PARLIAMENTARY DEBATE
Independent Water Commission - 23 October 2024 (Commons/Commons Chamber)

With permission, Mr Speaker, I would like to update the House on the action that this Government are taking to fundamentally transform our water industry and clean up our waterways for good.

Fourteen years of Conservative failure have left our water sector in disrepair. The rivers, lakes and seas that we all love have record levels of pollution. Severe droughts are set to leave parts of the country facing significant water shortages by 2050, particularly in the south-east, and water companies forecast that England will need to find an extra 5 billion litres of water a day to fill the gap between supply and demand by that same year. A rising population and the increasing impacts of climate change are putting strain on the water system. Firmer action should have been taken by the previous Government to ensure that money was invested to fix the water and sewerage system. Instead, they allowed that money to be siphoned off for bonuses while our water infrastructure crumbled.

A secure water supply is essential for every home and business throughout the country. It is the foundation of our economy, our communities and our global security. It is essential to life itself. We use water to cool power stations, and it is vital to our electricity supply. We use water to grow the crops that provide the food on our plate, and we use it to supply our leisure industries. Without a resilient water supply, we cannot build the new homes and critical infrastructure that we need to grow the economy.

Concerns about pollution, water shortages, bill increases and the sector’s financial resilience all point to the need for profound change. The water sector needs a complete reset, with a reformed water sector working in partnership with Government to bring in the investment we need. We need a clear long-term plan to ensure that the sector puts customers and the environment first and can attract investment to upgrade our infrastructure. We need a water system fit for the future. We cannot clean up our rivers, lakes and seas overnight, but we have a plan, and the work of change has started.

On 11 July, I made a statement to the House on the agreement that I reached with water companies and Ofwat to ringfence money earmarked for investment in water infrastructure so that it can no longer be diverted for shareholder payouts and undeserved bonus payments. On 9 September, we introduced the Water (Special Measures) Bill, which sets out new measures, including measures strengthening regulation to ensure that water bosses face personal criminal liability for serious and repeated lawbreaking; giving the water regulator new powers to ban the payment of bonuses if environmental standards are not met; and boosting accountability for water executives through a new code of conduct. Today, I am pleased to announce the third stage of our plan.

Together with the Welsh Government, we are launching an independent commission that will lead the biggest review of the water industry since privatisation 35 years ago. The commission will ensure that we have the robust regulatory framework that we need to attract the significant investment that is required to clean up our waterways, build new infrastructure to address water scarcity, and restore public confidence in the sector. I am delighted that it will be led by the former deputy governor of the Bank of England, Sir Jon Cunliffe, who has decades of economic and regulatory experience. Sir Jon will be supported by an advisory group of experts covering areas such as the environment, public health, engineering, customers, investors and economics. He will seek advice from wider groups of stakeholders including environmental campaigners, consumer champions, water companies, regulators and the public at large.

The commission will conduct a root-and-branch review of the water sector’s regulatory system. It will cover the water industry in England and Wales and the strategic planning framework under the water framework directive and river basin management plans to ensure that strategic water planning across sectors is effective at catchment, regional and national scales. Where housing, planning, agriculture and drainage interlink with strategic planning across the water system, they are also in scope.

The commission will set a new framework for the future. It will not make recommendations that affect the current price review ’24 process, in order to ensure that there is a stable climate for investment as that process concludes. It will be pragmatic and will focus on reforms that improve the privatised regulatory model. Nationalisation of the water sector will not be in scope, because of the high costs of buying out the current owners, lack of evidence that it would lead to improvements, and the long delays that it would cause in the process of cleaning up polluted water and serving customers better.

The commission will make recommendations in the first half of 2025, reporting to me as Environment Secretary and to the Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs in Wales. Once it has made its recommendations, the UK and Welsh Governments will respond and consult on proposals, including subsequent legislation. Further details of the commission’s scope, delivery, approach and timelines are set out in its terms of reference, which will be available on gov.uk today.

This Government will deliver an ambitious, long-term and collaborative approach to reforming the water sector, creating a strong new partnership between Government, water companies, customers, investors and all those who work to protect our precious environment. The commission will set the groundwork for the reformed water sector that we want to see. I thank Sir Jon for leading this important work.

This is our opportunity to ensure that our children, and their children, have the chance to create memories that will last a lifetime—to splash about at the seaside, row on our rivers or enjoy a picnic on the lake shore. This is our opportunity to inject billions of pounds into the economy and to power UK growth by attracting global investment into a transformed water sector. This is our opportunity to clean up our water once and for all.

I call the shadow Minister.

I thank the Secretary of State for prior sight of his statement.

Fourteen years in opposition—and this is what the Labour party has to offer. Labour Members have had more than a decade to craft a clear package of policies, listen to campaigners and prepare to govern, yet what they have brought to the House today illustrates no sign of any ambition. This is a sign of hesitation. It is a way to delay the difficult decisions and buy themselves more time. It is part of a growing trend that unfortunately we are seeing consistently from this new Labour Government, across all Departments: announce a review, a taskforce and yet another commission, and hope the public do not notice that really they never had much of a plan at all.

