Would everyone please ensure that all electronic devices are turned off or switched to silent mode? We will now continue line-by-line consideration of the Bill. The grouping and selection list for today’s sittings is available in the room and on the parliamentary website. I remind Members about the rules on the declaration of interests, as set out in the code of conduct.

On a point of order, Mr Mundell. It is a pleasure to serve under your chairmanship. I seek your guidance on the status of a document circulated to Members by the Scrutiny Unit. It says it is submitted by a Professor Mitie, but I believe that the document is in fact from Mitie, the organisation, and perhaps we do not know its author. Could I ask that we be told who the author is? It is Professor Somebody Else, I suspect. The document also has tracked changes in it, and I seek your guidance on whether those are comments inserted by the Scrutiny Unit or, perhaps, by the author. It is sometimes difficult to know when documents are circulated at the last minute.

Thank you, Sir Ashley, for giving notice of that point of order. The issue you have raised is obviously on the record. It will be raised with the Scrutiny Unit and there will be a report back to the Committee on the outcome of that inquiry.

Clause 72

Enforcement of labour market legislation by Secretary of State

I beg to move amendment 84, in clause 72, page 79, line 15, at end insert—

“(4A) Accordingly, in the case of the exercise by an enforcement officer of an enforcement function of the Secretary of State, any reference in an enactment to the Secretary of State in connection with that function is to be read as, or as including, a reference to that officer or any other enforcement officer.”

This amendment ensures that, where an enforcement officer is exercising an enforcement function of the Secretary of State by virtue of clause 72(4), references in legislation to the Secretary of State in connection with that function will include references to enforcement officers, so that the legislation will apply in relation to the enforcement officer as it would apply to the Secretary of State if the Secretary of State were exercising the function.

It is a pleasure to see you in the Chair this morning, Mr Mundell. I start by making the customary reference to my declaration in the Register of Members’ Financial Interests.

Clause 72 is the first in relation to the fair work agency, and it is one of the building blocks of the agency. I will explain the main elements of the clause, as that will help us to understand the amendment. The clause confers an overarching function on the Secretary of State to enforce certain legislation set out in part 1 of schedule 4, which the clause introduces. The clause provides flexibility for the Secretary of State in how to deliver that overarching enforcement function. It enables them to appoint enforcement officers to carry out the function on their behalf, and it provides that enforcement officers will be able to exercise any of the enforcement functions of the Secretary of State and will have the enforcement powers conferred on them as set out in the terms of their appointment by the Secretary of State.

As I said, the Secretary of State has the function of enforcing the legislation set out in part 1 of schedule 4. The legislation contains references to the Secretary of State having functions and powers in connection with the enforcement of the rights set out in that legislation. It is important that those references can be read as references to the enforcement officers the Secretary of State appoints to act on their behalf; otherwise, enforcement officers may not be able to properly exercise the enforcement functions of the Secretary of State. That would make their appointment, and potentially their enforcement activity, less effective.

Government amendment 84 inserts a new subsection after clause 72(4) to ensure that references to the Secretary of State are read as references to enforcement officers where necessary. The practical effect is that the legislation will apply to enforcement officers as it would to the Secretary of State. This is a technical change, but I hope that Members will see that it is necessary.

It is a pleasure to see you in the Chair once more, Mr Mundell.

Government amendment 84 looks to us like a drafting correction. We will not rehearse the arguments we have had so many times in the Committee about drafting corrections, but I would be grateful if the Minister could confirm whether the powers in the Bill, which are directly related to the amendment, for enforcement officers to enter and search business premises are any wider in scope than current enforcement powers and, if so, how and why.

I am grateful to the shadow Minister for not rehearsing the arguments, as we may end up having them every five minutes, given the number of technical amendments we will deal with today. He raises an important question about the enforcement powers and powers of entry. There are a number of clauses that deal with that. My initial understanding is that, generally speaking, we are not seeking to widen the remit of current enforcement powers. I will endeavour to write to him if there are any changes or exceptions to that. It may be something that becomes apparent when we debate the clauses in question.

Amendment 84 agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

Clause 72 is important, as it sets out the principles of a major part of the Bill. The UK’s labour market enforcement system is fragmented. The enforcement of core rights such as the minimum wage, domestic agency regulations and the gangmasters licensing scheme is split between three different agencies. That often means that workers do not know where to go when they think they might not have received what they are due. That makes enforcement ineffective. It is not fair for workers or businesses.

Clause 72 is a vital building block in the creation of the fair work agency. It is worth noting from the outset that the FWA will be established as an executive agency of the Department for Business and Trade, which means that it will not have its own distinct identity in legislation. The Bill therefore vests responsibility for enforcement of labour market legislation in the Secretary of State. The Secretary of State intends to discharge those responsibilities through the fair work agency, which will be created in administrative documents.

Clause 72(1) places responsibility for enforcing a set list of labour market legislation on the Secretary of State and introduces part 1 of schedule 4, which sets out the list of relevant labour market legislation that the Secretary of State will be responsible for enforcing. There is a general power in clause 118(3) to make regulations that commence different aspects of the Bill at different points. Exactly when the Secretary of State will take on responsibility for enforcement will depend on the detail of those commencement regulations. However, creating the fair work agency is about more than simply moving things around; the agency will also take on the ability to enforce workers’ right to paid holiday and their entitlement to statutory sick pay.

Clause 72(2) explains that part 5 of the Bill confers powers on the Secretary of State and enforcement officers to carry out the purpose of enforcing the labour market legislation in schedule 4. Clause 72(3) makes it clear that an enforcement officer includes anyone whom the Secretary of State has appointed to carry out enforcement of that legislation on his behalf, and clause 72(5) clarifies that enforcement officers appointed by the Secretary of State have only the powers conferred on them when they are appointed. Practically speaking, that means that whether the Secretary of State or an enforcement officer is carrying out this work, they will have the enforcement and investigatory powers they need to do the job effectively. Those powers are set out in later clauses.

Clause 72(5) is also a particularly important safeguard. As I have already said, the responsibility for enforcing legislation and the powers to carry it out will be vested in the Secretary of State, and the Secretary of State will then confer them on the enforcement officers he appoints. However, the FWA’s remit will also include the serious issue of modern slavery and labour abuse, for which certain specially trained enforcement officers will have extensive police-style powers, as set out in section 114B of the Police and Criminal Evidence Act 1984. Certain officers in the Gangmasters and Labour Abuse Authority are trained to use those powers, which are subject to additional oversight, including by the Independent Office for Police Conduct. The powers should continue to be reserved for tackling the most serious issues handled by the FWA. That is why we have included clause 72(5), through which the Secretary of State will specify what powers enforcement officers will have access to when appointing them. We will ensure that powers are conferred only on officers who are sufficiently qualified to use them and who genuinely need them to do their job.

The Minister is talking about granting officials of the state extensive powers currently reserved to police officers. Can he tell us how many additional officials will be granted those additional powers?

What we are doing is transferring existing powers and responsibilities from the existing agency. There are no new police-style powers being created for these officers; it is simply a transfer over to the fair work agency.

Clause 72 is key to delivering the much-needed upgrade to the enforcement of workers’ rights so that it is more effective and fair for workers and businesses. It brings together enforcement functions currently split between several different enforcement agencies and gives the fair work agency the flexibility to respond to a rapidly changing labour market. I commend the clause to the Committee.

A lot of the detail is in the clauses that follow this one; as the Minister said, this is very much a building-block clause. Although I totally understand and appreciate the rationale for taking enforcement powers that are currently fragmented across multiple different agencies and consolidating them into one, the devil is always in the detail.

Although it might seem sensible to consolidate the powers that are currently so spread out into one agency, this is very much a centralisation of power. The crux of clause 72 is about directly providing the Secretary of State with the overall function of enforcing labour market legislation. Whenever I see such provisions in any legislation, I cannot help but be reminded of the late, great President Reagan’s famous quote about the nine most terrifying words in the English language:

“I’m from the Government, and I’m here to help.”

As my hon. Friend the Member for Bridgwater suggested in his intervention on the Minister, the serious detail is about the practical workings of the fair work agency as it is set up. What will be the total number of enforcement officers, employees and ancillary staff required—admittedly, some will be brought across from other agencies—to form it? What will be the cost to the taxpayer of putting that together? How many people are we actually talking about? I think that, as opposed to the powers that they will hold, was the crux of my hon. Friend’s intervention.

As I said, we accept the rationale for bringing these powers together under one agency, but whenever such powers are granted to a Secretary of State, no matter what the field, there is always uncertainty and scope for never-ending expansion of the new agency, and of the size of the state, to do what is, in many cases, important enforcement work—I do not doubt that. Given the presumption that the Bill will become an Act of Parliament and that the agency will be set up in the way envisaged in clause 72, it would be good to have clarity about the plan for just how big the agency will be and whether the Secretary of State will put any cap on that from the get-go. How far does the Minister envisage the agency going?

It is a pleasure to work under your chairmanship, Mr Mundell. I broadly welcome the bringing together of powers under the fair work agency. I note that the Secretary of State is due to publish an annual report, but I am sure that businesses in Torbay would be interested to know where in the Bill the critical friend is to hold the Secretary of State to account and ensure that they are being light of foot and driving the agenda we all want to see in this area, so I would welcome the Minister’s sharing that.

As is customary, I draw the Committee’s attention to my declaration in the Register of Members’ Financial Interests. I am a member of the Union of Shop, Distributive and Allied Workers and the GMB.

I warmly welcome this clause and the subsequent clauses, and the establishment of the fair work agency. I remind the Committee of the evidence we heard of the broad support for the agency, including from Helen Dickinson, the chief executive of the British Retail Consortium, who said:

“I think everybody is supportive of and aligned on proposals like a single enforcement body.”––[Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 99, Q95.]

Jamie Cater, the senior policy manager for employment at Make UK, said:

“The important thing for levelling the playing field is the fair work agency, and making sure that we have an approach to enforcement of labour market policy and regulation that is properly resourced and does have that level playing field.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 54, Q53.]

Jim Bligh, the director of corporate affairs for the Food and Drink Federation, said:

“For me, it is about enforcement and having a really strong, well-resourced enforcement agency.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 55, Q53.]

As always, it is a pleasure to serve under your chairship, Mr Mundell. As is customary, I draw attention to my declarations in the Register of Members’ Financial Interests and my membership of the GMB and Unite trade unions. It is a pleasure to follow my hon. Friend the Member for Worsley and Eccles. I will make two brief complementary points.

First, the establishment of a single enforcement body was one of the core recommendations of the Taylor review. We were told over the last two Parliaments that an employment Bill was coming. Now that it is here, it is welcome that that recommendation is being acted on.

Secondly, in the Australian system of industrial relations, the Fair Work Commission is a long-standing and effective enforcement body that has survived multiple changes of governing party, so there are good international comparators to draw on, as well as the support we heard in the evidence sessions. The resourcing questions that have been raised are valid, and I am sure that those of us who come at this from a trade union background and point of view also take a close interest in the resourcing of the fair work agency. I make those two additional points in support of this measure.

I want to add my support in principle for the idea of a single labour market regulator. I have written about that in the past in different ways and can claim a small amount of credit for the commissioning of the Taylor review into the gig economy when I was working in 10 Downing Street. These issues are very important to me. Hopefully that will reassure the Minister and Labour Members of my cross-party credentials when that might be necessary.

We can all think of ways in which different kinds of labour market exploitation—non-payment of the national minimum wage or living wage; breaches of terms and conditions, health and safety or holiday rights; and illegal working, among many other examples—can be difficult to address if the laws are tough but the enforcement is poor. Those on both sides of the Committee can agree on that.

I want to add to the questions that have already been raised. I think the Minister said that the idea is that no additional powers will be granted and that this is just a consolidation. My understanding is that the fair work agency will not be a single monolithic agency; it is more about different strands of work being brought under a single leadership. If that is the case, presumably the different agencies that exist will do so until this legal change comes into effect. Presumably, the powers of the officers in each of those agencies differ in certain ways. Will that remain the case under the one body, or will there be interoperability and transfer of officers within the different sections under the single regulator? Or is the idea that the officers across those different entities will all assume the maximum powers that exist at the moment so that they can operate across all the different responsibilities of the new agency? I think that would still mean a net increase in powers across those people. What work has been done in the Department to give us an idea of the numbers we are talking about? If the Minister could answer that and then write to us with some more detail and statistics, I would be grateful.

It is pleasing to hear generally broad support for this measure. As my hon. Friend the Member for Birmingham Northfield pointed out, and as the hon. Member for West Suffolk will know better than most, this was previously a Conservative party manifesto commitment, and we are pleased to be able to move it forward.

Some detailed operational questions were asked. At this stage, how the agency will work in practice is still being fleshed out. The current understanding in the impact assessment is that this is about the consolidation of existing resources and having a single point of leadership. Members will recall that, in her evidence to the Committee, Margaret Beels, the Director of Labour Market Enforcement, talked about how her role would be much easier if she were able to combine the powers of different agencies.

The shadow Minister asked whether we will require extra staff. That will be part of discussions with the Treasury. As he will know, there is a spending review on the horizon and Departments have been asked to look at savings. Clearly, we hope that the combining of resources will lead to some efficiencies, but there is certainly a view from a number of stakeholders that enforcement is not at the level it ought to be—

I fully acknowledge and appreciate the Minister’s point about negotiation with the Treasury, but even if we take it as read that it is right to bring powers into a single enforcement agency, there is always a cost to creating anything new, even if it is a consolidation. Surely, the Department for Business and Trade has a cost for that. There is legislation live, in front of us right now, that seeks to create the agency, so surely he must know the broad cost of setting it up and consolidating those powers.

Yes, the impact assessment sets out the one-off set-up costs. I am sure the shadow Minister can spend the lunch break looking at the detail. In terms of the current enforcement framework, as I say, there is a view that more needs to be done. Of course, we will be adding holiday pay and social security to that, and there is a power to add further areas. We know that generally, when resources are combined, we can deliver more—the sum is greater than the parts.

The Liberal Democrat spokesperson, the hon. Member for Torbay, asked about the critical friend. This Government are always ready to have critical friends—more on the “friend” side than the “critical” side. We will come shortly to a clause about an advisory board, which will have a broad range of stakeholders able to take that role.

Does the Minister not agree that for any power held by any Secretary of State in any Department, the critical friend is a very simple concept? It is called Parliament—it is all of us.

Indeed it is, and the usual parliamentary scrutiny will apply, but I was talking specifically about the role of the fair work agency. There will be that role, and no doubt as more detail emerges there will be more parliamentary opportunities to talk about the role and functions of the agency.

My hon. Friends the Members for Worsley and Eccles and for Birmingham Northfield talked about the broad support for the agency’s establishment, as indeed did the hon. Member for West Suffolk. I have a list of all the supportive witnesses at the oral evidence sessions, and it is a broad and impressive cast. It includes the CBI, the British Chambers of Commerce, the British Retail Consortium, the Chartered Institute of Personnel and Development, the Recruitment and Employment Confederation, the Food and Drink Federation, the Co-op, Margaret Beels, and of course all the trade unions. There is support across the board for this single enforcement body.

It is a pleasure to serve under your chairmanship, Mr Mundell. There are a few points about the creation of the agency that I would like the Minister to address. I am broadly supportive of synergies and of the rationalisation of public bodies, particularly to ensure that the taxpayer is getting value for money, but have the Government considered the cost of this new body and whether it will result in savings for the taxpayer? Will they consider locating it outside London so that it is more broadly reflective of the country at large?

As a regional MP—a north-west Member—I am always looking to see where we can get more Government agencies out into the rest of the country. It is probably too early to say, but those kinds of decisions are being looked at.

At the moment, His Majesty’s Revenue and Customs deals with minimum wage enforcement. Moving such a specific task across to another body will take some time, so there may well be a period during which HMRC continues to undertake that work, albeit that it is within the remit of the fair work agency. Such operational details will be discussed and dealt with in due course.

The hon. Member for West Suffolk made a point about the powers of individual officers. Initially, we envisage that officers will move into, effectively, their existing roles. It will be a matter for operational consideration in due course whether it is beneficial to extend people’s remits. It will not be required of anyone without sufficient training and safeguards in place, but as the agency develops, it may well be considered advantageous to broaden the role of enforcement officers. One of the rationales for the body is that there are often several aspects to an employer’s breach of obligations, so we want the fair work agency to be able to tackle these things as a whole. However, that is an operational matter that will be dealt with in due course. I commend the clause to the Committee.

Question put and agreed to.

Clause 72, as amended, accordingly ordered to stand part of the Bill.

Schedule 4

Legislation subject to enforcement under part 5

I beg to move amendment 169, in schedule 4, page 127, line 29, leave out paragraph 3 and insert—

“3 Section 151(1) of the Social Security Contributions and Benefits Act 1992 (employer’s liability to pay statutory sick pay).

