[Relevant document: Oral evidence taken before the Environment, Food and Rural Affairs on 12 December 2023, on Thames Water, HC 402]
11:00 am
Hannah Bardell (in the Chair)
I will call Layla Moran to move the motion and then the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.
That this House has considered the performance of Thames Water in Oxfordshire.
It is a pleasure to serve under your chairmanship, Ms Bardell. I thank the Minister for being here to listen to my constituents’ concerns.
The River Thames is an integral part of life in Oxfordshire. Whether they are rowing, swimming, punting or walking, Oxfordshire residents love spending time outdoors and around our precious waterways. But our local environment is under threat, thanks in part to the shoddy performance of Thames Water. One constituent described Thames Water as a “disaster of a company”, and I am afraid to say that I completely agree. It dumps sewage in our rivers, fails to unblock drains, fails to fill reservoirs and does not deliver value for money.
It will come as no surprise that I start with the issue of sewage dumping. The statistics speak for themselves: across the network, Thames Water spilled sewage for 6,500 hours in the last nine months of 2023. Right now, sewage is flowing from treatment works at Combe, Church Hanborough, South Leigh, Stanton Harcourt, Standlake, Appleton, Oxford, Kingston Bagpuize, Drayton, Clanfield, Faringdon, Wantage and Didcot. There are 28—I will not go through all of them. It is like this every day. Sewage pollutes our waterways, damages the natural environment, and poses serious health risks to wildlife, pets and humans.
My hon. Friend is making a remarkably important speech and delivering it very well. We know about the issue because of testing, yet the testing in her area and mine is done by the water companies themselves—in my area, the north-west of England, by United Utilities—so there is a lack of confidence in my constituency, and I suspect in hers, about its reliability. Does my hon. Friend agree that it is wrong for the water companies to mark their own homework, that instead the water companies should be charged the full cost of that testing, that that money should be given to the Environment Agency, and that testing should be done independently, so that we can rely on it?
I thank my hon. Friend for his campaigning on the issue at the national level; my constituents are grateful to him. I could not agree with him more. I will talk about bathing water status in a moment.
Residents set up a huge citizen science group so they could do the testing themselves. They worked with Thames Water at the time, but they wanted the Environment Agency to be properly funded so that it could do the testing and they could have that reassurance. It is not right to ask residents to do that work, and I share my hon. Friend’s scepticism about the water companies sticking to their word and doing the testing 100% correctly, given that it is in their interests to make it look like the issue is getting better.
A mother got in touch with me after her son was admitted to hospital with a water-based bacterial infection on his hand. He is a keen rower, and a blister became infected by dirty river water from the Thames in Abingdon. It is not just about humans: a number of constituents also got in touch to say that they are worried about their pets. Matthew recently contacted me after his much-loved greyhound, Roy, sadly passed away. Matthew is convinced that that happened as a result of Roy going into raw sewage as he was frolicking along on his normal walk, and the vet said that contaminated water cannot be ruled out as the cause of death. There has been a spate of such deaths in Oxfordshire, including in Eynsham and Wolvercote, and I wonder whether there have been any elsewhere in the country. We have tried to interrogate the Department and Thames Water about the issue, but they do not monitor how many animals—that is, pets—are getting ill. Thames Water has biodiversity targets, but to the best of my knowledge the Department does not look at the issue at all. I urge the Minister to do so.
Just beyond Oxfordshire, in the village of Charvil, in Wokingham, a local fisherman described seeing raw sewage float past the end of his fishing rod. It is just disgusting. When we think of frolicking about in boats and the classic English countryside, we do not want that image. Rowers should be worried only about freezing temperatures at this time of year, dog walkers should be worried only about how muddy their pets are when they get home and fishermen should be worried only about their catch. No one should have to endure raw sewage floating past them or risk getting seriously ill by doing an activity that they love. The Government, despite their frequent protestations, are not doing enough.
It is a pleasure to serve under your chairmanship, Ms Bardell. I thank the hon. Member for Oxford West and Abingdon (Layla Moran) for bringing this incredibly important debate on the performance of Thames Water before the House.
Let me be clear: Thames Water’s performance is completely unacceptable, and it must take urgent steps to turn this around. Its customers deserve better, and I want to begin by assuring this House that improving the performance of all water companies, including Thames Water, and ensuring that they deliver for customers and the environment, are top priorities for this Government.
