Ofwat: Strategic Priorities

[Relevant documents: Environmental Audit Committee, Fourth Report of Session 2021-22, Water Quality in Rivers, HC 74, and the Government response, HC 164. Letter from the Chair of the Environmental Audit Committee to the Secretary of State for Environment, Food and Rural Affairs, dated 21 October 2021, concerning the consultation on the draft Strategic Priority Statement for Ofwat.]

Before we start the next Backbench business, may I remind everybody that anybody who wishes to take part in this debate, and indeed in any debate, should be here for the opening speeches, for a substantial part of the debate itself and for the entirety of the wind-ups? If you cannot do that, please come to see me in the Chair to have your name taken off the list, and then just intervene.

I beg to move,

That this House has considered the Government’s strategic priorities for Ofwat.

I wish to begin my remarks by placing on the record my thanks to the Backbench Business Committee for granting this opportunity to hold an important debate and in particular for its tolerance. The interventions of the Easter recess, the Prorogation and the recent Whitsun and jubilee mean that it is some two months since my fellow signatories, my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) and my hon. Friend the Member for Devizes (Danny Kruger), and I first submitted our application for this debate. I am pleased to see them both in their places today, and I hope that they will have an opportunity to contribute.

I thought the Environmental Audit Committee’s report was a model of its kind. I noted in particular that it created this context of identifying a “chemical cocktail” of sewage, slurry and plastic. Does my right hon. Friend feel that the Government’s response adequately addressed that issue—both on the sewage side and on the wider phosphates issue?

My right hon. Friend tempts me to rewrite my speech from scratch. First, I thank him for his comments about our report, which was a significant body of work and the first such report of consequence for a number of years. The Government response to our 55 recommendations was one of the most positive responses to any of the reports that our Committee has prepared in the time I have served on it. We made 55 recommendations and I believe only five were rejected by the Government; the others were either accepted in whole or in part. So I think the Government have moved quite a long way in addressing these concerns, but my right hon. Friend will recognise that solving this problem is going to take decades, not days. I know that the Minister will address that in her remarks.

I was just going to thank my colleagues on the EAC for embracing and sharing my passion for the issue of improving water quality as we conducted our inquiry. We published the report in January and it made specific recommendations for the strategic policy statement on Ofwat, which provides the context for today’s debate. I will discuss that shortly.

Having been tempted by my right hon. Friend to praise the Government, or potentially not to do so, I would like to take this moment, while I am in a generous mood, to thank the Minister, the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Taunton Deane (Rebecca Pow). I am pleased to see her in her place, responding to this debate, and I thank her for her personal commitment to this vital issue of improving water quality over the past two years. In particular, I thank her for driving her officials to work with me to amend the Environment Act 2021 and put into law many of the core elements of my private Member’s Bill, which the pandemic prevented from being debated. I am very grateful to her and I would like the House to be aware, from me, that she has moved the Government a very considerable distance on this issue.

I congratulate my right hon. Friend for his extraordinary campaigning on this issue, which has changed the entire debate. Although I recognise that the Government are spending £3 billion on schemes to prevent sewage overspills, does he know that in my constituency, in the River Wey, we have had nine overspills in one village and 12 in Godalming, that in Bramley we have had overspills and that we have had 76 in Chiddingfold? Does he agree that this is totally unacceptable and that much more needs to be done?

I am very grateful to my right hon. Friend for introducing the next comment in my speech, which was to highlight precisely the volume of spillages that these monitors have revealed—not just in his local river, but right across the country, in all catchments. All water treatment plants are obliged now to have event duration monitors. They are obliged to have them but not all have installed them—or at least not on all the storm overflows. I believe there are about 22,000 overflows and about 20,000 have the monitors on them, so this number will continue to increase until they are all being monitored; I will come on to discuss that in a moment.