3A Regulations under section 153(5)(b) of that Act (requirement to provide statement about entitlement).”

This amendment clarifies the specific obligations relating to the payment of statutory sick pay which will be enforceable under Part 5 of the Bill.

With this it will be convenient to discuss Government amendment 170.

As we have discussed, the current enforcement system for workers’ rights is fragmented. By creating the fair work agency, we intend to bring enforcement into one place. We have been clear that we also want the fair work agency to enforce individual rights to statutory sick pay, because we want to upgrade the enforcement of workers’ rights and stand up for the most vulnerable in our workforce, including those who are unable to work owing to sickness. That is why part 1 of schedule 4 to the Bill, as introduced on 10 October 2024, includes part 11 of the Social Security Contributions and Benefits Act 1992—one of the main pieces of legislation setting out the statutory sick pay regime—in the body of relevant labour market legislation. Government amendment 169 further clarifies the obligations concerning the payment of statutory sick pay under the Act and regulations made under it, which will be enforceable under part 5 of the Bill.

However, there is a wider body of statutory sick pay legislation containing details about the entitlements bestowed on workers and the duties of employers. After further work, we noted that some of those provisions needed to be included under the fair work agency. That led us to amendment 170, which will add the following legislation to part 1 of schedule 4: regulations made under section 5 of the Social Security Administration Act 1992, in so far as they relate to statutory sick pay, which deal with claims for, and payment of, benefits; section 14(3) of the Act, which establishes the duty on employers to provide employees with certain information about their sick pay entitlement; and regulations made under section 130 of the Act, in so far as they relate to statutory sick pay. Those provisions will be considered relevant labour market legislation, which makes them part of the Secretary State’s enforcement function. We will proceed with them once the fair work agency is ready to enforce them effectively. Amendments 169 and 170 are therefore necessary for the fair work agency to deliver its remit on statutory sick pay.

Amendment 169 clarifies the specific obligations relating to the payment of statutory sick pay that are enforceable under part 5. Similarly, amendment 170 will ensure that those additional obligations relating to statutory sick pay that are imposed on employers by the Social Security Administration Act 1992 are enforceable under part 5. This goes back to our old friend, drafting errors being corrected that should really have been sorted out before the Bill was presented to Parliament in the first place.

We will probably have this conversation a number of times. It is probably a little harsh to say that this was an error, but it would be fair to say that, given the complexity of social security legislation, not every provision was identified when the Bill was first introduced.

Amendment 169 agreed to.

Amendment made: 170, in schedule 4, page 127, line 30, at end insert—

“Social Security Administration Act 1992

3B Regulations under section 5 of the Social Security Administration Act 1992 (regulations about claims for and payments of benefit), so far as relating to statutory sick pay.

3C Section 14(3) of that Act (duty of employers to provide certain information to employees in relation to statutory sick pay).

3D Regulations under section 130 of that Act (duties of employers), so far as relating to statutory sick pay.”—(Justin Madders.)

This amendment ensures that additional obligations relating to statutory sick pay that are imposed on employers by the Social Security Administration Act 1992 are enforceable under Part 5 of the Bill.

I beg to move amendment 118, in schedule 4, page 128, leave out lines 11 to 16.

This amendment is consequential on NC20 and removes those regulations from the list of legislation subject to enforcement under Part 5 of the Bill.

With this it will be convenient to discuss the following:

Amendment 119, in schedule 5, page 130, leave out lines 16 and 17.

This amendment is consequential on NC20 and removes an enforcement authority within the meaning of regulation 28 of those Regulations from the list of persons to whom information may be disclosed under Clause 98 of the Bill.

New clause 20—Revocation of the Working Time Regulations 1998—

“(1) The Working Time Regulations 1998 (S.I. 1998/1833) are revoked.

(2) The following regulations are also revoked—

(a) the Merchant Shipping (Working Time: Inland Waterways) Regulations 2003 (S.I 2003/3049);

(b) the Fishing Vessels (Working Time: Sea-fishermen) Regulations 2004 (S.I. 2004/1713);

(c) the Cross-border Railway Services (Working Time) Regulations 2008 (S.I. 2008/1660);

(d) the Merchant Shipping (Maritime Labour Convention) (Hours of Work) Regulations 2018 (S.I. 2018/58).

(3) In consequence of the revocations made by subsection (1) and (2)—

(a) omit the reference to regulation 30 of the Working Time Regulations in Schedule A2 to the Trade Union and Labour Relations (Consolidation) Act 1992 (tribunal jurisdictions to which section 207A applies)

(b) omit section 45A of the Employment Rights Act 1996 (protection from suffering detriment in employment: working time cases);

(c) omit section 101A of the Employment Rights Act 1996 (unfair dismissal: working time cases);

(d) omit section 104(4)(d) of the Employment Rights Act 1996 (assertion of working time rights);

(e) omit section 18(1)(j) of the Employment Tribunals Act 1996 (which refers to regulation 30 of the Working Time Regulations among proceedings to which conciliation is relevant);

(f) omit section 21(1)(h) of the Employment Tribunals Act 1996 (jurisdiction of the Employment Appeals Tribunal in relation to the Working Time Regulations);

(g) omit the reference to regulation 30 of the Working Time Regulations in Schedule 5 to the Employment Act 2002 (tribunal jurisdictions to which section 38 applies);

(h) omit the reference to regulation 28 of the Working Time Regulations in Schedule 1 to the Immigration Act 2006 (person to whom director etc may disclose information);

(i) omit paragraph 141(h) of Schedule 7A to the Government of Wales Act 2006 (specific reserved matters), but this omission does not confer any jurisdiction on the Senedd or Welsh Government.

(4) The power of the Secretary of State to make consequential amendments under section 113(1) must be exercised to make such further consequential amendments as are necessary in consequence of subsections (1) and (2).”

This new clause revokes the Working Time Regulations 1998 together with other Regulations which give effect to the Working Time Directive in UK law, and makes consequential provision.

Amendment 117, in clause 118, page 105, line 20, at end insert—

“(3A) But if the provisions of section [Revocation of the Working Time Regulations 1998] have not been fully brought into force before the end of the period of 12 months beginning with the day on which this Act is passed, that section (so far as not already in force) comes into force at the end of that period.”

This amendment is consequential on NC20 and provides that the revocation must have effect within a year of the passing of this Act.

I rise to speak to amendments 117, 118 and 119 and new clause 20, which stand in my name and in the name of my hon. Friends on the Committee. I make it clear that they are probing amendments; it will become clear over the next couple of minutes why we seek to probe the Government on the issue.

The amendments would repeal the working time directive within one year of the Bill’s coming into force. Our reason for tabling them is not that we intend to abolish entitlement to holidays, lunch breaks and so on—far from it, and nobody is suggesting that. However, the working time directive has had a troubled history. One example is the difficulties that occurred between the Commission and member states when the Court of Justice of the European Union ruled that employers—all of them public health and emergency services—did not calculate time spent on call as working time, when they should have done. The CJEU consistently declared that practice incompatible with the directive, arguing that inactive time spent at the disposal of the employer must be counted in its entirety as working time. Then, in 2019, the Court ruled:

“Member States must require employers to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured.”

The result of that judgment was never formally brought into British law, but as a result of the European Union (Withdrawal) Act 2018, it became part of retained EU law.

Last year, the Conservative Government legislated to clarify that businesses do not have to keep a record of the daily working hours of their workers if they are able to demonstrate compliance without doing so; to amend the WTR so that irregular hours and part-year workers’ annual leave entitlement is pro-rated to the hours that they work; to introduce an accrual method for calculating holiday entitlement for certain workers; to revoke the covid regulations—it seems odd that we are still saying that—and to introduce rolled-up holiday pay for irregular hours and part-year workers. Consultation requirements under the Transfer of Undertakings (Protection of Employment) Regulations 2006 to allow smaller businesses to consult directly with employees would be another measure. That is just the start of how it might be possible to simplify the working time directive. I would be grateful to hear the Minister’s thoughts on how well the working time regulations are working, and on whether any further changes might be made for the benefit of businesses to enable growth in this country.

The working time regulations have had a relatively long history in our legal framework. They provide vital rights: a maximum working week of 48 hours, rest breaks of 20 minutes every six hours, rest periods of 11 hours each day and at least 24 hours each week, and 28 days of annual leave each year. The regulations implement the EU working time directive; the then Government deliberately designed them to provide maximum flexibility for both employers and workers. For example, workers can choose to opt out in writing from the 48-hour week maximum. We believe that the regulations have benefited millions of workers and their families over the years. They afford workers a better balance between work and other responsibilities, as well as improvements in health and wellbeing.

A 2014 review by the previous Government of the impact of the working time regulations on the UK labour market found that since 1998 there had been a decline in long-hours working in the UK and a general trend towards shorter working hours, which is probably not a surprise. The findings also suggested that the impact of the regulations was mainly through increased employment of workers doing shorter working weeks, rather than through a reduction in total hours worked. Annual leave entitlements have increased since the introduction of the working time regulations; many workers now enjoy a more generous leave entitlement than is prescribed by law.

Limitations on working hours and entitlement to a minimum number of days’ holiday can contribute to improvements in health and safety. Most employers accept that a minimum holiday entitlement contributes to physical and psychological wellbeing. Reductions in stress and fatigue caused by excess hours can provide many benefits, including less pressure on health services and better performance at work, with fewer accidents. By establishing minimum standards, the working time regulations also support a level playing field that discourages competition that relies on poor working conditions and a race to the bottom.

New clause 20 would revoke the Merchant Shipping (Maritime Labour Convention) (Hours of Work) Regulations 2018, which provide for adequate rest for seafarers and support the management of onboard fatigue and the wellbeing of seafarers. Revoking the regulations would negatively affect the ability of the Maritime and Coastguard Agency to enforce safe and healthy working conditions for seafarers.

The new clause would also revoke the Fishing Vessels (Working Time: Sea-fishermen) Regulations 2004, which require the UK to implement the International Labour Organisation’s work in fishing convention, which underpins the safe operation of vessels. Fishing is one of the most dangerous sectors in the UK, with 50 injuries per 100,000 workers compared with a UK average of 0.4. We believe that the 2004 regulations are critical to ensuring that workers take the appropriate hours of rest to prevent fatigue-related incidents.

The new clause would also revoke the Merchant Shipping (Working Time: Inland Waterways) Regulations 2003. The Maritime and Coastguard Agency is in the process of conducting a post-implementation review of those regulations. The initial responses to the consultation have indicated a generally positive view from stakeholders.

The new clause would also revoke the Cross-border Railway Services (Working Time) Regulations 2008, which provide enhanced rights and worker protections for those engaged in cross-border rail services, such as train crew for Eurostar services through the channel tunnel. The revocation of the regulations would erode those enhanced protections.

The Government believe that the minimum standards in the Working Time Regulations 1998 and other sector-specific working time regulations have supported millions of workers and their families by enabling them to better balance work and other responsibilities. The Government have no plans to revoke the working time regulations or any of the other sector-specific regulations.

I understand what the shadow Minister says about whether we consider the regulations to be beneficial to businesses, but he will know that there was ample time under his Government to undertake those reviews. Indeed, one was undertaken just over a decade ago, as I said. We have no plans to erode workers’ rights in this area; indeed, one of the fair work agency’s main functions will be to enforce rights to holiday pay, which evidence to the Committee suggests are not being enforced properly.

The shadow Minister says that he has no intention of revoking the working time regulations and that his amendment is probing, but I can only speak to what is before the Committee. If he had tabled an amendment seeking a review of the operation of the working time regulations, that might have been more appropriate in the circumstances. This feels to me like a dog-whistle amendment, so I am pleased to hear that he will not be pressing it.

I am always pleased to delight the Minister in these debates. It was a probing amendment, and I can confirm that we will not be pressing amendments 117 to 119 or new clause 20 to a Division. However, I will briefly comment on the Minister’s response. I entirely respect him for it, but it was a full-throated defence of the status quo.

Something that goes deep within my view of politics, of government and of public administration is there is always room for improvement in pretty much everything. I say that as much about measures passed by previous Conservative Governments as about those passed by current or past Labour Governments. I refuse to accept that something is as good as it possibly can be and is working as well as it possibly can in the interests of businesses and workers alike. There is some disappointment from the official Opposition that the Government do not seem to want to look again.

Does the shadow Minister not accept that his party undertook this exercise, which is why regulations were introduced last year to amend the working time regulations?

I fully and totally accept that, but it is our job as the official Opposition, here and now in January 2025, to press the current Government on further measures that could be taken to work in the interests of everybody in our country—workers and businesses alike. Perhaps I accept the Minister’s point; perhaps we could have tabled an amendment to call for a review. Who knows? Perhaps on Report we might. But the fundamental position that I come back to is one that does not just accept the status quo, but is always challenging, always reviewing and always seeking to make things better in the interests of everyone.

When the Minister goes back to the Department and prepares for the remaining stages of the Bill in the main Chamber and in the other place, may I gently urge him to consider in the round, with the Opposition’s support, whether there are tyres to be kicked and measures to be improved in the operation of the working time directive? May I also urge him to ensure—now that we are a sovereign country once more, having left the European Union—that this Parliament can make improvements should it so wish? I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 85, in schedule 4, page 128, line 13, at end insert—

“( ) regulations 13 to 15E (entitlement to annual leave, etc);”

This amendment would enable the Secretary of State to enforce the entitlements to annual leave conferred by the Working Time Regulations 1998.

Government amendment 85 will add to schedule 4 the additional holiday pay and entitlement regulations: regulations 13, 13A, 14, 15, 15A, 15B, 15C, 15D and 15E of the Working Time Regulations 1998. It will enable the fair work agency to take enforcement action in relation to incorrect payment or non-payment of a worker’s holiday pay and incorrect payment or non-payment in lieu of annual leave entitlement, ensuring that a wider range of complaints can be dealt with more effectively. I commend it to the Committee.

This is another example of a tidying-up exercise that we really should not have to be discussing in Committee. It should have been sorted before the Bill was introduced.

Amendment 85 agreed to.

Question proposed, That the schedule, as amended, be the Fourth schedule to the Bill.

With this it will be convenient to discuss new clause 23—Review of the effectiveness of enforcement of labour market legislation—

“(1) The Secretary of State must establish an independent review providing for—

(a) an assessment of the effectiveness of enforcement of, and compliance with, relevant labour market legislation requirements as specified in Part 1 of Schedule 4 of this Act;

(b) an assessment of the performance and effectiveness of following bodies in enforcing labour market legislation—

(i) Gangmasters and Labour Abuse Authority;

(ii) Employment Agencies Standards Inspectorate;

(iii) His Majesty’s Revenue and Customs; and

(iv) Health and Safety Executive; and

(c) recommendations on strengthening labour market legislation enforcement.

(2) The Secretary of State must lay before Parliament a report of the review in subsection (1) not more than 18 months after the day on which this Act is passed and before a new single labour market enforcement body is established.”

This new clause would require the Secretary of State to establish a review of enforcement of labour market legislation and to report findings to Parliament before a new labour market enforcement body is established.

The UK’s labour market enforcement system is fragmented, as we know. The enforcement of core rights such as the minimum wage, the domestic agency regulations and the gangmaster licensing scheme is split between three different agencies, so workers often do not know where to go when they think they might not have received what they are due. That makes enforcement ineffective.

Clause 72 is a vital building block of the fair work agency. Clause 72(1) will place on the Secretary of State a responsibility to enforce a set list of labour market legislation. It introduces part 1 of schedule 4, which sets out the list of relevant labour market legislation that the Secretary of State will be responsible for enforcing— the national minimum wage, domestic agency regulations, the gangmasters licensing scheme, parts 1 and 2 of the Modern Slavery Act 2015 and the administration of the unpaid employment tribunal award penalty scheme.

Creating the fair work agency is about more than simply moving things around. That is why we have also taken steps to enforce workers’ rights to paid holiday and statutory sick pay. We tabled two sets of amendments to part 1 of schedule 4 to ensure that the fair work agency delivers the policy intent in relation to enforcing holiday pay and statutory sick pay. As we have discussed, our amendment on holiday pay will ensure that the FWA can take action in relation to incorrect payment or non-payment of a worker’s holiday pay and incorrect payment or non-payment in lieu of annual leave entitlement; our amendment on statutory sick pay will ensure that all relevant statutory sick pay provisions that contain entitlements for workers or impose duties on employers are in scope of enforcement.

