Emma Hardy MP: speeches

Speeches

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  I think when we had this debate, it led to the first of the fact sheets that we produced for the Committee. The hon. Member is talking about the speed of installation, and we highlighted that we will double the rate of the previous Government. We also highlighted that some of the improvements involve engineering and work. That is why we think that with £12 billion of investment, we are improving things, and I mention again the 2,800 storm overflows by 2029-30. So in the next few years, there will be billions of pounds-worth of improvements. We all want opportunities to go quicker—everybody would want everything to be done quickly. As a Government, there is always a balance between making promises we cannot keep—which is never the best way to go—and being stretching and ambitious. I feel that we are being stretching and ambitious while also ensuring that we do not make promises we cannot keep. Obviously, however, if there was a way to go faster, everybody would accept that. The Environment Agency is currently consulting on proposals to add new spill frequency thresholds to storm overflow permits. That will maintain the performance of storm overflows that have undergone improvements, and make it easier for the Environment Agency to act quickly if storm overflow performance deteriorates. Ofwat sets specific performance targets for water companies in the five-yearly price review. Ofwat is expanding those performance commitments for price review ’24, to include an ambitious storm overflow spill reduction target, which, if achieved, would see average spill per storm overflow reducing by 45% by 2029, compared with the 2021 levels across the industry. Where the commitments are not met, companies must reimburse customers, holding water companies to account to deliver outcomes.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  Again, I recognise the intent behind the hon. Gentleman’s comments. Whichever way we want to address this, talk about it or set targets, ultimately what we want from a Government is less sewage going into our rivers, lakes and seas. If we can find a way to all agree on the best way to move that forward, that is something we can unite behind. As I mentioned, the Government cannot accept the new clause, but I recognise the intent behind it. It would cut across the existing targets that I have set out, creating confusion and uncertainty about which water targets the companies should meet. That would risk undermining the extensive forward investment programme that is already under way and is essential to delivering the changes that we all want. For those reasons, and for the last time, I ask the hon. Member to withdraw his new clause.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  With your indulgence, Dr Huq, I will clarify something that I should have mentioned in the previous debate. Ofwat reserves the right to explore the use of DPC for major projects below the £200 million threshold where it offers value for money for customers. I just wanted to put that on record. I thank the hon. Member for Westmorland and Lonsdale for tabling new clause 33, which would increase the responsibilities of water companies where they participate in the planning process. As we all do, I genuinely recognise the intent behind the clause and where the hon. Member is trying to get to. We absolutely recognise concerns surrounding water and sewage companies’ ability to keep pace with the needs arising from new property developments.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  Yes. We have ruled out nationalisation, but all other forms of ownership are in the scope of the Cunliffe review. I stress, however, that in a scenario in which a company was exiting special administration, it could go into mutual ownership if the organisation in question had sufficient funds and could ensure that the company, or parts of it, could continue to properly carry out its activities related to water. Of course, no one would want, in any situation, to transfer to a company incapable of operating and providing water. It is important to emphasise that it would not be appropriate for the Government to dictate the terms of exit from a SAR, as that would interfere with the conduct of the court-appointed administrator and their statutory objectives.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  I thank the hon. Member for Westmorland and Lonsdale for the intention behind new clause 32. On a personal level, I welcome the scrutiny and the level of detail that we have gone into. As the Bill started in the other place, there was a lot of cross-party work and the Government have taken onboard some of the recommendations. I gently push back on the idea that this is not a necessary or valid way to examine legislation. The Government agree that competitive procurement can be a successful way to provide better value for money for consumers, and greater innovation within major infrastructure projects. In the 2019 price review, Ofwat developed the direct procurement for customers approach, or DPC, building on the success of the Thames tideway tunnel. The DPC allows the water company to competitively tender for services in relation to the delivery of major infrastructure projects. At price review 2024, Ofwat noted that, by default, all projects with a total life cost of over £200 million should be delivered through a DPC. Following final determinations in December 2024, Ofwat announced that 26 major water company projects would be delivered by competitive tendering processes, including a DPC, with a total whole-life cost of almost £50 billion.