That approach is simply not going to wash with the bill payers. Before the election, the Secretary of State toured the country with campaigners like Feargal Sharkey, promising radical change to the sector. He is now in power, and what has he actually achieved so far? He spent the entire election campaign telling voters that he wanted to put water company bosses in the dock, but we can see from the Government’s announcements on the Water (Special Measures) Bill that it will achieve no such thing, as campaigners and industry experts have already pointed out. Nor will the Bill provide any reassurance whatever for investors. Rather marvellously, the Secretary of State has managed not only to frustrate campaigners, but to disenfranchise investors from any long-term aspirations to invest in the sector.

The Secretary of State says that he has announced a ban on water company bonuses. Hang on: that was a policy that we brought forward in our time in government and that the Secretary of State is now attempting to reannounce and pass off as his own. It was the Conservatives who announced a ban on water company bosses’ bonuses, linked shareholder dividends to environmental performance, quadrupled water company inspections, fast-tracked investments to cut spills and launched a whistleblowing portal for water company workers to report breaches.

It is surprising to hear the Secretary of State claim that his Government are truly serious about this issue, when their proposals are less firm than the measures delivered by the previous Government. He could take real action right now by progressing the last Conservative Administration’s plans for an automatic ban on water company bosses’ bonuses when offences take place. Rehashing announcements already set in motion by the Conservative Government, putting forward policies that will not actually put more pressure on water company bosses and then simply pressing pause on a year-long review will not result in the widespread change that Labour promised its voters.

The Secretary of State acknowledges that the announced review will make no recommendations that affect the current price review ’24 process, meaning that there will be no chance of the Government considering making any significant change until 2029 at the earliest. Will he provide an outline of the timeframe associated with actual recommendations from the review being implemented and put in place? When is any real benefit from this further review, taskforce or commission likely to be experienced, not only for the water industry, in terms of infrastructure improvements, but for the bill payer and the environment? It seems to me that the Secretary of State is just kicking the can down the road with another review, another taskforce and another commission, and removing himself from any of the tough decisions.

The Secretary of State said that the review would have no impact on the price review ’24 process. Will he outline exactly when the positive impacts will come? By my calculations, it will not be until 2029 at the earliest. Will he also outline the impact of the review on the measures proposed in the Water (Special Measures) Bill? What will be done if the recommendations do not sit comfortably with the current proposals?

One cannot help concluding that the Secretary of State is out of depth on this issue, cannot deliver on the tough language that he promised in the run-up to the general election and is now doing nothing more than attempting to kick the tough decisions down the road and into the long grass. This Secretary of State seems to be all bark and no bite.

Well, that was all a little bit embarrassing, wasn’t it? The previous Government had 14 years in power, our rivers, lakes and seas are awash with record levels of pollution, and that is all the Conservatives have to say. I took action seven days after the general election: I brought the water chief execs into my office, and we agreed that money earmarked for investment will be ringfenced so that it cannot be diverted to pay multimillion-pound bonuses to water chief execs who oversee failure in the water sector, as happened on the shadow Minister’s watch. The commission will reset the sector that the Conservatives broke, and clean up the water that they polluted. It will report to the Government in June and inform subsequent legislation.

At the weekend, I went swimming in the North sea —probably for the last time this year—having first checked on the Surfers Against Sewage website that there had not been any legal or illegal spills. It is disgraceful that the last Conservative Government left our seas and waterways in such as state, and it is notable that Water UK continuously blames the regulator for not allowing it to raise prices in order to invest further in our system. Will the Secretary of State make sure that we assess the value extracted by the water companies? They have taken billions of pounds in profits and hundreds of millions in bonuses. We need to make sure that future investment adds value and does not take it away.

I thank my hon. Friend for her comments. Unfortunately, customers have been left to pay the price of 14 years of Conservative failure to secure investment in our water infrastructure, so it has collapsed to such an extent that Ofwat now recommends eye-watering bill increases. Every penny of that is down to the failure of the Conservative party. Our reset will ensure that that kind of catastrophic failure can never happen again.

I call the Liberal Democrat spokesperson.

I am grateful to the Secretary of State for advance sight of his statement. To a large degree, I welcome it—or at least the intention behind it—but water companies dumped 54% more sewage into our lakes, rivers and coastal areas in 2023 than in the previous year. That amounts to 464,000 spills, including many in the lakes and rivers of Westmorland. My constituency is the most beautiful part of England and also the wettest, so water is deeply personal to us.

Does the Secretary of State understand my worry that we might have gone from having a Conservative Government who would not face up to this outrage or tackle it, to having a new Labour Administration who have acknowledged this outrage and decisively resolved to have a jolly good think about it? While Thames Water crumbles as we speak and water companies seek bill increases of 40%, despite such poor performance across the country, does he really think that having a commission is necessary, given the urgent need for action? We have a fragmented, under-resourced and under-powered regulatory system, which allows powerful water companies to play regulators off against each other while our constituents pay the price. Is the solution not obvious? As the Liberal Democrats propose, we should create a new, unified and far more powerful clean water authority.

Does the Secretary of State share my deep concern that the current regulator has to give 25 years’ notice in order to strip a water company of its licence for environmental failure? Will he ensure that this ludicrous protection for failing companies should be replaced by a six-month period of notice instead? We are already more than 5% of the way through this Parliament, and this issue is one of our constituents’ most pressing concerns. Do we have to drag our heels like this?

