[Lord Speaker] My Lords, first oral question.
Baroness Hayman of Ullock.
[Baroness Hayman of Ullock] My Lords, I beg leave to ask the question in my name
on the order paper.
[Lord Benyon] My Lords, the government welcomes this robust regulatory response
from Ofwat where water companies are underperforming.
It provides a great example of strong environmental and economic
regulatory frameworks in action.
The penalties to these 11 water companies were the result of missed performance
commitments on areas such as water supply interruptions,
pollution incidents and internal sewer flooding.
The government will continue to work with regulators to hold companies
to account on their environmental and other commitments.
[Baroness Hayman of Ullock] My Lords, the minister just mentioned
that the 11 companies fined by Ofwat missed targets in a number of areas:
water supply interruptions, pollution, internal sewer flooding.
But the problem is these performance commitments do not set the bar
particularly high, which makes it extremely worrying
that so many companies are falling short and some by a considerable distance.
So can I ask the noble Lord, the minister does he believe that the current sanction
which sees failing companies having to repay customers
a proportion of their bills in future years, is enough
to bring about the improvements we so desperately need to see.
And with this in mind, how would the noble Lord respond
to the suggestion by Ofwat’s newly appointed Chair Ian Coucher
that the regulator should be granted powers to debar the directors
of egregious water companies?
[Lord Benyon] Well, I take what she says
about the level that these
sanctions are set at.
And if she thinks that there are areas
that can be improved on, we will work with Ofwat to do that.
But she has
she has talked about this as if it's the only area of enforcement
and enormous fines have been applied to water companies where they have failed
to achieve the environmental standards and where they have illegally
pumped sewage into rivers,
resulting in enormous fines which have had dramatic impact
on the amounts of dividends that they have been able to award.
[Baroness McIntosh of Pickering] My Lords, will my noble friend
give an estimate to the House of the contribution in his view
that 300,000 new houses
being built are contributing to the problem.
When are we going to have an end to the automatic right to connect
so that we will have antiquated antediluvian pipes replaced
by modern pipes that can actually take the sewage from these new houses?
[Lord Benyon] Enormous amounts of money
have been spent on new water infrastructure, but
sewage companies are responsible for the maintenance and resilience of drainage
and wastewater networks.
And to address current and future pressure on drainage networks, we are making
drainage and wastewater management plans statutory through the Environment Act
so they will be consulted and they have to put these forward
as a legal measure in order to make sure that they are taking into account
the pressure of new housing.
[Duke of Wellington] My Lords, is the minister
aware of some analysis done by the Rivers Trust,
which shows that the monitoring
of our rivers by the Environment Agency
is much reduced in recent years, that
probably they say they don't have the resource.
Could the minister consider either adding to their resources
or at least redirecting their priorities?
[Lord Benyon] We have put more money into the Environment Agency
and they have been recruiting more enforcement officers to do precisely that.
We are also working with citizen science and I pay tribute to the River Trusts
and others who are providing people to assist the Environment Agency
in assessing the quality of river water.
[Baroness Bakewell of Hardington Mandeville]
My Lords, as someone who lives in an area which is likely to see a reduction
in water bills due to penalties from Ofwat,
I would prefer our rivers, waterways and seas to be sewage
free rather than receive a small monetary hand-out.
It appears that the threat of financial penalties is insufficient
to encourage water companies to change their damaging environmental practices.
Is the government ready to propose more stringent means to ensure
water companies invest in infrastructure rather than director’s bonuses?
[Lords] Hear! Hear!
[Lord Benyon] We are seeing precisely that a £56
billion investment in infrastructure, the biggest investment
in real terms that this industry has ever seen.
And since 2015,
further to the question that the noble Duke asked,
the Environment Agency has brought 54 prosecutions against water
companies, securing fines of almost £140 million.
In 2022 the EA had already concluded
six prosecutions with fines of over 2.4 million.
So not only are we seeing more investment, we are seeing more enforcement
and we will see an improvement and the government will insist
on an improvement in the releases of sewage into rivers.
[Lord Bellingham] My Lords,
Norfolk is fortunate to have a number of really quite remarkable chalk streams
which are providers of really quite spectacularly important habitat.