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  It is a pleasure to serve under your chairwomanship once again, Dr Huq. As promised, I have provided a fact sheet on the use of special administration. All Committee members should have received it by email, but hard copies are available on the table for their convenience. Welcome to the last day of Committee.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  I thank hon. Members for their contributions. Again, we recognise the intent behind new clause 34, tabled by the hon. Member for Westmorland and Lonsdale. However, it would be disproportionate to prevent all water company employees from being able to accept employment in Ofwat. Ofwat seriously considers the handling of actual and potential conflicts of interest. Staff in Ofwat are bound by the civil service business appointment rules, which do not apply to every agency, but they do in terms of Ofwat, and by the duty of confidentiality and the Official Secrets Act. Any new employees in Ofwat, regardless of their previous employment, would be bound by those rules. Compliance is mandatory and any breach may result in disciplinary action being taken. Individuals with experience working in the water sector have a wealth of knowledge—the hon. Gentleman mentioned this—that might be a valuable asset to Ofwat and could support better policymaking. I hope that this reassures him on his concern about the potential conflicts of interest in Ofwat, and that the new clause, as drafted, is therefore unnecessary.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  Thank you very much, Dr Huq, for your wonderful chairwomanship. I thank everybody on the Committee. It has been a new experience for so many of us, with Members in new positions and some new Members appearing on a Bill Committee for the first time. It has been really enjoyable, and there has been pleasant camaraderie. Where there have been disagreements, we have had them in a polite and courteous manner. I think we have set a wonderful example for many of the other debates, and long may it continue. I thank the incredible Bill Committee team, who have done such an amazing job in supporting me in my work. I thank the Whip, my hon. Friend the Member for Manchester Withington, for making sure that we all voted in the right way at the right time, which definitely prevented me from getting into trouble while leading on my first Bill. And of course, we have had loads of written evidence, and for a small Bill, we have had lots of amendments, which shows the strength of feeling and interest in the Bill from the wider community. What else can I say other than we’ve only just begun, and you ain’t seen nothing yet? Following this Bill, which is just part of our phased transition to transform the water sector as a whole, we also have the Cunliffe review, and in the words of Arnold Schwarzenegger, “I’ll be back”, with another Bill—similar time, same place. I hope to see many of you there, as we go again to clear up our rivers, lakes and seas for good. Question put and agreed to. Bill, as amended, accordingly to be reported.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  At the risk of having the same debate over and over, I refer the hon. Member to the last page of our fact sheet. I am not sure how much clearer we can make it: “Would the shortfall recovery mechanism be used to compensate financial creditors or shareholders following a SAR? No. The shortfall recovery mechanism could only ever be used to recover a Government shortfall in the unlikely event of a SAR.” Once again, I welcome everybody to the last day of this Committee. As I may not have the opportunity to do so later, may I thank all Members for their contributions and for taking part? I especially thank the hon. Member for Westmorland and Lonsdale for tabling another new clause. As I have said, a special administration regime enables a company that provides vital public services, such as water, energy or rail, to be put into administration in certain circumstances. During a SAR, a special administrator appointed by and answerable to the court takes over the affairs of the business. The court-appointed special administrator’s statutory objectives, which are set out in legislation, are twofold: to continue the running of the company to meet its statutory functions until it is possible to rescue the company, for example via a debt restructure, or to transfer the company to new owners, for example by selling it. There is nothing to prevent the company, or parts of it, from being transferred as a going concern to mutual ownership by a company’s customers, should the special administrator deem that appropriate. Although in an insolvency scenario the special administrator’s primary purpose is to rescue the company as a going concern, mutual ownership could be an option following a SAR, provided that the organisation in question had sufficient funds and could ensure that the company, or parts of it, could continue properly to carry out its activities relating to water.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  Very briefly, to return to the SAR—our favourite subject—it might be best if we take the conversation out of Committee and sit down with officials to make sure we are both having the same conversation about the same thing and we can clarify that. We will follow up on that, and of course I extend that offer to the shadow Minister. New clause 30 would require Ofwat to establish a public database on the performance of sewerage undertakers. I understand and acknowledge the intent behind the new clause, and I echo the hon. Gentleman’s thanks to all the environmental campaign groups that have been working in this area to make information available. It is vital that the public are able to access and scrutinise information on the performance of water companies. To support this, the Government are focusing our efforts on ensuring that the most salient information is published in a transparent way and is publicly accessible. That is why clause 3 