers Against Sewage—there is now deep anxiety that this commercial insecurity will spread. With only three prosecutions and no meaningful penalties under the previous Government, is it not clear that the Conservatives prioritised the polluters instead of protecting the environment and customers?
Steve Reed
My hon. Friend gives me the opportunity to congratulate Surfers Against Sewage on its fantastic work highlighting the failures of the water sector under the previous Government. I am sure both my hon. Friend and the charity will welcome the 81 criminal investigations we have launched in order to find out where lawbreaking is happening, to take action against it and to hold those who are responsible accountable for once.
Monica Harding (Esher and Walton) (LD)
In this Chamber in September, I called for Thames Water to be put into special administration in order to protect my constituents. A portion of the bills they have paid since then has gone on lawyers and consultants to put together a deal that has collapsed. The Liberal Democrats—unlike the Conservatives, who continue to bury their heads in the sand—have fought against throwing more good money after bad, and more and more debt. The Government did not act in September. Will they act now, put us all out of our misery and put Thames Water into special administration?
Steve Reed
As I have said, the Government stand ready for all eventualities, should they be needed.
Sir Julian Smith (Skipton and Ripon) (Con)
I refer the House to my registered voluntary interest. Over a year ago, I spoke to one of the then biggest investors in Thames Water, and I was struck by the fact that they said they had never been in a room with the regulator, other investors or the Government. I know it is difficult commercially, but I urge the Secretary of State, in trying to resolve this issue rapidly, to use his good offices and do as much as possible in the background to bring all the stakeholders to the best result.
Steve Reed
I thank the right hon. Gentleman for his question; I think what he is referring to, in the round, is the failures of the regulatory system and, indeed, the regulators. He will have seen that Sir Jon Cunliffe points to exactly the same problems in his interim report, published today. As we work towards the final report, published in about a month, Sir Jon is starting to point to solutions, and I am sure he will want to pay attention to the right hon. Gentleman’s comments.
Luke Taylor (Sutton and Cheam) (LD)
The British public are not fools—they know when the emperor has no clothes and, indeed, when a regulator has no teeth. Ofwat has failed, just as Thames Water has failed. Will the Government now act on the Independent Water Commission’s findings, published today, scrap Ofwat and replace it with a regulator that can end this crisis, which has been decades in the making?
Steve Reed
We are working towards resetting the entire regulatory framework, as the hon. Gentleman may have seen from Sir Jon Cunliffe’s report, published today. He is absolutely right, though: under the previous Government, the regulator was absolutely toothless. That is why one of the first pieces of legislation this Government passed was the Water (Special Measures) Act 2025, which gave the regulator the power it lacked previously to ban the unfair and unjustified multimillion-pound bonuses that so outraged the public as those companies profited from pollution.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I thank the Secretary of State for his comments on continuity of service, which will provide some reassurance to my constituents. Thames Water has failed my constituents time and again; clearly, it needs investment. What is he doing to ensure that there is the confidence to invest in our water sector?
Steve Reed
The hon. Gentleman makes a good point. Part of making the sector more investable is ensuring that we have a robust, clear and predictable regulatory framework, which is what Sir Jon Cunliffe is working towards. The hon. Gentleman may have had a chance to look at the interim report that Sir Jon published today; if he has not, I recommend it to him. That is the way we create an investable water sector and bring in the money that will allow us to fix our broken water system once and for all.
Calum Miller (Bicester and Woodstock) (LD)
I draw attention to my entry in the Register of Members’ Financial Interests. My constituent Bruno lives in Charlton-on-Otmoor. When it rains heavily, sewage flows into his garden, which is within sight of a pumping station that fails every single time. One third of bills paid to Thames Water by Bruno and other customers is used to service the company’s debt; that money should instead be invested, and should go towards improving pumping stations like the one near Bruno’s garden. Why will the Secretary of State not recognise that Thames is financially unviable, bring it into special administration, write down the debt and ensure that the future company serves the public interest?
Steve Reed
The hon. Gentleman points with a graphic example to what happens when we face the scale of regulatory failure that developed untroubled under the previous Government. That is why Sir Jon Cunliffe has brought forward his report today, which I hope the hon. Gentleman will read; I hope he will also provide Sir Jon with feedback, which he is asking for ahead of his final report in a month’s time. I remind the hon. Gentleman that the Government have helped to secure £104 billion of private sector investment by the conclusion of the price review period. That will be used to upgrade exactly the kind of facilities that he points to, which are letting down his constituents and mine, and those of everyone else in the House.
Mr Will Forster (Woking) (LD)
With a third of customers’ bills going to service Thames Water’s debt, my constituents are fed up of paying higher bills for Thames Water’s mistakes. Will the Government agree to put Thames Water into special measures to save my constituents and bill payers money? It is only a matter of time for Thames Water; will the Secretary of State act now and save people money?
Steve Reed
I share the hon. Gentlemen’s anger that the public have been left to pay the price of Tory failure over 14 years. One of the first things I did when I was appointed Secretary of State was get the water company chief execs into my office, seven days after the election. I got them to commit to ringfencing customers’ money that is earmarked for investment, so that it can never again be diverted to pay bonuses and dividends in the way that it was under the previous Conservative Government.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his answers, and for his perseverance on this subject. He will understand that it is disappointing in the extreme to hear that public funding may have to be used to bail out this company. Given that it has some 8,000 British employees and serves 25% of the UK population, Government attention is very urgently needed. What steps will be taken to ensure that this is not money down the drain, to use a pun, and that we instead reconstruct a viable concern that takes a modern approach? Does the Department have a team ready and able to step up and achieve that goal?
