My Lords, the House is sadly becoming used to Questions and debates on sewage overflows, the quality of waterways and water company CEOs’ pay. I do not apologise for raising the issue again.
Water companies continue to discharge sewage into rivers, lakes and coastlines. At the same time, the Government are watering down environmental protections and allowing sewage discharges to continue until 2050. Liberal Democrats are calling for this to end much sooner in order to improve the quality of the water in our rivers, lakes and beaches. England’s sewerage companies have been allowed to get away with discharging sewage into our waterways for far too long.
In England, over the last three years, 2020 to 2023, there have been 1,760,659 overflows, lasting for 7,523,601 hours. Over the summer, beaches across the south-west were closed because of sewage pollution, impacting holidaymakers and tourists alike, while national parks, such as the Lake District, have not been spared spills. Meanwhile, over the same period, water company executives have paid themselves £73 million in remuneration, including £41.2 million in bonuses. In 2022, the then head of the Environment Agency even suggested that executives might deserve to go to prison.
The Conservatives have done nothing to stop water companies dumping sewage into our rivers. They have consistently voted against tougher action to stop sewage overflows, while the water regulator Ofwat said that only three of the 11 sewerage companies were top performers and had met their sewage overflow targets.
The Conservatives’ plan to reduce these sewage discharges is a licence to carry on as normal. Under their plan, water companies will be permitted to continue discharging sewage until 2050 and bill payers will see hikes in their bills to pay for it. The Government are even watering down environmental regulations, such as nutrient neutrality rules, which is likely to make the sewage problem even worse. Liberal Democrats are calling for an end to sewage dumping. Water executives should be banned from paying themselves bonuses until illegal sewage overflows stop on a regular basis.
My Lords, I declare my interests as set out in the register. I co-chair the All-Party Parliamentary Group on Water, and last year I chaired a study organised by the Chartered Institution of Water and Environmental Management into bioresources strategy. I also worked with the water regulator for Scotland, the Water Industry Commission, between 2015 and 2018.
At the outset, I congratulate the noble Baroness, Lady Bakewell, on securing this timely debate on river pollution and the case for the regulation of private water companies. I, for one, recognise that privatisation has permitted the massive investment required to move UK water from being one of the dirtiest in Europe to upgrading our drinking water, rivers and bathing waters to infinitely better quality than they were in the 1980s. We can always improve regulation, although some might say that there is already a wealth of regulators for private water companies: Ofwat, the Environment Agency, the Drinking Water Inspectorate, and now the Office for Environmental Protection.
Let us examine the causes of the pollution of our rivers. A recent phenomenon has been surface water flooding, which was first recognised in 2007, with run-off from our roads spilling into combined sewers. Does my noble friend the Minister, whom I welcome to his place today, think it right that national highway authorities are not held accountable for surface water run-off? There is also the case of inappropriate developments, whereby water companies are required to connect wastewater—sewage—to antiquated infrastructure, causing further spills when mixed with flood water entering the combined sewers.
Large-scale developments built in inappropriate places, such as zone B flood plains, compound that with poor connections. We must tackle the problems of sewage at source, before it enters the rivers and sea. While the Government make the case for building on flood plains in certain circumstances, that should not be encouraged. In any event, such homes will not be insured under the Flood Re scheme if built after 2009.
I will also raise the vexed issue of misconnections. The Government made two commitments under the storm overflows discharge reduction plan that could help to address the issue: to give water companies the right to repair defective drains on private property, and to give water companies the right to alter drainage systems on private property to reduce impermeable areas connected to the combined sewer network. An important part of tackling misconnections is getting to the drains on private land, so that water companies can take action, as the majority of misconnections are on private land. Will the Government also allow water companies access to government-owned land, such as hospitals and schools, to make the necessary repair work and to repair drainage separation work where required? That measure alone would prevent excess water entering combined sewers.
Having examined the causes of pollution in our rivers, is there a case for further regulation of private water companies? Water companies have a positive role to play in areas such as creating natural flood defences—as the noble Baroness, Lady Bakewell, pointed out—particularly by working with farmers and others. I pay tribute to the work of Yorkshire Water and United Utilities in that area. Defra should encourage other private sector players to contribute to that. What plans does my noble friend the Minister and his department have to do so? The Slowing the Flow scheme in Pickering, with which I was associated, is a good example of a natural flood defence combined with a small reservoir—not an overengineered project, such as those to which the noble Baroness, Lady Bakewell, objected—although all those involved were from the public sector. I urge the Government to lever more private sector funding into that. If we are to follow through with linking renumeration to performance, I invite my noble friend the Minister and his department to look at the corollary of that by giving water companies the tools to do the job.