I thank the hon. Gentleman for his comments. He is absolutely right to point out that last year we saw the highest levels of sewage ever recorded in our rivers, lakes and seas. No wonder the public are so angry, including in his constituency. Tragically, Lake Windermere, an iconic and beautiful site, has been polluted with sewage and agricultural run-off because of the failures of the previous Government.

I have taken action already. We had a reset moment just seven days after the general election, when we carried out within a week things that the Conservatives failed to do in 14 years in power. The Water (Special Measures) Bill is going through the Houses of Parliament right now to ban the payment of unfair bonuses to water bosses. The commission, led by Sir Jon Cunliffe, will look at the entire sector—root and branch—including governance and regulation, which the hon. Gentleman points to. It will look specifically at the point that he has raised, so that we end up with a system of regulation that is fit to clean up our waterways and then to protect them for the decades to come.

I thank the Secretary of State for his statement and his announcement of this important review. To have Sir Jon Cunliffe, a long-term public servant, running it is very welcome indeed. Will my right hon. Friend say a bit more about how the close working between the Welsh Government and the UK Government will work, because that will be important in determining how this announcement affects my constituents?

My hon. Friend alludes to an important point. Rivers and water catchments are no respecters of boundaries, and it is important that we have a model that works within catchments, including where they cross boundaries, as they do in some cases between England and Wales. The review has been jointly commissioned by the UK and Welsh Governments, and it will jointly report to both Governments. It will seek a better model for structuring and supporting our water sector, so that we can ensure that we clean up all our rivers, all our lakes and all our seas; so that the public can get back to enjoying them; and so that we can bring in the investment to support the infrastructure, which will be delivered at pace, to drive economic growth in every single part of the United Kingdom.

We come to the Chair of the Select Committee.

The Secretary of State is quite right to point to the role of the payment of bonuses and dividends in bringing us to this point, but he must surely acknowledge that that is far from being the whole story. There are a number of business and accounting practices in companies such as Thames Water that have brought us to the stage we are at today. If he is serious about having a water system that is fit for the future, he has to understand properly what has gone on before. Will he therefore confirm that the commission will be properly resourced with the necessary forensic accounting resource, so that those who have been responsible for the most egregious practices in the past and who now seem to be appearing in other water companies around the country will not be allowed to do the same thing there?

I thank the Chair of the Select Committee for the points that he makes. Of course, he is right. The Water (Special Measures) Bill, with its ban on bonuses, will not be sufficient to reset the sector, although it is an ask that the public are rightly making because of the unfairness of people who are overseeing failure being richly rewarded for that failure. That should not have been allowed to go on under the previous Government, and it will not go on under this new Government.

The reason we have set up the commission is to address the very points the right hon. Gentleman makes about financial and environmental sustainability and viability. I look forward to working with him and his Committee as the commission carries out its work, as we review its findings in the summer of next year, and as we then shape what will be significant new legislation to reset the sector—a reformed sector—in a new partnership with Government to bring in the investment that will finally clean up our waterways.

I declare an interest as a customer of Southern Water who lost my water supply for five days earlier this year, as did 30,000 of my constituents. As the Secretary of State knows well from his visits to Hastings and to Rye, we have major issues from flooding to sewage to water outages. I welcome the water commission. How can my constituents, particularly volunteer groups such as the Clean Water Action group, have their voices heard, particularly their concerns about ensuring that the regulators have the power and resources to clean up our sea?

My hon. Friend is a powerful campaigner for cleaner water. In fact, it is hard to think of anybody who has campaigned harder on the issue. The commission will seek to engage the public at large, as well as a wider group of stakeholders who will be represented on an advisory group, which will include a customer voice. Once the commission has reported, the Government will consult on those findings and that will inform the subsequent legislation that will reset this sector once and for all.

Order. I say gently to the Secretary of State that I am here and he should be speaking through the Chair, not to the Member, as he has done for the last two questions. We can work together to get everybody looking the right way. I call Sir Gavin Williamson to set a good example.

In my constituency we have beautiful rivers, including the great and mighty River Trent and the River Penk. Over the last few years, as more transparent data has become available, we have been able to see the number of sewage discharges going into those rivers. Will the Secretary of State promise the House that looking at how we can reduce sewage discharges into the Trent and the Penk will be at the heart of what the commission does?

It is always a pleasure, of course, to gaze at you, Mr Speaker, rather than elsewhere in the Chamber.

The right hon. Gentleman makes an important point. The point of the commission is to identify ways in which we can strengthen regulation and operations so that we can bring in the investment, clean up our water sector once and for all, and reduce and remove the pollution that is destroying so many beautiful rivers, including those in his constituency.

I congratulate the Secretary of State on the commission that has been set up today—it is absolutely fantastic. Gower was the first area of outstanding natural beauty in the whole of the United Kingdom, and the bathing waters there are second to none, but some of them are less so. I would like to highlight a campaign I have set up to test the bathing water in the winter season, with my constituents, local business and the Gower Society, because data is key—it is what will drive the improvement of our bathing water. Will he congratulate Surfers Against Sewage, which has been really supportive, and everybody in my constituency who is taking part and taking control?

My hon. Friend represents an incredibly beautiful part of the country in the Gower, and her constituents and the many people who visit those beauty spots will want to know that their children can enjoy the water without risk of contamination from polluted water. Of course I congratulate Surfers Against Sewage and the many campaigners who have pushed for reform. They will be invited to participate in the work of the commission—they have huge expertise. I hope that, before long, her constituents who are testing the quality of the water will start to see improvements until it is pure and crystal clear, as it should always have been.