Steve Reed
I thank the hon. Gentleman for his question. We are ready for every eventuality, and there are teams in place to carry this out. Let me reassure him that I have no intention of using public money to bail out this company; we are looking for a market-led solution to its challenges. I thank him for his kind personal words—we will all keep persevering until we have cleaned up our waterways for good.
Oral Answers to Questions
Steve Reed Excerpts(2 months, 3 weeks ago)
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Liz Twist (Blaydon and Consett) (Lab)
The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
I start by acknowledging, on VE Day, the debt that we all owe to that great generation who sacrificed so much for our freedom. We will remember them and their sacrifice forever.
The Independent Water Commission, led by Sir Jon Cunliffe, will make recommendations to transform our water system and clean up our waterways. The recommendations will form the basis of further legislation to fix our broken water system. A public call for evidence that ran for eight weeks and closed on 23 April received a very high number of responses. Those will be shared in detail when the commission publishes its recommendations. Sir Jon and the commission have held more than 130 meetings, including with regulators, environmental groups, campaigners, investors, water companies and consumer bodies. Engagement will continue ahead of the commission’s recommendations to the Government in a few weeks.
Emma Lewell
I echo the Secretary of State’s initial comments. South Shields has a long-standing problem with sewage being dumped in the sea at Whitburn. Just this week, Little Haven beach was handed a brown flag, and myself and local campaigners are completely fed up. The Environment Agency, Ofwat, Northumbrian Water, the council and the last Government all completely ignored our concerns. We have already requested a meeting with the Water Minister, and I hope she will confirm today that the meeting will happen very soon.
Steve Reed
I congratulate my hon. Friend on her tireless work to represent the concerns of people in South Shields about those terrible problems with water pollution. Of course, my hon. Friend voted for the Water (Special Measures) Act 2025, which has given the regulator many more powers, including the power to ban undeserved multimillion-pound bonuses. I am sure she will be interested to read, as will I, the findings from the Independent Water Commission led by Sir Jon Cunliffe when they come forward in a few weeks’ time.
Liz Twist
As we act to protect our rivers and waterways from pollution, regulation will be important. The Environment Agency’s resources were decimated under the Conservatives. How will the 2025 Act give the Environment Agency the powers it needs to hold polluting companies to account?
Steve Reed
My hon. Friend is absolutely right. The previous Government cut resources for regulation in half, and that is one of the ways water companies were able to get away with so much pollution. We have changed the law to allow regulators to recover prosecution costs so that they can carry out further prosecutions and stop those who have been polluting our waterways.
Mark Pritchard (The Wrekin) (Con)
Can I make an appeal to the Secretary of State, and indeed his whole Front Bench, not to make farmers a scapegoat in any water reforms? Clearly, where farming and farmers are involved in bad practice, they should be penalised, but social industrialists, other employers, and indeed those in the public sector, might also pollute rivers. Water is a critical part of the food supply chain and agriculture. Farmers look after the environment on all our behalf—in the right way most of the time. My appeal to the Secretary of State is to please get the National Farmers’ Union and farmers involved and not let them become scapegoats.
Steve Reed
I of course agree with the right hon. Member. We are supporting farmers, many of whom were affected by very severe flooding recently, with the farming recovery fund. I am engaging constantly, and will be again today, with the National Farmers’ Union about those issues and many others.
Sarah Dyke (Glastonbury and Somerton) (LD)
By 2050 we will need more than 4,000 additional megalitres of water a day, with rising temperatures resulting in a fivefold increase in drought risk. That is concerning news for farmers in Glastonbury and Somerton, given the necessity of water for livestock and crops. What steps is the Secretary of State taking to consult farmers about reforms to the water sector, and does he know how important water is to food production?
Steve Reed
We recognise the importance of that point. The hon. Lady will be aware that, at the close of the price review process, we secured £104 billion of investment now and over the next five years to improve water infrastructure and ensure that we get water to where it needs to be. We have also increased flooding funding so that we can take the water away from where it should not be. All of that will support food production as well as many other sectors of the economy.
Chris Murray (Edinburgh East and Musselburgh) (Lab)
The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
Officials and I continue to maintain regular engagement with the Scottish Government on many issues. While sewage overflow monitoring is a devolved matter for Scotland, we continue to share best practice wherever appropriate. The SNP Government should follow this Government’s lead and introduce robust legislation to clean up their waterways.
Chris Murray
The beautiful beaches of my constituency are marred by sewage-related debris. In Scotland, under the SNP, we do not even properly monitor sewage overflows. Meanwhile, in England, the Labour Government are making great strides to improve water quality—how I wish we had that in Scotland. Will the Secretary of State commit to working as constructively as possible with his counterparts in the Scottish Government so that they can learn from here how we can improve water quality in Scotland?
Steve Reed
I pay tribute to my hon. Friend for highlighting the pollution and sewage on beaches that so concern his constituents. It is deeply disappointing that the SNP Government in Edinburgh are not following the UK Government’s lead in tackling sewage pollution. I agree with my hon. Friend that his constituents, like mine, and everyone else in Scotland and right across the UK deserve to enjoy sewage-free lakes, rivers and beaches. Sadly, that does not seem to be what they are getting from the SNP.
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
My constituents in Bognor Regis and Littlehampton have been subjected to an enormous increase in their water bills. Will the Secretary of State reassure the House that his water review will seek ways to prevent the costs of water companies’ mismanagement being passed on to their customers?