already requires water companies to publish information on discharges from emergency overflows in a way that is readily accessible and understandable to the public. As mentioned, this matches the pre-existing duty for storm overflows. To support the storm overflow duty, Water UK has published a centralised map of discharge data from all storm overflows operated by English water companies on one website. A similar approach is intended for emergency overflows. We have also requested that water companies begin installing continuous water quality monitors for storm overflows in the 2024 price review. This will provide useful information on the impact of sewage discharges on water quality, and we will be working with water companies to consider how best to publish the information in near-real time. That is in addition to the duty to publish information on pollution incidents in clause 2, as well as existing regulatory requirements for the Environment Agency to publish water company environmental performance data. This data includes the annual environmental performance assessment of the water sector, which provides information on the performance of waste water treatment works. Information from flow monitors, as we have discussed previously, is very technical and does not relate to the impact of the discharge, unlike continuous water quality monitoring data. Therefore, we do not think there is sufficient additional value in requiring this data to be published. As the industry is already centralising data on sewage discharges from storm overflows on one website, and given the existing environmental performance reporting, the Government do not believe that an amendment to require further publications by Ofwet—Ofwat—to do the same thing is necessary. I therefore hope that the hon. Member feels able to withdraw his new clause.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  The point is that competitive tendering processes were introduced back in 2019, including looking at where money is being used and how that money can be used most effectively. As I have just mentioned, we have £50 billion-worth of competitive processes in the next price review determination. Water companies are already actively using competitive procurement processes. This is something that Ofwat already encourages through the price review process. I therefore hope that the hon. Member is content that this amendment is unnecessary.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  I would like to thank, as I have before, all the environmental groups and activists up and down the country who do so much to champion cleaner air, rivers, lakes and seas for us all. I look forward to seeing hon. Members on Third Reading and Report. As I did before, I will gently push back and say that the Government did work collectively and cross-party in the other House and brought in compromise amendments before the Bill came here. It would be slightly disingenuous to imply that the Government have not accepted amendments or worked with other parties on the Bill. I thank the hon. Member for Westmorland and Lonsdale for tabling new clause 35. We must ensure that companies accelerate action to reduce pollution to the environment, halting the unacceptable harm they have caused in recent decades. That is why we have introduced a new requirement for water companies to produce annual pollution incident reduction plans and the accompanying implementation reports through the Bill. Again, I gently note that the implementation reports and the strengthening of that provision was done cross-party in the other place. The plans will need to set out the actions that water companies intend to take to reduce pollution incidents, and an assessment of the impact that those actions will have. Companies must then report on the progress they have made with measures they committed to in the previous year, and must clearly explain the reasons for any failures to implement their plans and set out the steps they are taking to avoid similar failures in the future. In addition to the new requirements that increase accountability for pollution incidents, the Government are committed to acting as fast as possible to reduce sewage pollution in our waterways and upholding stringent performance criteria for water companies, as evidenced by the significant forthcoming programme of investment in price review ’24. A delivery programme of this scale, improving thousands of storm overflows with billions of pounds of investment, requires clear and robust regulation. The new clause as drafted would unfortunately undermine that. The Government’s storm overflows discharge reduction plan sets stretching timebound targets to eliminate ecological harm from all storm overflows by 2050, and for water companies to significantly reduce harmful pathogens from storm overflows discharging into bathing waters by 2035. This is supported by an ambitious backstop target. By 2050, no storm overflow will be permitted to spill more than 10 times a year on average. Those stretching targets are informed by detailed analysis and extensive engagement. They will drive £60 billion of investment between 2025 and 2050—the largest infrastructure programme in water company history. Almost £12 billion of that investment will begin this year, improving over 2,800 storm overflows by 2029-30. Those targets bolster underpinning legislative requirements to limit pollution from storm overflows. The Environment Agency monitors and enforces against breaches of environmental requirements, utilising monitoring data to support its investigations. Where breaches are identified, it has significant powers to ensure enforcement orders and financial penalties, and where appropriate, to pursue criminal prosecution. The measures in the Bill will further strengthen its powers, including by introducing automatic penalties.