Part 2 of schedule 4 grants the Secretary of State a delegated power to make affirmative regulations to add new legislation to part 1 of the schedule. The Secretary of State can use the power to bring in scope legislation that relates to the rights of employees and workers, the treatment of employees and workers and requirements on employers, and legislation on trade unions and labour relations. It is a broad power but a necessary one: if we are to deliver the policy intent of genuinely upgrading enforcement, the fair work agency needs to be able to respond to changes in the labour market. We believe that a power to make affirmative regulations, which Parliament will of course have to approve, will ensure proper parliamentary scrutiny for any further changes.

New clause 23 is well intentioned, but it is unnecessary and would be counterproductive. It would impose a lengthy and redundant review process that largely duplicated the statutory duties that are already undertaken by the director of labour market enforcement. She already oversees the enforcement landscape and provides an annual strategy and annual report on the effectiveness of the activities of the bodies that will make up the fair work agency. New clause 23 would do nothing to add to those mechanisms. In fact, it would slow down the creation of the fair work agency.

I turn to clause 75—

We will come to that later.

Okay. I have nothing further to say, except that the shadow Minister’s new clause 23 is a duplication of existing requirements that would add nothing to the process.

I hear what the Minister says about slowing things down, but it would be remiss of me not to comment that if the Government had perhaps taken their time a bit on the drafting of the Bill, we would not be spending so much time in this Committee considering the absolute deluge of Government amendments that tidy things up that should have been right in the first place. Sometimes it is best not to rush things. Sometimes it is better not to dive in head first and just go for the first thing available, but to be cautious, to review and to fully understand all the implications that new legislation such as this will have in the real world.

That is what new clause 23, which stands in my name and those of my hon. Friends, seeks to double-check. It seeks to ensure that the Government are getting this right—not in our interests or those of anyone in the House of Commons, but in the interests of businesses and workers in the real world, trying to get on with their daily lives, get their jobs done and get their businesses growing and providing the growth and prosperity that we all want to see in the country.

As I have said previously, we do not have a problem in principle with the establishment of a new body to oversee the enforcement of labour market legislation. I have made that clear, and hon. Friends who have spoken have made it crystal clear. But we also made a challenge in the previous debate, and that is what new clause 23 is all about. It is about ensuring that we fully understand the scope, cost and effectiveness of this new body.

Any new body, be it a Government body or in the private sector—although the creation of new bodies in the public sector tends to be slower and often cost more than the private sector would manage—will take time and resources, and we would like to be reassured that this is a good use of time and resources. I repeat that our instinct is that it probably is. Our instinct is that it does seem to make sense, but we can never rely on instinct or on that which might look good on paper as the absolute cast-iron test. It is about the real evidence.

We heard from the hon. Gentleman earlier in the main Chamber about sustainable aviation fuel; I wonder whether he might share with us the shadow ministerial equivalent that he seems to have discovered, because we are covering a huge amount of ground. I just say this to him. We did have the Taylor review, which looked at these matters, including the functioning of the individual enforcement agencies, so I am just wondering: does he think that something has changed, in terms of their effectiveness, since then? We have already had an assessment of the nature that he is calling for.

I think we will focus on the latter part of Mr Turner’s remarks.

Yes, Mr Mundell. I am genuinely struggling to find the connection between my questions in transport orals this morning on sustainable aviation fuel and this Bill. I will gladly offer to have a coffee with the hon. Member for Birmingham Northfield to discuss my passionate view on synthetic fuel in the future, but it really is not relevant to this Bill.

I accept the hon. Gentleman’s latter point, about previous reviews, but new clause 23 is specifically looking at the creation of this new body and is about ensuring that that is the right thing to do and that the cost of it will actually bring the benefit that the Minister and other Government Members have explained that they believe it will. It is incumbent on all of us, whether we sit on the Government or Opposition Benches or for the smaller parties, that we challenge everything put in front of us. Any culture in any organisation that does not challenge what is put in front of it is often weaker for it. That is what new clause 23 is seeking to do.

Inherent in that, notwithstanding the Taylor review, is the aim to ask and double-check whether the rationale takes into account how effectively labour market legislation is currently being enforced and understand what research this Government—not former Governments, but this one—have undertaken on what will be done more effectively or efficiently with the creation of this new body. We would like the Government to assess how effectively the labour market legislation that will be enforced by the new body is currently working in that fragmented sense that the Minister spoke about earlier, and how effective the enforcement of it is, before setting up any new quango.

Generally speaking, new quangos fill me with dread and fear, but this one may be worth while. However, we need the evidence. Will the Minister expand on how matters will change for businesses through the new labour market enforcement authority? What will feel different for them and what changes might they need to make as they prepare for it? New clause 23 tries to get to the heart of that.

I know from my surgeries and casework in Torbay that discrimination is sadly alive and well. I ask the Minister to reflect on some of the evidence from the Equality and Human Rights Commission, which talked about the provision leading to fragmentation and the possibility of some of its standard work falling between two stools. What reassurances can the Minister give that the good work will proceed appropriately either through the fair work agency, or in a partnership approach with the Equality and Human Rights Commission?

I want to speak in support of new clause 23 and to ask the Minister whether he is familiar with Parkinson’s law. It states that the number of workers in any public administration will tend to grow over time, regardless of the quantity of work done. The corollary is that work expands to fill the time available for its completion.

Although Conservative Members are in favour of the creation of the fair work agency, there is a risk that, over time, it will seek to have more staff and more power, will consume a great deal more of taxpayers’ money and resources, and will impose more on employers’ time, without great result. That is why a review is necessary. We want to ensure that any new authority is lean and efficient. We also want the Government to take the same approach to regulations.

Unfortunately, the Bill is a hefty document. It will impose £5 billion-worth of costs on employers, which will probably result in fewer people being employed, higher inflation and lower growth. It is therefore perfectly reasonable for the Opposition to ask the Government to reflect after 18 months and ascertain whether they can find anything in this weighty tome that they could do better or more efficiently.

The working time directive is immensely complicated and imposes burdensome record keeping on employers. In the past, it has resulted in retained firefighters in rural areas having to count the time when they sit at home, not doing anything, as working time. It has been a difficult and troublesome measure, and perhaps my party should have done more to simplify it when we were in office, but that is not an excuse for the Government to say, “Because you didn’t do enough, we intend to do nothing.” It is reasonable for us to ask the Government, at the end of 18 months, to take another look and see whether they can do anything to reduce the burden on businesses.

I am beginning to wonder whether the Opposition’s support for the fair work agency is as strong as I thought. They now appear to want to make sure that creating it is the right thing do, despite its featuring regularly in Conservative manifestos and despite the support of the breadth of stakeholders who gave evidence to the Committee. The current Director of Labour Market Enforcement made it clear in her evidence to the Committee that the creation of the fair work agency would make her role much easier and more effective. She spoke about the recommendations in her most recent report:

“The ones that relate to having a better joined-up approach, to greater efficiency and to better sharing of information among bodies are the things that I think the fair work agency will do a lot better.” ––[Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 153, Q159.]

I think that almost half of the recommendations from her most recent report contained an element of that.

For clarity, the question on new clause 23 will be put at a subsequent point in the proceedings.

Question put and agreed to.

Schedule 4, as amended, accordingly agreed to.

Clause 73

Enforcement functions of Secretary of State

Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss clause 74 stand part.

Clause 73 specifies which functions are considered enforcement functions of the Secretary of State for the purposes of part 5 of the Bill. It defines enforcement functions widely and then carves out certain functions that are not enforcement functions.

Clause 73(1) specifies that the enforcement functions of the Secretary of State include the following: any functions granted under part 5 of the Bill; functions in the relevant labour market legislation that they are responsible for enforcing; and any other functions that they perform to support enforcing labour market legislation.

Clause 73(2) goes on to set out exceptions. It lists specific functions that are not enforcement functions for the purposes of part 5 of the Bill. These are generally functions that relate to the arrangements for state enforcement of labour market legislation, and the overall governance of the fair work agency. These overarching governance functions include: appointing officers under clause 72; delegating functions under clause 74; setting up the advisory board under clause 75; publishing the annual reports and enforcement strategies under clauses 76 and 77; providing for transfer schemes to move staff into the Department under part 1 of schedule 7; and powers to make subordinate legislation.

The effect of clause 73 becomes clear when it is read in conjunction with clause 72. First, the enforcement functions that are listed in clause 73(1) can be performed by enforcement officers appointed under clause 72. Under clause 72(4), the powers of an enforcement officer include the power to exercise any enforcement function. Those powers can be limited further by the terms of the appointment of those officers.

Clause 74 gives the Secretary of State flexibility about how they carry out the functions of labour market enforcement. It provides the option to delegate functions to another public authority. Clause 74(1) gives the Secretary of State the power to make arrangements with the public authority so that it can exercise the delegable function. It also enables the Secretary of State to make arrangements to appoint a public authority’s staff as enforcement officers. The Secretary of State can delegate the enforcement functions listed in clause 73(1), all of which have been highlighted already. Those functions relate to arrangements for state enforcement of labour market legislation or the overall governance of the fair work agency. The Secretary State can also delegate powers relating to the licensing of gangmasters under sections 7 or 11 of the Gangmasters (Licensing) Act 2004. The arrangements the Secretary of State makes with public authorities can also include an agreement to make payments in respect of the performance of any function by either the public authority or their staff.

Clause 74(5) means that delegating an enforcement function does not strip the Secretary of State of responsibility or control in enforcing labour market legislation. The Secretary of State can still carry out functions even when they have arranged for another public authority to do that on their behalf.

The Bill is about bringing enforcement and employment legislation into one place in order to make enforcement more effective and efficient by ensuring the better use of resources. It is about creating the right powers to carry out investigations and take enforcement action where necessary. However, it does not set out a specific approach to implementing that more joined-up enforcement, because operational flexibility will be the key to the success of the fair work agency. The clause helps to provide that flexibility by enabling the Secretary of State to delegate certain functions to other public authorities or to make arrangements for staff of other bodies to be appointed as enforcement officers. Both clauses are integral to the effective functioning of the fair work agency in the future.

On the face of it, the clauses are not problematic: they are quite clear, and it is important that those things that are considered as enforcement functions are clearly defined. That is all well and good—until we get to clause 74(5), which states:

“Arrangements under this section do not prevent the Secretary of State from performing a function to which the arrangements relate.”

Therefore, a body with certain powers—admittedly in the Secretary of State’s name—is created; essentially, a quango is put in place, and people are given the clear job of carrying out the enforcement functions in the Bill. However, if the Secretary of State is not prevented from performing one of those functions, what is the mechanism by which they can overrule the quango they themselves set up to perform them? Of course, the ultimate buck must stop with the Secretary of State, but it is a pretty established convention that where a quango is set up and has powers delegated to it—I think of Natural England within the Department for Environment, Food and Rural Affairs and many other quangos—it is very rare for a Secretary of State to intervene, overrule and perhaps come to a different conclusion from that quango.

We will not oppose the clauses, but I would be grateful if the Minister could reflect on the circumstances in which he believes clause 74(5) would come into effect, to make clear the procedures a Secretary of State would need to follow to bring that subsection into effect.

I broadly welcome the proposals in the clauses, and I look forward to the Minister’s explanation of the issues outlined by the shadow Minister.

I hear what the shadow Minister says. He is possibly over-egging the pudding or taking us on a ride on the ghost train in terms of what clause 74(5) means. It simply means that if the Secretary of State delegates powers to another body, they are still the responsible person for the overall operation. This is not about overruling different bodies; it is about where the final responsibility lies. I hope I have put the hon. Gentleman’s mind at rest to some extent.

Question put and agreed to.

Clause 73 accordingly ordered to stand part of the Bill.

Clause 74 ordered to stand part of the Bill.

Clause 75

Advisory Board

Question proposed, That the clause stand part of the Bill.

I know you have been eagerly awaiting this clause, Mr Mundell. It concerns an important part of the fair work agency, and something that the Liberal Democrat spokesperson touched on earlier. The agency has a big job on its hands to restore trust among workers that they will get the rights that they are entitled to and that Parliament has laid down. It also important that the agency is trusted by businesses, and that they know they will be treated fairly and that if they follow the law, they will not be undercut by those who seek to avoid it. That is an important job for the fair work agency and it is important that we get it right. It must reflect the concerns of businesses and workers.

The Low Pay Commission has served the country well since the last Labour Government created it to advise on the national minimum wage. That is because it is a social partnership, comprising equal voices of workers, businesses and independent experts, and can reflect the perspectives of all those bodies when making recommendations. We want the FWA to replicate that success.

The clause requires the Secretary of State to create an advisory board for the fair work agency. Subsection (2) specifies that the board must consist of at least nine members appointed by the Secretary of State. Subsection (3) provides that board members must hold and vacate their position in accordance with the terms and conditions of their appointment. Subsection (4) provides for the advisory board to have a social partnership model, requiring equal representation of businesses, trade unions and independent experts.

We know this is a complex area that is constantly changing, but we believe that the model and approach that has proved so successful with the Low Pay Commission should be replicated here. I therefore commend the clause to the Committee.

I hear what the Minister says in his explanation of the clause. Often, advisory boards are perfectly good and useful bodies, but I return to my earlier point that where a power rests with a Secretary of State, the accountable body to which any Secretary of State must submit themselves is the House of Commons, where they are a Member, or the House of Lords, in the rare case that they sit in the other place. Parliament is the advisory body—the critical friend—that the Secretary of State should submit themselves to.

However, accepting that an advisory board is going to be established, I want to ask the Minister about its make-up. While the Bill seems to be quite clear, there are some gaps, and some unanswered questions that the public, businesses, employees and the trade union movement will no doubt wish to have answered.

Probably the clearest definition in clause 75(4) is that in paragraph (a):

“persons appearing to the Secretary of State to represent the interests of trade unions”.

I think we can all understand that that means representatives of the trade union movement.

There are 10 of them over there.

There is my first question, prompted by my hon. Friend: does that include right hon. and hon. Members of Parliament who themselves are members of trade unions? Could that be the case?

We are less clear on paragraphs (b) and (c). Paragraph (b) states:

“persons appearing to the Secretary of State to represent the interests of employers”.

That is a far less easily defined body of people. On the one hand, I can hear some potentially arguing that that is the representative bodies that gave evidence to the Committee, such as the Confederation of British Industry and the Institute of Directors. That would be a legitimate answer, until somebody came forward and made a compelling case that, as an individual employer, they should be considered to sit on the board.

Will the shadow Minister give way?

I will be delighted to in one second, when I have finished my train of thought.

Can someone be classed as independent if they are an academic or a university professor, perhaps with considerable knowledge of and expertise in employment law and matters relating to the Bill—someone we should all respect—but also a member of a trade union? Does their membership of a trade union count towards whether they are independent? Would that be at odds with paragraph (a)?

I apologise for interrupting the egging of the pudding—we were definitely in the “over” area of the egging. Does the shadow Minister accept that despite what we have heard, and despite the picture that he is trying to create, this model works? It is not novel; we have the Low Pay Commission. It is an established fact. Despite the many layers and convolutions that we see being built in front of us, we are actually considering something quite straightforward here.

I am grateful to the hon. Gentleman for his intervention and for what appears to be his support for the British egg industry. I encourage him to eat as many British eggs as possible and to support our farmers.

Egg-cellent!

We are not going down this route, thank you.

I always bow to your advice, Mr Mundell. I will try to save the Minister the embarrassment of having that recorded in Hansard.

Let me try to return to my point. While I accept that advisory boards of Government Departments often follow this formula, we have a particular definitional problem with this one. The problem is whether, in the example I gave before the intervention of the hon. Member for Worsley and Eccles, the independence of a seemingly independent expert—most reasonable people would say a university academic, professor, doctor or whoever would normally fall into that category—would be influenced if they were a member of a trade union, and whether in that case their membership of the board would be compliant with the provision for an “equal number” of independent experts and those representing the trade union movement on the board.

This is an important problem for the Minister to acknowledge. He must be very clear to the Committee whether the word “independent” in paragraph (c) would disallow anyone who is a member of a trade union from being a member of the board under paragraph (c), for fear of contradicting paragraph (a).

I refer the Committee to my membership of the GMB and Community unions. The shadow Minister is keen for us all to stress our trade union membership, and we do so at the start of every sitting. He makes the point about trade union membership potentially impacting independent experts, but he will be aware that many university professors are funded by private limited companies to support their research, just as some Opposition Members are supported by private limited companies and employers for campaign purposes, none of which is declared in this Committee. Would he not say that might impact those professors’ independence too? Would that not need to be declared to ensure that the numbers are balanced?

I understand the hon. Gentleman’s point. I believe in freedom; I have no problem with any hon. or right hon. Government Member being a member of a trade union. The point here is clarity and transparency. We have a Bill in black and white in front of us that refers to equal numbers but fails to define whether a member of a trade union could sit as an independent expert or would have to be categorised under subsection (4)(a) as representing the interests of trade unions. This is a matter of information on which the Committee and the general public deserve to have clarity before we allow this clause to become part of primary legislation in our country. As in all walks of life, there will be points of debate on that. I want to hear from the Minister’s own mouth whether he deems it to contradict the “equal number” provision. We could dance on the head of a pin all day, but when we are seeking to pass legislation, clarity is very important, and I look to the Minister to give it.