Steve Reed
I am sure that the hon. Lady will be reassured to hear that the Government have ringfenced money that is earmarked for investment in water infrastructure so that it can no longer be diverted for payments on bonuses and dividends. If water companies attempt to do anything of the kind, the money will be refunded to their customers through a discount on their bills.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
Ben Maguire (North Cornwall) (LD)
The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
Fly-tipping scandalously shot up by over a third under the previous Conservative Government, and the public are rightly furious when they see their communities buried under an avalanche of rubbish. This Government will clean up our streets, towns and villages. We will support councils to identify, seize and crush waste criminals’ vehicles by closing the Tory fly-tipping loopholes that prevented tough action. We will increase sentences for dumping waste to up to five years, and we will make fly-tippers pay the cost of impounding their vehicles before they are crushed, because we believe that the polluter, not the public, should pay. This Government will call time on fly-tippers so we can restore people’s pride in their neighbourhoods.
Ben Maguire
The River Camel multi-use trail in my North Cornwall constituency attracts more than half a million users every year and brings over £3 million to the local economy. Will the Minister please meet me to discuss a river trail extension to Camelford as part of this Government’s manifesto pledge to create nine new river walks and connect thousands more people to nature?
Steve Reed
I am delighted to hear that people are enjoying the River Camel trail. It is wonderful to visit and we want to extend more of these walks across the country so that more people can enjoy them. I will of course make sure that the hon. Gentleman can meet the appropriate Minister to raise his concerns.
Mr Speaker
I call Diane Abbott—not here. I call the shadow Secretary of State.
Mr Speaker
Order. This is a very important matter, but I am bothered that nobody else is going to get in, so I hope the shadow Secretary of State’s second question is shorter.
Steve Reed
I express my regret that the shadow Secretary of State would seek to politicise personal tragedy in this way. It is immensely regrettable that she would seek to do that; none of us can know for sure what happens in matters of personal tragedy. It is beneath her to try to weaponise the issue in the way that she has done. This Government take issues of mental health very seriously indeed. We are setting up mental health hubs in every community, so that we can support farmers and others who are suffering from mental ill health. I gently remind her that this was a problem that escalated during her time in office as Secretary of State for Health, when she failed to address the problems that people are facing.
Victoria Atkins
I am sorry, Mr Speaker, but I am simply confronting the Secretary of State with the realities of his policy. Another policy is distressing farmers and other people: the removal of our ancient property rights, first enshrined in the Magna Carta. The Planning and Infrastructure Bill gives a quango, Natural England, powers to seize private land, not for house building but for undefined environmental reasons. It can seize not just agricultural land, but our constituents’ gardens, and it does not even have to pay market value for that land. Will the Secretary of State now commit to an amendment to the Bill to save our constituents’ gardens, or is this Labour’s garden grab?
Steve Reed
As is so often the case from that particular source, that is a complete misrepresentation of the truth. Nothing of the kind is happening. Rather than trying to politicise and weaponise the matter, the right hon. Lady would help herself and people who are genuinely concerned about those issues by sticking to the facts.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Tim Farron (Westmorland and Lonsdale) (LD)
On behalf of all Members on the Liberal Democrat Benches, I add my tribute to those who fought and died to secure our freedom. I also pay tribute to those in rural communities, like ours in Westmorland, who fed this country and welcomed evacuee children from the cities, and to our community in Windermere, who welcomed the children who had survived the Nazi death camps after the war. We remember them all with deep gratitude.
Has the Prime Minister consulted the Secretary of State on the potential impact on British farmers of the US-UK trade deal? It is a matter of fact that US animal welfare standards are worse than ours, which means that import costs are lower, so allowing equal access is not free trade—it is unfair trade. It is throwing our farmers under the bus, just as the Conservatives did through their deal with Australia and New Zealand. Will the Secretary of State support Liberal Democrat calls for the deal to be signed only if it supports farmers, and after a vote in this House?
Steve Reed
There have been no announcements yet, and I cannot pre-empt them, but we have been crystal clear that we have red lines. We will not allow British farmers to be undercut on environmental or welfare standards in the way that the Conservatives did when they agreed a trade deal with Australia; it undercut British farmers and caused them immense damage. We will never go the way of the Tories; we will stand four-square behind our farmers, and I am delighted to hear that the Liberal Democrats feel the same.
Sam Rushworth (Bishop Auckland) (Lab)
On a similar theme, I congratulate the Government on securing a good deal for our farmers in the India trade deal, which was welcomed by the president of the NFU, who said it showed that this Government have “clearly listened”, in marked contrast to the previous Government. What assurance will the Secretary of State give me that our farmers will still be included in negotiations on the US trade deal?
Steve Reed
I am grateful to my hon. Friend for welcoming the trade deal with India; it is a £4.8 billion boost to the UK economy, and very good news for our whisky and gin producers—and for the producers of salmon, lamb and chocolate, which are all now tariff-free exports to India. This Government will always negotiate in the national interest, and that is exactly the approach we will take with the US trade negotiations.
Sewage
Steve Reed Excerpts(3 months, 1 week ago)
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The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
I beg to move an amendment, to leave out from “House” to end and insert
“recognises that the Government inherited a broken water system, with record levels of sewage being pumped into waterways; welcomes the Government’s rapid delivery of its promise to put water companies under tough special measures through the landmark Water (Special Measures) Act 2025, which has introduced new powers to ban the payment of unfair bonuses to water bosses who fail to protect the environment and to bring tough criminal charges against them if they break the law; supports the Government’s work to secure over £100 billion of private sector investment to upgrade the crumbling sewage infrastructure; and backs the largest review of the water sector since privatisation, aimed at tackling inherited systemic issues in order to clean up UK rivers, lakes and seas for good.”