As has been raised in this debate, the performance data for Thames Water is stark. According to Ofwat, Thames Water is failing to meet its commitments to customers on eight of the 12 common performance metrics, particularly on ensuring a consistent supply of water and on its pollution instances, as the hon. Member for Oxford West and Abingdon laid out for all to see. The Environment Agency’s findings tell a similar story, with Thames Water’s environmental performance at the worst levels since 2013, with 17 serious pollution instances in 2022.
The Government and regulators do not take underperformance lightly. As a result of failing to meet its performance commitments, Ofwat has directed Thames Water to return over £73 million to customers during the financial year of 2024-25, which is in addition to £51 million returned to customers during 2022-23. There are also ongoing investigations into compliance at sewage treatment works under way by both Ofwat and the Environment Agency. While it would inappropriate for me to comment further on the specifics of those proceedings, as they are currently under way, they are a clear example of robust regulatory action to hold water companies to account by not only Ofwat but the Environment Agency.
I have been meeting with Thames Water on this issue for years now, and every time we meet, it has a plan. Every time we meet, there is a new bit to the plan or the plan has progressed a little bit. I hear now that there is a new plan: what will be different about it? It is everyone’s interest in this House to get this to work. Can the Minister assure us that this plan will actually deliver what people want?
I want to reassure not only the hon. Lady but every Member who has customers of Thames Water that the Government will hold the water company to account through the use of the regulators—the Environment Agency and Ofwat. I will shortly meet again with the new chief executive of Thames Water, which follows a meeting that the Secretary of State and I had with the CEOs of Thames Water and other water companies very recently. It also follows on from a meeting that the previous water Minister, my hon. Friend the Member for Taunton Deane (Rebecca Pow), had back in November. We want to take all these concerns seriously and deal with surge discharges, supply interruptions and internal sewer flooding, which was also mentioned by the hon. Member for Oxford West and Abingdon.
I know that Thames Water is under no illusions as to the scale of the challenge. It has recently published its revised three-year turnaround plan to address some of the concerns raised today, and while we all understand that it will take time to turn performance around, I want to be clear that I expect to see clear and measurable progress being made by the company as swiftly as possible.
I want to press the Minister on the point I raised with my hon. Friend the Member for Oxford West and Abingdon (Layla Moran) a moment ago. The Secretary of State, the right hon. Member for North East Cambridgeshire (Steve Barclay), said something encouraging the other week. He said it was not right that the water companies were marking their own homework in assessing the scale of the problem. Does the Minister agree with that? More importantly, will he give us some details on the testing? There are more than a dozen water company assets around Windermere, many of which are failing, but we only know that they are failing when the water companies actually do the testing. Should it not be the case that the water companies pay for the testing but leave the Environment Agency to actually do it, so that we can have confidence that the data is independent?
I will come on to that point as part of my speech. I also want to clarify that we only have to turn the clock back to 2010 to see that only 7% of storm overflows were monitored. For a Government and a regulator to hold water companies to account, they need 100% monitoring, which we achieved at the end of December last year. That is 100% monitoring of storm overflow discharges compared with only 7% in 2010.
I want to pick up on some of the specific points made by the hon. Member for Oxford West and Abingdon on bathing water status. I know how important this issue is, having campaigned in my constituency for a bathing water designation on the River Wharfe in Ilkley. The hon. Lady rightly raised the issue of the “poor” classification on her bathing water designation. I know the challenges of that, since my local bathing water designation is still classed as poor. As we both recognise, that is why it is incredibly important to have a specific plan to tackle improving the designations poor, sufficient, or even good, to bring them to an excellent rating.
At Wolvercote, the Environment Agency is currently undertaking a nationally funded joint bathing water investigation, both in Yorkshire and in the Thames region, including enhanced monitoring and DNA sampling. That will help the Environment Agency find the sources of bacterial pollution and develop plans specifically on a local catchment area approach to address them.
Thames Water also has a role to play in fixing the problem. That is why, as part of its business plan from 2025 onwards, it will identify and address additional actions needed to improve the quality of the bathing water site, which the hon. Member referred to. Although those business plans are subject to scrutiny by Ofwat, to ensure value for money for customers, I welcome those positive steps to protect people and the environment.