My Lords, I thank the noble Baroness, Lady Bakewell of Hardington Mandeville, for securing this debate and congratulate her on setting out the issues in her superb speech. I will concentrate on regulatory issues.
The key principles of effective regulation are that the regulator must be independent, must levy effective sanctions, must be publicly accountable and must empower stakeholders to curb abuses. Water and sewerage regulators fail these key tests. In any system of regulation, capture of the regulators by the regulated is a recurring problem. However, this is the starting position in the water industry. Two-thirds of England’s biggest water companies employ key executives who previously worked at Ofwat. Water company directors and the chairs of Ofwat and the Environment Agency regularly meet at exclusive clubs to discuss how to quell public anger over bill rises and sewage dumping. The cost of these lavish lunches and dinners is passed to customers, but no agenda papers or minutes of such meetings are made publicly available. We all know that secrecy breeds corruption and the water industry is full of that.
The revolving doors deepen cognitive capture and the cosiness is all too evident. Water companies have an operating profit margin of 35%, even though they have no competition. Water bills have risen by 363% since privatisation, and over 40% in real terms. Up to 28% of customer charges cover the interest paid on debt, which would not be necessary if Ofwat had been vigilant and curbed high leverage at water companies. It has completely failed to protect customers.
In the debate on 22 February, I drew attention to the number of times some water companies have been sanctioned since 2010. I gave the example of United Utilities, which has been sanctioned 215 times. In reply, the Minister seemed to regard that as a sign of success. Imagine an offender hauled in front of the same judge every three weeks for identical offences and given a puny fine, only to reoffend again. Nobody would consider that to be a regulatory success—but the Minister thought it was somehow a success story. I hope he will explain why the Government consider repeat offences by the water companies to be a success—that was just an easy question for him.
My Lords, it is such a pleasure to follow the noble Lord, Lord Sikka, who really does his homework. I advocate to the Government Benches reading his speech in Hansard just to make sure that they have got the full picture.
I congratulate the noble Baroness, Lady Bakewell, on bringing this topic up again. When I was thinking about what to say, I wondered whether I should just print off my speeches from six months, a year or two years ago. We have debated this issue a lot; there is strength of feeling here. The Minister might stand up and say, in his innocence, “But we’re doing more than any other Government have ever done on this issue”. That may be true but, unfortunately, the situation has got worse and the Government are not doing enough.
We have had some really good briefings on this issue. The Rivers Trust produced a very good report saying things such as this:
“No single stretch of river in England or Northern Ireland is in good overall health”.
That is shameful. It also said that 85% of river stretches in England have failed to reach good ecological health, and that toxic chemicals pollute every stretch of English rivers. What a legacy this Government have left us. This will come up on doorsteps—I am going to make sure that it does if I have anything to do with it—and the Government will be shamed.
We also had a very good briefing from Sustain. It made the point that the main cause of river pollution is livestock farming—that of chickens and other animals. This is perfectly true but it does not mean that sewage will not be important; somehow, the general public have heard the word “sewage” and will ask questions about it.
We had a briefing from Windrush Against Sewage Pollution. It talks about the inadequate monitoring and the fact that there simply is not enough data to know the full picture. This is something that the Government have not taken seriously. The Freshwater Future briefing called for the regulation of private water companies.
My Lords, it is a pleasure to speak in this debate. I thank my noble friend Lady Bakewell and all those who are speaking. I will talk about the scale of the pollution problem in our rivers and the causes, and will suggest some possible solutions.
The scale of the Government’s overall environmental ambitions is to be commended. This is the first Government to have set a target to leave nature in a better place than they found it, but there is much to do and time is short. My overall message is that more must be urgently done at scale and at pace to meet the targets that the Government have set themselves. Clear plans, clear policy direction, clear timescales for action, monitoring regimes, and a clear and consistent direction of travel and political messaging are all vital to secure the planning, investment and action needed to achieve these objectives at scale and on time.