My right hon. Friend has described the particular challenge in his river system, but he will be aware that the aggregate number showed that there were 372,533 spill events, lasting 2,667,452 hours, during 2021. Every Member of this House will have access to those figures and can look them up. I commend to them The Rivers Trust website, as it has made this information very accessible. It is very easy to find where a facility is being monitored and what spillage events have occurred in the previous year.

Not many in the House will have been able to attend the reception for World Oceans Day, where I congratulated Surfers Against Sewage on their 32 years of work trying to make sure that our seas are safe as well. Our seas and rivers are intimately connected.

Mr Deputy Speaker, I am rather concerned that my speech has been leaked to other Members of the House, because the Father of the House has just pre-empted my next sentence. He is absolutely right: it is appropriate that we are having this debate on the day after World Oceans Day. Of course, the devastating effect of the spillages impacts the receiving waterway, and gradually impacts the oceans as the rivers flow into the seas around us. This has a differing effect depending on the severity of the spillage, but the effect is routine, not exceptional.

Water companies were allowed to spill discharges so that they did not back up through the drainage system into people’s houses and on to our streets. The whole purpose of the licences was to allow such an opportunity in exceptional circumstances. What is so apparent from all this information is that it is routine spillages that are causing so much damage to our rivers and our oceans.

Sewage discharges, at least in the River Wye, on which my right hon. Friend’s report brilliantly focused, are only 25% of the problem. Phosphate leaching from fields is more like 65%. Does he feel that the Government have set an adequately ambitious target in saying that 80% of this phosphate should be reduced by 2037? I wonder whether we should go faster than that.

My right hon. Friend is right to refer to other polluters. If we take a look across the country as a whole, we will see that it is roughly evenly balanced between pollution from water treatment plants and storm overflows and pollution from agriculture. In the Wye, pollution is particularly prone to come from agriculture. As he knows, I am one of his parliamentary neighbours and our waterways along the whole of the Wye and the Lugg catchment are very affected by intensive poultry farming and the phosphates that it generates through spreading litter on the fields.

The Government need to join up their support mechanisms for agriculture. Now that we have left the EU, we have the opportunity through the environmental land management scheme to redirect support in a way that meets not only the objectives to ensure viable agriculture in this country, but other objectives of the same Department—the Department for Environment, Food and Rural Affairs.

I would like to see a more joined-up approach, so that we can use the mechanisms that exist, such as the sustainable farming incentive, the environmental land management scheme system and the farming rules for water to ensure that we are not only helping farmers to generate and maintain a viable business—I should declare an interest as a farmer and a recipient of the basic payment scheme at the moment—but improving our waterways. My right hon. Friend was absolutely right to raise that issue.

Sewage discharges at the scale that I have mentioned must stop. Campaigning groups up and down the country, with which I have been working, have recognised that for some time—from national organisations such as the Rivers Trust, which I have mentioned, the Angling Trust and Surfers Against Sewage, which was mentioned by my hon. Friend the Member for Worthing West (Sir Peter Bottomley), to individual catchment campaign groups such as Windrush Against Sewage Pollution, which gave powerful evidence to our Committee. All have been focused on raising awareness and urging the Government to take action to compel change in the behaviour and performance of water companies, and they are right to do so.

I agree with my right hon. Friend’s point about Ofwat, but there is also another issue here relating to the planning system. We find that some of the water companies are not statutory consultees for large-scale new residential developments, and those residential developments can have a vast impact on the amount of surface water run-off at times of heavy rainfall. Moreover, new developments can impact on existing sewerage networks, which, historically, can often be very inadequate. How important would he consider that to be as a part of tackling this issue of sewage discharge into rivers?

Again, my hon. Friend has made a point that I was intending to make in my speech. In fact, it is my final point. I have something specifically to address that in a request to the Minister when we get there. He is absolutely right: development puts pressure on the water treatment works without requiring developers to contribute to improving that infrastructure.

Order. Mr Dunne, could you please face the front of the House, so that your wonderful voice can be picked up by the microphone and your words everlastingly put into Hansard?

I do apologise, Mr Deputy Speaker. I will address you, as I should do.

