The Rt Hon Steve Reed OBE MP Secretary of State Environment, Food & Rural Affairs Seacole Building, 2 Marsham Street, London SW1P 4DF

 

24th October 2024

Dear Secretary of State

Thank you for your letter to campaign groups taking part in the March to end pollution for profit, and to pressure your department to enforce the law.

You set out your commitment to cleaning up our rivers, lakes and seas and the mechanisms of the Water (Special Measures) Bill and the Commission.

The Water (Special Measures) Bill

We previously (25th September) wrote to you setting out our concerns that the Water (Special Measures) Bill should not stop the government enacting existing law; and our concerns that underpinning this lack of implementation is confusion between the regulators on what the existing law actually means. We also called on you to use existing powers to protect the public’s interest by putting failing water companies into special administration and set out how the public will not tolerate paying increasingly large bills to water companies whilst they are under criminal investigation by the regulators. Please find this letter re-attached as an appendix, and we look forward to your response.

We do agree that alongside enforcing existing legislation as a priority, in the short-term water companies must have a more direct route of accountability to consumers. To that end the smoke and mirrors of water companies not listed, means that the public has no access to Board meetings or to shares. We have therefore proposed an Amendment to the Water (Special Measures) Bill in relation to governance to put employees and bill payers on the Boards of water companies, so that whilst the Commission takes place we can have a much stronger consumer presence and voice within water companies. This goes further than the current Bill provisions. This reflects the normal practice in most wealthier OECD countries for large companies.

We are also concerned that Section 10 allows for public bailout overtly or by stealth and a complete betrayal of the duty to protect customers of monopoly companies providing something that no-one can give up – water. Current law allows the government to ensure that debt liability stays with the shareholders, but the new Bill appears to have chosen the public as the party that will have to pay up the compensation to fix the damage done to the country’s water and sewerage infrastructure. We therefore ask you to stop public bailout of the failing water industry.

The Commission

We have now read the Terms of Reference for the Commission. We agree that there must be a root and branch review of the whole system. We suggest that these ToR need tightening as follows:

  1. The environment must be front and centre stage. There are many routes the government can take to secure growth, but these should be in service to securing a healthy sustainable environment. For instance, a growth area could be to provide chemicals (pharmaceuticals) that don’t pass through the treatment system into waterways. If the purpose is innovation in the environment, growth will follow.
  2. ToR 3 implies that the only model is the current monopoly privatised system. You must question why less than 10% of the world’s cities have some degree of privatisation, and yet this is the only model we are committing too nationally. Examining all models of ownership must be part of the ToR. Without the Commission being able to look at a variety of ownership models, it is operating with one hand tied behind its back. This should include the size of the water companies. We suggest looking at international examples of mixed models of ownership, and size that are delivering better value with lower customer bills than we are paying in this country with better water quality outcomes than we have here. Our current system is broken, and it would be scandalous to waste the opportunity of the Commission, if its only work is to shore up the current broken model which has delivered eye watering debt, and environmental disaster, and no hope for a solution.
  3. The ToR should include a review of the actual investment made by water companies; in our view this is less than zero with the public providing all the investment to our water system through our bills (David Hall 2024). It should also investigate the actual spend by water companies on infrastructure projects[1]

Finally, we the public, made our voices loud and clear in the election, with many new backbench MPs dealing with public outrage at sewage pollution for profit. If in a year’s time there is not a step change in water quality, whilst bills continue to rise, the public will not afford this government the time to take the next steps. There must be tangible change now by clarifying and enforcing existing laws, rather than muddling through at the public’s expense.

Yours sincerely

Prof Becky Malby, Stephen Fairbourn, Di Lury, Isla Lury Martin Robertshaw, Karen Shackleton, Owen Wells, Ilkley Clean River Campaign. A member of The Sewage Campaign Network

[1] Using industry standards such as Open Contracting for Infrastructure Data Standards Toolkit https://standard.open-contracting.org/infrastructure/late as used by other countries