Water quality was awful but, thanks mainly to EU measures and their enforcement and monitoring, it improved in the past. Progress is either slipping back or stagnant at best. Nowhere is the scale of the challenge clearer than the daily scandal of raw sewage being discharged into our waterways unabated while water company bosses continue to pay themselves millions in bonuses with seeming impunity from the harm their companies do. Our rivers and inland waterways are in a desperately sorry state. The combined impacts of sewage discharges and pollution from farming and agriculture, chemicals, road networks and urban spaces are taking their toll.
The recently published Rivers Trust State of Our Rivers Report found that, of our rivers:
“0% are in good overall status … 0% are in high overall status … 23% are classed as in poor or bad overall status … 85% of river stretches fall below good ecological standards; only 15% achieve good or above ecological health status”.
My Lords, I thank my noble friend Lady Bakewell of Hardington Mandeville for tabling this very important topic for debate. She has described the consequences for our rivers of discharging raw sewage from storm overflows; the health problems that follow can be very serious, but I will start with some history.
Nearly 170 years ago, sewage was discharged into the rivers that served our great cities. In London, it was the Thames, and one hot summer in 1858 the smell that resulted from the raw effluent was dubbed the Great Stink. It affected Parliament to such an extent that the curtains were soaked in chloride of lime in a vain attempt to reduce the overpowering smell. The failure to deal with a long-running discharge of raw sewage into the Thames had literally got up the noses of MPs and Peers; something had to be done, of course, and it was.
The great Joseph Bazalgette was a civil engineer who then set to work and created the sewage system for central London, including for Parliament. Standards for sewage systems for the whole country followed in 1875, when a Conservative Prime Minister, Benjamin Disraeli, overcame the laissez-faire attitude of his party and passed the Public Health Act, which required local authorities to create or repair sewers at significant cost to ratepayers. It is salutary to think that, over 150 years later, that investment in the sewerage infrastructure has been so neglected that, today, communities across the country face a modern equivalent of the Great Stink.
In Yorkshire, where I am happy to live, the rivers create a beautiful environment, as well as providing water for habitats and a focus for recreation but also water abstraction for domestic consumption. Sadly, too often, these great rivers are also used to carry sewage from storm overflows. I hasten to add that, despite all else that pollutes our rivers, the water companies and the Drinking Water Inspectorate ensure a very high quality of drinking water.
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The Secretary of State is proposing to block payouts to executives of firms that commit criminal acts of water pollution with effect from the financial year beginning this April. Can the Minister say how this information will be collected and monitored? What will be the criteria for preventing payouts?
The Liberal Democrats are calling for four actions. First, England’s water companies should be transformed into public-benefit companies. Secondly, Ofwat should be abolished and replaced by a new regulator which has effective powers to intervene. Thirdly, a sewage tax should be introduced to fund the clean-up of the most polluted lakes, rivers and coastlines. Fourthly, compensation should be introduced for swimmers who fall sick after swimming in dirty waters.
In Wales, things are no better. There have been 287,836 overflows, lasting for 2,290,674 hours over the last three years. The bosses of Welsh Water have been paid £3.5 million, including £841,000 in bonuses, benefits and incentives. The top executives of Wales’s other water company, Severn Trent, paid themselves £15 million, including £11.2 million in bonuses, benefits and incentives. In Wales, Welsh Water is not-for-profit and is still responsible for vast amounts of illegal sewage discharges. The Labour Government in Cardiff Bay are responsible for the regulation of Welsh Water and sewage overflows within Wales. Labour has systematically underfunded Natural Resources Wales, which is responsible for monitoring water quality, and has provided nowhere near enough oversight of Welsh Water. Liberal Democrats are also calling for a ban on sewage bonuses for directors in Wales.
Up in Scotland, illegal sewage discharge is also a problem, but its sewerage company, Scottish Water, is publicly owned by the Scottish Government. Over the last three years, Scottish Water allowed sewage overflows 37,396 times into Scottish rivers, lakes and coastal areas, lasting 403,230 hours. However, of the 3,614 overflows in Scotland’s 31,000-mile sewerage network, only 4%—that is, 144—are currently monitored. The Ferret website made a freedom of information request and, on 22 September, revealed that more than half of Scotland’s bathing waters—49 out of 87—have been contaminated with sewage. Meanwhile, Scottish Water’s top executives took home £2.9 million in remuneration, including £1.13 million in bonuses, benefits and incentives over the last three years. This is unacceptable. However, the SNP and its Green Party partners have failed to tackle sewage discharges, despite being directly responsible for them. Due to their failure to monitor, we do not even know the full extent of the problem.