What more can be done to protect these chalk streams?
[Lord Benyon] My noble friend raises a very important point.
The chalk streams strategy written by somebody who I suspect
was a former constituent
of my noble friend Charles Rangeley-Wilson is a brilliant piece of work,
which the government has accepted and will form the basis of our
policies to
see these very valuable
environmental and ecological systems
in pristine state as quickly as possible.
[Baroness Jones of Whitchurch] My Lords, the noble Lord
the minister talked
about the enormous fines that were able to be given to the water companies,
but as Ofwat already admitted, they’re only able
to fine up to 10% of the turnover of these water companies.
And what Ofwat said was that that was a very small percentage
of the total value of those companies because they are so asset rich.
So can I ask the minister once again to look again at what those limits are in
terms of the fines that can be passed on to the water companies
because they clearly not working at the current time?
[Lord Benyon] Well, I'm very pleased to make the noble Baroness’s day
by saying that we have increased a thousandfold, a thousandfold,
from £250,000 to 250 million,
the upper limit on which water companies can be fined.
[Baroness Browning] Can I ask my noble Lord, has the government
given consideration to changing the building
regulations, particularly with regard to rainwater runoff,
so that the water is recycled and not taken into the system
and thus reducing the volume going out of the system?
[Lord Benyon] My noble friend is absolutely right to raise this.
One of the problems we have is that water coming off roofs
and driveways, absolutely clean water goes into the same sewerage system.
To separate them, to separate foul water from clean water
has been estimated, costing between £350 to £600 billion,
which would have a dramatic effect on people's bills.
But that is nothing to stop us trying to do this with new housing,
as well as retrofitting it into existing housing.
And ongoing discussions are happening with
other government departments to see if this can happen.
[Members] My Lords, my Lords -
[Baroness Boycott] My Lords, by no means wanting to
excuse the water companies anything,
is certainly in the west of England a lot of river pollution does come from
industrial food farming, particularly chickens and particularly nitrates.
What's the government doing to fine them for their contribution to our
pollution in our rivers.
[Lord Benyon] The noble Baroness raises
a very severe problem and we rightly hold water companies to account.
But that's only part of the problem.
On rivers such as the Wye phosphates from the poultry industry
have caused that river to become in parts of it
and at certain times of the year, practically ecologically dead.
And this is one of the great rivers of our country.
And we have to recognise that there is a planning issue
alongside the way we support and incentivise farmers,
the way we enforce these issues, which all has to be brought together.
And we all want to see more
food security, free range eggs and broiler houses and all the rest of it.
Those are the sort of things we want to see more of in this country,
but not at a price that we are now paying in rivers like the Wye.
[Lord Brooke of Alverthorpe] My Lords, if we're bringing these all together
what is the government going to do when it's brought it together?
[Lord Benyon] Well,
I refer the noble Lord to the Environment Act as a first measure,
probably the most significant piece
of environmental legislation that any country has brought forward.
And this brings with it controls and sanctions alongside it a new
statutory policy statement to Ofwat,
to give them more powers, higher enforcement
fines and many of the other things I've already discussed this afternoon.
So he, I hope, can see on reflection that there is a plan
that we are determined to end the shameful situation
of illegal outflows into rivers, whether it's from sewage
or whether it's illegal pollution coming from farmland as well.
[Baroness Jones of Moulsecoomb] Those of us who watch this situation
closely, actually don't think that Ofwat is doing a very good job and a case
in point is that they did fine Thames Water £50 million, which was great.
But Thames Water is now giving each of its customers
£3.40, as a sort of recompense.
Does that sound reasonable? Does it sound fair?
[Lord Benyon] As part of this
failure to hit their commitments Thames
Water will be returning to customers next year
£51 million, which
as an average household's
water bill to take all the freshwater into a household
and remove all the dirty water is just over a pound a day.
That's a lot of money for someone on low income.
But in terms of household incomes,
it probably sits well below, for example, their energy costs.
But this system of being able to return money
to customers is absolutely at the heart of the kind of incentives we want to see.