• 15 Jan 2025 · Rivers, Lakes and Seas: Water Quality · Hansard source

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  It is a pleasure to serve under your chairmanship, Mr Dowd. I thank my hon. Friend the Member for Monmouthshire (Catherine Fookes) not only for securing this debate but for her work on the Water (Special Measures) Bill. I thank all the campaigning groups and environmental groups that have been mentioned throughout the debate for the work they do in our communities. The number of MPs who have attended the debate—or at least, the number on the Government Benches—shows how popular and important it is. As I listened to the comments from the shadow Minister, the hon. Member for Keighley and Ilkley (Robbie Moore), I felt a little confused, because he does not seem to recognise or understand the level of anger and resentment towards his Government on this issue. He listed all the amazing achievements of the previous Government. I wonder how those stack up against the facts we have heard in the debate about the level of sewage that is being pumped into our rivers, lakes and seas, the ecological standard of many of our rivers, lakes and seas and the fact that people are so angry about the situation. I gently suggest that, rather than try to rewrite history or place alternative facts on to the record of Hansard , he would do better to acknowledge the fact that his Government got this issue so dreadfully wrong. That is why—as we have in many Departments and on many issues—we have had to come and, in this case, literally clean up the mess we have been left with. The quality of our rivers, lakes and seas and our water is essential for supporting ecosystems, providing clean drinking water and producing our food, and of course, as Members have said, our beautiful rivers, lakes, seas and beaches are a source of pride for our communities, and we want to restore them to that. Maintaining healthy and clean water sources is vital to achieving this Government’s mission for economic growth, and the £104 billion of investment in the next five years in the water sector will help to clean up our waters and with very important job creation up and down the country. Water systems are under massive pressure, no thanks to the 14 years of mismanagement that they have just gone through, and water bodies such as the River Wye and the River Usk in Monmouthshire face significant challenges due to agricultural run-off from intensive poultry farming, leading to high phosphate levels in our water. More broadly, my hon. Friend the Member for Monmouthshire is right to question the quality of our water due to increasing pressures from pollution, climate change and unsustainable practices. The Government are prioritising water quality as a key element of their environmental and public health agenda. Significant steps are being taken to address pollution, enhance infrastructure and ensure clean and sustainable water sources for future generations. In his first week in office—it is slightly amusing that we are criticised by the Opposition for not solving all the problems in our first six months—the Secretary of State secured agreement from water companies and Ofwat to ringfence money for vital infrastructure upgrades, so that it cannot be diverted to shareholder payouts and bonus payments. The Government’s Water (Special Measures) Bill, which has been in Committee this week, sets out measures to crack down on water companies failing their customers, and the independent commission on the water sector regulatory system was launched by the UK and Welsh Governments in October 2024, as the third stage of this Government’s water strategy to clean up the mess we have inherited. I will quickly respond to some of the contributions from my hon. Friends. My hon. Friend the Member for Bracknell (Peter Swallow) is right to share his upset and anger at the number of sewage spills damaging his constituency, which have continued for the past 14 years. I thank him for his support for the Water (Special Measures) Bill. Monitors will be installed and then verified independently. My hon. Friend the Member for Carlisle (Ms Minns) is a brilliant champion for her area, on both flooding and sewage, and I agree that we are blessed with many beautiful rivers, lakes and seas. I quite like the sound of that hidden river cabin; maybe that is worth a visit. My hon. Friend the Member for Mid Cheshire (Andrew Cooper) mentioned the chronic under-investment in sewage infrastructure, and he is absolutely correct. That is why we need the £104 billion investment, to clean up and deal with the mess we have inherited. I will speak to the farming Minister, my hon. Friend the Member for Cambridge (Daniel Zeichner), and get a precise answer to the question asked by my hon. Friend the Member for Strangford (Jim Shannon)—I count him as an hon. Friend. My hon. Friend the Member for Shrewsbury (Julia Buckley) talked about how appalled she is by sewage coming up through manhole covers. That sounds dreadful and I am happy to discuss that with her after the debate. I like the sound of Up Sewage Creek—that is a catchy name for a local campaign group. I thank her for her work, not just in this area. We have had many conversations and she is standing up for her community, as has been noticed and recognised. My hon. Friend the Member for Hexham (Joe Morris) is right to highlight the damage to tourism in his beautiful constituency, and the work being done by local campaign groups. I thank him too for his support for the Water (Special Measures) Bill that will bring forward the reforms we desperately need. My hon. Friend the Member for Scarborough and Whitby (Alison Hume) highlighted the decline in fish stocks, in an area near my constituency that I like to visit, and the need to tackle sewage and pollution. I thank her for her support. My hon. Friend the Member for Reading West and Mid Berkshire (Olivia Bailey) highlighted the important issue of phosphate pollution, and I am happy to support her work pushing Thames Water to tackle that. My hon. Friend the Member for South East Cornwall (Anna Gelderd) championed her beautiful area of the country and highlighted the damage done by sewage. Having listened to the speeches given by Conservative Members, one might have imagined the problem had already been solved, but in reality it has not and it is damaging her beautiful area. She also raised the dangers caused by PFAS. My hon. Friend the Member for Lichfield (Dave Robertson) talked about an incredibly concerning serious pollution incident. I am happy to look into the issue and find out what is happening with the EA investigation. The theme of agriculture came up during the debate. Working with farmers to reduce agriculture pollution is key to delivery against the Government’s priority to clean up our rivers, lakes and seas. The Environment Act 2021 set a legally binding target to reduce nitrogen, phosphorus and sediment contribution from agriculture by at least 40% by 2038. Alongside developing a new statutory plan to restore nature and meet those targets, this Government are enforcing key regulations, such as the farming rules for water, and have carried out thousands of advice-led inspections through the Environment Agency. Investment is directed to environmental land management schemes, including the sustainable farming incentive, and supported by the catchment sensitive farming programme, which are designed to help farmers protect water quality and adopt sustainable practices while maintaining viable businesses. The Secretary of State announced just last week at the Oxford farming conference that we will ensure permitted development rights work for farmers, so we can support them to reduce water pollution through improved slurry stores, anaerobic digesters and small reservoirs. In my remaining time, I will respond to the main points raised about the River Wye. This Government are actively progressing the next steps for the River Wye, including building stronger ties and working collaboratively with the Welsh Government, the Environment Agency and Natural England, as well as local MPs, farmers and ENGOs who are already doing great work to tackle pollution. Indeed, when I held a meeting with the River Wye partnership, which the hon. Member for North Herefordshire (Ellie Chowns) and others attended, and mentioned that we would not be continuing with the previous Government’s plan, those present applauded, such was their condemnation of that plan. I do not wish to test hon. Members’ knowledge of geography, but one of the main problems with the previous Government’s plan was that it did not involve the Welsh Government. I would suggest that any plan to tackle the River Wye’s problems ought to include consulting the Administration responsible for where the river starts and ends.