I want to pick up on some points made about data. We must remember that bathing water quality in England has improved significantly due to robust regulation and strong investment. In 2023, almost 90% of designated bathing waters in England met good or excellent standards. That was up from 76% in 2010, despite stricter standards being introduced in 2015.
11:30 am
Sitting suspended.
In Oxford, local campaigners and I fought hard for Wolvercote mill stream at Port Meadow to gain bathing water status. I know the Minister has a keen interest in this, because the River Wharfe in Ilkley, which was the first to gain that status, is in his constituency. We were very proud to follow his constituents and become the second. Indeed, the then Minister with responsibility for water, the hon. Member for Taunton Deane (Rebecca Pow), came to wade in it herself when the announcement was made in 2022.
However, at every single data collection point so far, Wolvercote mill stream has been classed as poor. If the water quality does not improve in the next three years, we will lose bathing water status. Despite bathing water status placing a legal duty on water companies to clean up their act, Thames Water continues to discharge sewage from the treatment works at Cassington and Witney, just upstream of Port Meadow. That means that the levels of harmful bacteria, including E. coli, are dangerously high.
The regulations clearly are not working. In April last year, the Secretary of State for Environment, Food and Rural Affairs promised legally binding targets on sewage dumping, yet nothing has come to fruition. The Government talk about progress in monitoring, but it is not good enough just to monitor the sewage that is flowing into our rivers; we need to stop it altogether. Areas such as Port Meadow simply cannot afford to wait. If it loses bathing water status, the blame will lie squarely with this Government. Has the Minister considered tougher targets for water companies, specifically in areas such as his and mine that have bathing water status? Will he look at introducing a targeted plan for bathing waters that are rated as poor?
This is not the first time that I have raised the issue, or raised it with the Minister. I asked to meet him back in December, after Port Meadow was first rated as poor. I thank his office, and I am sure we will find a time in the near future to discuss it in more detail. However, I am afraid to say that sewage dumping is not the only thing that I would love to chew his ear off about, because it is not the only area in which Thames Water is failing. Almost no part of Oxford West and Abingdon was unaffected by the flooding after Storm Henk in January. It is one thing to see floodwaters lapping at the door, to be scared and to have to decide what to take up to higher levels while trying to get the water out. That is scary enough, but for the residents of Lower Radley, blocked drains meant that they were not looking just at floodwater but at floodwater and sewage in their homes. That was a direct result of Thames Water failing to clear drains that we had been alerting them to for months because they were blocked; in fact, it had been three years since Thames Water had cleaned them. One resident wrote to me:
“This has been going on for some years with zero remedial action from Thames Water…utterly appalling!”
One couple who are suffering are in their nineties. They simply should not have to go through that misery time and time again. Fields, gardens and homes were flooded with water; meanwhile, residents in Farmoor noticed that the levels of the reservoir were low. Thames Water claimed that the level was normal for this time of year, but residents were confused because it seemed that the whole of Oxfordshire was under water except the reservoir. Thames Water said that “dirt and debris” in the rivers prevented abstraction, but one resident described the situation as the water company
“pooing in their own nest”.
Filling reservoirs in periods of heavy rainfall is vital for drought preparedness, but Thames Water’s refusal to invest in infrastructure and fix leaky pipes is putting that at risk. In the south-east, we regularly endure hosepipe bans in the summer; in the summer of 2022, the village of Northend in south Oxfordshire was forced to survive on emergency rations after its water supply stopped entirely. Yet Thames Water loses an estimated 630 million litres of water to leaks every single day—the highest it has been in five years. Thames Water cannot seem to put anything in the right place: there is sewage not in the rivers but in people’s homes, and water is leaking out of pipes while the reservoir’s level drops. It is not just gross; it is gross incompetence across the board.
My constituents are incredibly concerned that, despite that litany of errors, Thames Water is planning to embark on an enormous infrastructure project called the south east strategic reservoir option—known locally as the Abingdon reservoir. It is vast. It will cover an area of 7 sq km and have a volume of 150 million cubic metres. Local campaigners, such as the Group Against Reservoir Development, have raised a number of questions about the water demand projections used to justify this project, the environmental impact of the project and the safety measures that are in place to mitigate any risk of a dam breach. So far, Thames Water has failed to answer those questions. More importantly, however, my constituents simply have no faith that Thames Water has the wherewithal to undertake such a significant infrastructure project. In December, its auditors even warned that the water company would run out of money by April of this year without a serious cash injection from shareholders. Thames Water has been horrifically mismanaged, and there is no sign of that turning around. That is why I am calling for a public inquiry into its super-reservoir plans, to ensure rigorous scrutiny and transparency in their decision making.