The Secretary of State highlights the scandal of sewage in our seas and rivers. Indeed, raw sewage was dumped into our rivers and seas for 3.6 million hours last year. Since privatisation, £72 billion has been paid to shareholders in dividends, while his Department highlights that it would cost £56 billion to carry out the necessary investment, so privatisation has failed as a model for getting the investments in place. Will he therefore confirm that the commission will look at what ownership model for water will be effective in addressing this scandal, including the option of bringing water back into public hands?

The reason I have ruled out nationalisation is that it would not resolve the problems we face. We saw in the Olympics in France that the River Seine was not able to be used for swimming because of pollution. That is a state-owned water system. We see the problems in Scotland. That is a state-owned water system as well. The problems are those of governance and regulation. Nationalisation would cost towards £100 billion of public money—money that does not exist—and the time it would take to unpick the current models of ownership, during which time investment would be choked off, would see our rivers, lakes and seas filled with even more sewage and pollution, rather than less. I am more interested in the purity of our water than the purity of our ideology. I will do what works best as quickly as possible. The commission will give us guidance on how we should change the system to make sure it works for everybody.

For the last few weeks, I have been conducting independent tests, with colleagues from Bournemouth University, for nitrates and bacteria in the lovely Poole harbour and the surrounding waters. I have noticed, from talking to colleagues, that the frequency of official testing and the number of sites at which those tests are carried out have been reduced significantly by the Environment Agency over the years. Will the commission look at those issues? Will testing and the frequency of testing be included in its work?

I recognise what my hon. Friend says about Poole harbour. It is, indeed, an incredibly beautiful part of the country. I have visited it several times and, sadly, I have also seen the extent and impact of the pollution. We are making sure that all sewage outlets are monitored through compulsory means, which is not the case currently. The commission will look at how we can improve the testing and monitoring of water quality as part of the strengthening of regulation, which will form a key part of its work.

The Secretary of State mentioned the importance of drainage in reducing incidents of pollution caused by flooding. Will he therefore commit today, while we await the outcome of the commission, to distributing the £75 million allocated by the previous Government to internal drainage boards, so that farmers in my constituency and others in the River Hull catchment do not have to spend another winter under water?

Unfortunately, the hon. Gentleman is referring to commitments to spend money that did not exist. We are waiting for the Chancellor to announce her Budget from this Dispatch Box in almost exactly one week’s time, and we will find out much more then.

Last year, sewage was dumped 57 times along the precious coastline of my constituency—the equivalent of 594 hours of sewage spillages. Our constituents are rightly disgusted by this state of affairs. The Conservatives covered up this scandal for 14 years. Will my right hon. Friend tell me what this new Labour Government will do to hold companies to account?

I thank my hon. Friend for her question. I had the pleasure of visiting Bournemouth West with her, and I saw for myself the impact on businesses and tourism in that part of the world. Parents are frightened to let their kids go in the sea at certain times of day, when the water contamination has reached unacceptable levels. The commission will look at how we can strengthen regulation and governance to ensure that the practices that water companies have got away with over recent years can no longer happen. It will also look at how we can bring in the investment needed to repair our broken water infrastructure, so that we can drive economic growth in every part of the country, including, of course, in Bournemouth West.

The use of storm overflows in places such as Skegby in Ashfield is absolutely disgusting and it pollutes my rivers, so will the Secretary of State commit to giving the water companies a deadline for ending their use?

It will be for the commission to look at what we need to do to improve infrastructure and fix the broken system that we have at the moment. We are making sure that every overflow has monitoring on it, so that we know exactly what is coming out of it. We can therefore take action against the water companies that might be responsible.

In my constituency this week, as well as having sewage in our bathing waters, we have had sewage on the streets in Penryn. The Conservative party cut funding to the regulator in 2015. Will the Secretary of State please confirm that the review will completely reset the role of the regulator?

I thank my hon. Friend for her question. I had the pleasure of visiting Truro and Falmouth during the election, and I saw for myself the problems there. It is disgusting to see sewage bubbling up into the streets and even into some people’s back gardens because the sewage infrastructure is so broken after the previous Government failed for 14 years to bring in the investment necessary to upgrade it. The commission will look at how we secure funding and get that infrastructure rebuilt at pace, so that we can improve the situation we are hearing about. It will also look at regulation and the role of the regulator and make proposals as to how we can improve those, so that we have regulation that is fit for purpose.

In Kingsbridge, in my constituency, the residents are literally wading through sewage, which seeps out of the drains in heavy rain due to a mixture of increased sewage from new houses and ancient culverts that cannot cope. I do not think that those residents will be encouraged by a review and a commission, which will not solve the problems they will face this winter. Will the Minister therefore meet me to discuss the particularly difficult and chronic problem in Kingsbridge? We need to find a solution, because we have not had one for a long time and we desperately need to sort this out.

I have, of course, already taken action myself. I had the water chief executives into my office just seven days after the general election, and we agreed a programme of initial reforms, including ringfencing customers’ money that is earmarked for investment, so that it cannot be diverted and spent on undeserved multimillion-pound bonuses or dividend payments. We also have the Water (Special Measures) Bill going through the House of Lords right now, which will ban the payment of those undeserved bonuses. It is important that we understand exactly what has gone wrong in the sector that has led to a situation where regulation does not meet the requirements of the public, businesses, the economy or the environment. Key proposals will be coming out of the commission on those issues, and I hope the hon. Lady will welcome them when they come forward.