I welcome the chance to set out the action that the Government are taking to end the sewage scandal in our waterways once and for all. The staggeringly high level of sewage pouring into our rivers, lakes and seas is a national disgrace. The beach in Deal that I visited just a couple of weeks ago was forced to cancel its Boxing day swim because of toxic levels of sewage in the water. The world-famous boat race between the Oxford and Cambridge University boat clubs earlier this month was, yet again, overshadowed by concerns about water quality in the Thames, so much so that rowers were told not to throw their teammates into the river.
Freddie van Mierlo
The Secretary of State mentions the boat race, but in 10 weeks we will be welcoming the world’s rowers to the Henley Royal Regatta. Does he share my concern about the amount of sewage being dumped in that part of the Thames, which is blighting the event?
Steve Reed
I am grateful to the hon. Gentleman for his intervention and I share his concerns. Wherever it is happening and damaging people’s ability to enjoy our rivers, it is a disgrace and a scandal, and we want to work across the House to put that right.
Parents across the country should not have to worry about letting their children splash about in the river or paddle in the sea on a sunny bank holiday weekend. I recently met campaigners at Windermere, in the constituency of the hon. Member for Westmorland and Lonsdale (Tim Farron), who told me that they are sick and tired of the sewage flowing into the iconic and beautiful lake on their doorstep and that, a few years ago, that sewage caused algal blooms that turned it bright green.
Up and down the country, the public are furious about water pollution. So am I and so is this House, so how did we get into this situation? I am afraid to say it is the toxic result of years of failure by the previous Conservative Government. Instead of fixing our sewage system before a problem turned into a crisis, the Conservatives stood back and let water companies divert millions of pounds of their customers’ money into the pockets of their bosses and shareholders. Over £25 million was paid in bonuses to water company chief executives during the last Parliament alone. The Tories left our water infrastructure to crumble into ruin.
Suella Braverman (Fareham and Waterlooville) (Con)
Putting party politics aside for a moment, I point out to the Secretary of State that Southern Water was fined a record amount of £90 million for dumping raw sewage in 2021. Last year, it received another fine for dumping sewage in rivers near Southampton. This year, bills have risen by almost 50% for residents in Fareham and Waterlooville. Southern Water now proposes to recycle effluent water in Budds Farm near my constituency, to distribute drinking water to residents in Fareham and Waterlooville. Will the Secretary of State do the right thing and reject Southern Water’s proposal, which is expensive, disruptive and dubious? I do not trust Southern Water, and my constituents do not trust it either.
Steve Reed
I hope that the right hon. and learned Lady will work with the Government and support the reforms we are bringing forward to improve the functioning and performance of the water sector and all the water companies up and down the country, so that we can prevent the kind of concerns she speaks about.
Let us look at the record of the past Government. If somebody sees a crack in the wall of their house and they leave it for 10 years, the problem gets much worse and it costs much more to put it right. That is exactly what happened with our sewage system. The result is that rivers, lakes and seas across this country are choked by record levels of raw human filth, and bills are rising to repair damage that could have been repaired at a much lower cost if it had been done earlier. I am afraid that the Tories polluted our waterways and left bill payers to pay the price for their failure. It is no wonder that they stand condemned as the sewage party.
Sean Woodcock (Banbury) (Lab)
My constituency is served by Thames Water, which is the largest provider in the country. Every week in my surgery, it is fair to say that I have people who have frankly given up on this issue ever being fixed. Will the Secretary of State provide my constituents and the rest of the country with the reassurance that this Labour Government will fix the issues left by the Conservatives?
Steve Reed
As my hon. Friend will have seen, we have already passed the Water (Special Measures) Act 2025, which gives the regulators more teeth to enforce against the polluting water companies. We look forward to Sir Jon Cunliffe’s review for the Independent Water Commission; we will get the interim report next month and the final report the month after that, which will lead to further action to reset this sector once and for all.
Joy Morrissey (Beaconsfield) (Con)
On the subject of the Act, it is wonderful to hear the Secretary of State say that he wants to take criminal action against water companies and water bosses, but I tabled an amendment to do just that that was rejected by the Government. Now that the Act has passed, it is interesting that the Government are so keen. Why did they not just accept my amendment, or a similar one? The Act does not mention criminal charges or what they will do, as my amendment did, but it passed without that measure being put in place. The Government are now saying from a point of retrospective gleefulness at the Dispatch Box that they would like to put that in. Is that actually going to happen?
Steve Reed
With the greatest respect, the hon. Lady’s party had 14 years to take action, and did nothing.
Although I am grateful to the Liberal Democrats for calling this debate, and I think there are many points of similarity between our approaches, I must gently point to some of the opportunities they missed to take action when they were in government. For instance, the Environment Agency had its funding cut by more than half between 2010 and 2019, leading to a fall in prosecutions against water companies and other polluters, and there were Liberal Democrats in the coalition Cabinet that started those cuts. The coalition Government published a report in 2011 that wrongly and, in my view, bizarrely concluded that water regulation
“works and is not fundamentally flawed”.
Of course, under that coalition Government, a Liberal Democrat Minister was responsible for the water sector between 2013 and 2015, and disappointingly they kept in place the very system of regulation that the hon. Member for Westmorland and Lonsdale quite rightly just criticised.
Gideon Amos (Taunton and Wellington) (LD)
Would the Secretary of State recognise that the Budget papers for 2009 and 2010 show that the then Labour Chancellor was projecting bigger capital cuts in expenditure than were carried out under the coalition Government?