Liberal Democrats are calling for an end to sewage discharges and a ban on bonuses for Scottish Water bosses until the discharges end. Scottish Liberal Democrats have also called for targets to be set to reduce discharges. Renationalisation will not be effective and would make no difference to the issue. Scottish Water is publicly owned, and we simply do not know how many illegal sewage overflows are taking place. At least in England, according to the Government, 100% of sewage overflow outlets are monitored. However, it is unclear who is doing this monitoring. Can the Minister give information on this please?
We need strong action from the Government to regulate these water companies to stop illegal sewage overflows, coupled with a truly independent water regulator, to ensure that companies are held to account with transparent reporting, plus the acceleration of measures to upgrade sewerage systems and tackle overflows.
In the 2023 round of accelerated infrastructure delivery decisions, we sadly saw a number of nature-based solution project proposals rejected by Ofwat for not being able to reach technical specifications designed for concrete engineering. Ofwat needs to wake up and ensure that it is getting a lot more for its money than just carbon-creating concrete solutions.
Government communications are also not helping. Last July, the Secretary of State sent a communication to water companies through the EA, raising concern about the affordability of environmental investments and encouraging deferral of these investments to keep water bills low. I begin to wonder why the Government spent so much time getting the Environment Act through if they were going to undermine it from the start.
I am sure the Minister will tell the House that Ofwat is independent. However, a recent article in the Guardian of 1 February indicated that water company executives and the chairs of Ofwat and the Environment Agency went for dinner at an exclusive private members’ club to discuss how to quell public anger over rising bills and sewage spills—at an estimated cost of £1,200. It does not appear to me that either the Environment Agency or Ofwat are independent of the water companies—quite the opposite. A cosy chat over dinner about how to alter public opinion, without addressing the root cause of the problem, hardly seems likely to reassure the public.
On Tuesday this week, Southern Water was fined £330,000 over a raw sewage spill at a rural beauty spot. That killed more than 2,000 fish, with staff ignoring an alarm about the emergency for five hours. The YMCA Fairthorne Manor, an outdoor activity centre popular for school trips, had to stop water activities for 10 days after the incident and cancel more than 1,000 sessions. The health implications of sewage are why Liberal Democrats have previously called for sewage sickness victims to receive compensation, and we repeat that call today. It is not right that, as water companies make large profits, swimmers get sick. If someone is poisoned by sewage, they should be compensated for it.
A recent report by Surfers Against Sewage found that the number of people who fell ill after entering water between October 2022 and September 2023 was 1,924. This is three times the number reported in the previous year. The sewage spill that Southern Water was fined for on Tuesday, and many other spills like it, show the need for an effective Environment Agency.
Defra is heavily dependent on the monitoring and intervention of the Environment Agency. However, cutting the Environment Agency’s budget from £170 million in 2009-10 to £76 million in 2019-20 is not likely to assist this hard-pressed organisation to act effectively. A general rule of life is that you get what you pay for. It is essential that the Environment Agency is provided with adequate funding to conduct inspections and take remedial action.
According to a Guardian article on 13 February, the Levelling-Up Secretary, Michael Gove, proposed an amendment to the then Levelling-up and Regeneration Bill that would strike at the directive on preventing extra sewage going into waterways in sensitive areas by either updating infrastructure or buying biodiversity credits. The Secretary of State’s action would allow developers to ignore the rules that were so strenuously fought for in this Chamber by the noble Duke, the Duke of Wellington, and others. The Government are not taking this issue seriously. There is then the issue of axing the right of developers to connect to already overloaded sewerage systems, which is not currently anywhere on the horizon.
On Tuesday afternoon, as I sat in this Chamber waiting for the next business, a message came through to my private email from Southern Water, of which I am a customer. The heading was, “Tired of hearing about storm releases? Us too”. There then followed some excellent nature-based solutions that it is prioritising. Obviously, it was trying to head off criticism. However, when I got home and watched the local television news—delayed due to the football overrun—I saw the news of Southern Water’s fine, to which I referred earlier. This sewage discharge was in the next village to where I live. The worst aspect of this is that it took from 2019 until this week to come to court and be dealt with. No wonder water companies include the cost of possible fines in their business plans. To them, it appears to be all part of their operation.
