The Water (Special Measures) Bill, introduced into Parliament on 4 September 2024, is intended to strengthen the power of the water industry regulators and to put failing water companies under special measures. Although the measures appear sensible, in reality, they represent little more than a superficial attempt to re-announce what action the previous Conservative Government had already taken. For example, the last Government had already announced that water company executive bonuses would be blocked if a company had committed serious criminal breaches.
The issues affecting our water infrastructure require different solutions. Action taken by the last Government helped to unveil the enormous scale of the problem – in 2010 when the Conservatives were elected, the number of storm overflows monitored across the English network was just 7 per cent. By the time of the 2024 general election, this had risen to 100 per cent. Ultimately, our sewerage network is Victorian and as such it was not designed for a population which has more than doubled and is still increasing, or for the frequent extreme weather events that we now see.
While many of the measures in the Bill were already being taken forward by the previous Conservative Government and do not require primary legislation, I have supported the Bill to date as well as amendments which would strengthen it further.
In response to concerns about the environmental performance of water companies, the previous government announced in November 2022 that environmental fines would be ringfenced, go to Defra and be invested directly back into environmental and water quality improvement projects. During House of Commons committee stage on 14 January 2025, a Conservative amendment (new clause 2) to put the WRF on a statutory footing was opposed by the Labour government. You can read the letter to the Chancellor Rachel Reeves from the Shadow Secretary of State at Defra Victoria Atkins signed by myself and many of my colleagues here:
Letter to Chancellor - Water Restoration Fund
I also supported an amendment tabled by the Shadow Secretary of State for Environment, Food and Rural Affairs which sought to place a limit on the amount of money that can be borrowed by a water or sewerage undertaker and prevent an undertaker who has exceeded such limits from being able to pay dividends to shareholders. Regrettably, this was also unsuccessful as it failed to receive support from the Labour Government. I had hoped that the Government would have been receptive as the amendment sought to ensure that companies do not leverage too much debt from borrowing as that is ultimately bad for bill payers As the Shadow Minister had highlighted in Committee Stage, "there is a direct link between financial resilience, problems connected to borrowing and the very survivability of the water firms. That should be of huge concern to all of us."
I welcomed some of the amendments that have already improved the Bill. For example, in the House of Lords, Opposition Peers argued strongly that the Bill as drafted was deficient in that it lacked a provision requiring the water companies to implement the Pollution Incident Reduction Plans that are established as a statutory duty for water companies to produce under the Bill. As a result, the CEO is now responsible for the plans. The Liberal Democrats tabled amendment New Clause 8 which was also unsuccessful. As my colleague, Dr Neil Hudson MP, Shadow Parliamentary Under Secretary (Environment, Food and Rural Affairs) pointed out in the debate held on the 11th February,
‘There has been many a chance for the Government to grab opportunities to bolster the Bill with both hands. Many chances have been missed throughout its passage, not least by the Government continually rejecting our water restoration fund to ringfence fines to restore local waterways, rather than to balance the Treasury’s books. They did not accept our sensible proposals to go further with nature-based solutions to flood risk.
They rejected our proposals for fines on water companies to result in equivalent reductions in customers’ bills, and our sensible proposals to allow the Secretary of State to place limits on the amount that water companies can borrow. They blocked our proposals to protect consumers in different parts of the country from paying for failing water companies that do not supply them.
As the Bill progresses and the Cunliffe review begins, I again urge the Government, for the sake of our water, environment, constituents, communities and, indeed, fairness, not to let political pride and dogma stand in the way of doing the right thing and making water legislation the best it can be’
I appreciate that consumers are very concerned about their bills. The last Government had a proven track record of working to help keep bills down. From the TV licence to energy bills, Ministers did not hesitate to take steps to support families, individuals and businesses with rising costs. The new Government had promised to protect bill payers. However, just months into the new Government and the average bill for consumers is going up 36 per cent over the next five years - an average of £31 per year - despite the Environment Secretary's promise that 'polluters must pay'. Due to the Government's inaction, consumers are sadly being hit.
I expect all water companies to help consumers who struggle to pay their bills through measures such as WaterSure, social tariffs, payment breaks and holidays, and debt management support. All companies should ensure households are aware of the support schemes available to them. I know that the last Government was working with industry and consumer groups to explore options to improve present social tariff arrangements and broader customer support, focusing on improving consistency and fairness. I hope that the new Government continues this important work and provides an update on its progress at the earliest opportunity.
However, it is clear this Bill is not enough. A clear strategy must be put forward by the Government as soon as possible if Ministers are going to keep to their promises to clean up our waterways. The new Government's plan must include investment to upgrade our sewerage system, tackling all of the sources of water pollution; and harnessing nature-based solutions to improve water quality. Until this happens, I fear there will not be any significant improvements. I hope the Government begins work as soon as possible to deliver on their promises to improve the water industry. Please know, I will be holding them to account to deliver on their commitments.