I am concerned about the heavy weather that colleagues on the Opposition Benches are making of this. For me, this measure is about driving a positive culture in employment, and the board’s balance is entirely appropriate. I welcome the clause.

I have a number of concerns about the establishment of the advisory board for the enforcement of labour market rules. I do not believe that such an advisory board is necessary and I am convinced that its creation would represent an expensive and bureaucratic exercise that would be redundant at best and a tool to disguise the Government’s intentions behind a veil of unnecessary consultation at worst. Let me explain why.

Let us first address the central issue: the need for advice. It is not as if there is a shortage of expert opinions on labour market matters; far from it. If the Secretary of State is seeking guidance from trade unions, he need look no further than the extensive and loud representation of trade union interests on the Benches behind him. There seems to be no shortage of trade union representatives in key positions, be it MPs with close ties to the unions or those with—

Does the hon. Member accept that there is a difference between “member of” and “represents” when it comes to trade unions?

Yes, I do. Indeed, “funded by” trade unions is another distinction. The point I am making is that this advice is available for free. There is no need for the Secretary of State to commission a board and pay representatives of trade unions to give him advice. The notion that three members of trade unions are needed on the advisory board seems, to put it bluntly, quite redundant. The Secretary of State can obtain that advice from any number of trade unions, their experts, or any of the MPs that sit on the Government Benches, who will all freely give it. Let us not forget that there are already plenty of independent experts contributing to various public bodies and providing high-level advice to the Government—there is certainly no shortage of them dotted throughout Whitehall.

If the Government require business perspectives, they certainly need not search too far for that advice either. If they wanted to, they could listen to the CBI or, if they preferred, to the Federation of Small Businesses, which provide ample insights and recommendations on policy matters relating to labour and employment. Those bodies represent businesses large and small, and have extensive networks of experts available to advise on any issues regarding the labour market. The problem—I suspect the Federation of Small Businesses would agree—is that the Secretary of State does not listen to them, so what difference would it make if he were to put one of them on a board of nine or 12? Do we need more voices from the same sectors giving advice?

Who might we see the Secretary of State appoint to this board? I am sure Sir Brendan Barber would get a look in, or perhaps Baroness Frances O’Grady. I wonder what Len McCluskey is up to these days—I am sure he has vast experience in employment rights matters.

Mr McCluskey is now a constituent of mine.

Mr Mundell, you are as fortunate as Mr McCluskey.

I am sure that those are just the independent experts that the Secretary of State will be considering appointing to this board. This highlights another crucial point: the Government designation of independent experts is incredibly vague. The Government define “independent expert” as anyone who is neither a trade union representative nor an employer representative. There is no requirement in the Bill for someone to have any particular expertise; they just must not fall into one of those two categories. Nowhere does it say that that expert cannot be a member of a trade union; nowhere does it say that they cannot be a former leader of a trade union; nowhere does it detail what qualifications or experience these experts are expected to bring. Let us not forget that these experts will be paid substantial sums of money—potentially hundreds of pounds per day—and the Government want us to take it on trust that they will be appointing the best people for the job.

As is often the case with such bodies, it is not a risk, but a total certainty that the advisory board will be appointed disproportionately to represent one end of the political spectrum. I suspect the Government will make every effort to ensure that those appointed align with the views they already hold—or, if we have a board of nine, that at least eight of them are firmly in the camp of the Labour party. The most likely outcome in my view is that this board will be packed with individuals whose perspectives on labour markets are perfectly aligned with Government policy and with the trade unions that this Government represent. It might be more straightforward for the Government simply to ask the TUC for instructions on how to go ahead, rather than to go through this cumbersome and expensive process. It would certainly cost the taxpayer less, and I would argue it would be more honest too. The fact is that this board’s purpose seems more to provide a cover for a Government agenda that is already in place than to genuinely provide diverse input. It looks like an expensive way to present the façade of consultation without delivering anything meaningful at all.

If the idea of this surplus of readily available advice was not bad enough, we have not started to talk about the cost of setting up this quango and the board. Having served on two public bodies, I know that advisory bodies are expensive and time-consuming ventures that require significant administrative resources in terms of staff, time and finance. Not only do the members of those bodies need to be compensated—perhaps the Minister will advise us whether they will be paid £300 a day, or £400 or £500 a day—but there is also the cost of setting up the selection process, conducting interviews and managing the day-to-day operation of the body. We are talking about at least nine members being appointed—probably more—which will consume considerable amounts of civil service time and taxpayers’ money. The selection process alone will involve a long list of procedures: advertising positions, longlisting, shortlisting, interviewing, and ultimately appointing the individuals—all, inevitably, to end up with the appointment of the nine people that the Secretary of State wanted to appoint in the first place.

What will this board ultimately do? It will advise the Secretary of State on drafting a strategy. We all know how these things go: the result will be a glossy document full of attractive photographs, distributed widely to people who will never read it, and it will have little or no practical impact on the ground. It will be yet more time and money wasted by this Government. We do not need more reports or strategies; we do not need an advisory board. Labour market rules are already there and they need to be enforced. The person responsible politically is the Secretary of State. He should take responsibility for the political decisions he makes in enforcing those laws, and not hide behind an advisory body.

Ordered, That the debate be now adjourned.—(Anna McMorrin.)

I have a few preliminary announcements to make. Members should send their speaking notes by email to hansardnotes@parliament.uk. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings. Today, we will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication. In view of the time available, I hope we can take those matters formally and without debate. I call the Minister to move the programme motion standing in her name, which was discussed yesterday by the Programming Sub-Committee for the Bill.

Ordered,

That—

1. the Committee shall (in addition to its first meeting at 11.30 am on Thursday 9 January) meet—

(a) at 2.00 pm on Thursday 9 January;

(b) at 9.25 am and 2.00 pm on Tuesday 14 January;

(c) at 11.30 am and 2.00 pm on Thursday 16 January;

2. the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 16 January. —(Emma Hardy.)

Resolved,

That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Emma Hardy.)

We shall now begin line-by-line consideration of the Bill. The selection and grouping list for today’s sittings is available in the room. It shows how the clauses and selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or similar issue. Please note that decisions on amendments do not take place in the order in which they are debated, but in the order in which they appear on the amendment paper. The selection and grouping list show the order of debates. The decision on each amendment, and on whether each clause should stand part of the Bill, is taken when we come to the relevant clause.

A Member who has put their name to the leading amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments within that group. A Member may speak more than once in a single debate. At the end of a debate on a group of amendments, I shall call the Member who moved the leading amendment again. Before they sit down, they will need to indicate if they wish to withdraw the amendment or seek a decision. If any Member wishes to press any other amendment in a group to a vote, they will need to let me know in advance. I am sure that is clear to everyone.

Clause 1

Rules about remuneration and governance

I beg to move amendment 22, in clause 1, page 1, line 11, at end insert—

“(1A) The Authority must use its power under subsection (1) to issue rules which require—

(a) the interests of customers, and

(b) the environment,

to be listed as primary objectives in a relevant undertaker’s Articles of Association.”

With this it will be convenient to discuss the following:

Amendment 18, in clause 1, page 2, line 3, at end insert—

“(ca) requiring the management board of a relevant undertaker to include at least one representative of each of the following—

(i) groups for the benefit and interests of consumers;

(ii) groups for the benefit and interests of residents of the areas in which the undertaker is operational;

(iii) experts in water and sewerage policy and management; and

(iv) environmental interest groups.”

Government amendment 1.

Amendment 19, in clause 1, page 2, line 8, at end insert—

“(e) preventing a relevant undertaker from employing any individual who has been employed by the Authority in the preceding three years.”

Government amendment 2.

Amendment 21, in clause 1, page 4, line 35, leave out from “force” to the end of line 40.

Clause stand part.

Happy new year to all colleagues. It is good to be in this place and it is a great pleasure to serve under your guidance as Chair, Mr Vickers. I put on the record my thanks to the Minister for her engagement, and to the Committee Clerks and the Minister’s team for being immensely constructive throughout this process.

My hon. Friend the Member for Witney will speak to amendment 22, and I will make remarks on amendment 18, which, with your permission, Mr Vickers, I will press to a vote if the Government are not minded to accept it. I will also voice my concerns about amendment 2 and I give notice that we will vote against it.

Among the challenges that we face is the complete and utterly justified lack of trust in the water sector—water companies in particular, but also the regulatory framework. Amendment 18 was tabled to ensure that some of the people appointed to the boards of water companies, whatever their structure otherwise, have a connection to the benefit and interests of the consumers within the region; will benefit the residents within the areas in which the undertaker—the water company—is operational; and are experts and campaigners on environmental and sewage policy matters.

I am sure that Members on both sides of the House have people in their communities equivalent to the ones I will briefly mention. People from groups such as the Clean River Kent campaign, the Eden Rivers Trust, the South Cumbria Rivers Trust and the Save Windermere campaign, in addition to citizen scientists and others who represent local interests and have great expertise, ought to be on the boards of the outfits that run our waterways in future, and that should be in the Bill.

The amendment would bring the expertise and accountability that we are seriously lacking, and it would build trust, which our water companies are also lacking. We think that the case for it is self-evident, because those bodies and others around the country self-evidently have the expertise, authority and tenacity to add huge value and to ensure that our water companies deliver for the communities they are meant to serve, not just their shareholders.

Government amendment 1 seeks to undo an amendment added by my hon. Friends in the other place. Our concern is that if the Government insist on it and we do not have a much tighter timescale, that will basically undermine the regulation and leave it open-ended so that we cannot be certain that we would be able to enforce the things that the Bill seeks to do in a timely fashion. To ensure that the Bill does what it is supposed to do, we should not cut the water companies any slack.

I rise to explain amendment 22. On 11 July, the Environment Secretary issued a press release on the reform of the water industry that stated:

“Water companies will place customers and the environment at the heart of their objectives. Companies have agreed to change their ‘Articles of Association’—the rules governing each company—to make the interests of customers and the environment a primary objective.”

However, that commitment is not currently in the Bill. The amendment simply seeks to bring that commitment into this legislation.

It is a great privilege to serve under your chairmanship, Mr Vickers.

On behalf of His Majesty’s Opposition, I rise to challenge the Government on their plans in Government amendments 1 and 2. Before I go into the detail, I will make some general comments about the clause that are pertinent to the amendments.

The Opposition worry that the Bill, rather than taking original and new measures to tackle these issues, is purely an attempt to copy and paste the work done by our previous Conservative Government. In fact, many of the measures have already been copied from previous measures that we introduced in government.

In the Environment, Food and Rural Affairs Committee, we took evidence from the chief executive of Ofwat, who was clear that the bonus that the boss of Southern Water, Lawrence Gosden, received this year would not have been paid had the previous Conservative Government brought the measures in this Bill before the House. The Conservatives had 14 years to change the rules, but they failed to do so.

With the greatest respect, I sat on the Environment, Food and Rural Affairs Committee in the previous Parliament, and we took evidence from the chief executive of Ofwat on some of the key measures that the Conservative Government brought forward. Our Government gave Ofwat teeth and powers, and we need to make sure it uses them.

As detailed in the explanatory notes, Ofwat already has wide powers to set the conditions of water company appointments and licences. The Conservatives worked hard to strengthen its ability and power to do that since this issue came to the fore in order to drive the regulatory change that was vitally needed to tackle the scale of the crisis that came to light.

I again remind Members on both sides of the House that when Labour left office in 2010, only 7% of storm overflows were monitored; when we Conservatives left office, 100% of outflows were monitored. We found the scale of the sewage problem and were the first party to start to address it. The Conservative Government’s Environment Act 2021 gave Ofwat the power to consider, when deliberating about dividends, the environmental performance of a company and its credit rating, whereby Ofwat could stop the paying of dividends if it felt that the firm faced financial risks as a result of its actions.

The hon. Gentleman said that 100% of outflows are monitored, but I am afraid that is not correct. In fact, 100% of the 14,000 storm outflows are monitored—he did not mention storm—but 7,000 emergency overflows are not currently monitored. On the other aspect that he just mentioned, Ofwat was entirely devoid of looking at the balance sheets of the companies under the Conservatives’ watch. That is the root of all our trouble, and it would be beneficial to acknowledge that.

If the hon. Gentleman checks Hansard, he will see that in my speech on Second Reading and just now I said “storm overflows”. I gently remind the third-party spokesman that in the coalition Government the Liberal Democrats had a Water Minister who did absolutely nothing on this issue.

Will the hon. Gentleman give way?

Will the hon. Gentleman give way?

I will make some progress, if I may.

The hon. Gentleman has just referred to me—

I was referring to the hon. Gentleman’s colleague.

It is therefore worrying that although the previous Administration went to great lengths to ensure that water companies were financially resilient, this Government are doing quite the opposite with Government amendment 1. That amendment, which will leave out lines 4 to 8 of clause 1, would amend the requirement for rules made by Ofwat under the clause to specifically include rules on financial reporting. That could not more clearly delineate the Conservative approach that the Labour party so derided—it promised the British people that it would do things differently—from the actual approach that Labour has taken in power.

Government amendment 1 undermines not only the hard efforts of the previous Conservative Government in taking the issue seriously, but the efforts of the cross-party consensus that secured the commitment to having financial reporting rules made by Ofwat in the Bill. That cross-party coalition, which included my Conservative colleagues in the other place, forced the Government to ensure that the original commitment would be in place in the Bill. Labour voted against the commitment and is simply seeking to overturn a clear cross-party consensus for Ofwat to be given powers to set rules on financial reporting.

Ensuring that Ofwat can view a water company’s financial structuring will help it to scrutinise and have an understanding of how the company is operating. It will also ensure that the consumers who have been let down by the water industry for far too long are protected. With close financial monitoring, water companies will face the necessary scrutiny to reduce the risk that ordinary consumers are left without a supplier. Financial mismanagement poses great risks, so every sinew must be strained to prevent it; financial reporting is key to ensuring that that takes place. The financial resilience of the water companies is not a hypothetical issue, but a paramount concern right now.

As recently as November, Ofwat’s monitoring financial responsibility report identified 10 companies that needed an increased level of monitoring and/or engagement concerning financial resilience. Seven of those companies were placed in the elevated concern category, meaning that some concerns or potential concerns with their financial resilience have been identified. Three companies were placed in the highest category of action required, meaning that action must be taken or is being taken to strengthen the company’s challenges with financial resilience, and therefore they need to publish additional information and report on improvements at a more senior level with Ofwat.

Does the hon. Gentleman agree that his Government had 14 years to reform Ofwat, during which time they did absolutely nothing?

I respectfully disagree with the hon. Member. We passed the Environment Act 2021, we gave Ofwat and the Environment Agency more teeth and, as I have said, we were the first party to start measuring and collecting the data that meant we could act on this issue. Moving forward, we are trying to ensure that Ofwat and the Environment Agency use the teeth given to them by the previous Conservative Government to make our waters better. To suggest with Government amendment 1 that Ofwat should not be concerned with financial resilience rules quite simply sends the wrong message to the public, so I urge the Government to reconsider. The Opposition will seek to push Government amendment 1 to a vote.

It is a pleasure to serve under your chairship, Mr Vickers. I take the opportunity to welcome the measures in the Bill, particularly those in clause 1, and to thank the Minister for her really swift work. We know all too well the damage that has been done by water companies and agricultural pollution across the UK. That damage has only been exacerbated by years of Conservative failure, allowing for record levels of illegal sewage dumping in our rivers, lakes and seas.

In my constituency of Monmouthshire, we have the majestic rivers the Wye, the Usk and the Monnow. Armies of citizen scientists, co-ordinated by the wonderful Save the River Usk group in Usk with Angela Jones, have been monitoring the river over the past few years. Sadly, it is getting worse and worse. The levels of phosphate pollution in the River Usk are the worst in all the nine Welsh rivers that are special areas of conservation—SACs.

This Labour Government have only been in office for six months, yet we are already taking more action to tackle the scourge of sewage than the Conservative party did—indeed, more than the Conservative party and the Liberal Democrat party did—when they were in government. Instead of obfuscation and delay, we are getting serious action to end the disgraceful behaviour that we have been discussing. That is especially evident in clause 1, which seeks to ban bonuses for water bosses unless high standards of protecting the environment are met. Water bosses must also involve consumers in decision making. In addition, the clause ensures that failing water bosses will no longer be able to be water bosses. This action is essential if we are to hold water company bosses to account and ensure that they act in the best interests of the public and the environment, rather than in the interests of their own pockets.