• 15 Jan 2025 · Rivers, Lakes and Seas: Water Quality · Hansard source

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  I thank the hon. Lady, but I have been told I have 15 seconds left. We will develop a plan for the River Wye and I will let hon. Members know about it as soon as possible. The unacceptable destruction of our waterways should never happen again and we are working to tackle the challenge. Efforts are already underway locally and nationally that will support restoration of rivers. The independent commission will report in June 2025. I look forward to working with hon. Members to take this important agenda forward and clear up the mess that we have been left.

• 15 Jan 2025 · Farmland Flooding · Hansard source

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  That sounds like an excellent example. I note that the hon. Member for Glastonbury and Somerton intervened earlier on the hon. Member for Broadland and Fakenham so, if she does not mind, I will use the last five minutes of the debate to respond to some of the comments made earlier. We are looking at reviewing the flood funding formula, which was brought up by farmers during many of the visits that I made when I was in a shadow ministerial position. I want to work with all the various stakeholders on that, and I recognise that, in my opinion, at the moment the flood funding formula disincentivises investment in rural areas. I want to have a serious look at that. I hate to see an outbreak of, almost, unity—although that is nice to have sometimes—but there is much love among Labour Members for natural flood management, so I welcome the comments made by the hon. Member for Broadland and Fakenham. The Government champion and support natural flood management, and I am keen to explore how we can encourage more of it, throughout England. I have therefore convened a roundtable on Monday to explore opportunities and challenges in the delivery of natural flood management. It will include experts and those directly involved in the projects, and will help inform our delivery of natural flood management. I look forward to hearing from farming representatives as part of that discussion, and have invited the National Farmers Union, the Nature Friendly Farming Network and the Country Land and Business Association. I am keen to hear how their views can feed into Government work. As has been mentioned, various natural flood management methods can be used to protect flooded farmland, such as planting winter cover crops, soil management, matching grazing density to the capability of the land, avoiding growing certain crops on steep slopes, and blocking drainage ditches to slow down run-off and create wetland habitats. There will be measures that benefit flood mitigation in all three of the environmental land management schemes: the sustainable farming incentive, countryside stewardship and landscape recovery.