Steve Reed
I do not think that decisions taken by the coalition Government were the fault of the previous Labour Government. I am merely gently pointing out that the Liberal Democrats did have a chance to reset regulation in the way that this Government are now doing. Where they offer their support for that work, I am grateful for it; by working constructively right across the House, we can make sure that we now reset a water sector that has failed the public, consumers’ investment and the environment for far too long.
Mr Joshua Reynolds (Maidenhead) (LD)
In my constituency, the Cut runs from Binfield all the way through to the Thames. That river had 615 hours-worth of sewage pumped into it last year, and my constituent Danny’s dog had to be put down, having got so ill from swimming in that water. Does the Secretary of State agree that no matter how many fines we levy against Thames Water, which ultimately come back to our bills—we have to pay for them—they will do absolutely nothing to deter the shareholders and make them invest properly where needed?
Steve Reed
The hon. Gentleman makes a very powerful case for why reform is so desperately needed. My condolences to the owner of the dog—that is a terrible thing to happen to anybody.
Anna Dixon
Bill payers in my constituency of Shipley are facing an 18% hike in their bills. By 2030, the increase could be as high as 35%. About 19% of those bills already goes towards servicing the debt of the holding company that owns Yorkshire Water. Is it not the case that our customers are paying the price for the failure of the Opposition parties—plural—to address the problems in the water industry during their time in government?
Steve Reed
My hon. Friend is absolutely right. I am angry about the bill rises, as she is. I am sure that Members on both sides of the House are angry about them, but in a very real sense, people are being forced to pay the price for 14 years of Conservative failure.
Previous Governments let the sewage scandal spread; this Government will end it once and for all. That work began as soon as we came into office. Within one week of the general election, I invited the water company chief executives into my office, and I ringfenced money earmarked for investment in water infrastructure so that it can never again be diverted for the payment of bonuses or dividends.
Alison Hume (Scarborough and Whitby) (Lab)
I welcome the rapid action that this Government have taken to hold failing water companies to account. Does the Secretary of State share my view that it is simply disgraceful that water company CEOs such as Yorkshire Water’s Nicola Shaw—who paid herself a £371,000 bonus —were able to pay themselves multimillion-pound bonuses while overseeing record levels of sewage spills?
Steve Reed
My hon. Friend is absolutely right, which is why we have given the regulator new powers through the Water (Special Measures) Act 2025. The Conservative party could have done so at any point during its 14 years in power, but at no point did it take that common-sense action. We passed that landmark piece of legislation, which became law in February. It gives the regulator tough new powers to hold water companies to account, bans unfair bonuses when water company bosses fail to meet high standards, and imposes stricter penalties—including up to two years in prison—if water company employees obstruct investigations by environmental regulators, as well as severe and automatic fines for wrongdoing. Environmental regulators can now recover costs for successful enforcement, meaning that the polluter pays and the regulators gain new resources to enforce more effectively.
Jamie Stone
I suggest to the Secretary of State that the problem may be more deep-seated than we realise. He mentioned algal blooms in the Lake district. Not only do those blooms turn the water a strange colour; they suck the oxygen out of the water, leading to the death of wildlife in the water. Furthermore, sewage contains heavy metals and other toxic substances that can kill fish or affect their ability to reproduce, so we may find ecosystems that have been damaged over a much longer term than we realise.
Steve Reed
I recognise the catastrophe that the hon. Member is talking about. It is not just that the water is polluted; the water becomes toxic, and it is killing ecosystems and damaging the wider environment. Those are all reasons that we need to move ahead quickly with the reforms that this Government are working towards.
Several hon. Members rose—
Steve Reed
I will give way two more times and then I had better make some progress, or Madam Deputy Speaker will chastise me as she chastised the hon. Member for Westmorland and Lonsdale.
Paul Holmes (Hamble Valley) (Con)
The Secretary of State is right to outline the legislation he is bringing forward, but on the ground there is still frustration about pollution in rivers, such as in Botley in my constituency. We are still seeing overflows—not from sewage but from development pollutants going into the river—and parish councils are identifying them quickly and coming to me, but the accountability structures behind water companies such as Southern Water will not answer to elected Members like me. We are still not seeing the improvement that the Secretary of State is advocating at the Dispatch Box. Will he agree to meet me and my parish council to hear our concerns? Can he outline briefly how the sewage legislation that he has just brought forward will add to that accountability for parish councils and local residents?
Steve Reed
The hon. Member makes an important point. One issue that Sir Jon Cunliffe and the water commission are looking at is how we can increase accountability and responsiveness directly to customers and, indeed, to authorities such as the parish councils he has just talked about. I would be happy to arrange a meeting for him with the appropriate Minister.
Daisy Cooper (St Albans) (LD)
The Secretary of State referred to rare ecological rivers that can be damaged by sewage pollution. In my constituency, we have a very rare chalk stream, the River Ver. Thames Water says that many of the sewage spills happen because the pipes are old and porous. Part of the solution is to line them, but when Thames Water is lining pipes, it is not prioritising pipes that are close to rare chalk streams. Will the Secretary of State meet me to discuss my Chalk Streams (Sewerage Investment) Bill, which would make water companies prioritise those pipes that are close to chalk streams, because of their rare ecological status?
Steve Reed
I know the River Ver very well; I used to walk past it every day on my way to primary school at the Abbey primary school at the bottom of the abbey orchard. I would be happy to make sure that the hon. Lady gets a meeting with the appropriate Minister to raise those points.