The country cannot wait any longer. The countryside and our waterways are submerged by pollution. A radical overhaul is needed of the way in which water and sewage companies operate, and a more accountable replacement Ofwat needs to be delivered without delay. I beg to move.
The Government promised in this place and the other place that Schedule 3 to the Flood and Water Management Act 2010 will be implemented as it has been in Wales. Will my noble friend confirm that this will happen in England before the election? It is extremely important that we stop the automatic right to connect, whereby water companies are expected to connect pipes from three, four or five-bedroomed homes to antiquated Victorian pipes that simply cannot take the amount of wastewater and sewage coming out of these new builds. The Government must insist on mandatory SUDS—sustainable drainage systems—for all new builds. I hope they will also commit to an ambitious programme of retrofitting to existing developments, where appropriate. Obviously, that raises the question of who will maintain the SUDS, which is an open question at the moment.
Will the Government look favourably on rewarding farmers for storing water on flood land? According to the NFU, over half the most fertile farmland in Britain is on flood plains. The farming community and landowners are performing a public good by preventing communities downstream from flooding. However, there is great uncertainty as to how farmers can benefit from public funds. Often this flooding will include sewage. Can my noble friend clarify who will be eligible to apply for both the flood recovery framework and the farming recovery fund, and what level of damages can be recovered? Equally, will Defra recognise that the role farmers play in storing floodwater is a public good? Will the Government look positively at a whole-catchment area approach, and more slow-the-flow schemes such as those successfully implemented in Pickering and elsewhere protecting downstream communities from flooding?
I applaud the action that the Government have taken on holding directors to account, particularly the instruction they have given to Ofwat and the work Ofwat has done on executive pay. Ofwat has been very clear that companies need to demonstrate that performance-related executive remuneration is linked to performance for customers and the environment. In June last year, Ofwat confirmed that where companies do not demonstrate that executive pay is linked to performance, it will stop companies recovering the cost of bonuses from consumers.
I welcome the level of investment announced in the five-year business plan that Ofwat has yet to approve. It will factor in £96 billion in the next investment period 2025 to 2030, of which £11 billion will be allocated to reduce overflow spills. The noble Baroness, Lady Bakewell, identified an area which has only been recognised for spend—innovation—since 2014. I hope that Ofwat will go much further, recognising the natural flood defences to which the noble Baroness referred as innovative projects under the spending review. I think this will help many of the issues the noble Baroness identified. We do not want overengineered projects, we want natural flood defences—and these schemes have to be approved as part of the price review.
Finally, the NAO report in November 2023 made a number of very apt recommendations to increase resilience to future flood events, such as reprofiling capital spend, maximising long-term value for money and ensuring flexibility to switch money from capital spend to asset management. My preference is to establish a single budget for all flood spending.
Finally, will my noble friend look favourably on the use of SUDS and natural defences to ensure no overspill of raw sewage into combined sewers, so that it will not enter the rivers. Will he look favourably at a whole-catchment area management approach, to make highways authorities responsible for water run-off of pollution from these surfaces into combined sewers? Will he address the issue of missed connections and permit water companies to enter private land and government property in schools and hospitals? Will he look at giving water companies the right to alter drainage systems, consider the recommendation from CIWEM for a comprehensive independent review of water management, inform the public of the importance of water efficiency and address all the recommendations of the NAO report of November last year?
Despite the repeat offences, bonuses continue to flow. Again last week, in response to my suggestion that customers should elect water company directors and vote on executive pay, the Minister said:
“Remuneration committees for each water company independently determine the appropriate level of remuneration for their water company executives”.
This is simply not true. First, remuneration committees are staffed by non-executive directors who owe their position to favours from the executive board. They have absolutely no independence from the executive board and they very rarely bite the hand that feeds them. None is a substitute for direct representation of customers on company boards.
Secondly, the Minister added:
“Ofwat expects water companies to take into account the legitimate concerns of stakeholders when making decisions on the application of remuneration policies”.—[Official Report, 22/2/24; cols. 758-9.]
Every opinion poll has shown that people are concerned about high bills, pollution, lack of investment and poor regulation. Relying on failed structures and practices cannot give us effective regulation, yet the Minister was defending them, for some reason. Maybe he has had second thoughts since; I do not know.