• 15 Jan 2025 · Farmland Flooding · Hansard source

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  I will give way to my hon. Friend the Member for Reading Central (Matt Rodda) and then to the hon. Member for Glastonbury and Somerton (Sarah Dyke), but I have only six minutes.

• 15 Jan 2025 · Farmland Flooding · Hansard source

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  To reassure the hon. Gentleman, the Government are committed to the environmental land management programme and are looking at funding natural flood management on farmland. As I said, we are having a meeting on Monday to discuss, with farmers, what more we can do for natural flood management. Part of our vision for farming is a sector that recognises that restoring nature is not in competition with sustainable food production—on this point I agree with the hon. Gentleman—but actually essential to it: restoring nature helps food production. We will provide farmers and land managers with the support they need to help restore nature, which is vital to safeguard our long-term food security, support productivity and build resilience to climate change. That means continuing the transition away from payment for land ownership towards payment for delivering public goods for the environment, and continuing to use regulation to require minimum standards that will—importantly—be designed in partnership with farmers, and have sufficient lead-in times for change. The countryside stewardship scheme already has specific flood resilience options, such as “making space for water”. I also flag that our land use framework will be coming out at some point, and that this year we will introduce new actions with flood mitigation benefits to our combined environmental land management offer, including actions to reduce flood risk, restore and enhance floodplains, and provide better storage of floodwater. To sum up, I reiterate that the Government are dedicated to exploring ways that nature-based solutions to flooded farmland can be delivered for the benefit of farmers and others. We have already taken decisive action with the first steps to reviewing the outdated funding formula, the creation of the new, multi-agency floods resilience taskforce, and the updating of flood options under the environmental land management schemes. I look forward to continuing to engage with farmers on these incredibly important matters. I am grateful for this important debate, and grateful to have heard the views of Members in the room. Question put and agreed to.

• 15 Jan 2025 · Farmland Flooding · Hansard source

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  It is our secret. I enjoyed the hon. Gentleman’s thoughtful contributions on the importance of using soil in the right way and how farming practices can be updated, which were valuable. As I mentioned to the House last week, and as I am sure people have heard me say before, I am fully aware of the impact of flooding on households, people’s mental health and, importantly, farmland. I have deep sympathy with farmers, so much of whose crop has been underwater this season, which has impacted yield. The storms this winter highlight the urgent need for many of us to adapt to the threats of climate change, not least farmers, who often feel the impact directly. As climate change leads to more extreme rainfall, as has been mentioned, the number of people at risk from flooding and coastal erosion will continue to grow. I therefore want to make it abundantly clear that this new Government are committed to tackling this challenge, which is one of the top five core priorities for the Department for Environment, Food and Rural Affairs. The good news is that work has already begun. Recognising the significant impact of flooding on farmers, the Government are bolstering England’s resilience to flooding by confirming an additional £50 million for internal drainage boards to improve assets. That is on top of the existing £25 million, and takes total investment to £75 million. That transformational investment will put IDBs on a firm footing to deliver their vital role in flood and water management. It will benefit projects that will improve, repair or replace IDB assets, including flood barriers, embankments and, as has been mentioned, the maintenance of watercourses. Projects will reduce risks and impacts from flooding for farmers and rural communities across England. To ensure that we protect the country from the devastating impact of flooding, we are investing £2.4 billion in 2024-25 and 2025-26 to improve flood resilience by building, maintaining and repairing flood defences. However, I gently point out to the hon. Member for Broadland and Fakenham that this Government inherited our flood defence assets in the worst condition on record. We have had to come in and deal with the maintenance backlog.