I am pleased that in Wales we have the not-for-profit water company Dŵr Cymru. Sadly, however, that status has not stopped the company from leaking sewage. In 2023, we had 2,383 sewage dumping incidents in Monmouthshire, which is 2,383 too many. In 2022, chief executive Peter Perry took home £332,000 and a further £232,000 in bonuses, while in the latest financial year Ofwat had to step in and stop the company from paying out £163,000 of bonuses from customers’ money.

I am sure that I am not alone in recognising the injustice of such bosses’ being paid hundreds of thousands of pounds in bonuses while polluting our environment. It is clear to me that significant Government action and regulation is needed, and the clause delivers it. It finally ensures that the polluter pays. I support it wholeheartedly.

I am pleased to see you in your place, Mr Vickers.

I am not going to speak to the Government amendments; I merely repeat the very good arguments put forward by my hon. Friend the Member for Epping Forest. At this stage, however, I will just express a couple of concerns that I have about amendment 18, tabled by the Liberal Democrats.

I understand the rationale or the intention behind amendment 18; we all want the water companies to pay closer attention to the interests of their consumers. I note in passing that they already have a statutory duty—a consumer-focused statutory duty—but the actions taken by the Conservative Government over the past 14 years to ask questions about the state of sewage discharges and to get information about them, so as to take effective action to bring them to an end, bring with them an additional need.

The hon. Member for Westmorland and Lonsdale highlighted a loss of trust in the water undertakers, and I agree with him on that. There has been a significant loss of trust as their poor behaviour, which was uncovered by the Conservative Administration, has been met with considerable outrage—justifiable outrage—by the Government and by members of the public.

However, I fear that there will be some significant unintended consequences associated with the drafting of amendment 18, relating to the legal obligations of a board member. The hon. Member for Westmorland and Lonsdale referred to those new positions being on the boards of companies. There are legal obligations that apply to all board members and I question whether the representatives of consumers and of the voluntary organisations that have been so active in this area over the past few years would really want to be exposed to the legal obligations of being a member of the board of a plc, because those obligations are significant and onerous.

It is fairly standard on boards today to have directors and officers insurance; indeed, all board members have it. What is the problem with the new people also having D&O insurance?

I am grateful for that intervention. However, it seems an odd way to proceed if it is recognised that there is a risk to voluntary members who join boards, exposing them to personal obligations, such as a fiduciary duty of care. There is also a legal duty of loyalty to the organisation, which such volunteers might find quite difficult to stomach. There is a duty of obedience to the organisation as well. It seems odd at this drafting stage to say, “We recognise that there is a risk, but don’t worry: you can take out insurance and you’ll probably be okay.” It seems odd to introduce an amendment in an imperfect form, rather than perfecting it.

First, it is up to each individual to sign up or not; they do so of their own free will. Secondly, this is standard insurance which almost all boards have in the UK and internationally nowadays, which protects board members. It would not be specifically for those board members; it would be for all board members. To say that that is a concern, and that we should not make this provision on those grounds, seems odd.

I have expressed my concerns. It would be perfectly possible to achieve the object, which I share, of improving the voice of the customer in water companies, or of improving the implementation of the existing obligation on water companies to take account of the consumer interest. I do not think that the current drafting is the best that we can do. I raise these concerns so that they may be properly considered.

I thank the Minister for all her work in introducing this Bill so quickly in the new Parliament. It is a Bill that my constituents in Hastings and Rye desperately need. As I have said many times in this House, our constituency of Hastings, Rye and the villages has suffered hugely at the hands of Southern Water. Litres of raw sewage has been pumped into the sea. Our town centre has been flooded twice, leaving homes and businesses under sewage water, and our taps have run dry twice in less than a year. We in Hastings and Rye felt the impact of 14 years of Conservative failure to crack down on water companies’ bad behaviour.

I agree with many of the hon. Lady’s points. Many of our constituents are feeling the same effects, but does she not agree that the reason why the Bill has been introduced so quickly in this Parliament with so few new ideas in it is that most of the work was done by the previous Government?

I think Opposition Members are slightly confused about the record of the Government of the past 14 years, of which both the Liberal Democrats and the Conservatives were a part at different points. My constituents in Hastings, Rye and the villages would find the hon. Gentleman’s assertion that the last Government fixed the crisis in our water companies very bizarre indeed. I draw his attention to the powers that this Government are introducing to ban bosses’ bonuses when they fail our constituents. The last Government left thousands of outlets unmonitored, and when there were monitors, they were reporting to the water companies themselves. What this Government are doing differently is not allowing the water companies to mark their own homework; we are saying that monitors should report directly to Government, not the water companies.

The hon. Lady says that it was the last Government who allowed the water companies—the undertakers—to mark their own homework. Does she not recall that it was actually the Labour Government in 2008 who specifically changed the rules to allow water companies to do just that in relation to their environmental performance?

I am yet to hear an apology from the Conservatives for their failure to put monitors on any outlet in my constituency, their failure to make those monitors report to Government at all, and their failure to address the severity of the sewage scandal that has caused so much disruption for my constituents, for local businesses and for so many people up and down this country.

I pay tribute to campaigners in so many of our constituencies. Many are in the Public Gallery and they have done so much work exposing this scandal for what it is. We would not be discussing the scale of this scandal were it not for their hard work. In my constituency, Clean Water Action Group campaigners go out regularly of their own accord and out of their own pockets to test the water to expose what Southern Water is doing in our community. I pay tribute to them.

What we are discussing today is a measure to ban bosses’ bonuses, because it is so important that we do not see what we have seen over the last 14 years of Conservative Government—the continued failure to prevent Southern Water from rewarding bosses with bonuses. Laurence Gosden, the chief executive of Southern Water, received a bonus last year when we had seen repeated failure in Hastings and Rye under Southern Water’s watch. As I said earlier, the chief executive of Ofwat confirmed to the Select Committee that had the measures in the Bill been put in place last year by the Conservative Government, the bonus would not have been paid. Laurence Gosden only received that bonus because of the failure of the Conservatives to act when they had 14 years to do so.

Will the hon. Member give way?

I will make some progress, because I know that we need to make progress in the debate.

In conclusion, I thank the Minister for her work on bringing the Bill before the House so quickly. I know that this is just the start of the change that we need to deliver on our water companies. This Government are acting where the previous Conservative and coalition Governments failed, and are working to clean up our water system.

I have a question for you, Mr Vickers. This is my first Bill Committee and I am trying to understand how everything works. There are six amendments to clause 1, and our task is to do line-by-line scrutiny. My ambition is to understand why the Government support or reject each of those amendments. At the moment, in our debate of clause 1, we are swimming quite happily between those amendments. I would love your advice, Mr Vickers, as to how we work to understand what the story is on each amendment in turn, because I am not clear on that.

There will be an opportunity to force any amendment to a Division, if the hon. Member wishes. We are attempting line-by-line scrutiny—I think it is more like a debate on Second Reading, but that is by the way. Does that answer your question? The Minister will respond.

Perhaps, since I am standing, I will make the other two points I want to make.

We have touched on Government amendment 2 already, but I think it is important. I was very pleased to see the wording coming in about bonuses. Proposed new section 35B(3) of the Water Industry Act 1991 says:

“Rules made for the purposes of imposing the prohibition mentioned in subsection (2)(a) (“the pay prohibition”)”.

That is the ban on bonuses. While the explanatory statement says that it is to prevent the need for a statutory instrument—which the Liberal Democrats support and seek to do in further amendments—the impact of the Government’s change is also to remove the requirement for the rules to be published by Ofwat within six months. That we find very odd.

I take it in good faith that the Government are keen to have the measures implemented, so we do not understand why they would take the timeline out. The Government want to ensure that it happens, but as currently stated, they are removing the timeline. Taking it on good faith that Ofwat will publish the rules is less strong than keeping in that commitment to six months.

I will correct the hon. Member for Epping Forest on our amendment 21. Our amendment relates to the same aspect of the Bill as Government amendment 2. However, we want to retain the need for Ofwat to publish the rules on bonuses within six months but remove the option for that to be kicked into the long grass by requiring the Secretary of State to lay a statutory instrument to bring them into effect. By taking out that provision, we remove that risk. That is the purpose.

As a new Member, it is a privilege to serve on a Bill Committee under your chairmanship, Mr Vickers—I hope I will get all of it right. I felt particularly moved to speak on these amendments and clause 1, given some of the earlier comments. I was a bit worried that we had been transported by the Opposition back to a previous Conservative age, because we seem to be being told that water customers have never had it so good—as one of their predecessors said—because of all the action that was taken.

There has been a lot of talk about teeth. I ask the Minister to confirm that the Bill is about the dentistry that is needed to put more teeth into the water sector. When she responds, will she identify whether the clauses that the Government have tabled help to address some of the very real anger that my constituents feel about the way they have been ghosted and treated by the big water companies and the behaviour of some of the senior leadership? Representing a seat with Anglian Water, which I think applies to some other Members present, I place it on the record that there is real frustration at the performance and actions of such a large company when at the same time as more than 3,000 hours of sewage were being dumped into rivers around my area, the fens and John Clare county, we saw the Anglian Water chief executive receiving £1.3 million in a package of pay and bonuses, despite that poor performance. The anger and the desire and drive of this Government, but also the public, to see action is palpable, so I very much welcome the Bill and I seek clarity on that. It is absolutely right, as the Government have outlined, that we have a fast Bill to get these teeth and this emergency dental treatment delivered quickly, so that we can come back and put the braces on for the rest of the water sector—[Laughter.] I think I am running out of places where that analogy can go; it is getting very dangerous.

When we get the Cunliffe report and others, we will look at some of the bigger issues for the water sector, but I am very concerned by that £1.3 million. I serve as a member of the Environment, Food and Rural Affairs Committee and I share the concerns expressed by my hon. Friend the Member for Hastings and Rye that when we directly asked Ofwat whether it had the dental tools to challenge and put the surgery on to the water companies, Ofwat was very clear that it did not. I specifically asked the chief executive and leadership of Ofwat about another bête noire of the debate, which is Thames Water. Up until March 2024, in those three months, the chief executive gave themself a £195,000 bonus. Since 2020, we have seen £41 million given to water company chief executives in bonuses and incentives, so can the Minister reassure this Committee that the clauses that the Government have put forward will help to restore trust and put in place initial measures so that we can get on with this, end the delay, take action and start to put right the problems that the Government have inherited, and then look at the wider issues when we get the report later in the year?

I will just have a quick canter through three things that I should have talked about earlier. My apologies, Mr Vickers, and thank you for your indulgence. I will speak to amendments 21 and 19 and new clause 26 briefly.

I reiterate the comments by my hon. Friend the Member for Witney about amendment 21. I have great respect for the hon. Member for Epping Forest, but I think he has misunderstood. As my hon. Friend said, our amendment seeks to ensure that we do not run the risk of kicking into the long grass the taking of action against bonuses by sticking that provision anywhere other than in the Bill. We were not planning to divide on it, but we will be happy to be the ones voting in favour of immediate action rather than kicking it into the long grass, if that is what he wishes to do.

I do not want to bore anybody about the coalition, but it has been mentioned—give me 20 seconds on it, Mr Vickers. The privatisation of the water industry was where all this went wrong. All the parties that have been in government in the 35 years since then share some responsibility. Just for the record, it is worth stating that DEFRA had no Liberal Democrat Minister in it at all for the majority of the coalition period. For 18 months, my great friend Dan Rogerson served in that position. That was the time during the coalition, by the way, in which we undid some of the foolish capital costs that were made at the beginning of the coalition. It is the opposite of the truth to say that we did nothing; we actually did the only thing that did happen during that time. It is also worth bearing in mind—people might remember—that we were in the EU then and properly regulated, and things were different. That is the end of that defence.

Will the hon. Gentleman give way?

Oh, go on.

His recollection is perhaps different from many people and the public at large regarding the Liberal Democrat record on water. His party seemed to jump on this bandwagon once the Conservatives were the party that actually started measuring the scale of the problem.

Returning to amendment 21, the hon. Gentleman has the word “Democrat” in the name of his party. I do not know why they are so scared of having democratic and ministerial accountability by having a very simple clause in the Bill that would provide for a statutory instrument being laid so that the Secretary of State for DEFRA would have some accountability for that. I take on board the point about the first part of paragraph 5 in terms of the first six months of the Bill, but with the amendment would remove two thirds of that clause, which was put in with cross-party consensus in the other place. I am surprised that they are scared of democratic accountability.

Well, that is bizarre. With total respect for the hon. Gentleman, he completely misunderstands. We are seeking to put this on the face of the Bill and not kick it off to a statutory instrument. That seems the opposite of anti-democratic—or, indeed, democratic.

Let us move on to the other issues I would like to briefly mention. New clause 26, which is in this group—

Order. We have agreed to discuss new clause 26 separately.

In that case, I will speak to amendment 19, which is about revolving doors. Amendment 19 seeks to prevent a revolving door between water companies and the regulator. In July 2023, the chief executive of Ofwat stepped down to very swiftly pick up the role of interim chief executive of Thames Water. An analysis by The Observer in 2023 found 27 former Ofwat directors, managers and consultants working in the industry they helped to regulate until shortly beforehand, with about half of them in very senior posts.

Some work that the Liberal Democrats did in the last 18 months found that the director for regulatory strategy at the country’s largest water firm, Thames Water, was previously an Ofwat employee. Meanwhile, a senior principal at Ofwat moved directly from Thames Water, where they worked on market development. We also found links between Ofwat and Southern Water, Northumbrian Water and South West Water, including directors who work on regulation. The amendment tries to prevent that revolving door, which clearly brings in a potential conflict of interest. It also builds the quite justified absence of trust. I can feel an intervention brewing—go for it.

I am not against the principle of this—in fact, I am strongly in favour of it—but I have some practical questions. I wonder whether this would bump up against individuals’ human rights and restraint of trade arguments in the courts. I must confess that I was previously a barrister. That was a long time ago, so I have dangerously little knowledge now, but it was certainly the case that the courts would habitually not enforce a restraint of trade clause on a contractual basis that was in excess of 12 months. I know that this would be legislation, but to have such a wide-ranging blanket prohibition for such a long period against all employees, irrespective of the role they undertook and the role that they might in future undertake with a water company, might be challenged successfully under human rights legislation. I wonder whether the hon. Gentleman has considered that in his drafting.

I remind Members that interventions should be short—much shorter than the last two. I have been very generous.

I appreciate that, Mr Vickers. I am very grateful for the helpful and constructive intervention the hon. Gentleman just made. Look, this is not an amendment we are seeking to press to a vote, but it is an issue that is clearly very serious in terms of the quality and safety of regulation. We are perfectly happy for the Government to use all the legal might they have available to find a way of amending the Bill on Report to deal with the issue in a way that builds confidence and prevents obvious conflicts of interest.

It is a pleasure to serve under your chairmanship, Mr Vickers. This is an important topic and Committee, but before I talk about that, I wish gently to remind the hon. Member for Epping Forest that the Conservative party was in power for 14 years. I know the general election defeat was historic—quite enormous—but I do not think the bump to the head should have caused such an enormous loss of memory about what was achieved, or not achieved, over the past 14 years. Residents of Bournemouth East are incandescent about the state of water infrastructure and the sewage that they are enduring as a seaside town. It is no surprise that as a consequence, when I was campaigning in the general election and knocking on doors since, people raised this hot topic with me.

As a fellow Member from a coastal town, I echo my hon. Friend’s point about the anger and frustration on the doors from residents in Weston-super-Mare. Over the past decade the quality of water on the three main beaches has got worse and worse, and the bathing water at all three is now classified as poor. The anxiety among every sector of the community is really high, and political point scoring aside, the situation is dire. This week raw sewage was spilled on Uphill beach because of the crumbling infrastructure. I urge the Government—I am pleased we have grasped the nettle—to take on the big challenges.

I thank my hon. Friend for his important intervention. It is great to see him championing his constituency, and it goes to show why Labour won in so many seaside and coastal towns. The people of those towns and cities trusted Labour to bring forward a Bill such as this as quickly as we have done, and this is just the start of change. As we have heard, more legislation will come forward, but so that we do not delay and wait for the full package, the Minister is bringing forward this action rapidly to respond to the urgent case that is being made on doorsteps all around our country, particularly in our seaside towns.

I have constituents who are livid about the fact that while infrastructure has crumbled, no investment has gone in, and money has gone out the door in bonuses and shareholder payment dividends, bills are rising. That is not just water bills—bills on a whole host of things contribute to the significant cost of living crisis that so many in our country have felt. I welcome the efforts of this Government, and I congratulate the Minister on all the hard work that she and her officials have been undertaking. I very much look forward to seeing further development of our programme of investment.