The additional new resources that our reforms will give to the regulators are underpinned by mandatory monitoring of storm overflows and pollution incidents. Water companies in England and Wales must now publish information on the frequency and duration of discharges from every single storm overflow within one hour of the discharge happening. We have extended that to emergency overflows, so that all spills will be publicly reported in near real time. We expect water companies to monitor 50% of them by 2030 and the rest by 2035. Companies are now required to publish their annual pollution incident reduction plans and implementation reports to outline the progress they have made and show the public that they have a credible plan to end the scandal of water pollution. Those measures give the water regulators new powers to hold water companies to account and ensure that customers and the environment always come first.
We can and we will turn the water sector around. We have secured more than £104 billion of private sector investment in the water sector over the next five years. That is the biggest investment in our water sector in its history, and the second biggest investment in any part of the economy over the lifetime of this Parliament. It will build and upgrade water infrastructure in every single region of the country, cut sewage spills by 45% compared with 2021 levels and drastically improve the quality of water in our rivers, lakes and seas. It will allow us to move ahead with nine new reservoirs and nine large-scale water transfer schemes, and reduce leaks from crumbling pipes, so that we have a reliable water supply for the future.
This vast investment will create tens of thousands of jobs up and down the country, allow us to go ahead with building 1.5 million new homes, support 150 major infrastructure projects and power new industries with high water usage, such as data centres. This is the regional economic growth that the country voted for last year; this is the Labour party’s plan for change in action.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
I think that Members in all parts of the House agree with much of what the Secretary of State is saying. I am fortunate enough to have the beautiful River Trent in my constituency, along with the Sow and the Penk, but new housing developments, which he mentioned, are a big issue, because the run-off from them is not properly attenuated. How could that best be dealt with? Building homes for the right reasons sometimes has unintended consequences.
Steve Reed
The right hon. Gentleman is entirely right, and I have asked Sir Jon Cunliffe to consider measures that we could implement to start to address that and, indeed, wider issues involving nutrient neutrality in our waterways.
Several hon. Members rose—
Steve Reed
I will make some progress, because I do not want to take up too much of the debate.
Last month the Water Minister and I toured the country to see where and how the investment will be spent—from Windermere to the Wye, from Hampshire to Yorkshire, and to Suffolk, Northumbria and Somerset. In Windermere, we are working with local groups and organisations to eliminate all sewage discharges into the lake. That includes schemes that allow owners of septic tanks to connect them to the mains sewer network so that they no longer discharge directly into the water. On the River Wye we are running a £1 million joint research initiative with the Welsh Government to tackle water-quality issues across the catchment. We are working with local farmers, environmental groups and citizen scientists to investigate the sources of the pollution so that we can tackle them effectively.
Steve Reed
I will make some progress, if the hon. Gentleman does not mind too much.
The south-east of England will face severe water shortages by 2030 if we do not act urgently, so we are supporting new infrastructure such as the Havant Thicket reservoir, which will store nearly 9 billion litres of water when it is completed.
This is just the start of our wider plan to fundamentally reset the water sector so that it is fit for the future. I am grateful to Sir Jon Cunliffe, the former Deputy Governor of the Bank of England, for undertaking the biggest review of the water sector since privatisation. He is supported by an advisory group of experts covering the environment, public health, investors, engineering, customers and economics. The failures of regulation and governance that allowed our water system to decline into scandalous failure must never happen again. This summer, Sir Jon will publish his findings on how we can build the robust regulatory framework that we need to clean up our waterways, build infrastructure for a reliable water supply and restore public confidence.
Steve Reed
If the hon. Gentleman does not mind, I will make a little more progress, because I have already taken up more than 20 minutes of other Members’ time.
Sir Jon is looking into how we can embrace a catchment-based approach to cleaning up our rivers, and our farming road map will help farmers to make the transition to more nature-positive farming methods that will reduce agricultural run-off into our waterways. I hope that many Members have shared their views as part of the Independent Water Commission’s call for evidence, which closes at the end of today. The Government will respond and consult on the commission’s recommendations, and we intend to legislate so that we can completely reset our water sector for the future.
The Water Minister has announced reforms to shake up our water bathing regulations for the first time in more than a decade, so that more people, whether they are swimmers, paddleboarders or surfers, can get outside and enjoy our waters safely. Our proposed measures would remove the fixed bathing season dates from the regulations to better reflect when people actually use our waters, and would allow greater flexibility in monitoring.
Martin Wrigley
I thank the Secretary of State. I have just been reading about his core reforms, and I note that, as he has said, core reform 3 changes the way in which the season for bathing is determined. However, it continues the principle that water is not tested by the Environment Agency throughout the year. This is an important omission that must be rectified. During a bathing season, the water can become polluted. Will the Secretary of State consider introducing all-year-round testing for our Blue Flag areas?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Before the Secretary of State responds, I would like him to consider the fact that more than 30 colleagues wish to contribute. The longer he speaks, the less likely it is that they will all get in.
Steve Reed
Thank you, Madam Deputy Speaker. I will not take any more interventions. I hear the hon. Gentleman’s point. Public health is a priority in the reforms that we are making.
The Environment Agency must consider public safety and the environment when it assesses applications for bathing waters, and remove the harmful automatic designation of bathing waters so that we can continue to invest in and improve these sites. Applications for new bathing waters will open next month, adding to the more than 450 bathing waters around the country. Details of how to apply are online.
The sewage scandal ends with this Labour Government. Our groundbreaking Water (Special Measures) Act will give the regulators tough new powers to hold water companies to account. They will no longer get away with polluting our waterways and rewarding themselves with undeserved bonuses for what they have done. This is a fresh start for the water sector—a fundamental reset that will clean up our waterways, create thousands of jobs, grow the economy and give us a reliable water supply for decades to come.