In the debate on 22 February, the Minister defended water companies with the claim that, since privatisation, £215 billion has been invested in infrastructure. I do not have any confidence in that number because it has been manufactured by dubious accounting practices. I will give two examples, both relating to the accounts for 2022-23 published by Thames Water.
First, on page 134 of those accounts, the company states that it
“capitalises expenditure relating to water and wastewater infrastructure where such expenditure enhances assets or increases the capacity of the network. Maintenance expenditure is taken to the income statement in the period in which it is incurred. Differentiating between enhancement and maintenance works is subjective”.
What does that mean? It means that the amounts that are capitalised to show higher investment cannot be independently corroborated. It just depends on the whims of the directors; there is absolutely no solidity to it. Will the Minister write to the House after this debate and say how much of the repair and maintenance costs have been capitalised since privatisation by water companies so that we can remove it from the £215 billion?
Secondly, on page 143 of Thames Water’s annual accounts, it states that
“£215.2 million of borrowing costs were capitalised in the period”
and gives a comparison of £114.8 million for 2022. So, the investment made by Thames Water in those two years alone has been inflated by £330 million. The crazy logic of this policy is that, when a company mends leaks by borrowing money compared to one that uses retained earnings, it is somehow investing more and its assets are worth more. That simply is not true. We know a company that used such imprudent policies: Carillion. I have a slight declaration to make here in that I was an adviser to the Work and Pensions Committee for that investigation—and we know what happened to Carillion. This is where water companies are heading with the full blessing of the Government, Ofwat and all the other regulators. Again, I ask the Minister to write to the House and explain both how much interest has been capitalised by water companies since privatisation and what the consequences of such practices are. Are those companies going to go the same way as Carillion? I fear they are; Ofwat certainly has no financial nous to check these things.
After 35 years of failure, we can all see that the current regulatory structures are highly deficient. We cannot have that; we need to change it. Ofwat and the Environment Agency need to be replaced by bodies that are pluralistic, with direct representation of stakeholders on their boards. The regulators and the regulated do not need to have a hostile relationship but there must be distance between them. They cannot be in each other’s pockets or cosy. Regulators must owe a duty of care to stakeholders so that they can be sued for failing the public; that is virtually impossible at the moment. All significant board meetings must be in the open so that we can all see how appropriate evidence submitted to regulators is weighted, filtered or acted on. At the moment, there is complete secrecy. All board minutes, working and agenda papers need to be publicly available. If the Minister possibly feels uncomfortable with those suggestions, it would be helpful to know why he is afraid of openness and democracy. Why is he afraid of empowering stakeholders and the public at large? We need to bring public pressure upon the water industry and its regulators so that they clean up their act.
Clearly, we are all tired of talking about this and of the Government replying in platitudes, saying how it is going to be fine and that they have done everything anyone could possibly do. They have not. I think that even the two noble Lords on the Front Bench know that water regulation has failed; I would be very disappointed if they did not know that basic fact.
I have all sorts of facts and figures here but, quite honestly, I will have to cut those bits out of my speech because the noble Lord, Lord Sikka, has used them all. It is time that all politicians of all political parties question and reject the ideological belief in water privatisation; it has failed. Once you are free of that ideological straitjacket, when the water companies say, “We’ll go bankrupt if you don’t let us raise the average water bill by £150 a year”, you can say, “No problem. We can take you over; that is fine. You failed. We’ll buy you for 50 pence”, or whatever.
The water companies had the public money to invest but, instead, they paid it out in dividends. Either they can do what they were paid to do already or they can go bankrupt. As I say, we can buy them. An even better solution has been put forward by the charity We Own It, which suggests that, instead of the stupid, paltry fines that the water companies keep getting thrown at them—they pay them quite happily because they just do not care; it is not much money—we could take shares from them every time. We could be quite strict and tough about it, then we would have them in no time.
The water companies are saying that they need the predicted £150-a-year rise in bills with which they are insulting us at the moment in order to invest over the next 27 years. However, the £57 billion that the Government are offering is the same amount of money that those water companies have paid to shareholders in the previous 27 years. Where is the guarantee that any money we give to these water companies will actually be spent on the things we care about? I would argue that we have absolutely no guarantee.