Today, a report found that rivers in the east and in London have the worst water quality in the UK, with an alarming amount of chemicals found. Citizen science has played a key role up to now in monitoring the quality of our water, so will the Secretary of State join me in paying tribute to citizen scientists and volunteers and assure us that their voices will be heard in this important work?

My hon. Friend makes an important point. The many campaign groups and citizen scientists have had a huge impact on raising the profile of the sewage scandal affecting our country and in pointing to some of the ways in which we can start to fix things. Sir Jon’s commission will have an advisory group with representation from campaign groups and consumers. There will also be wide engagement with the public, both through the work of the commission itself and subsequently, as we work towards the reform legislation that will reset the sector once and for all.

In the absence of a plan, it is always a good idea to do a review. My constituents are being failed by our local sewage infrastructure—Thames Water is a total and utter disgrace. However, I really welcome the Secretary of State’s statement, because I think I have found an unlikely ally. The Labour Government will force through building on the green belt in my constituency, with a whole host of new houses—a situation exacerbated by the failure of the Liberal Democrat administration in Elmbridge to deliver a local plan. Given the time it will take the commission to report back, and given that these new houses will require more sewerage, does the Secretary of State agree that we should pause and think again about the house building targets until the review has been completed?

I thought the hon. Gentleman was standing up to apologise for the fact that the Conservative Government did absolutely nothing for 14 years, other than watch the torrent of effluent going into our rivers, lakes and seas increase and pollute them. My hon. Friend the Water Minister would be more than happy to meet him to discuss the issues that he raises in his constituency.

I welcome the commission announced by my right hon. Friend. Last week, six beaches in my constituency were affected by raw sewage dumping, with two of them—Joss Bay and Stone Bay—experiencing a bad effect on their bathing water quality, but the verdict was that they were still within Environment Agency permitted limits. Will my right hon. Friend confirm that the commission will investigate regulatory standards, so that when raw sewage is dumped, there is actually a fine and a punishment for the water companies? I must also make a declaration as a customer of Southern Water and a sea water swimmer.

I thank my hon. Friend for her question. She is, of course, a well-known environmental campaigner who stands up for her constituents and for the many businesses, including tourism businesses, that are adversely affected by the appalling state of our waters. It is clear that regulation and governance have been inadequate for a long time. This is a reset moment, where we can finally strengthen those things and deliver the clean water that her constituents, mine and those of all Members across the House expect to see.

Diolch, Mr Llefarydd. Water is devolved, but we in Wales do not have the full range of powers needed to address this scandal. For example, the Senedd cannot regulate the transfer of water by private companies whose catchment area straddles the border, which of course includes the likes of Hafren Dyfrdwy. Will the Secretary of State ensure that the commission considers the full devolution of powers over water and sewage licensing to Wales to empower the Senedd to set higher targets?

Diolch yn fawr. The commission is jointly set up by the UK Government and the Welsh Government, and it will report back to both. It will inform the actions that both Governments take subsequently, including looking at infrastructure and how we make catchment areas operate better, particularly when they cross borders, as so many do between England and Wales.

I congratulate the Secretary of State on the launch of the independent water commission. I know my constituents in Sheffield Central will welcome the review. They are seeing a 25% rise in their bills, but that does not make sense to them when shareholders continue to receive profits. Will the Secretary of State provide an assurance that as an outcome of the review there will be transparency, water companies will be held to account and we will reset the focus on consumers instead of company profit?

My hon. Friend makes an important point. Consumers must have a strong voice on the commission. They will gain that through consumer representation on the advisory group that will be working with Sir Jon, as the commissioner. She points to the eye-watering level of bill increases already proposed by Ofwat; alas, they are the price of Tory failure. The Tories allowed the water infrastructure to collapse to such an extent that it costs much more to fix it now than it would have cost had it been maintained properly through those 14 years. I cannot undo the damage they caused, but I can draw a line in the sand to ensure it never happens again.

When the Conservatives privatised water, they created risk-free, money-printing emporiums that could pollute our coasts, including my west Cornwall coast, at their convenience. Although the Secretary of State says that nationalisation is not in scope —one can understand why—to what extent will company governance be in scope? Will it be possible to move companies closer to becoming community benefit societies, or at least to installing a community environmental champion, not in the pay of the company, on every board, to keep watch on the company?

The hon. Gentleman makes important points. The areas he refers to will be in scope for the commission. I hope he will make his own representations to ensure those points are heard and fully considered before we get the findings in the summer of next year.

Residents in my constituency have been disgusted by the degradation of our rural waterways across the east of England, as well as by the hollowing out of reservoir capacity across the country. I welcome the new Government and the new Secretary of State’s renewed leadership on these issues, but it is clear that under the previous Government weakened regulation and regulators played their part in facilitating the mess we have inherited. What assurances can he give my constituents that we will be beefing up the regulators and giving them the power they need to take the action we all want to see?