• 15 Jan 2025 · Farmland Flooding · Hansard source

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  It is a pleasure to serve under your chairmanship, Dr Murrison. I am delighted to contribute to this debate with the hon. Member for Broadland and Fakenham (Jerome Mayhew), although I feel that we are spending more time together at the moment than I am with my own family, what with the Bill Committee and other debates. I look forward to round 3—or is it 4?—tomorrow.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I thank the hon. Gentleman for tabling new clause 26. The Government agree that we need to rebuild trust in the water sector and that executives should be firmly held to account for companies’ serious failures to meet environmental standards. That is why clause 1 will give Ofwat new powers to issue rules on remuneration and governance. The legislation requires Ofwat to set rules that make the payment of bonuses contingent on companies achieving high environmental standards. It is more appropriate for Ofwat, as the independent regulator, to determine the performance metrics to be applied when setting the rules for performance-related pay. As outlined in the initial policy consultation, Ofwat is currently considering prohibiting bonuses where companies have had a serious category 1 or 2 pollution incident in the preceding calendar year. That is not on the face of the Bill, but it is very clearly in Ofwat’s consultation. It is looking to consult on prohibiting bonuses after a category 1 or 2 pollution incident, as my noble Friend outlined. That provides an early indication of the direction of travel on the environment metric. Ofwat would be able to use its direction-giving power and wider enforcement framework to hold companies to account where it has reason to believe that they are in breach of the rules. However, banning bonuses, even in cases of unwanted but legal spills, would effectively ban bonuses for all companies. That could unnecessarily threaten the sector’s ability to attract and retain talent. I refer the hon. Member for Westmorland and Lonsdale to the consultation that Ofwat has launched so that he can see for himself the pollution metric that I have mentioned. On that basis, I hope that he feels able to withdraw new clause 26.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I respect the hon. Gentleman’s contributions on matters of finance, and I recognise his knowledge in this area. However, I think he would probably acknowledge—even if not publicly—that using a new clause to determine the level of debt that we think is appropriate is not the best way to make legislation for our country, or for the financial resilience of the water sector. I am entirely confident that the best way to look at this seriously, taking contributions and recommendations from all the wider stakeholders, is through the water commission. The commission might draw similar conclusions but it is not for us to pre-empt them now, without having first taken on board the opinions of many other stakeholders. I trust that the hon. Member for Epping Forest is reassured by the steps being taken by the Government, and by Ofwat, and I ask him to withdraw the clause.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I thank the hon. Member for Westmorland and Lonsdale once again for his thorough consideration of the Bill. I will turn first to new clause 7, which was tabled in his name and which proposes the abolition of Ofwat. As the hon. Member will be aware, and as he already mentioned in October ’24, the UK and Welsh Governments launched the independent commission to fundamentally transform how our water system works. The commission, led by Sir Jon Cunliffe, will be broad-ranging and will make recommendations in line with eight objectives, which include specific objectives considering the role, structures, responsibilities and powers of the regulator. It is right that the commission, rather than this Water (Special Measures) Bill, is the vehicle for considering the water regulator’s roles and responsibilities. This Bill focuses on strengthening the powers of the regulators to drive improvements in performance. The Bill will not, and cannot, fix all the sector’s problems. The commission is the right place to consider the long-term future of the regulatory system and the role of the regulator. Indeed, I would argue that the Labour Government want to move away from sticking-plaster politics to fundamentally reset and transform the problems facing our country for good. I hope therefore that the hon. Member for Westmorland and Lonsdale is content that this new clause is unnecessary. New clause 20 was also tabled by the hon. Member for Westmorland and Lonsdale. It sets out requirements for a water review that is undertaken by the Secretary of State. I think we are all agreed that we have seen years of water company underperformance, and we all agree that there is a clear need to fundamentally reset the water sector. Although I understand that the hon. Member is seeking to ensure that any review of the water sector is sufficiently thorough, the Government are confident that the commission’s scope is broad and comprehensive. Sir Jon will be supported by a range of experts from the regulatory, environment, health, engineering, customer, investor and economic sectors to effectively examine this sector as a whole, including the regulatory framework. By setting out considerations for a water review in primary legislation, we risk prejudicing or pre-empting the outcome of the current commission, as well as its independence. The sector is facing complex challenges that require the support of customers, environment groups, investors and companies alike to address. An independent review is best placed to find solutions to those challenges, and it is critical that its independence is preserved. The commission will report its findings in summer 2025, and the Government will consider them in full before outlining the next steps. I therefore hope that the hon. Member for Westmorland and Lonsdale understands that to avoid duplication and, importantly, maintain the independence of the commission, the Government will not accept the new clause.