Exciting progress is already being made. The Thames tideway tunnel was fully activated in February—an amazing feat of British engineering and entrepreneurial spirt that will reduce sewage spills into the Thames by around 95%. Since coming into operation, the tunnel has captured enough sewage to fill Wembley stadium five times over and stopped it pouring into the river. I want to see innovation like that not just in London but right across the country, bringing investment, driving regional economic growth and cleaning up our waterways for good.
Many of us cherish memories from childhood of summer holidays on the beach, exploring rock pools or splashing about in the waves. Today’s children deserve to make the same magical memories. This is our moment to give our children back the future that is their birthright, to restore pride in our rivers, lakes and seas, to end the sewage scandal and to clean up our waterways for good. That is the prize, and this is the Government who will make it happen.
Several hon. Members rose—
Oral Answers to Questions
Steve Reed Excerpts(4 months, 1 week ago)
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Jeremy Hunt (Godalming and Ash) (Con)
The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
My officials and I have regular conversations with Ofwat and other regulators. As the right hon. Gentleman will be aware, last year water companies discharged record levels of sewage into our waterways, which is why the Water (Special Measures) Act 2025 gives the regulator tough new powers, including the ability to ban the payment of unfair bonuses to polluting water bosses. The Government have also secured a record £104 billion that will include improvements to more than 3,000 storm overflows and significantly reduce sewage spills over the next five years.
Jeremy Hunt
I wish you a happy World Sparrow Day, Madam Deputy Speaker.
In Bramley in my constituency in 2023, sewage was spilled into the local river for 59 hours. In Godalming, the figure was 83 hours; in Chiddingfold, it was 410 hours; and in Cranleigh, it was 691 hours. That is the equivalent of nearly two hours every single day—it is totally unacceptable. As a result, last year, after pressure from me and others, Thames Water agreed to invest £400 million by the end of next year. Will the Secretary of State meet me and the chief executive of Thames Water to see whether that money is actually being spent?
Steve Reed
The situation that the right hon. Gentleman describes is absolutely outrageous, and Members across the House will recognise similar situations in their own areas. We need to completely reset the water sector so that these situations cannot continue, which is why Sir Jon Cunliffe is leading a water commission. I hope that the right hon. Gentleman and other Members are taking the opportunity to feed their experiences and those of their constituents into his call for evidence, and I would be happy to arrange for the right hon. Gentleman to meet an appropriate Minister to discuss his concerns.
Amanda Hack (North West Leicestershire) (Lab)
I get so many people in North West Leicestershire telling me about the toxic sewage pouring into their waterways, such as in the brook near Donington le Heath. Will the Secretary of State assure me that, unlike the previous Government, when he says that he will hold the water bosses to account, he means it?
Steve Reed
Absolutely. That is why we have passed—and my hon. Friend will have voted for—the Water (Special Measures) Act, which gives the regulator the power they need to hold those water bosses to account so that instead of paying themselves multimillion-pound bonuses they do not deserve, that money is spent where it should be spent: on fixing our broken sewage system, so that we can cut the sewage flows that are polluting our rivers up and down the country.
David Reed (Exmouth and Exeter East) (Con)
Clive Jones (Wokingham) (LD)
The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
I am of course having conversations. I can reassure the hon. Gentleman that the company remains stable, and that the Government are closely monitoring the situation.
Clive Jones
Data published this week in The Guardian revealed that 50% more raw sewage was discharged by Thames Water last year than in the previous 12 months. Thames Water is racking up billions of pounds of expensive extraordinary debt, while continuing to pump tonnes of sewage into our rivers. Despite bold targets and kind words, there is simply no action on cleaning up our rivers. What will the Government do to improve Thames Water’s performance?
Steve Reed
The Government are taking steps to improve the performance of all water companies, including through the Water (Special Measures) Act 2025, which I spoke about earlier. Sir Jon Cunliffe is leading a review of the entire sector, so that we can reform regulation and, if need be, the regulator, to ensure that they are fit for purpose.
Sarah Bool (South Northamptonshire) (Con)
The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
Our rivers, lakes and seas are awash with pollution. The public are rightly furious about leaking pipes and sewage spills, and we have not built a new reservoir in this country for well over 30 years. After years of failure, this Government are turning the tide. The Water (Special Measures) Act 2025 is creating stronger regulation to hold water companies to account. We have secured over £100 billion of private sector investment—the largest such investment in the water sector in its history—to upgrade our infrastructure. Last week, the water Minister—my hon. Friend the Member for Kingston upon Hull West and Haltemprice (Emma Hardy)—and I toured the country from Windermere to the Wye, from Hampshire to Yorkshire, and from Suffolk and Northumbria to Somerset, to see where that investment will build new homes, create thousands of new jobs and boost local economies. This is a cornerstone of our plan for change. Things can only get cleaner.
Sarah Bool
In February, Lucy Manzano of the Dover Port Health Authority came before the Environment, Food and Rural Affairs Committee and warned that if funding was not confirmed before the new financial year, checks at our borders would stop. With the new financial year fast approaching and another case of foot and mouth in Europe, will the Secretary of State confirm that the Government have finally secured that funding, or will we be more at risk in April?
Steve Reed
We take border security extremely seriously. That is why we have the BTOM—border target operating model—system, which we are very closely monitoring to make sure it is doing the work that it needs to do, and why we are investing money in the National Biosecurity Centre in Weybridge to ensure it does not fall into dilapidation, which is where it was heading under the previous Government.