Of course, Ofwat has failed and the Environment Agency has failed. I feel very sad about that. Instead of our regulators acting years ago to clamp down on CEO bonuses and shareholder dividends, they are still going to private dinner clubs with the water industry to discuss how to quell the public anger at sewage and rising bills. As I said, there will be anger over this at the next general election. The cost of living will be the major concern but sewage will come up.
I have had quite a lot of people saying to me, “Oh, we should just take all these CEOs and top execs to court, throw them in jail and forget about them, basically”. I am not a big fan of putting people in prison. What we should do with all these top execs is give them community service. They should be out there on the riverbanks and the beaches clearing up the mess that they have made. A couple of years of doing that and possibly other CEOs would learn that you cannot carry on polluting our natural resources in that way.
I will cut huge chunks of my speech out now, which I am sure everybody will be very happy about. Local campaigners in West Oxfordshire have worked with the district council to ensure that planning applications have conditions set for Thames Water to upgrade illegal sewerage systems before accepting the occupancy of new housing. The effectiveness of the conditions is being tested, with the first examples under way. The Environment Agency has been prodded into action, and on one application of 1,450 houses north of Oxford it said clearly that the Oxford sewage works is operating illegally and has failed to upgrade, despite the water company having had the money years ago.
I do not want there to be a shortage of housing. I do not want us to stop building new housing; I want to stop our polluting some very precious ecosystems. The same rule that I have just talked about would apply to any new housing served by the Oxford sewage works and every other illegally operating sewage works in the country. It will stop a new deluge of sewage being dumped into local rivers due to overloaded systems.
How many sewage works around the country are currently operating illegally and do not have the capacity to handle the existing levels of sewage? This is a very important question. If we do not have the data on that, we really ought to. Perhaps the Minister can write to me and to everybody about that, because it is a crucial question. You cannot fix a problem if you do not know what it is and how big it is.
Lastly, can the Minister explain how water companies that are blocking new housing from being occupied and have never invested the money given to them to produce a modern sewerage system can now be expected to do so? We have let the water companies run rampant over our very precious land, rivers, waterways and all sorts of ecosystems. It is time we stopped them.
The report found that very little had changed or improved since the last full report in 2019. Worryingly, river sampling has also decreased, with nearly 6% fewer river stretches receiving health clarifications compared with 2019.
What a sorry situation this is. From Pooh-sticks to the simple pleasures in life of sitting by a cooling river on a warm day, and for the 7.5 million people who regularly wild swim, our rivers and lakes are precious and life affirming. As the noble Baroness, Lady Jones, said, people care passionately about our rivers, which occupy a deep and sacred place in our natural soul and well-being. Their health is an election-defining issue that this Government need to invest more commitment and energy into.
The Government should be aware that there is a reason for the Liberal Democrats going on—and, at times, on—about sewage in our rivers. It is not just because my party cares about these issues but because we know that the Government’s voters care just as much. My party is committed to protecting our natural environment. That protection will be at the heart of our overall policy approach. Everyone should be able to enjoy access to nature, free of this mess and its risk to their health.
The water companies have failed to invest in water infrastructure, especially at a time when interest rates were historically low. In 2011, for example, Defra’s Water for Life paper found that only 1% of public sewers were replaced between 2000 and 2008. At that continued rate, it would take 800 years, or 10 times longer than a life cycle, to replace them all. This lack of investment has continued until today, with Ofwat finding a £587 million water company underspend for the years 2020 to 2023. At the same time, the shareholders continue to receive record bonuses. Poor regulation and enforcement across several sectors are making things worse. The Environment Agency saw its environmental budget more than halve in 10 years, from £170 million to £76 million in 2019-20.
As a result, it is struggling to monitor and enforce the rules. Ofwat has similarly failed to hold water companies to account. It has prioritised low bills for customers over the need for investment in networks and environmental protections. We have seen a revolving door between Ofwat and the water companies. The question remains: who regulates the regulators? We need clear and enforceable statutory regulations for long-term improvements in overall water health to be added to the Environment Act 2021.
Sewage may be in the public consciousness—and, in too many cases, people’s nostrils—but it is only a small part of the overall pollution problem. Land management practices must change. This is an issue that the Government have failed to tackle. ELMS has been rushed. Too much money is given to big agricultural businesses. Our small farmers are excluded and are suffering. Many more small-scale farmers must be brought into the scheme, and more help must be provided for them to make applications. The programme must adequately compensate farmers for the nature-friendly practices that we all need and depend on. There is far too little monitoring of our waterways and far too little understanding of the dangerous cocktail of chemicals, and for ever chemicals, that are still present. When do the Government plan to bring forward their chemicals strategy, a key call of the recent OEP report?