It is a pleasure to serve under your chairmanship, Mr Vickers, and if I may I will start by wishing everyone a happy new year. I thank members of the Committee for the engagement with the Bill they have shown, and I also thank all the environmental groups, everyone who submitted evidence, and Members in the other place for the work they did on the Bill.

I am pleased to be back debating this vital piece of legislation. As I set out on Second Reading, the Bill will drive meaningful improvements in the performance and culture of the water industry as part of wider efforts to ensure that water companies deliver for both customers and the environment and, as has been mentioned in the debate so far, act on the real anger and mistrust we feel towards our water sector at the moment.

However, the Bill is one part of the Government’s ambitious and long-term approach to fundamentally transforming the water sector. As Members will be aware, in October 2024 the Government announced an independent commission, which will be the largest review of the water sector since privatisation. The commission has a broad scope and will consult experts in areas such as the environment, public health, engineering and economics, as well as customers and investors. It will look closely at financial resilience as one of its key areas—I know we all care about that.

I reassure members of the Committee on the timeline; the commission will report to the Government by quarter 2 of 2025. The UK Government and the Welsh Government will then respond and consult on proposals that they intend to take forward, and we expect those to form the basis of future legislation.

Does that mean the beginning or the end of Q2?

We expect the commission to report to the Government in June. I reassure the hon. Member that when I respond at the end of every session, I will go through each and every amendment in turn.

I turn to Government amendments 1 and 2 to clause 1. The Government have carefully considered all non-Government amendments made in the other place and how they fit within the wider plans for reform of the water sector, including the amendments tabled by Lord Roborough and Lord Cromwell. I thank them, and indeed the other place, for their careful consideration of the Bill, particularly for the constructive way in which they worked with the Government during the Bill’s passage through the Lords. That collaborative approach enabled the Bill to be strengthened, for example, through the introduction of new requirements relating to the implementation of measures in pollution incident reduction plans. However, the Government have determined that the amendments from Lord Roborough and Lord Cromwell are not necessary and should be removed from the Bill.

Government amendment 1 concerns financial reporting. During the Bill’s passage through the other place, it was amended in such a way that required rules made by Ofwat under clause 1 to include reporting requirements on company finances. The Government strongly agree with the need to ensure water company finances are closely monitored, especially given the current financial issues experienced by some companies. However, having considered the Lords amendment in detail and having had further discussions with Lord Cromwell about the intent behind his amendment, we feel that it is duplicative of existing processes as well as conditions in water company licences.

Ofwat already has processes in place to monitor where a company may be heading towards financial difficulties. It is already a condition of water company licences that companies are required in their annual report to publish by a set date financial performance metrics, including interest on their borrowing, financial flows and analysis of their debt. Based on those reports, Ofwat sets out its observations on financial resilience across the sector in its “Monitoring financial resilience” report. Ofwat is also alive to the potential for financial engineering to occur outside of regulated companies and is thoroughly monitoring the financial position of all water companies. The Lords amendment would therefore duplicate existing requirements, with the potential to create confusion in what is already a complex regulatory landscape. This is important: we also retain concern about the potential for the Lords amendment to pre-empt forthcoming reforms following the independent commission led by Sir Jon Cunliffe. On that basis, the Government have tabled Government amendment 1 to remove Lord Cromwell’s amendment from the Bill.

During the debate, we have heard a lot of words from the Opposition parties, but we had very little action during their 14 years in Government. We on the Government Benches have raised clear examples pointed out by Ofwat where it has not had the necessary tools to ban bonuses when it wanted to do so with Southern Water. While we are on that topic, I express my surprise that the hon. Member for Waveney Valley has not turned up to this sitting of the Committee.

I have to say that it is slightly disappointing that we do not have a full contingent for such an important Bill Committee, which matters so much to people up and down the country. There could be personal reasons, so let us reserve judgment, but it is a little surprising to me too.

The Minister said that she worries that the amendment from Lord Cromwell would duplicate things. Actually, it is quite a simple amendment that achieved a lot of cross-party support in the other place. If it duplicates things, a bit of repetition is not a bad thing to ensure annual financial reporting by water companies. It would not create confusion: repeating this important matter on the face of the Bill would just create clarity, so we urge the Government to reconsider.

Just for the record, I am advised by the Clerk that Adrian Ramsay has sent his apologies, as he is ill.

I am pleased that we have that on the record. This is an important Bill, and I encourage everyone to attend.

I believe, first, that the Lords amendment is duplicative of the work that Ofwat is already doing and, secondly, that it will pre-empt any forthcoming reforms from the water commission.

We have heard repeatedly that this is just the start of the legislative process to bring our water companies back to heel. Will the Minister please explain what she thinks the Bill lacks and what she hopes to do in the future to strengthen and add to it?

The hon. Gentleman tempts me to look into the future before we have had the water commission. To clarify—just so there is no misunderstanding—the commission will not amend this Bill but will produce another piece of legislation that looks at everything.

The review will be very wide ranging. We are talking in great detail about the regulators’ powers, and there are four regulators. I assume—I think the Government have made this clear—that the review will look at how water is regulated, right down to how many regulators there are and how they operate, so that is completely up for grabs. We are prejudging what may be in that review, but that will be for Sir Jon to work out for himself. I feel like this is something that may be covered in the review, but will the Minister please confirm that regulation is all up for grabs?

My hon. Friend is absolutely right. Information will be coming out shortly about how each and every Member across the House can contribute to that review.

Government amendment 2 seeks to remove the amendment that requires rules made by Ofwat under clause 1 to be brought into force by statutory instrument within six months of the Act’s coming into force. Alongside my amendment, I will also address amendment 21—I thank the hon. Member for Westmorland and Lonsdale for tabling it—which is largely in line with the intention behind mine.

Although the Government understand the need to ensure the rules relating to remuneration and governance are subject to efficient scrutiny, this additional process risks compromising Ofwat’s independence, which must be protected. The necessary secondary legislation would be prepared by the Government, and therefore would represent significant Government interference in the independent regulatory process. That kind of interference has the potential to have adverse effects on investor confidence. The consultation requirement in clause 1 already provides the Secretary of State and other interested parties with the opportunity to raise major concerns with the regulator on the content of the rules. We are confident that Ofwat will continue to work constructively with the Government and other stakeholders to determine a robust and appropriate set of rules.

Will the Minister give way?

I will finish what I am saying. I might answer the hon. Gentleman’s question in my upcoming remarks—who knows?

The additional requirement for the rules to be confirmed for affirmative resolution statutory instruments could also risk delaying the introduction of the first set of rules. That is counter to the other aspects of Lord Roborough’s amendment, which requires Ofwat to publish the first set of rules within six months of Royal Assent. I reiterate that the Government expect Ofwat to have the rules in place as soon as possible. Indeed, Ofwat has already concluded its initial policy consultation on the rules, demonstrating its commitment to meeting the Government’s expectations. I highlight the fact that Ofwat today submitted to the Committee written evidence of its statutory consultation on the proposed timelines for introduction of the rules, demonstrating its commitment to getting this done as quickly as possible. I urge all hon. Members to have a look at that evidence.

I will just express disappointment. The Bill currently sets a deadline of six months, which is not exactly a moment in time; six months is a long time to get something done. I respect what the new Government are doing by trying to go after the bonuses and hold people to account, but to take a step back and say, “Actually, we are going to weaken the Bill”, which is what amendment 2 is doing—the Government are taking out the deadline—is retrograde and a real mistake.

I strongly disagree that this amendment weakens the Bill or is retrograde. Instead, it is doing things effectively. If we were to put a six-month deadline in the Bill and rush to get the rules done in that period of time and there were complications, we would risk leaving a loophole that could be exploited by companies that have exploited loopholes for an incredibly long time and become rather apt at doing so. With respect, I would rather do it properly.

The Minister says that she would like to do this properly. We all agree around this House on the scale of the problem, the public outrage at some of the things that have happened with water companies and the fact that we are trying to address and improve our water quality. I am therefore curious why both the Government and the third party are shying away from giving the Secretary of State and the Department the democratic powers and accountability to pass statutory instruments, which, as we all know, can be done very quickly. We have talked about dental analogies. I am an equine vet; I have rasped many teeth in my time. It would help ministerial oversight to see that the dental work is being done properly.

I am desperately searching for a dental analogy. I have already outlined to the hon. Gentleman that we tabled this amendment to protect the independence of Ofwat, protect investor confidence and ensure that rules under clause 1 are effective and in place as soon as possible. It is therefore necessary to remove Lord Roborough’s amendment. I again urge hon. Members to look at the written evidence supplied by Ofwat today. On that basis, and considering the arguments I have put forward for removing the six-month deadline for the rules to be published, I ask the hon. Member for Westmorland and Lonsdale not to press amendment 21.

Turning to amendment 22, also tabled by the hon. Member for Westmorland and Lonsdale, public trust in the water sector has been severely damaged and the number of serious pollution incidents is increasing. At the same time, companies are paying out millions in bonuses. I therefore fully support the intention behind the amendment and agree on the importance of ensuring that customers and the environment are put at the heart of companies’ objectives. That is why the Secretary of State announced immediate action to improve the performance of the water industry in his first week in office. That included an agreement that companies would update their articles of association to make the interests of customers and the environment a primary objective. I am pleased to inform the House that a number of companies have already made that change, and DEFRA is working to ensure that all companies implement it as soon as possible.

This is a Government of service, focused on improving people’s lives, and it is important that consumer interests are represented at the heart of decision making. That is why, under clause 1 of the Bill, Ofwat must make rules requiring consumer involvement in corporate decision making. Companies will be required to put in place arrangements to involve consumers in decisions that have a material effect on consumer interests. I trust therefore that the hon. Member for Westmorland and Lonsdale is reassured by the steps being taken by Government and he feels able to withdraw amendment 22.

There is a lot of additional work being pushed towards Ofwat. Could the Minister confirm whether Ofwat has the internal capacity to meet that workload? If not, is there a ringfenced budget in DEFRA to allow Ofwat to employ more people?

I thank the hon. Gentleman for his helpful question. Yes, we obviously have regular conversations with Ofwat to ensure that it is capable of delivering everything here. There is an impact assessment on the table in the room, if the hon. Member would like to look at exactly how that all works out.

Amendment 18, also tabled by the hon. Member for Westmorland and Lonsdale, speaks to the representation of customer views and those of wider groups. The Government are clear on the importance of elevating the voice of consumers in water company governance and decision making. That is why—as I have mentioned—under the Bill, Ofwat will set rules requiring water companies to have arrangements in place for including consumers in company decision making.

In October last year, Ofwat published a public consultation on the rules on remuneration and governance and how they will apply. The proposed options put forward by Ofwat include giving a non-executive director the responsibility for oversight of consumer interests on the board and providing opportunities for consumer panel representatives to meet with the CEO on a regular basis. Furthermore, companies already have a range of environmental obligations that they should be meeting, and experts in water and sewage policy should already be considering those obligations to inform board-level decision making. I trust the hon. Member for Westmorland and Lonsdale is therefore reassured by the Government and Ofwat’s approach and is content that amendment 18 is not needed.

I will now take a little time to discuss clause 1 itself and the importance of it standing part of the Bill. As hon. Members know, clause 1 provides Ofwat with new powers to set rules on pay and governance in the water sector and requires that Ofwat make rules on four topics. I have already spoken about one of these, consumer representation. The legislation also provides Ofwat with new powers to issue rules on remuneration and governance, and requires that Ofwat set rules that make the payment of bonuses contingent on companies achieving high environmental standards. As the independent regulator, it is more appropriate for Ofwat to determine the performance metrics to be applied when setting the rules for performance-related pay.

In addition, Ofwat must also make rules covering the fitness and propriety of chief executives and directors. That means that it will be required to set standards of fitness and propriety that chief executives and directors must meet in order to be appointed by water companies or stay in post. People holding those senior roles will be held accountable against those standards and, if they fail to meet them, companies may need to take corrective action or ultimately remove executives from post if necessary. Ofwat’s initial policy consultation outlined some proposed standards of fitness and propriety that included ensuring that individuals have sufficient knowledge of the duties of water companies, are financially sound and have not been the subject of regulatory investigation. Collectively, those rules on remuneration and governance will help to drive meaningful improvements in the performance and culture of the water industry and form a central part of the Bill.

To pick up on the point made by my hon. Friend the Member for Hastings and Rye about whether the rules go further than the previous Government’s, the short answer is yes. The legislation will provide Ofwat with legal powers to ban bonuses, whereas currently it can only set expectations, and it will require Ofwat to set rules prohibiting the payment of bonuses in certain circumstances. Executives will no longer be able to take home eye-watering bonuses where companies fail to meet standards on environmental performance, financial resilience, customer outcomes or criminal liability. We will go further by requiring Ofwat to set rules requiring water companies to ensure that directors and executives meet the highest standards of fitness and propriety, and that customers are involved in company decision making that impacts consumers.

Finally, turning to amendment 19, also tabled by the hon. Member for Westmorland and Lonsdale, I would like to reassure the hon. Member that both the Government and Ofwat take the handling of actual or potential conflicts of interest very seriously. Ofwat employees are already bound by a range of robust rules and processes that support the management of conflicts of interest, including when leaving the organisation. Failure to comply can result in disciplinary action. That includes the civil service business appointment rules, duties of confidentiality and the Official Secrets Acts.

The underlying issue here is a cultural one—I do not think I am alleging corruption. For example, one can look at fines outstanding. Ofwat set fines for, I think, four water companies; at the last check just before Christmas, many months later on, not a penny of the fines had actually been collected. There is a sense of a lack of urgency and a lack of understanding of the anger felt towards the water industry. When we have this revolving door, there may be no corruption at all, but there is a kind of watering down—no pun intended—of the culture of being a watchdog. There is a level of compliance, and it is apparent.

I understand the hon. Gentleman’s intention, which fits within the bigger picture of how we change the culture and improve trust in the industry. On these specific points, there is already legislation in place. However, I take his wider point that there is no trust and a lot of anger, and we need to do something around the culture of how these organisations work.

Given that existing measures are already place and Ofwat’s forthcoming fit and proper person rules should encompass conflicts of interest, the amendment is unnecessary. I ask the hon. Member to withdraw it. I hope that hon. Members will support the Government’s amendments and that all members of the Committee are satisfied that clause 1 should stand part.

We would be content not to press any of the amendments bar amendment 18, which we will seek to push to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: 18, in clause 1, page 2, line 3, at end insert—

“(ca) requiring the management board of a relevant undertaker to include at least one representative of each of the following—

(i) groups for the benefit and interests of consumers;

(ii) groups for the benefit and interests of residents of the areas in which the undertaker is operational;

(iii) experts in water and sewerage policy and management; and

(iv) environmental interest groups.”.—(Tim Farron.)

Question put, That the amendment be made.

I beg to move amendment 23, in clause 2, page 5, line 9, after “occurrence” insert “and impact”.

With this it will be convenient to discuss the following:

Amendment 9, in clause 2, page 5, line 10, at end insert—

“(2A) A pollution incident reduction plan must, in particular, state how the undertaker intends to reduce the occurrence of pollution incidents in national parks that are attributable to its system.”

Amendment 25, in clause 2, page 5, line 27, after “occurrence” insert “and impact”.

Amendment 24, in clause 2, page 5, line 29, at end insert—

“(ea) the use the undertaker plans to make of nature-based solutions for reducing the occurrence and impact of pollution incidents,”.

Amendment 6, in clause 2, page 7, line 14, at end insert—

“(5) An implementation report must be published on the relevant undertaker’s website in a form which is publicly accessible.”

Clause stand part.

I will speak to amendments 23 and 25 first, as they are connected, then amendment 24, and then amendments 9 and 6, which were tabled by those on the Conservative Front Bench. I think amendments 9 and 6 are both fine and helpful, and we would be supportive of them.

In amendments 23 and 25, tabled in my name and that of my hon. Friend the Member for Witney, we are referring to impact. There is reference in the Bill to an incident reduction plan, to reduce occurrences and to have reports about occurrences. Our concern is about much more than occurrences; it is about impacts. We know, for example, that a spillage into the River Kent, River Eden, Windermere or Coniston may last a certain amount of time, but we do not know about the volume. We may have a trickle over a day or a deluge over a half-hour period.

It is important to understand the impact not only on marine life, fish stocks and biodiversity, but on things such as leisure activities. As an occasional wild swimmer myself, and as somebody who knows a lot of anglers, canoeists and sailors in my constituency, it seems wrong that we should not put front and centre, not just a greater awareness of and action on incidents, but a look at the impact—the measured impacts on biodiversity, wildlife, livestock, farmers and the tourism economy in places like the Lakes, which is the biggest visitor destination in the country after London. I would be very grateful if amendments 23 and 25 were taken on board by the Government.

