My Lords, the current environmental performance of water companies is unacceptable. In December 2022, the Water Minister and the Secretary of State met with CEOs of lagging water companies—as identified by Ofwat’s recent assessment—to outline the Government’s expectations that performance must improve significantly. Furthermore, in January, my colleague Rebecca Pow met with the CEO of South West Water. She will be meeting the CEOs of all lagging companies individually every six months and she expects to see significant progress. Most recently, I also met CEOs of water companies with Minister Pow to highlight the importance of addressing water pollution and reaching their net-zero goals.
My Lords, the water companies are themselves responsible for monitoring the quality of water. They are awarding themselves top marks and bonuses when they are clearly failing, as the Minister has acknowledged. When will the responsibility for monitoring water quality be taken away from these companies and given to the Environment Agency? When will there be serious sanctions against those running these companies for their repeated failures?
In 2013, we only knew about 5% of the storm overflow points where sewage was going into our rivers. We now know about 90% because we instructed the water companies to provide that information. By the end of this year, we will know about 100%. The Environment Agency is the guardian of water quality and it takes forward prosecutions. The Government have said that they will increase the fines available as, at the moment, there is a cap on them, which we think should be higher. The Environment Agency is already able to launch criminal prosecutions against CEOs. Ofwat has the power to impose a fine of up to 10% of a company’s annual turnover and all fines are taken from the water company’s profits and not from customers.
My Lords, we consume twice as much water per capita as we did 50 years ago. There is an increasing frequency in sewage discharges as a result of extreme weather events, all of which require institutional investment. Do the Government not have the choice either to reduce profiteering in the sector in favour of this investment or to ask the taxpayer to subsidise this infrastructure?
We are asking water companies to spend a lot more—£56 billion. In this period alone, they are putting an extra £7 billion into investment in infrastructure. Water companies make a profit of about 3%. This is not dramatic, compared with what some other companies make, but we watch it very carefully through the instructions we give to Ofwat. We want to make sure that customers are getting a good deal but, more importantly, that there is investment going into infrastructure.
I wonder if the Minister is aware that, in two weeks, the Industry and Regulators Committee of this House will be producing its own report into governance and regulation in the water and sewage industry. This will clearly be of interest to many in this House. Can the Minister confirm that putting right the sort of problems we are talking about is going to take decades, not years? Can he also confirm that the money for it will not be public money, but that the companies themselves will raise money in the City, take on debt and possibly put up water bills?
At a time of concern about household expenditure, it is important that we balance water bills. It is always a balancing act. We want to make sure that, with an average bill at just above £1 a day to provide all the water a household needs and to have all the sewage taken away, water companies can invest in the necessary infrastructure. Most importantly, during the next decade or two, we must eliminate rainwater getting into sewage. This is the challenge. At the moment, we have water coming off roofs and going into Victorian or Edwardian sewers. Many of them have been updated and improved, but billions of pounds still need to be spent to tackle this recurring problem.
My Lords, I have raised before in this House the River Wye, which is one of the most glorious rivers in our country. We know why it is polluted; my noble friend the Minister has mentioned this from the Front Bench before. Can he give me some idea of when that river will flow clean again so that we can be proud of it, as our forebears were?
I am not an aquatic scientist but I can tell my noble friend that the problem in the Wye is principally due to phosphates coming from the poultry industry, which has boomed in that area and for which no adequate planning provision was made to prevent the leakage of effluent. The Environment Agency and other parts of Defra are making sure that we are correcting that. I hope that we will prevent what is happening, which is an absolute tragedy. For large parts of the year, large sections of one of the great rivers of this country are nearly ecologically dead. We want to reverse that.
My Lords, there has been considerable media interest in the pollution of bathing waters, inland rivers and waterways as a result of the release of sewage overflows. Nearly every week, the Minister is called here to answer questions on this issue. Given that warmer weather is approaching, can he say how the Government will protect the health of the children and adults who will be exposed to this fetid and polluted water?
We rightly beat ourselves up about this but it is worth stating that our bathing waters are in their best state ever. Last year, 93% of them were classified as “good” or “excellent”. The number of serious sewage incidents has fallen from 500 a year in the 1990s to 62 in 2021, although that number is still 62 too many. What is called wild swimming—what my mother used to call swimming—is becoming a great national sport and activity. We want to connect more people with nature; that is a wonderful way of doing it. Making sure that our rivers are clean is vital.
My Lords, I feel like a stuck record on this issue; goodness only knows what the Minister feels like. He keeps assuring us that the Government are doing a lot of work here so why does he think that, week after week, month after month, he has to come to the Dispatch Box to answer the same question?
I refer the noble Baroness to the answers that I gave on 7 September, 25 October, 2 November, 14 November, 24 November, 30 January and 22 February, as well as to my 60 Written Answers. I think that we are all of the same mind: we want to resolve this problem. We are seeing massive enforcement activity taking place and a complete change to our farming system, which will weaponise soil as a great tool in preventing the pollution of our waterways. We are also seeing a variety of other activities, such as the riparian planting of woodland along rivers. Things are getting, and will continue to get, better but I like to fill the noble Baroness with joy by coming back and repeating this every week.
My Lords, water pollution is not confined to England. According to Scottish Water, more than 10,000 spill events typically happen north of the border each year; that is nearly 30 a day. Similar to other water companies, Scottish Water attributes many of those spills to flooding and more frequent rain due to climate change. Scotland’s environmental protection body, SEPA, works with the Environment Agency on cross-border issues across the Solent, the Tweed and in coastal waters but can the Minister ensure that he and his department are ever mindful to co-operate at a government level as well as at an agency level on cleaning up, planning and infrastructure upgrades? We all know that this issue does not stop at any border; neither does the effluent.
My noble friend is absolutely right: nature does not recognise borders. There is an arrangement whereby the Scots administer the Tweed, which is a border river, and the English Government administer the Esk, which is also a border river. However, we must ensure that our policies on the environment are aligned, that water companies, whether they are in Scotland or England, are abiding by the rules, and that we are of a similar mind in bearing down on this problem.
My Lords, the water companies and their directors are making considerable profits. When was the last CEO or director of any water company prosecuted, fined or jailed for the grievous breaches that are occurring? If they have not been, why have they not been?
Part of me wants to answer that question by saying, “our rivers are in a better state under this system of administration of our waters”. However, I really want to say that we have given ourselves the powers now to do precisely what the noble Lord is asking for. We can have criminal sanctions, we can fine considerably more than we could previously, and we can drive up standards through our directions to Ofwat, through what we are providing with the extra enforcement that we are giving to the Environment Agency and through many other areas. It is not for me to say who should be criminally sanctioned or when. That is for the courts, and we have given them the powers to do that.