The impacts of climate change are real and are happening now. The average UK winter has become around 1 degree warmer and 15% wetter over the past century. We are seeing more rain and it must go somewhere. We must work to separate rainwater from our sewerage systems. Climate change puts increased pressure on the systems and overwhelms them. Heat will increase pressure for water abstraction, and floods bring increased risks of pollution events. I warmly welcome the £25 million of government money that was announced last week to work with nature, not against it, to help with flood management. It is a welcome sign of a change of direction, but we could have had £250 million and that still would not have been enough.
We need more whole-catchment-area, nature-based approaches to slow water, hold and release it slowly to protect soils, and to filter rainwater prior to it entering our waterways. We must do more to work with nature, not against it, in an age of extreme weather. We need long-term plans and greater ambitions from this Government. Ambition must be accompanied by consistent political will, determined action, adequate investment and regulatory regimes that are statutory, well-funded, enforced and fit for purpose.
My party is clear: we are determined and committed to real change in these areas. We will transform the private water companies into public benefit companies. Our view is that Ofwat has failed to get to grips with the problems and define solutions, so our policy is to abolish Ofwat and replace it with a more effective regulator with more powers to directly intervene with speed and much-needed enforcement teeth. We will ensure that there is more adequate funding for regular monitoring of all our waterways. The Liberal Democrats are also committed to introducing a sewage tax on water company profits to fund the clean-up of the most polluted inland waterways and our coastline. We will also introduce compensation for swimmers, and others, who fall sick after exercising in water. These are our policies for change. I kindly ask the Minister: what plans do the Government have to offer?
These are some of the more recent incidents. Over 2020 and 2021, two Yorkshire rivers, the River Nidd and the River Wharfe, received almost approximately 1.4 billion litres of untreated wastewater—for “wastewater”, read “raw sewage”. The River Nidd saw 870 sewage dump incidents in 2022, according to Environment Agency figures. Testing of water pollution in the River Nidd at the time showed that the harmful bacteria E. coli was at “concerningly high” levels.
In 2016, the Environment Agency received a report of pollution in Hookstone Beck in Harrogate. Investigating officers traced it to the nearby overflow, which had blocked. The investigation found that almost 1,500 fish had been killed and that water quality was affected for 2.5 kilometres downstream. A series of further blockages and discharges took place in the following months.
These are just some of the pollution incidents relating to the discharging of raw sewage in our great Yorkshire rivers. The question for the Minister is this: why have these pollution incidents been permitted without earlier intervention by the regulators and the Government?
The EU water framework directive has been retained by the Government as retained EU law. Prior to 2019, the water framework directive was a key driver to very significant capital investment by water companies in their wastewater treatment works and sewage systems. In Yorkshire, there were some very large schemes to improve wastewater treatment facilities and the system attached to them. The Environmental Improvement Plan 2023 only requires
“water companies to have eliminated all adverse ecological impact from sewage discharges at all sensitive sites by 2035, and at all other overflows by 2050”.
The Government are apparently satisfied that raw sewage discharges can continue for a further 25 years. What is worse is that these aims in the plan are not even legally binding.
Further, the Government’s Storm Overflows Discharge Reduction Plan of 2022 set a target for 75% of overflows close to high-priority sites such as SSSIs and so on by 2035. This is a considerable dilution of the water framework directive, which set a date to restore all surface water bodies—rivers, streams et cetera—to good ecological status by December 2027. Yet the Government are apparently okaying 2035 for the most sensitive areas.
One hundred and fifty years ago, a Government were able to accept, first, that they had a responsibility and, secondly, that taking responsibility meant having a duty to act. The situation we suffer today is that Conservative Governments have been keen to outsource these critical responsibilities of providing clean drinking water and treating sewage so that the end-result can be discharged to rivers or the sea without causing pollution.
It is time for the Government to appreciate that discharging raw sewage into watercourses is not acceptable. It is a public health scandal. But, of course, public health is underfunded, as is the Environment Agency, to tackle these health challenges. Disraeli understood that his Government would be judged by the approach to public health. That same challenge exists today, and we are yet to see the Conservative Government rising effectively and with determination to that challenge.