It is all the more galling, in the middle of this cost of living crisis, that Thames Water announced late last year that water bills were set to rise by a whopping 60% over the next six years. That increase is to allow water companies to invest in infrastructure, which is something that they should already have been doing, and that they are now asking bill payers to do in their stead. The average household water bill will go up from £456 a year to an expected £735 a year by 2030. The price hikes are going to hit this year: water bills will increase by 6% above inflation in April.
People cannot afford it. They are already struggling; they are on their last 50p, if they even have that. They cannot cope with this. That is why Oxfordshire Liberal Democrats have started a petition calling on Thames Water to scrap this unfair price hike. What conversations has the Minister had with his departmental colleagues and the water company about the fairness of this hike? Is support in place for people who will simply not be able to afford the increase? We are not just talking about people who are on universal credit anymore. We are talking about people who go to work every day. They are in work, but they are in poverty, and this will just make the situation worse.
Do the Government seriously think that it is acceptable for taxpayers to foot the bill for the historical failings of Thames Water? Well, the Liberal Democrats do not. That does not just go for Thames Water; the whole system needs to be fixed. We need radical action. We need to protect our environment and bring down people’s bills. The Liberal Democrats are calling for England’s water companies to be transformed into public benefit companies. That is a new thing for the UK: it is not a social enterprise, as such, and it would mean a complete shake-up of the boards. Public policy benefits would explicitly be considered in the running of the water companies, putting a stop to the prioritisation of profit over our waterways, without the distraction of renationalisation. We want to see environmental experts and local community groups on the boards to ensure proper scrutiny and transparency. The concept is radical and new, and I would like to know whether the Minister has looked into it seriously because, if not, I would urge him to do so. We are also calling for a ban on water executive bonuses until sewage dumping stops, a sewage tax to fund the clean-up of the most polluted lakes, rivers and coastlines, and, ultimately, an end to sewage dumping altogether.
In our view, the Government have acted far too slowly and limply, as our rivers get dirtier and our water bills get higher. Knowing that it is happening is not enough; it is time for radical improvement. I look forward to hearing the Minister’s remarks about what the Government are going to do about it.
Ofwat has directed Thames Water to produce a service commitment plan. That will require Thames Water to publicly commit to a plan for how it will start to turn its performance around. Please be assured that regulators and the Government will scrutinise those plans in detail to ensure that everything possible is being done to get the company back on track with its service delivery, environmental performance, and ensuring that customers rightly get the good supply they deserve.
To address the point on storm overflows: the frequency and duration of storm overflow discharges in the Thames region is completely unacceptable, though it would be unrealistic to suggest that the issue can be simply turned around overnight. Independent estimates show that eliminating all discharges nationally would cost between £120 billion and £600 billion, increasing water bills between £271 and £817 per annum by 2049.
Our storm overflows discharge reduction plan is the most ambitious plan to address storm overflow discharges in water company history, delivering £60 billion of capital investment by 2050. The Government have also driven water companies to ensure that 100% of storm overflows, of which there are about 15,000, have been monitored. Furthermore, our plan for water, which is delivering more investment, stronger regulation and tougher enforcement to clean up our water, makes a step change in how we will manage our waters, delivering for customer bill payers and for our environment.
I also want to pick up on supply interruptions, which the hon. Member for Oxford West and Abingdon referred to. I know that customers in Oxfordshire and the wider Thames region have experienced multiple supply interruptions, largely as a result of adverse weather, in the past 18 months. I understand how frustrating that can be for customers. Water companies must by law ensure a continuation of water supply throughout an emergency. Plans must cover a range of risks and include the provision of alternative water supplies. Those requirements are set out in the security and emergency measures direction 2022.