Jim Dickson (Dartford) (Lab)
Steve Reed
My hon. Friend is absolutely right. Over the past 14 years, things only got filthier. This Government will turn the tide. Things will get cleaner thanks to the investment this Government are bringing in.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State.
Victoria Atkins (Louth and Horncastle) (Con)
I welcome the Secretary of State back to the Chamber. He has been in hiding for a week. We were so worried about him that we were going to start a “Where’s Wally?” competition. The reason he has been in hiding is that he is ducking scrutiny of his dreadful decision to stop the sustainable farming incentive farm payment scheme immediately, without warning. Conservative Members have been inundated with messages from farmers saying that businesses will not survive this latest assault by the Government. How many farmers will be bankrupted as a result of the SFI stoppage?
Steve Reed
There were, unfortunately, record levels of bankruptcies of farm businesses under the previous Government, in which the right hon. Lady was a member of the Cabinet. Under this Government, we have more money in the hands of more farmers through SFI than at any point under the previous Conservative Government. This Government understand that when a budget has been fully allocated, you stop spending. The party of Liz Truss prefers instead to keep spending, bankrupting the economy and sending mortgages spiralling. That is not good for farmers, for the economy or for anyone.
Victoria Atkins
The Secretary of State cannot find his way around a farmyard; he is certainly not speaking to farmers. We Conservatives know that if the Government continue to tax, tax, tax businesses, they will break. His answers show why we have seen cold fury in the countryside at his impotence in standing up to the Chancellor on compulsory purchase orders, the massive cuts to de-linked payments, the stopping of capital grants and SFI and, of course, the family farm fax. Ahead of next week’s emergency Budget and spending review, and given that The Guardian seems to know more than he does, will the Secretary of State guarantee that his Government’s Budget will not face further swingeing cuts?
Steve Reed
The problem facing farming is that it became unprofitable because of the actions of the previous Government, who undercut farm businesses in trade deals, undercut farmers on welfare and environmental standards and raised barriers to exports to the European markets, causing exports to plunge by 20% since 2018, which led to record numbers of bankruptcies. This Government have a plan for change that involves turning farming into a profitable set of businesses, including by backing British businesses through public sector food procurement and ruling out trade deals that undercut farmers in the way the previous Government were happy to do.
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
Mr Paul Kohler (Wimbledon) (LD)
Last month, more than 4,000 litres of diesel spilled into the River Wandle from a Transport for London garage in the Secretary of State’s previous constituency. Will the Secretary of State meet me and my hon. Friend the Member for Carshalton and Wallington (Bobby Dean) to discuss what can be done to restore the wildlife and to ensure that that cannot happen again?
Steve Reed
I agree that what happened on the River Wandle is shocking; it runs very close to my constituency as well, so I am aware of the situation. The Environment Agency is investigating and, if there was inappropriate behaviour, there will be swift action. I would be happy to arrange an appropriate meeting for the hon. Gentleman.
Adam Jogee (Newcastle-under-Lyme) (Lab)
For far too long, the people of Newcastle-under-Lyme have had to live with the consequences of Walley’s Quarry landfill site. With the operator, Walley’s Quarry Ltd, now in liquidation, may I urge the Minister to do all she can to make sure that those who caused the mess are forced to pay to clean it up?
Rishi Sunak (Richmond and Northallerton) (Con)
I recently visited New Sheepfold Farm in Ingleby Greenhow to see the great work that the Day family are doing to diversify their farm, help nature recovery and improve enjoyment of our rural area. They did this with the help of the North York Moors National Park Authority and the farming and protected landscape scheme, which I am glad the Government have extended for a further year. Does the Minister agree with me about the importance of family farms, such as that of the Days, in landscapes such as the dales and the moors, and will he ensure that they remain at the forefront of Ministers’ minds?
Steve Reed
We are fighting to have the honour of responding to the former Prime Minister! Of course I agree with him. Our focus on farm profitability is precisely so that family farms up and down the country can have a bright and secure future. Any sector that does not make a profit is not going to attract investment and will not have a future. We want farming to succeed in his constituency and in every constituency across the land.
NFU Conference: Farm Profitability
Steve Reed Excerpts(5 months, 1 week ago)
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The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)
Today at the NFU conference, I made several announcements to make farming more profitable:
Extending the Seasonal Worker visa route for five more years will give farms a pipeline of workers and certainty to grow their businesses. Annual quota reviews will ensure we strike the right balance—supporting farms while gradually reducing visa numbers as we develop alternative solutions.
Backing British produce: there are now requirements for Government catering contracts to favour high-quality, high-welfare products that local farms and producers are well placed to provide. The move marks a major leap in achieving the Government’s ambition for at least 50% of food supplied into the £5 billion public sector catering contracts to be from British producers or those certified to higher environmental standards.
Investment of £110 million in technology: the Farming Innovation Programme supports research and development of agri-technology for farmers, for example, the chemical-free cleaning for integrated milking equipment, which lowers energy costs and chemical use. The Farming Equipment and Technology Fund provides grants of up to £25,000 to buy new equipment such as electric weeders to reduce chemical use.
Protecting farmers in trade deals: the Government will uphold and protect our high environmental and animal welfare standards in future trade deals.
Strengthening Britain’s biosecurity: transforming the Animal and Plant Health Agency animal health facility at Weybridge into a National Biosecurity Centre, and investing £200 million to improve our resilience against animal disease to protect farmers and food producers.
As I said at the Oxford Farming Conference in January, more profitable, sustainable farm businesses will ensure our nation’s long-term food security. The Government have an important role in creating the conditions for growth and maintaining the resilient production of high-quality food the British public depends on.
[HCWS469]