Amendment 24 relates to nature-based solutions and looks at incident reduction plans. As the Chartered Institution of Water and Environmental Management put it:

“Nature-based solutions…can help address many of the water sector’s challenges while also providing significant benefits for people and planet, such as water quality improvement, flood risk reduction, carbon sequestration, climate resilience, nutrient neutrality, biodiversity enhancement, community engagement, and public health and wellbeing.”

Indeed, nature-based solutions are also a vital source of funding and income for farmers. Examples include natural flood management techniques, such as wetland restoration, tree planting across catchments of areas of unproductive land—not of productive agricultural land, I hasten to add—and building resilience to flooding; the construction of treatment wetlands and reed beds to treat waste water and improve water quality; the creation and restoration of ponds and pondscapes; climate mitigation and adaptation; and the building of resilience to drought.

Finally, the multiple benefits delivered by working with nature also create opportunities for blended finance by drawing in private investors or gaining income from buyers and ecosystem services. That further increases taxpayer value for money at a time when the delivery burden on the water industry, and therefore customer bills, is at a record high. Investment in nature-based solutions will help to ensure that water industry spending supports the delivery of the maximum environmental and social benefits.

Amendments 23, 24 and 25 are about assessing the damaging impact of pollution incidents in our lakes, coastal areas and rivers in my communities and across the country. Through amendment 24, they also try to provide practical solutions that will help to address those issues. They are meant to be helpful amendments and I hope that the Government will take them on board.

I rise to speak about amendments 6 and 9, proposed by His Majesty’s Opposition. I hope that they are self-explanatory amendments that are quite simply about the core concept of accountability, which was at the heart of the previous Government’s mission to improve our water system. We must remember that at the heart of every failure that damages our waterways, it is the Great British public—those who rely on our waterways as consumers and as members of communities served by them—who are let down and denied the rights to pollution-free water systems to which they are entitled.

Amendment 6, which would require water companies to publish their implementation reports accessibly online, gives the public a tangible and visible sign by which water companies can be held to account for the promises they make and the actions they say they will take. It is a vital step in trying to restore the trust that water companies may be seen to have lost in recent years with the public through their inadequate actions to deal with this issue, as people have seen and as hon. Members have articulated today on both sides of the House. It is very much about having not just words and promises but explicit standards to judge water companies by, and it would form a kind of contract between the companies and their consumers, who would then know what to expect from their individual company.

His Majesty’s Opposition have no objections to the principle of clause 2 and its requirement that water companies publish an implementation report, nor in the specific details that companies would be expected to produce in proposed new section 205B of the Water Industry Act 1991. In fact, we welcome the Government’s willingness to listen to the concerns from Conservative peers, including Lord Roborough, and peers from other parties in the other place to strengthen clause 2, including the requirement for implementation reports to be drafted by water companies in the first place and ensuring that the requirements for pollution incident reduction plans also include water supply system-related incidents, not just sewage-related incidents.

However, we believe that amendment 6 would go even further to strengthen that proposal and advance the accountability that we all want water companies to have. Requiring implementation reports to be published online in an accessible way sets out an explicit and clear definition to water companies of how they are expected to publish any such plans, as the clause requires, and demonstrates how water companies must comply with the law in unequivocal terms.

In stressing accessibility, amendment 6 would end the ambiguity that can sometimes exist for the public, which means that it is often too easy for companies to hide away behind protocol and procedure. By making such information available to consumers, we would ensure that there could be no hiding in murky waters on this vital issue and the concrete commitments to improving our waterways.

Water companies can also benefit from the chance to make reflections on their progress available in full sight of the public. In all walks of life, sometimes people’s efforts to make good on promises cannot come to full fruition for reasons beyond their control. If genuine reasons arise for not meeting targets, there can be full transparency for the public as to why, so they can understand more about the nature of the industry and the issues involved in protecting the quality of our water system. In other words, full transparency is in everyone’s interests.

A 2023 review commissioned by Ofwat about the importance of open data was clear that open data provide great benefits in a range of areas when it comes to the water industry. In terms of the environment, it highlighted that open data from sewage overflow monitoring were beneficial to the creation of the predictive analytics tools used in Wessex Water’s intelligent sewers competition, which helped to identify sewage blockages much earlier than they otherwise would have been. That demonstrates an explicit link between the work of recent years to require data monitoring in the water industry, such as on storm overflows—I reiterate that 100% are monitored thanks to the work of the previous Conservative Government—and improvements in the water industry’s tackling of pollution. That is in addition to the improved accountability and the responsibility that data publication places on water companies to get the issue right.

The report highlighted, however, that at the time there was a trend towards companies sharing data with their key partners, rather than making information completely and clearly available for unrestricted public access. The report therefore explicitly recommended that companies in the water sector should look at the data they had been sharing only with specific groups and partners, and take steps to make available those data where they can.

Amendment 6 would solve the problem of information reports before it could even arise—upstream—by unequivocally stating that water companies must publish implementation reports on their websites that would be accessible to all members of the public, not just those with the time and influence to ask for such data. We talked about citizen science: this will give those data to the people to analyse and hold water companies to account. The Conservatives will therefore be pressing amendment 6 to a Division.

I am conscious of time, Mr Vickers. Are you going to call stumps in about 20 seconds?

No. We can keep going until 1.30 pm.

On that note, I will move on to amendment 9, which would make it a requirement for pollution incident reduction plans to include how an undertaker intends to reduce the occurrence of pollution incidents in national parks attributable to their water system. The Opposition tabled the amendment to strengthen the existing plans that the Government have put forward, so that no stone is left unturned in ensuring environmental protections from our water companies. The amendment ensures that water companies make it clear how they will work to reduce pollution incidents in national parks in a system that a water company operates in.

National parks are an area that the previous Conservative Government took great efforts to protect in their legislative programme on protected landscapes. We worked to encourage water companies to invest in peat restoration, and allowed teams at national parks to bid for investment that improved their water environments. The history of recent work on national parks goes beyond just the most recent Government, with the Glover review being published in July 2019. In a response to that review, the Conservatives highlighted their commitment to national parks and water quality, such as through developing the natural capital and ecosystem assessment, which combined data science, citizen science and earth observation technology to inform water quality improvements as a priority target; and ensured that capital and natural capital reporting were embedded into the management plans of protected landscapes.

I will speak primarily in support of amendment 6. I pay tribute to the former Member for Ludlow, the right hon. Philip Dunne, who throughout the previous Parliament was the Chair of the Environmental Audit Committee, on which I sat. The EAC’s work on water quality and the seminal report that we produced started this huge public interest in water quality and led to the legislative changes in the Environment Act 2021, among other things.

One of the key lessons we learned from the work that we did on the EAC was the need for transparency of data and information, which can unlock the power of citizen science. We visited the citizen scientists working on the River Windrush, who had difficulty analysing the data that was then publicly available but very hard to find to work out whether storm overflows were being used in the way the water companies were describing. Their very detailed, hard-to-do work exposed the shocking misuse of storm overflows.

As those citizen scientists understood, an event duration monitor is a very simple piece of equipment: it is either on or off. It is set on the outflow of the storm overflow tank. When it detects flow on that channel, it turns on, and when that flow ceases, it turns off. What it does not do, as the hon. Member for Westmorland and Lonsdale rightly pointed out, is measure volume. It also does not measure what is passing. It says that something is passing or not passing, but it does not measure volume or quality. That leads me to support amendment 6, tabled by the loyal Opposition, and to question not the intention behind the Liberal Democrat amendments—amendments 24 and 25 and those to clause 3, which I suspect we will talk a bit more about—but the effectiveness of having new machines that measure volume, in addition to whether it is on and off, but not quality.

A better solution may be the one that the Environmental Audit Committee recommended all those years ago—I stand to be corrected, but I think we wrote that report in 2021. It called for the upstream and downstream monitoring of water quality, typically in the outflow river, so that in addition to a signal that there has been an event, there is close to real-time reporting of the comparative water quality upstream and downstream of a discharge outlet. That would simplify the technical requirements of having to install a whole load of new equipment, which other amendments from the Liberal Democrats anticipate, at an unknown cost and implementation speed. Instead, it would look at the actual real-time impact on a particular water body.

Amendment 6 would require the publishing of the information on the undertaker’s website. I am surprised that that was not part of the Bill in the first place and, given that it was not, that the Government have not adopted the amendment. All it does is to apply consistency to the legislative programme. Section 81(2) and (3) of the Environment Act 2021—I know the Minister is familiar with it, but just in case she is not—require the publishing of event duration monitor data within an hour and in a format that is readily accessible by the general public. The loyal Opposition’s amendment is simply trying to ensure consistency between what we already require for EDMs on undertakers’ websites and this area.

Ordered, That the debate be now adjourned.—(Jeff Smith.)

With this it will be convenient to consider the following:

Amendment 9, in clause 2, page 5, line 10, at end insert—

“(2A) A pollution incident reduction plan must, in particular, state how the undertaker intends to reduce the occurrence of pollution incidents in national parks that are attributable to its system.”

Amendment 25, in clause 2, page 5, line 27, after “occurrence” insert “and impact”.

Amendment 24, in clause 2, page 5, line 29, at end insert—

“(ea) the use the undertaker plans to make of nature-based solutions for reducing the occurrence and impact of pollution incidents,”.

Amendment 6, in clause 2, page 7, line 14, at end insert—

“(5) An implementation report must be published on the relevant undertaker’s website in a form which is publicly accessible.”

Clause stand part.

No one was trying to catch my eye before we broke for lunch, so I call the Minister to respond.

Before I start my response to this group, I just want to note that there has been considerable discussion on the monitoring of the volume of discharges during this debate. In the interests of time, I will respond to those points when we debate amendment 13 next week, if that is agreeable to everyone. I thank hon. Members for tabling the amendments relating to pollution incident reduction plans.

On amendments 23 and 25, tabled by the hon. Member for Westmorland and Lonsdale, we agree that companies should seek to reduce the impact of pollution incidents in their pollution incident reduction plans. That, of course, is the core purpose of the plans. That is why the clause requires water companies to set out the measures they will take to reduce the frequency and seriousness of the pollution incidents and their causes. The impact of a pollution incident on people and the environment will be taken into account when the undertaker determines how serious it is, as required in the pollution incident reduction plan. In fact, it would be impossible to determine whether something was serious without looking at the impact the pollution was having. These amendments are therefore not needed, and I ask the hon. Member not to press them.

I thank the hon. Member for Epping Forest for tabling amendment 9. The Government agree that national parks form a vital part of our environmental heritage and must be protected. For that reason, the Government have committed to strengthening the statutory purpose of national landscapes and national parks to give them a clear mandate to recover nature. We will also strengthen through new regulation the role that public bodies, including water companies, must play in delivering better outcomes for nature, water, climate and access to nature in these special places.

Ofwat made significant funding available to water companies in the price review for 2024 to support work to reduce pollution in national parks. As an example, Ofwat approved four storm overflow schemes related to improvements in the Windermere catchment, with potential to include 12 additional schemes via the large scheme gated process. We do not believe it is necessary to include a specific reference to national parks in clause 2. All sites, including national parks, are already in scope of the duty. Creating a statutory hierarchy of priority sites risks deprioritising other important areas such as bathing and shellfish waters. For those reasons, the Government will not support the amendment.

I thank the hon. Member for Westmorland and Lonsdale for tabling amendment 24. The Government agree that nature-based solutions are an essential tool for tackling the root cause of sewage pollution, while also delivering significant ecological benefits. That is why, in line with the Government’s strategic policy statement, Ofwat has allowed companies to increase the use of nature-based solutions with £3 billion-worth of green schemes in water companies’ final determinations for price review ’24. Although the benefits of nature-based solutions are clear, we believe their use is better supported through drainage and sewerage management plans than through pollution incident reduction plans.

Pollution incident reduction plans are intended to set out the steps that companies intend to take to reduce the frequency and severity of pollution incidents. These issues are often best addressed by monitoring and maintenance measures such as burst pipe detection, checking pumps and re-lining sewers. Drainage and sewerage management plans are intended to address the resilience of the whole sewerage network over a long period of time. That is why the Government have introduced a duty through the Bill for sewerage undertakers to consider nature-based solutions in their drainage and sewerage management plans. That will ensure that nature-based solutions are considered at the very start of the investment planning, increasing their development and potential future delivery. The amendment is therefore not needed, and I ask the hon. Member not to press it.

Regarding amendment 6, which was tabled by the hon. Member for Epping Forest, I agree that improving transparency and accountability is key to the success of pollution incident reduction plans. That is why clause 2 already requires water companies to publish the implementation report alongside the pollution incident reduction plan. Details of where and how to publish the plan and the implementation report, and in which format, may change over the years as technology and best practice evolve, so that is best addressed in the guidance that the Environment Agency is producing about how to fulfil the duty.

I am grateful to the Minister for giving way; she is being generous with her time. The problem with the position she is taking now is that it is at variance with the Government’s position and with section 81 of the Environment Act 2021. If she is right about the efficacy of leaving it to the Environment Agency to publish such information, buried in its website or its regulations, should she not also amend section 81 of the Environment Act so as to have consistency?

I understand the point that the hon. Gentleman is making, which is that people need to have access, clearly and simply, to as much information as possible. My point is that if we put such details into law in the Bill, the way in which we want people to access such information may change—technology or best practice may evolve—and we will have to resort to altering legislation using statutory instruments. That is why I think it is better that we look to the guidance produced by the Environment Agency as the best way to present that information, while continually evaluating how we do so. I completely understand the essence of what the hon. Gentleman is saying, however, because we all want information to be transparent and clear for everyone, and certainly not buried on a website.

To conclude, I will briefly speak to why clause 2 should stand part of the Bill. The occurrence of pollution incidents is unacceptably high and has not reduced in the last four years. Water companies must reduce pollution incidents as a matter of urgency. Currently, sewage companies in England produce pollution incident reduction plans on a non-statutory basis. These plans vary in standard, content and frequency, and that makes them hard to scrutinise. It is particularly difficult to identify the progress that companies have made on the actions that they committed to in these plans. More transparency and greater accountability are needed.

That is why the clause will require both water supply companies and sewerage companies in England and Wales to publish annual pollution incident reduction plans to address matters such as the seriousness of pollution incidents and their causes. These plans will need to set out the actions that the water companies intend to take to reduce pollution incidents, and an assessment of the impact that those actions will have.

In addition, the Secretary of State will be able to direct water companies to include other matters in the plans as needed. Moreover, companies will be required to produce an accompanying implementation report detailing the progress they have made with the measures to which they committed in the previous year. Companies must clearly explain the reason for any failure to implement their plans and set out the steps they are taking to avoid similar failure in the future. This will create a high level of transparency, enabling the public and regulators to hold water companies accountable for making the improvements that they have committed to.

Chief executives will be personally liable for the production of these plans and must approve them before publication. If a company fails to publish a compliant plan and implementation report by the deadline each year, the company or the chief executive could be prosecuted for the offence. That could result in a fine and a criminal record. This emphasises that taking action to minimise pollution incidents should be at the core of the chief executive’s role.

We believe that this provision will ensure that the right people, with the right incentives, lead water companies through the changes necessary to drive down pollution incidents. Furthermore, regulators will be required to take companies’ compliance records in relation to implementation reports into account when carrying out their enforcement duties.

I hope that all hon. Members agree with me about the importance of clause 2, and I commend it to the Committee.

There are no further comments from us, and we do not seek to press to a vote any of the amendments that we have tabled. We are concerned that there is not enough detail in the Bill about the impact of pollution incidents on the wider environment, much as I am grateful to the Minister for many of the comments she has made. All the same, we will not seek to trouble the Committee with a vote at this stage, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

In the interests of promoting transparency and clarity, we would still like to press our amendment 6 to a vote. To bolster, support and protect the precious integrity of our national parks, we would like to do the same with amendment 9.

Amendment proposed: 9, in clause 2, page 5, line 10, at end insert—

“(2A) A pollution incident reduction plan must, in particular, state how the undertaker intends to reduce the occurrence of pollution incidents in national parks that are attributable to its system.”— (Dr Hudson.)

Question put, That the amendment be made.

I beg to move amendment 13, in clause 3, page 8, line 10, at end insert—

“(e) the volume of discharge.”

With this it will be convenient to discuss the following:

Amendment 14, in clause 3, page 8, line 13, leave out “subsection (1)(d)” and insert “subsections (1)(d) and (e)”.

Amendment 3, in clause 3, page 8, line 18, at end insert—

“(c) be published on the home page of the undertaker’s website.”

This amendment would ensure that information regarding a discharge from an emergency overflow must be published on the home page of the undertaker’s website.

Amendment 15, in clause 3, page 8, line 18, at end insert—

“(c) be uploaded and updated automatically, where possible; and

(d) be made available on the undertaker’s website alongside searchable and comparable historic data.”

