It is quite interesting that the subject of my Adjournment debate is dirty water; it might be appropriate. I thank Mr Speaker for the opportunity to have this debate.
I want to start by correcting the parliamentary record. In a previous Opposition day debate on water quality, on Tuesday 5 December, I said:
“athletes fell ill from swimming in waters contaminated with E. coli”
and
“we know the source of the problem.”—[Official Report, 5 December 2023; Vol. 742, c. 288.]
Subsequently, in a letter dated 11 January 2024, Heidi Mottram CBE, the chief executive of Northumbrian Water, said my statement was factually incorrect. I am advised by Heidi Mottram CBE:
“The UK Health Security Agency (UKHSA) investigated the causes of illness in participants of the World Triathlon Championships Series in Sunderland, reporting in August 2023 with their preliminary findings. They found that 19 of the 31 of those affected had evidence of Norovirus infection, while the remaining samples either tested negative or were found to be positive for other infections, including sapovirus, astrovirus, and rotavirus. No evidence of E. coli O157/STEC was found, which can cause severe gastrointestinal illness. Four samples of other E. coli were found, but it was not possible to link its presence with participation in the triathlon, and these strains can be carried naturally in the gut. The UKHSA report, concludes that ‘the predominance of Norovirus makes it the most likely explanation of illness in participants.’”
I am happy to share those comments from the Northumbrian Water chief executive in the interests of fairness.
However, the Environment Agency’s sampling at Roker beach on Wednesday 26 July—three days prior to the event—showed 3,900 E. coli colonies per 100 ml, which is almost 40 times higher than a typical reading.
I commend the hon. Gentleman for bringing this debate forward. He is right about the water pollution in east Durham; he is also right to underline the medical circumstances. I, too, represent a constituency with an enormous coastline that is highly reliant on the fishing and tourism sectors. Water pollution is a vital issue because it has an impact on our environment, as well as a direct impact on livelihoods. Does he agree that it is imperative to have Government support to deal with small pockets of pollution before they turn into large-scale environmental crises and medical problems, like those he referred to? To make that happen, it takes funding and a Government initiative.
I thank the hon. Gentleman for that intervention. My personal belief is that the privatised water companies have more than sufficient resources to address the issues if they prioritise infrastructure repair work and do the job that we, as customers, pay them to do.
I am sure that the hon. Gentleman will be more than familiar with this, but in previous debates we heard about correlation and causation: one is a kind of coincidence, and the other is a direct link between one event and another. The samples I referred to, which were 39 times above the average level, were not in the body of the water that was used for the swim. That is absolutely correct. I am therefore sure that it is only a coincidence that high levels of E. coli were detected in a body of water near the swim event. There are no such things as tidal movements, are there? I do not know if they have them in Northern Ireland. There are no such things as prevailing winds, which would move a large body of E. coli into the swim area. I refer to the comments of the Australian triathlete Jake Birtwhistle. They are slightly unparliamentary, but he said:
“Have been feeling pretty rubbish since the race, but I guess that’s what you get when you swim in” —
S-H-1-T—
“the swim should have been cancelled.”
I hope Mr Birtwhistle is reassured by the comments of Northumbrian Water that the high levels of E. coli detected in the waters near to where the swim event took place had nothing to do with the sickness he experienced on the day of the racing.
I am disappointed that, in her letter to me, Heidi Mottram CBE failed to address any of the other issues that were raised in the debate on Tuesday 5 December. They included the issues of debt and dividends, investment, and how to regulate water companies to implement some level of corporate responsibility. The Guardian, which studied financial documents of all the privatised water companies from 1990 to 2023, said that Northumbrian Water is far from the worst-performing water company, which I think makes the following statistics really rather worrying. The Guardian found that 19% of Northumbrian Water’s consumer bill is spent servicing debt. The debt owed by Northumbrian Water is £3.5 billion. Over the same period, it paid £3.7 billion in shareholder dividends. Does the Minister think it is acceptable to use debt to pay shareholder dividends? As a consumer I am outraged, as I am sure are a large number of my constituents.
I thank the hon. Member for Easington (Grahame Morris) for securing this important debate and welcome the opportunity to respond to some the points he has made. As we all know, our waterways are a precious resource and their management is something on which this Government have been leading the way, in taking incredibly serious action against those who pollute. In April 2023, the Government introduced our “Plan for Water”, which marks a step change in how we manage our waters. This will deliver more investment, stronger regulation and tougher enforcement to tackle pollution and clean up water. The Government have also set stringent targets to tackle sewage spills, prioritising bathing waters and sites of special scientific interest just like the Durham coast SSSI.
To improve our waterways, the Government are clear that we need to hold to account robustly those who pollute, including our water companies, as customers rightly expect us to do. Yesterday we announced that we are significantly increasing our oversight of the water industry. Every water company should expect their waste water treatment sites to be regularly inspected, which includes unannounced inspections. The number of inspections will rise to 4,000 by the end of March 2025, which is a 370% increase.
