On 4 September, the Government introduced the Water (Special Measures) Bill to Parliament to deliver on our manifesto commitment to put water companies under special measures to clean up our water. This builds on the statement of 11 July, which set out our first steps for ending the crisis in the water sector, and paves the way for a review to shape further, transformative legislative change to fundamentally transform how our water system works and clean up our rivers, lakes and seas for good.
This Government will never look the other way while water companies pump record levels of sewage into our rivers, lakes and seas.
To deliver on the manifesto commitment to “block the payment of bonuses to executives who pollute our waterways”, the Bill will provide Ofwat with a new power to establish rules for the water industry relating to governance and remuneration.
The Bill also delivers on the manifesto commitment to “bring criminal charges against persistent law breakers” by making obstruction of the general investigatory powers of the Environment Agency, Natural Resources Wales and the Drinking Water Inspectorate punishable by imprisonment; and by opening up new routes for prosecuting executives.
To deliver on the manifesto commitment to “impose automatic and severe fines for wrongdoing”, the Bill will enable the Environment Agency and Natural Resources Wales to issue automatic fines for certain offences, ensuring water companies face rapid repercussions where it is immediately clear they have acted unlawfully.
To deliver on the manifesto commitment to “ensure independent monitoring of every outlet”, the Bill will place a requirement on water companies to publish data on discharges from emergency overflows in near real-time. This data will be independently scrutinised by the regulators.
Finally, the Bill will also modernise and strengthen the water industry special administrations regime by introducing procedural rights around winding up petitions, and providing powers to recover the costs of special administration—bringing it in line with other sectors, such as energy.
Taken together, these measures will turn around the performance of the water industry and will be a first important step in enabling long-term and transformative change across the water sector.
However, I am clear that there are other fundamental challenges facing the sector, which will not be addressed by this Bill alone. A comprehensive reset is needed to restore our rivers, lakes and seas to good health, deliver a resilient water supply in the face of a changing climate, and ultimately ensure that the water sector works for customers and the environment.
Therefore, to build on the critical first steps of the Water (Special Measures) Bill, this Government will carry out a review of the water sector regulatory system and will fundamentally transform the water sector through future legislation. The review will focus on the private regulatory model and will not change plans for much needed investment in PR24. It will ensure that the framework that underpins our water sector delivers long-term stability, with incentives aligned to clear, achievable targets that reflect the needs of customers and the environment at a catchment, regional and national scale, supporting the Government's growth mission. We will invite views from a range of experts covering areas such as the environment, public health, consumers, investors, engineering and economics, and this will include a public consultation to test the proposals and bring in a diverse range of views. Further details will be set out in the autumn.
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