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I will quickly note the constructive and nice way in which the hon. Member for Epping Forest is taking part in these debates. I also want to come up with more dentistry analogies, so I will be thinking of those as we keep going. The Bill will drive meaningful improvements in the performance and culture of the water industry. In line with that, it will introduce many measures to disincentivise pollution. For example, it will provide Ofwat with legal powers to ban bonuses where companies fail to meet standards on environmental performance, financial resilience, customer outcomes or criminal liability. The Bill will also enable automatic and severe fines, allowing regulators to take swift action. It will enable the public to hold companies to account through a new requirement for water companies to produce annual reports on pollution incident reduction. Collectively, these measures will strengthen enforcement, improve transparency and disincentivise water company pollution. The Committee and the wider public are able to see a more detailed assessment of the expected impact of the Bill via the published impact assessment. I reassure the Committee that my Department is committed to post-legislative scrutiny of primary legislation. The Department for Environment, Food and Rural Affairs will work with the cross-party Select Committee on Environment, Food and Rural Affairs to assess the impacts of the Act three to five years after Royal Assent as part of the standard practice for all new legislation. I welcome that scrutiny. The Government therefore cannot accept new clause 6. Although we agree on the importance of understanding the impact of the Bill on environmental pollution, adding further reporting requirements to the Bill would be duplicative and unnecessary.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I understand the intent of new clause 11. The location and health of a water company’s assets is key to ensuring their maintenance and improvement. Under section 199 of the Water Industry Act, companies are required to keep records of the locations of many of their sewers, natural drains or disposal mains. Members of the public are able to request this information from water and sewerage companies in map form. Furthermore, the Environment Agency hosts a public register of information relating to all sites and assets permitted under the environmental permitting regulations. As of 1 January—this month—all water companies are required to publish discharge data from their storm overflows. Water UK’s centralised map shows that near real-time data for water companies across England in a publicly accessible format.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I thank the hon. Member for Westmorland and Lonsdale for the intent behind new clause 19. As highlighted, it seems in parts to contradict new clause 18, which was also tabled in his name. It is important to highlight that Ofwat already has a core duty under section 2 of the Water Industry Act 1991 to ensure that water companies are able to finance the proper carrying out of their statutory obligations. Ofwat already monitors information it receives about companies and their financial positions on an ongoing basis. That includes carrying out a detailed review of the financial information published by companies in annual performance reports, statutory accounts, interim accounts, investor reports and other sources. Ofwat also directly engages with companies where it sees an increased level of risk. Additionally, Ofwat has recently updated water company licences to require companies to take account of service delivery for customers and the environment, as well as financial resilience when deciding whether to pay a dividend. More broadly, the independent commission into the water industry will look at long-term, wider reform of the water sector, as I have mentioned. Company financial structures are one of a number of areas that could be explored under the commission, and we do not want to pre-empt the outcome of the commission through this new clause. The former deputy governor of the Bank of England, Sir Jon Cunliffe, chairs the commission. As mentioned, he has decades of financial, investor and regulatory experience. His appointment demonstrates the Government’s ambition to fix the foundations of the industry. As I have mentioned previously, there will be a call for evidence, and the hon. Member will be able to make his points to Sir Jon Cunliffe and the commission. Given the existing monitoring of the financial resilience of the sector and the forthcoming recommendations of the independent commission, we do not believe that the new clause is appropriate, and I ask the hon. Member to withdraw it. Turning to new clause 23, which was also tabled by the hon. Member for Westmorland and Lonsdale, a special administration regime enables a company that provides vital public services—water, energy or rail—to be put into administration in certain circumstances to ensure that the public service will continue to be provided pending rescue, via a means such as debt restructuring or transfer, via a sale, to new owners. There is no need for a company exiting a SAR to be placed under an enhanced regime regarding its debt levels. Water companies are allowed to raise debt to fund the delivery of their services, and it is for companies to decide their financial structures. I will resist the urge to repeat my previous comments about the water commission looking at the financial structures of all the water companies, and I hope the hon. Member will take what I outlined previously as read. In relation to capital expenditure during a SAR, it is not necessary to establish a statutory process for agreeing that expenditure, as that would be agreed under a court-appointed special administrator in the lead-up to a SAR. The Government can provide funding support to a special administrator. Any company under a SAR will still be subjected to the same regulatory regime and expected to meet its statutory obligations. I hope the hon. Member understands why we cannot accept his new clauses, but I repeat the offer made: he will be able to talk to Sir Jon Cunliffe and present to him the evidence he has just presented to the Committee, so that he can consider it as part of the wider evidence gathering. I therefore ask the hon. Member not to press his new clauses.