Also, on 12 February the Environment Secretary announced that Ofwat will be consulting on banning water bosses receiving bonuses if a water company has committed a serious criminal breach. Ofwat will take forward a consultation to define the criteria for a ban, which could include the prosecution of a category 1 or category 2 pollution incident—such as causing significant pollution at a bathing water site location or a conservation area—or where a water company has been found guilty of a serious management failing. The ban would apply to all executive board members and the chief executive who sits on that board, and we expect it to come into effect later this year. The Government are clear that no one should be rewarded for a serious criminal breach while managing and operating a water company, should that serious breach take place on their watch. This builds on Ofwat’s announcements last year to tighten restrictions on bonuses, using powers given to the regulator through the Environment Act 2021.
I thank the Minister for his response but, in terms of serious notifiable incidents, there were 184 sewage discharge water alerts in 2023, which is a huge number. I am not sure of the established definition of “serious”, but what is his view of the level of dividends being paid and of the business plans being operated by Northumbrian Water and, presumably, other privatised water companies? They are securitising assets, including Kielder Water, the biggest reservoir in western Europe, and using the proceeds to pay shareholder dividends, rather than to repair infrastructure. What is his view on that?
The hon. Gentleman will have noted what I said about wanting to tighten up the bonuses paid not only to chief executives but to executive board members. Earlier this year, the Government announced tighter measures, relating specifically to environmental performance, for Ofwat to be able to challenge dividends.
Last year, to tackle storm overflow discharges, we updated our storm overflow discharge reduction plan, which sets stringent targets to reduce storm overflows. It prioritises action on overflows that discharge into ecologically sensitive sites such as SSSIs, areas of outstanding natural beauty and bathing waters. It will also drive water companies to deliver their largest ever infrastructure programme, an incredible £60 billion over the next 25 years. We are already seeing many water companies accelerating their investment in increasing the assets they oversee.
Moreover, I am aware that there are three designated bathing waters on the County Durham coastline in the hon. Gentleman’s constituency: Seaham Hall, Seaham beach and Crimdon. Substantial improvements have been made to English bathing waters in recent years. Almost 90% of designated bathing waters in England met the highest standards—good or excellent—in 2023, up from 76% in 2010, and that is despite stricter standards being introduced in 2015. These bathing waters are routinely monitored by the Environment Agency during the official bathing water season from May to September.
In 2023, two of the bathing water sites in the hon. Gentleman’s constituency were classified as good, and all met the minimum standard of sufficient. However, I recognise that two had deteriorated from the previous year’s classification. The Environment Agency will investigate the reasons for that deterioration in the region’s bathing water.
We are working closely with Ofwat and the Environment Agency to ensure that they have the tools and resources they need to hold water companies to account. We have provided an extra £2.2 million a year to the Environment Agency specifically for water company enforcement activity. Furthermore, in May 2023 Ofwat announced that its enforcement capacity will be trebled following the Government’s approval of an £11.3 million budget increase.
I am, exceptionally, going to take a point of order, because I know that the hon. Gentleman has been asked by the right hon. Member for Suffolk Coastal (Dr Coffey) to correct the record as soon as possible, and that he has given a commitment to do so. I would not normally do this, but I will this time because it is about a speech that was made earlier today.
I am very grateful, Madam Deputy Speaker. I am also grateful to the right hon. Member for Suffolk Coastal, who pointed out to me that I had got something completely wrong in the speech I made earlier. I said that she had presented a ten-minute rule Bill, the Schools (Gender and Parental Rights) Bill, but that was not introduced by her at all; it was in fact introduced by the hon. Member for North West Leicestershire (Andrew Bridgen), who is quite a different matter. I heartily apologise to the right hon. Lady—I am terribly sorry—and I am glad that you have given me the opportunity to do that as swiftly as I could, Madam Deputy Speaker.
I heard the right hon. Lady say that she was grateful that the hon. Gentleman had done this as quickly as possible.
Question put and agreed to.
7:50 pm
House adjourned.
If this were any other product or service, I could choose to change suppliers. Even in the rail industry—heaven knows, I have been a critic of poor service—I at least have the opportunity to highlight to Ministers failing train operating companies and to advocate that they should be stripped of their contracts for failing to deliver for the travelling public. But water is unique. I can think of no other essential public service that has been privatised where there is no consumer choice or accountability. Water is a private monopoly and a natural monopoly that is essential for life. It is vital national infrastructure. The Government are entitled to impose a strict level of oversight and scrutiny.
It will come as no surprise to the Minister, I am sure, that I personally believe that water should be publicly owned, run in the national interest and deliver public policy goals. However, I accept that neither the Conservatives nor my own Labour Front Benchers have an appetite for a publicly owned water industry, so I want to propose an alternative. First, end the use of debt to pay for dividends. Secondly, prohibit the payment of dividends until debt goals are met. Any profit in the system must go towards water sewerage infrastructure and lowering debt.