My hon. Friend is absolutely right that the previous Government deliberately weakened the regulators. They kept regulation too weak to hold the water companies to account and to ensure that we got the investment which could have maintained a better standard of infrastructure and stopped the level of pollution that his and everyone else’s constituents have had to face. We have already taken steps through the Water (Special Measures) Bill to give the regulator more teeth. The commission will be looking root and branch at the role of regulation, governance and the regulator, to ensure we have a system that is fit for the future that will guarantee clean water for decades to come.

If I heard correctly, at the start of his statement the Secretary of State referred to the River Lugg, which runs through the centre of my constituency. Its catchment has been subject to a planning moratorium for more than five years, because of excess levels of phosphates in the river. The Secretary of State will be well aware that the reason for that is not primarily sewage pollution, but agricultural run-off; more than two thirds of the pollution is from agricultural run-off and only a quarter from sewage. However, the terms of reference for the Government’s water commission essentially make no mention of agriculture, with only a passing reference and nothing specific about addressing that problem; likewise the Water (Special Measures) Bill. With such a narrow approach to addressing water pollution, the Secretary of State will not be able to achieve his aim of cleaning up our rivers and seas. Does he agree that the terms of reference need to be changed to incorporate full attention on agricultural pollution as well as sewage?

I hope the hon. Lady will look at the terms of reference, which are available at gov.uk. They focus on the whole catchment area of rivers and include agricultural run-off, which accounts for 45% of water pollution. Where there is an interface between agriculture and polluted water, that is indeed in scope for the work of the commission.

I thank the Minister for his statement. The contamination and destruction of our waterways, and even of our high streets, as we saw with sewage pollution in Newquay the other week, is an absolute disgrace that the previous Government failed to address. With Pennon Group, the owner of South West Water, paying £112 million in dividends and over £160 million in other finance costs, will the Secretary of State ensure that the independent commission, which I greatly welcome, addresses whether we have effective funding models for our water industry?

My hon. Friend is absolutely right; it is disgusting for people to see sewage bubbling up, and not just in their high streets but even in their gardens, because of broken water infrastructure. We will be looking for a reset so that we can have a water sector that works for customers and the environment, as well as investors.

The year 2 pupils of Bishop Tufnell school in my constituency told me how disappointed they were not to be able to swim in the sea on their summer day out last year. As a fellow sea swimmer, I share their disappointment. Winter is coming and there is no time to waste. Pushing the can down the track with this commission is not good enough. Having reviewed the activities in my constituency, I want to know how the Secretary of State will provide a strategic overview that brings together all the different agencies that impact this matter, and not some time next year but before the real issues hit every single constituency around the coast of the country right now?

I am very sorry for the year 2 pupils at the school the hon. Lady mentioned. I respectfully remind her that she represents the party that sat back and did nothing for 14 years, while the levels of pollution in our rivers, lakes and seas got far worse. That, I venture to suggest, is why those year 2 pupils cannot go in the water.

Sewage polluting Cornish beaches such as those in my constituency—specifically, St Agnes, where Surfers Against Sewage has its head office, Perranporth and Portreath—is yet another Conservative scandal that has damaged our economy and society for years, and that a Labour Government will now have to clear up. Does the Minister agree that as well as the economic damage, the damage to the mental health of those of us who cannot regularly use the sea should not be underestimated? Will the commission consider the mental health benefits as part of its work?

I had the pleasure of visiting my hon. Friend’s constituency with him during the summer. I saw for myself the impact of sewage in the sea on the beautiful beaches around his part of Cornwall. Of course, it is not unusual for a Labour Government to have to come in and clean up the Tories’ mess, but rarely quite so literally as in the case of sewage in our waterways. He makes an important point about mental health. I hope he will feed that back to the commission because it is important it hears all sorts of views about the impact of polluted water as it considers how we can best clean it up.

Since I was elected in July, Exmouth and Exeter East has been hit by significant sewage issues. I am sure the Secretary of State will understand that and I have written to him recently outlining some of those issues. Although the commission may bear fruit in future years, there are areas of the country, such as my constituency, that need immediate fixes. Will the Secretary of State meet me and the chief executive of South West Water to ensure that immediate fixes are put in place and maximum pressure is applied, so that we have the fixes we need and do not have to endure another summer like the one we have just had?

I welcome the hon. Gentleman to his place and to this House. I hope Conservative Members will engage constructively with the commission, so that he can feed in his views directly. My hon. Friend the Minister for Water and Flooding is happy to meet him to discuss his local issues.

My constituents do not think that Yorkshire Water is doing a good job. Last year, sewage was discharged into the River Calder 4,125 times. The same year, Nichola Shaw, the boss, chose to take home a bonus of £371,000—or £90 per discharge. We have also had three major flooding incidents in Calder Valley over the past 15 years. Regulations do not cover water companies acting against flooding. Will my right hon. Friend look at the breadth of the current regulations and at what water companies can do about flooding?

My hon. Friend makes an important point. The Water (Special Measures) Bill, which is currently going through the House of Lords and will soon be in this House, looks at how undeserved bonuses can be banned. The public quite rightly feel a sense of injustice that failure is being rewarded, when clearly it should not be. The points he makes about flooding are well made, and I hope he will feed those into the work of the commission as it starts its work.

The Environment Agency used to be responsible for monitoring sewage discharges, but for more than a decade now the water companies have had the responsibility for monitoring releases via storm overflows. In the previous Parliament, the Environmental Audit Committee heard that illegal spills may have been 10 times greater than that declared by the water companies. Will the new commission consider removing from water companies the monitoring of sewage discharges, or will it let them mark their own homework, as the previous Government did?