Amendment 16, in clause 3, page 8, line 18, at end insert—

“(3A) The undertaker must ensure that, within 12 months of the passing of this Act, appropriate monitors are installed to collect the information required by subsection (1).”

With your permission, Mr Vickers, I will allow my hon. Friend the Member for Witney to speak to the bulk of these amendments. I will focus on amendment 17, which requests that we insert into the Bill a position of Minister with responsibility for issues relating to the coast. That is something that the all-party group for coastal communities, chaired by the hon. Member for East Thanet (Ms Billington), is fully in favour of.

Coastal communities face a unique set of environmental and economic challenges, which are spread across Departments. It is therefore common sense to have a Minister to bring them together under one portfolio and champion those communities in Government. The specific needs of coastal communities were raised in the annual report of the chief medical officer, Chris Whitty, in 2021, and we particularly highlight those communities. In my own part of the world, we have the Lancashire over the sands part of my constituency and south-west Westmorland, but there are also coastal communities in places such as North Norfolk, Devon, Cornwall and elsewhere. As I said, there is cross-party support, through the APPG for coastal communities, for this proposal.

Let me make a quick reference to my own constituency. Among the challenges that the communities around Morecambe bay face is the pollution of the environment around them. In 2023 alone, one treatment works in Grange-over-Sands pumped sewage into the Kent estuary channel on 79 occasions for 73 hours. Across the water in Arnside, another pumped 42 times for 147 hours.

It is a pleasure to serve under your chairmanship, Mr Vickers. I rise to speak in support of clause 3, which deals with defining emergency overflows and reporting requirements. Like my hon. Friend the Member for Hastings and Rye, I have the great fortune to live on the south coast and the great misfortune of being in the area where Southern Water is a local provider.

Order. We are debating amendment 13 specifically, so please restrict your comments to that. I call Charlie Maynard.

Amendment 13 is about volume. It would add volume to the list in clause 3, which includes

“the location of the emergency overflow…when the discharge began…when the discharge ended.”

The Liberal Democrats seek to add the volume of discharge to that list, and that is common sense. As many Members have said, we want to know how much sewage is coming out, and we are looking for help from all Members to get the amendment into the Bill. If we are serious about solving the problems in our rivers, we need to know how much sewage is coming down.

I am grateful to the hon. Member for giving way and for the conversation that we had over the lunch recess. One challenge with the measuring of volume is what we are measuring the volume of. The industry estimates that 97%-plus of volume from a storm event is water—it is just rainwater. How do these amendments address the measurement of what is being passed, and is this something on which we could co-operate?

Let us talk about the spectrum of information here. We have got the number of spills, where we have no idea how long those spills went on. We then have EDMs—event duration monitors—which count the number of hours of pollution. There is then the volume of flow, and then various iterations around measuring dissolved oxygen, or whatever it might be. I do not want the perfect to be the enemy of the good. We need to make progress. Thames Water is installing flow monitors all over its network, upstream of its sewage treatment works, but not downstream. That is because it is scared of actually having to count and have in the public domain the volume of sewage that it is dumping.

As my hon. Friend the Member for Eastbourne (Josh Babarinde) said, “If you have a coke bottle of sewage, and you don’t know how diluted it is, you still don’t want it in your bath.” Of course we want to know how diluted it is—that would be nice—but if we are serious about addressing these problems, we need to know how much is coming out of those overflows.

To quantify what has been going on over the last few years—I give the previous Government some credit—some 14,000 monitors have been installed in the last seven years, which is good news. The figure was less than 1,000, and 15,000 have now been installed on the storm overflows, but another 7,000 do not have monitors. Amendment 16 talks about where those locations are. We can have overflows at a sewage treatment works, at a pumping station or on the sewer network. I believe that everyone on this Committee wants to capture wherever that overflow is, which is what the amendment would do.

I will try to quantify some of the numbers, and I will talk about my favourite, Thames Water. Right now, Thames Water has 30 event duration monitors at inlet storm overflows at waste water treatment works. It has 183 EDMs on storm tanks at waste water treatment works and 137 EDMs at storm discharge overflows at pumping stations, and it has 320 storm overflows on the sewer network—not in a pumping station or at a treatment works. We are trying to capture all those areas, because we need to know what is going on. If we do not know what is going on, we cannot fix it.

Amendment 13 is on the volume of discharge. Amendment 14 concerns the same count, so I will not go into it in more detail. Amendment 15 relates to reporting on discharge from overflows and would add to existing stipulations about the form in which the information must be published. I will read it out: the information must

“be uploaded and updated automatically”.

Let us get rid of human involvement. We are in 2025—all this stuff can, and should, be automated.

Professor Peter Hammond has done some great research, and I am incredibly grateful to Windrush Against Sewage Pollution, which has been one of the drivers of information and campaigning in this space. Well done to Peter, Ash, Vaughan and Geoff; I give them many thanks. Peter spotted that when Thames Water monitors its sewage, it does so at the wrong times of day, when the level of sewage is at its lowest. We want to automate that so that it is monitored all the time. That means less human interaction and lower costs, and it is much more achievable.

There is a map that shows whether sewage has been dumped in the last 48 hours, is being dumped currently or has not been dumped in the last 48 hours—Thames Water was actually one of the first to put that in the public domain—but it does not give the historical information. We need the historical information in there and it needs to be downloadable, so that any citizen scientist can come along, pull the data off and act on it. Without amendment 15, we do not have that. These are very nuts-and-bolts, practical things that we want to head along.

On the questions that the hon. Gentleman is asking around the type of monitors we have on sewage outlets, is he aware that the Environmental Audit Committee looked at this very issue in the last Parliament? It recommended the approach currently being taken by the Bill, which is to look at monitors upstream and downstream that look at the water quality. The Committee regarded that as the best way to assess this issue.

I am very happy with looking at monitors upstream and downstream. That is fine, but I want them all to be in, and I want them done quicker. In the last seven years, 14,000 monitors were put in. As per the House of Commons Library briefing on clause 3, we are currently being signed up to a much slower installation of monitors—it does not matter if they are EDMs or flow meters. The briefing states:

“The reporting duty on discharges from emergency overflows would be phased in, with water companies expected to achieve 50% monitoring coverage by the end of the next price review in 2030 and 100% by 2035, the end of the following price review.”

Why would we go slower? That is a lot slower than what has been done over the last seven years. We should be moving much faster.

I find it rather depressing that I suspect this information came out of the Department for Environment, Food and Rural Affairs. Why is there this desire to slow the whole thing down if possible? We have a huge problem, so why are we not moving faster to deal with it? Frankly—I am not looking at the crew opposite—the DEFRA mindset is profoundly depressing. That’s that.

Amendment 16 covers the installation rate. What we are trying to do there is get the rate much faster. We have asked for 12 months, and I will try to quantify this; I have a business background. How much do flow monitors cost? How much they cost matters. Flow monitors are £500 to £2,000 per unit. We have 15,000 across the country, so we are talking £85 million or whatever it might be. That is if we have £2,000 as the unit cost. If we take the higher level of the unit cost and say that each of them will cost £2,000 to install, it is quite a lot of money. We did it much cheaper in west Oxfordshire and Witney. Well done to the Witney flood mitigation group. It got 10 installed for a fraction of that, so that is doable. Let us just talk £84 million. Does that sound like a lot of money? Frankly, it does not to me, and I will try to quantify that. The £84 million is between 10 or so water companies. Thames Water alone has £17 billion of debt. We are talking about £84 million. It is a fractional number, and if we are serious about fixing our problems, we have to go there.

It is a great pleasure to speak to amendment 3, in the name of my hon. Friend the Member for Beaconsfield (Joy Morrissey). Today, there is a recurrent theme—transparency and clarity. We want cleaner waters and we want the data collection to be transparent and available to people so that they can actually monitor and analyse. The spirit of this amendment is, again, transparency and clarity.

Amendment 3 would, as the text suggests, make it a statutory requirement for water companies to publish the information that they have on discharges from emergency overflows on the home page of their website. Some water companies already go some way to discussing overflows of different kinds, including what they are and why they occur, but this amendment from my hon. Friend would go further by setting a clearer guideline for how transparent water companies must expect to be for every specific incidence of an emergency overflow that may occur.

We of course know that emergency overflows are those that occur particularly when technical faults or blockages in the water system arise and require overflows to help with their resolution, as opposed to storm overflows, where the system is overwhelmed by excess surface water or groundwater entering the network. The work of the previous Conservative Government tackled the issue of storm overflows—unlike any Government who had preceded them—including by, as I have said, getting 100% of reporting and monitoring of storm overflows, which was at 7% back in 2010. That was in addition to fast-tracking £180 million of investment from water companies to prevent 8,000 sewage spills in 2024, and introducing requirements for further investment, over 25 years, of upwards of £60 billion.

Moving forward, however, we need to ensure that emergency overflows are treated with a similar parity of attention. We do not want the hypothetical situation to arise whereby the problem of storm overflows, which have had so much attention in recent years, is simply shifted to emergency overflows, and technical fault is used as an unnecessary justification for emergency overflows to occur. By requiring emergency overflow information to be published on the home page of each and every water company’s website, this risk is potentially alleviated.

Although the Government may argue that the risk is alleviated by clause 3 in and of itself, this amendment goes further in its specificity about the publication of data relating to emergency overflows. By requiring the home page to be used for publication of emergency overflow data, the requirement in clause 3 that the information be published in a way that makes it readily accessible to the public would be given a definition that the Bill in its current form lacks. In other words, amendment 3 would provide explicit clarity in the Bill for water companies about the requirements for publication of emergency overflow information, without the risk of dispute down the line about whether an individual company has complied with the measure’s requirements.

On that basis, I encourage the Government to support the amendment, as it clearly does not seek to frustrate their intentions to be stringent with the water companies about duties on emergency overflows. The amendment merely strengthens the existing conditions in the clause by providing further clarity and specificity. We urge the Government to consider it.

I will start with the Liberal Democrat amendment to add volume measurers to storm outflows. I hope I made it clear in my earlier intervention that I am sympathetic to the amendment’s objective, but I have questions about whether the route that the Liberal Democrats have gone down is the right one. Legislating for another piece of kit—volume-measuring equipment, alongside the EDM—yes, would go some way to solving the problem, but it would not solve the real problem, which is that we need to know when a discharge is happening, the volume of the discharge, the level of sewage as opposed to water in that discharge, and the consequential impact on the watercourse into which it is being discharged.

I was grateful for the intervention of the hon. Member for Hastings and Rye, who referred to the water report of the Environmental Audit Committee, of which I was one of the authors. We took a lot of evidence on the issue and we had a trip to Oxfordshire, to the River Windrush. We met the leading citizen scientists in the area and took evidence from them there and in our more formal evidence sessions in this place. The hon. Lady was right that the outcome of the combination of evidence we received was that the most appropriate form of technical solution was a measurer of water quality upstream and downstream, and for that water quality measurement to be published timeously. For that reason, section 81 of the Environment Act 2021 requires automatic publishing within 60 minutes of an event happening.

That leads me to a question. The hon. Member for Witney referred to Thames Water choosing when to measure, but with respect to him, the clause is about emergency overflows, not about standard monitoring, and under the existing legislation, Thames Water or any other water undertaker has no option as to when it measures—the EDM is triggered by the emergency event. It also has no option as to when it can publish, because it has to be within 60 minutes of the event being notified.

Yes, of course, the EDMs are automatic; I was talking about the spot monitoring by individuals.

With respect, that is a separate point, because we are talking about amendments to clause 3, which is about emergency overflows. I accept the point. As with so many of our discussions this morning and this afternoon, we are all trying to get the right outcome, but this is line-by-line consideration of the Bill, which is rather boring and technical, but it is where we try to tease out some of the drafting issues and what can be improved. I am not sure that the problem that the hon. Gentleman is seeking to resolve sits naturally in this clause.

Moving on to amendment 15, again I highlight my fear that, given that the clause relates to emergency overflows, the amendment leads to a legal duplication of section 81 of the Environment Act. I do not want to do the Minister’s job for her, but from my perspective, that is a reason why we should look carefully at amendment 15 before we accept it. Of course, when I say that I do not want to do the Minister’s job for her, that is only pro tem—in the future, I definitely want to do this job for her.

The Liberal Democrats have not yet spoken in favour of amendment 16, so I will leave that until such time as they decide to. The hon. Member for Witney can come back to it.

Finally, on amendment 17, which the hon. Member for Westmorland and Lonsdale—

Order. Amendment 17 is not in this grouping.

Mr Vickers, may I revert to amendment 16? I am sorry; I thought I had mentioned it. I will read it out:

“The undertaker must ensure that, within 12 months of the passing of this Act, appropriate monitors are installed to collect the information required”.

That point is 12 months, so that is holding people’s feet to the fire, but we have a massive problem. This is totally doable in terms of timeline. If the Government came back and said, “No, we want 36 months, not 12 months,” then fine, I have no problem with that, but I have talked about being depressed by the desire to slow things down, and about the House of Commons Library data on giving another 10 years to install these monitors. Why are we going slow? We all say to the public that we are really serious about it; let us be serious. I thought that I had covered amendment 16, but there it is again.

I now rise to talk about amendment 16. My primary objection here is the overarching one: I am not convinced that this is the right technical approach, for the reasons set out in the report of the Environmental Audit Committee, and also in the Environment Act 2021. However, if I am wrong on that, I am happy to support this amendment as a probing amendment and look forward to the answer that the Minister gives; but if it were to be taken to a vote, without further information about the practicality of being able to obtain the required tens of thousands of these machines, install them and have them operational and reporting in a 12-month period, I am not sure that I, as a responsible legislator, could support amendment 16. I would need further information on whether that was a practical option.

I thank all hon. Members for their thoughts on this set of amendments. I would also like to pay tribute to all of the citizen scientists—in fact, many Members have paid tribute to them—and the incredible work that they do as volunteers, going out there to discover the true state of many of our rivers, lakes and seas. I think we can all agree that it is vital to understand the scale and the impact of sewage discharges by ensuring that water companies install monitors on emergency overflows as soon as possible and by encouraging public access to emergency-overflow discharge statements. As the hon. Member for Broadland and Fakenham said, I think this is about us all trying to move in the same direction.

Just before I turn to the amendments, I think there may be some confusion in the debate today about the different types of monitors and the different types of discharges being discussed. There is a big difference between fully treated waste water being released from treatment outlets and the discharge of untreated sewage from an emergency or storm overflow. I am therefore very happy to share a factsheet detailing the differences in the different types of emergency and storm overflows to help inform future debates.

On amendments 13 and 14, tabled by the hon. Member for Westmorland and Lonsdale, clause 3 requires water companies to provide information on the frequency and duration of discharges from emergency overflows in near-real time. Combined with the equivalent duty for storm overflows, which has just come into force, that will ensure that all sewage overflows on the network are monitored. That will enable regulators and the public to see, in near-real time, when a discharge from any overflow has occurred, and how long it has lasted for. Water companies will use that information to prioritise investment to mitigate the impact of the most polluting overflows, as guided by the regulator.

However, the monitors required to measure volume are much more difficult and costly to install compared with those used to monitor discharge duration. By comparing that with the cost of installing flow monitors at waste water treatment works, we estimate the cost of installing flow monitors on all 18,000 storm and emergency overflow sites in England to be up to £6 billion. Network overflows are not set up for flow monitors to be installed, which means that the majority of overflows would require complex works, such as pipework modifications, in order for monitors to record volume accurately. We do not think this added cost is proportionate to the additional value that volume information would provide, especially given that volume information alone does not provide a comprehensive account of the impact of a discharge. For example, a very small volume of very concentrated foul water could enter our rivers, which would be very damaging, or a large volume of diluted rainwater overflow. Volume cannot give an accurate assessment of impact. The measurement of water quality, as the hon. Member for Broadland and Fakenham has said, is required.

Would the Minister be willing to give information on the breakdown of that £6 billion? That would be very helpful. Also, I think we are all in agreement and of course we want to know the quality. As has been said, if that is the case, surely the plan is to go there. By all means, have flow meters with the quality meters installed, rather than not going there. I think the Minister was proposing not putting in flow meters and not putting in any quality meters either, or is she planning on putting in flow and quality meters? If so, when and how?

I am very happy to give a breakdown of the numbers that we have worked out. To reiterate the point I made before the intervention, that is why the Government believe that it is the measurement of water quality that is required. Water companies have been instructed to begin installing continuous water quality monitors for storm overflows and waste water treatment works from April 2025 onwards, so they have been told to put in those water quality monitors from April 2025. That will provide further information on the impact of sewage discharges on water quality. On that basis, I hope that the hon. Member for Westmorland and Lonsdale will see that amendment 13 is not needed and feels able to withdraw it.