Water companies are major polluters. Although Northumbrian Water is adamant about the Sunderland triathlon, there is no doubt that it is routinely polluting rivers and seas. In my constituency, the Safer Seas and Rivers Service app shows that there are three sewage overflows in my constituency, from which there were 184 sewage discharge alerts in 2023—almost one every third day. Northumbrian Water is not limiting these sewage overflows to rare and extreme weather conditions; it a matter of routine disposal of waste. My third proposal is that there should be no dividend payments until clean water targets are met. We need all available resources going towards improvement, upgrades and new infrastructure.
The promise of privatisation is always about improved standards, lower bills and more consumer choice, but experience suggests that the reverse happens: we get lower standards, higher bills and no choice. Therefore, the Government should put an expectation, or indeed a requirement, on private monopolies to deliver for the taxpayer. I am not telling the Government to block profits and shareholder dividends forever—quite the reverse. Private water companies that deliver public policy goals and lower consumer bills, and that make real profits rather than artificial profits funded through debt, could reasonably argue that they deserve to be rewarded, but I have no trust or confidence in the private sector to deliver essential public services in the public interest.
The list of disasters is there for all to see, and it is far longer than just water. It includes probation, prisons, NHS dentistry, bus services, rail, social care, Royal Mail, the Post Office Horizon scandal and energy. Everything seems to be broken, and there are no-risk rewards for the private sector. Failure does not affect companies, with services and contracts handed back, even when they fail to deliver, having already extracted their profit. The Government take a hard line against the poorest in society, with stringent rules, benefit sanction regimes and limits on social security. However, when it comes to billions of pounds of public contracts, they allow the taxpayer to be exploited and systematically milked. Frankly, it is not acceptable.
If the law does not allow the Government to hold failing companies accountable, we must legislate and change the law. I believe that we need a corporate responsibility Bill—a Bill with teeth—to ensure that the Treasury is the guardian of public money, not a cash point for corporate greed and irresponsibility. Our water companies are the epitome of corporate greed and irresponsibility. As an industry, they have extracted immense profits while ramping up debt and failing to invest in order to end the dumping of raw sewage into our rivers and seas. Where is the risk? It lies not with these irresponsible companies, but with the taxpayer. When a company collapses under the weight of its debt after decades of underinvestment, who has to step in? The taxpayer, who is forced to clean up the mess of corporate irresponsibility and get these services up and running to an acceptable standard, only for a Conservative Government to sell them off again.
I am deeply sceptical. Water is privatised, with companies collecting their rewards and paying out dividends. However, there is no free market; there is a private monopoly. As a consumer, I am appalled that, at the first sight of rain, our local network hits peak capacity and sewage is dumped into our rivers and seas. I want to penalise water companies that fail to protect our environment. If their business is clean water, the product of our privatised water companies is defective.
The Government can continue to back corporate greed over public interest and maintain an indefensible system of privatisation that denies the public consumer choice, which is the ultimate tool of accountability. But I hope the Minister will explain to my constituents how he will deliver a zero-waste, zero-pollution policy and end the routine dumping of raw sewage on the east Durham heritage coastline.
Let us be clear: tougher enforcement requires more monitoring. To ensure that robust action is taken, we are holding the water industry to account on a scale that has never been seen before. This Government are driving up monitoring and transparency to ensure that the public can see what is going on, and this starts with monitoring. This Government have achieved 100% monitoring of England’s storm overflows, which is a vast improvement on the just 7% of storm overflows that were monitored under Labour in 2010. This is a major step forward in protecting our precious water bodies as well as the communities and wildlife that rely on them. Meeting this target is a significant achievement in creating positive environmental change and an ability to hold to account the water companies that pollute.
Regarding Northumbrian Water, the water and sewerage company servicing the east Durham area, I am aware that no serious pollution incidents were recorded in 2022 or 2023. However, I am aware that there has been a concerning increase in the number of pollution incidents that have taken place over a longer period. Since January 2015, Northumbrian Water has faced three prosecutions and a total of £807,000 in fines from the Environment Agency. The most recent prosecution followed two consecutive days in March 2017 of raw sewage being released from manhole chambers in Bishop Auckland, which was completely unacceptable. Northumbrian Water is one of six water companies with live cases for potential failures at sewage treatment works that may have led to unpermitted sewage discharges into the environment. I am happy to meet the hon. Member if there are other matters that he wishes to raise.
We have legislated to introduce unlimited penalties for water companies that breach their environmental permits, and to expand the range of offences to which those penalties can be applied. For the avoidance of doubt, this includes criminal.
In our “Plan for Water” we announced the water restoration fund, which will channel environmental fines and penalties collected from the water companies into projects that improve water environment. Further details of the water restoration fund will be announced.
This Government are going further and faster than any Government to protect and enhance the health of our rivers and seas. We expect water companies, including Northumbrian Water, to use the next five-year price review period, PR24, to set bold and ambitious plans to deliver for the people and the environment. That means security of supply, cleaner rivers and beaches, fewer leaks, fewer supply interruptions, greater water resilience—so that we see a fit future for our rivers and coastal environment—and substantial improvements to tackle storm overflows. In turn, this investment will boost economic growth and create more jobs.