There has been a wide failure in the regulation of water. That is why I have asked Sir Jon Cunliffe, as part of the commission that he is leading, to look at regulation and the roles of the regulators—not just one of them—to ensure that we have a system that is fit for purpose. We are ensuring that, outside the commission, there is mandatory monitoring of what is coming out of all overflows, including emergency overflows. In the Water (Special Measures) Bill, water chief executives will be required to be open and transparent about the extent of pollution; otherwise, they will face personal criminal liability for the first time.

In 2024 alone, Hartlepool’s beautiful coastline has been marred by 49 separate incidents of sewage being discharged into our sea. At the same time, the water companies are making billions in profit. Whatever the outcome of the commission, can the Secretary of State commit to putting people in Hartlepool and across the country ahead of profit in cleaning up this mess?

My hon. Friend is absolutely right; this sewage scandal affects the entire country, including his constituency of Hartlepool. It is important that this commission focuses on ensuring that consumers and the environment come first, and that we have a water sector that serves their interests primarily. I hope that he will make his points directly to the commission, because they will value hearing from him.

I was a brand-new parent when South East Water cut off the water for six days for me and for thousands of my constituents. South East Water is 74% in debt—it is the second most indebted company in the land. Its current investment plans rely on taking on more debt, which is then paid for through increased customer bills. Clearly, that is unsustainable not just for the companies, but for the customers because of their ever-rising bills. Will the Secretary of State assure me that this commission will make suggestions for reducing the indebtedness of water companies?

That is an important point. The commission will be looking at the financial viability of water companies, including their levels of indebtedness. The hon. Member also made the important point about what happens when water companies cut off supplies, because, frankly, compensation to individual households and businesses has been inadequate. That is something that we seek to address through the Water (Special Measures) Bill, which is going through Parliament right now, so it need not wait for the commission.

The village of Upper Tean, which the Secretary of State may remember, has experienced flooding, burst drains, and sewage flooding into rivers and streams, killing them, for many years. And recently residents had to turn out en masse in the middle of the night to divert traffic away when the village was overwhelmed by quite a serious and urgent flood. Following meetings with the Environment Agency, the parish council is looking into developing a flood action group, so that it can provide the resilience and the powerful voice to take action against water companies such as Severn Trent. Will the Secretary of State assure me that the commission will look at how communities such as that of Upper Tean can build the resilience they need and also help them develop a flood action group?

I remember very well and with pleasure the visit to which my hon. Friend refers. I also remember how distressed residents were to see their homes flooded and their possessions destroyed. Very often their homes were uninsurable, because of where they were located. The commission will consider all those factors. My hon. Friend the Water and Flooding Minister and I are also looking at what can be done separately to tackle the scourge of flooding to better protect communities now and into the future.

I will try to get in as many people as I can, so can we please keep the questions and answers as snappy as possible?

The statement from the Secretary of State is welcome, but passionate campaigners in my constituency will be concerned that, when we already know the dire state of our rivers and water courses, a review will potentially push the can down the road and delay the changes that we so desperately need. Will the commission set a deadline by which water companies have to prevent all sewage discharges in sensitive sites, including chalk streams such as the Lavant and Ems in my constituency?

We certainly know the dire state of our waterways. We also need to know in detail the root and branch reforms required to make the corrections. We will have that from this commission by next summer, and I hope the hon. Lady will take part in that. We need to clean up all of our waterways, including those very important ones to which she refers.

This weekend, I met the Fillongley flood action group, a small group of brave men and women who, when they receive notifications about floods, put on their waders in the middle of the night and go out and clear a culvert that is not fit for purpose. Will the Secretary of State join me in applauding their efforts? Will he also reassure them that this commission will look across all Departments to see how we can best ensure that those culverts can accommodate the overflow from things such as smart motorways, as I am hearing that the floods have got worse since the M6 was allowed to become a smart motorway. Will it also consider the economic impact on those villages when shops, hairdressers and the local pubs close, sometimes on a permanent basis?

I thank the residents of my hon. Friend’s constituency and those in other constituencies who are taking action for themselves against flooding. We have already set up and held the first meeting of the flood resilience taskforce, which will be seeking to provide better co-ordination between central Government—where the resources are held—and those local agencies on the ground charged with improving work to protect people from the very damaging effects of serious flooding.

Last year, water company bosses in England and Wales were paid £9.1 million in bonuses. That is while Thames Water proposes a 59% increase in customer bills by 2030. Does the Secretary of State therefore understand why many residents in our constituencies have lost faith in the regulator’s ability to control these powerful firms and will he commit to replacing the regulator with one that has some teeth?

I certainly agree that residents have lost confidence not just in the regulators but in the water system at large, which is why we have set up this commission to look at how we can get regulation that is fit for purpose for the future.

Diolch, Secretary of State. Monmouthshire must be one of the only constituencies in the UK that did not get a visit from the Secretary of State, but we did get a visit from Feargal Sharkey, which was great. I really welcome the announcement today, especially this new partnership between the Welsh and UK Governments, which, unfortunately, the Conservative Government completely failed to achieve. For example, they brought out the River Wye action plan, which failed to include Wales and had no new money. May I ask the Secretary of State to relook at that action plan, commit to a new one that uses the River Wye catchment partnership groups, the Friends of the River Wye, and all the different civil servants from both sides of the border. Let us then use that group and help clear up the River Wye.