I wish to assure hon. Members and the House that, during any incident, the Department for Environment, Food and Rural Affairs engages closely with water companies to obtain accurate and timely updates on the scale, impact and response, to ensure incidents are being resolved as swiftly as possible, and that impacted customers—particularly vulnerable customers—have access to alternative sources of water, such as bottled water, when a supply interruption takes place.
I understand how pressing a problem this is for affected customers, particularly in the Thames region. For that reason, this is another issue I will raise directly with the chief executive when I meet him shortly, as we have done in relation to recent supply interruptions in the Reading area.
The hon. Member for Oxford West and Abingdon mentioned storm Henk. Extreme weather can also lead to sewer flooding, such as that experienced during storm Henk in January. I understand how difficult and distressing it can be for the public when sewage gets into their gardens and properties. Indeed, recently I spoke to the Under-Secretary of State for the Home Department, my hon. Friend the Member for Newbury (Laura Farris); although her constituency is not in Oxfordshire, she has constituents who are part of the Thames Water region. We specifically talked about Lambourn in her constituency, where again Thames Water’s response to an incident has not been sufficiently robust. I expect the chief executive of Thames Water to update me on what it is doing in Lambourn when it is dealing with surface water flooding.
I want to be very clear that any sewer flooding is unacceptable and that Thames Water has reassured me that it plans to invest £1.12 billion in 250 sewage treatment works between 2025 and 2030, including those in Oxfordshire, to increase capacity to prevent sewer flooding from happening again. Ofwat will also assess internal sewage flooding inside people’s homes as a core performance commitment and where companies fall short of that metric they will be required to return money to customers under Ofwat’s outcome delivery incentives.
The hon. Member mentioned Abingdon reservoir. There is obviously a clear need for the water industry to improve the resilience of water supplies through new water resources infrastructure. Abingdon reservoir is subject to ongoing assessments, which will continue in the future, to develop the design and to understand the impacts of the scheme. Thames Water will need to ensure that any scheme that it builds will not only possess the resilience that we expect within its supply systems but has proper environmental benefits that can be demonstrated to its customers. Of course, any new development of this nature must also provide at least 10% biodiversity net gain, which again must be capable of being demonstrated.
Although the hon. Member did not mention it, I am also aware, from speaking to Members with constituencies that neighbour hers, about Witney sewage treatment works, so I will just use this opportunity, given that time permits, to provide an update on that. I am aware of the discharges from Witney sewage treatment works and the impact they have had on local communities. I share Members’ concerns about that and I want to reassure them that the Government and the regulator will take robust action on pollution incidents.
A criminal investigation into sewage discharges at Witney is currently being conducted by the Environment Agency, regarding significant sewage pollution incidents impacting the Colwell Brook and Emma’s Dyke downstream of Witney sewage treatment works. This was brought to my attention by the Solicitor General, my hon. and learned Friend the Member for Witney (Robert Courts). Although it would be inappropriate for me to comment in any detail, because this is an active investigation, there are significant consequences when water companies pollute the environment. For example, in July 2023, following an Environment Agency prosecution Thames Water was fined £3.3 million for discharging sewage that caused significant environmental impacts.
I also wish to assure the House that the Environment Agency is ensuring that treatment capacity at Witney sewage treatment works is increasing, meaning that the site will be able to treat more sewage before using its storm tanks, which will reduce the risk of pollution in the future. That work is due to be completed by 31 March 2025.
Furthermore, the Government are strengthening regulation. The Environment Agency can now use new powers to impose unlimited penalties, raising the previous cap from £250,000. This change came into effect at the end of last year and it will apply to water companies for a wider range of offences, following the Government’s changes to broaden the scope of the existing civil sanctions regime to remove the previous cap on penalties.
We are also increasing funding for the Environment Agency. Its funding was raised by both Members who have spoken today. We are providing £2.2 million per year specifically for water company enforcement activity, so that robust action is taken against illegal breaches of storm overflow permits. Both hon. Members said that the Environment Agency was not being given enough money, but I can reassure both of them and the House that, as I say, an additional £2.2 million per year is being given specifically to the Environment Agency to carry out enforcement action.
I have tried to go through all the points that have been raised, but I want to be as robust as I can. For the reasons that I have set out, it is therefore critical that all water companies, including Thames Water, clean up their act, behave transparently and take urgent action to improve their performance when they fall short. If they do not do these things, the Government will not hesitate to hold them to account.