I was just saying how heartened I have been to be involved in a campaign over the past two years with so many people from across society and the political spectrum who are engaged in trying to restore our rivers to a healthy and natural state. Some people have called for the issue to be solved overnight; of course, in an ideal world we would all like that to be the case, but it is simply not deliverable.

We need to introduce a degree of realism into the debate, because otherwise we find people out there in the wider community believing some of the very unfortunate propaganda that has been used for party political reasons on this debate—not today, but during the course of these discussions—to try to make out that, for example, Conservatives are voting in favour of sewage pollution. That is completely inappropriate and a disgraceful slur, given the work that has been done by Conservatives, with others.

It is not my intention to go into a party debate, but does the right hon. Gentleman agree that there is a real need to ensure that Ofwat accounts for its actions? Does he agree with the suggestion that some have made that there should be annual reports against the priorities for Ofwat to his Committee?

I would like to say to the hon. Lady that my remarks about people misinterpreting what is being done do not apply to her. She has been a doughty champion on this issue; she has led debates in this House and we have had good cross-party discussions. She makes an interesting point: there are already five-yearly reviews, but whether that should be done more frequently is an interesting question, and maybe the Minister might like to respond to it in her winding-up speech.

Moving on, the pressures on the drainage systems have been developing over six decades, as investment in water treatment infrastructure and drainage systems underground has not kept pace with development above ground, as my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) has pointed out. It is also exacerbated by pollution caused by others—both farming practices, which my right hon. Friend the Member for Hereford and South Herefordshire described, and run-off from highways and other hard standing—so I accept that it is not exclusively the responsibility of water companies.

As the Secretary of State himself acknowledged before our Select Committee, the solution ultimately may require separation of surface and foul water drainage systems, and I believe the Department is currently trying to get a harder estimate of the cost of such a massive exercise. It will take enormous capital expenditure to correct the problem for good, and the work will take decades to complete, but a start needs to be made now. The SPS provides that opportunity.

I will focus my remarks now on what Ofwat should consider in its negotiations with water companies to encourage them to identify and quantify solutions. It inevitably takes time to progress solutions through the planning process before the required infrastructure construction can begin, whether through nature-based solutions or traditional mechanical and chemical systems. Much of that involves installing monitoring equipment to increase public awareness of the quality of receiving waters in real time. That was a key transparency recommendation of my private Member’s Bill and our Committee report, and it is now required to be introduced under the Environment Act. However, it merely establishes the baseline; the real spend will be incurred in the corrective measures required.

I welcome the right hon. Gentleman’s mention of the Tideway tunnel. It is an enormously expensive project and collects a lot of the sewage from London, but not from any sewage treatment works above Hammersmith—by which I mean specifically Mogden sewage treatment works. Every time it rains more than a drizzle, Mogden and Thames Water discharge dilute sewage into the River Thames, and the Thames Tideway tunnel can do nothing about that.

I bow to the hon. Lady’s knowledge of her constituency and the area around it. I am informed that the tideway tunnel will take 37 million tonnes of the 39 million tonnes of sewage currently discharged annually into the Thames out of the river, so it may not affect every single treatment plant, and it is primarily coping with the north of the Thames rather than the south of the Thames, as I understand it. I will touch on how it is being paid for in a moment.

Given Ofwat’s unique opportunity to approve capital investment, it needs to focus not only on the economic impact of household bills but on the environmental impact that water companies have. With the rising cost of living, none of us wishes to see bills rising sharply, but equally, if water rates are set so low as to preclude necessary capital investment in water quality, we will simply kick the can down the road for another five years and the problem will be harder to solve and more expensive to fix.

Given that the current cost of capital is still at historically low interest rates, over a multi-decade investment cycle water companies remain well placed to fund significant capital investment. For example, the tideway tunnel, the biggest current project, is due to add only £19 per annum to household bills in London. I believe that a balance can be found as regards Ofwat’s new priority for water companies to improve treatment in addition to the necessity to secure adequate drinking supply and have low bills.