Diolch yn fawr i chi. I would be very happy to visit Monmouthshire. It is important that we look at the situation with water across catchments, particularly where it is crossing borders between England and Wales. The fact that this commission is jointly commissioned by both Governments and will report to both Governments will ensure that is what happens.

I am pleased to see action coming forward from the Government on this, but we know that they need to go further and faster on this issue. In North Norfolk, much of the infrastructure dates from the 1970s and 1980s. Then, a just-about-managing approach was taken to construction and clearly it is no longer managing the situation. Can the Minister confirm that this commission will look specifically at directing investment from water companies to infrastructure upgrades as and where they are needed?

We certainly need fast action after 14 years of absolutely nothing. The commission will point the way to resetting the sector for the future, and will seek to establish a system that will do exactly what the hon. Gentleman talks about.

Hundreds of residents in Ruislip Gardens and Ruislip Manor in my constituency have been flooded in recent weeks. I have met many of them who have had to move out of their homes. They are frustrated by poor regulation and buck-passing between the water authority and the local council, the flood management authority. This welcome review, after 14 years of dither and delay, is good news for my residents, but will my right hon. Friend assure me and my residents that it will look specifically at the adequacy of governance and accountability mechanisms between flood management authorities and water management organisations, and will he meet with me and my constituents to discuss these issues?

I have had the pleasure of visiting my hon. Friend’s constituency many times over the past year, and I know what a concern flooding is to people living there. We have already set up a flood resilience taskforce, which will ensure better co-ordination between the centre, where resources are held, and agencies on the frontline, including those to which he refers, to ensure that people are better protected from the impact of flooding. I am sure that my hon. Friend the Water Minister will be happy to meet with him to talk about local flooding.

Order. If we are short and sharp, we can probably wrap up proceedings on this statement in the next several minutes, with everybody getting in. Jim Shannon, show us how it is done.

Short and sharp—my goodness, what a challenge.

It is great news that accountability will, at last, be at heart of this review. Northern Ireland is in a similar situation regarding water, though it is a slightly different scenario, with a Government-owned operator. Will the Secretary of State indicate how the review can help to deliver a UK-wide water service that is truly fit for purpose?

It is always a pleasure to hear from the hon. Gentleman. Of course water is devolved in Northern Ireland. It will be for the local authorities there to make their own decisions about how to correct problems in beauty spots such as Lough Neagh.

My constituency is made up of 21 local government wards. One of them, Bagots and Needwood, was subjected to 3,000 hours of sewage spills in just one year. Can the Secretary of State assure me that, after 14 years of failure from the Conservative party, the commission will leave nowhere to hide for criminal water bosses?

That is absolutely the intention.

The commission will look at identifying a model of appropriate and effective regulation for precisely the reasons my hon. Friend outlines.

My constituents in North East Derbyshire are rightly disgusted that water bosses received over £41 million in bonuses and other incentives under the previous Conservative Government. Can the Secretary of State assure me that every penny of my constituents’ hard-earned money will be spent where it is needed?

We have already announced plans to ringfence money earmarked for investment so that it cannot be diverted for undeserved multimillion-pound bonuses, as happened so frequently under the previous failed Conservative Government.

The chalk streams in North East Hertfordshire and across England are of international significance, but too often these waterways are not just polluted, but running dry. Will the Secretary of State assure me that the commission will look at the regulation needed to bring an end to not only sewage spills, but the over-abstraction of aquifers and chalk streams?

The commission has a wide remit, and will look at the wider impact of damage to the water system, which got much worse under the previous Government.

As a coastal city, we welcome the commission. It is vital to sort out sewage and floods. In my constituency, parts of Drayton and Farlington are affected by floods—not from rivers or the sea, but because water pumps up through the drains. While it is not sewage, the water cascades down the streets into houses and shops, forcing holidaymakers to check whether they need to get people to put sandbags out to protect their property. Will the Secretary of State ensure that those types of floods are included in the remit of the commission, and that water companies take responsibility?

We have also set up a flood resilience taskforce, which is looking precisely at those kinds of problems related to flooding so that we can take action immediately.

Toothless water regulators have been left up the creek. Can the Secretary of State confirm that Sir Jon Cunliffe will look at scrapping and replacing Ofwat?

It will be for the commission to look at how we get to an effective and appropriate model of regulation, including the roles of the regulators.

The River Weaver, which runs through the town of Nantwich in my constituency, suffered from a spate of devastating pollution last year, killing hundreds of fish and blighting our beautiful market town. It is believed that the cause of the pollution was slurry dumping from intense agriculture. Can the Secretary of State confirm that the engagement and support that farmers need to dispose of slurry mix in the appropriate way will form part of the review?

Yes, the impact of run-off from agriculture will be in the scope of the commission’s work.

Does my right hon. Friend agree that, had the Conservative party put as much energy into protecting our rivers, lakes and seas as it has into filling its reservoirs of chutzpah, my constituents in Rugby would not be living with the consequences of ineffective regulation, undue profits and unearned bonuses, and that, as in so many areas, the Labour party is clearing up the mess that we inherited?

The short answer to that is yes.