Philip Dunne, Chair of the Environmental Audit Committee, makes a statement on the committee’s fourth report entitled “Water Quality in Rivers”, and answers questions.
I am delighted to serve under your chairmanship, Mrs Murray. I am grateful to the Backbench Business Committee for giving me the opportunity to introduce the Environmental Audit Committee’s latest report, which, as you say, is on the topic of water quality in rivers. This is an issue of particular interest to me, as I had a private Member’s Bill in the last Session of Parliament that was not able to progress, and our Committee has worked very hard for over a year in taking evidence, including from the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Taunton Deane (Rebecca Pow), who I am delighted to see is in her place. As an Environment Minister, she has taken a particular interest in championing this issue in Government and in introducing measures to the Environment Act 2021, which became law two months ago and whose measures will in some respects pre-empt some of our recommendations. We are grateful to her for her interest in this subject.
I would like to take the opportunity—it is the first time we have been able to do so—to welcome our latest recruit to the Committee, the right hon. Member for Walsall South (Valerie Vaz). We look forward to her contributions to our Committee in due course.
By way of introduction, we have been concerned about water quality because of the extraordinary evidence that we have received from campaign groups up and down the country. We recognise that we are presiding over a cocktail of contamination in our rivers, stemming from more than 60 years of under-investment in drainage networks, sewers and treatment plants, mostly because they are underground, out of sight and not at the top of public consciousness, other than when there is a disgusting sewage spill—an incident that captures public attention. For 60 years, however, we have been developing more and more housing, industry and agricultural buildings above ground, without putting corresponding investment underground to deal with the effluent that a growing population of both humans and animals creates. That is something that we absolutely have to put right.
At present, only 14 of England’s rivers are in good ecological health, and not a single one gets a clean bill of health for chemical contamination. Getting a full overview of the health of our rivers, and the pollution affecting them, has been hampered by outdated, underfunded and inadequate monitoring regimes, which is why it has taken our report to pull all the data together. Water companies appear to be dumping untreated or partially treated sewage in rivers on a routine basis, often breaching the terms of the permits that, on paper only, allow them to do so in exceptional circumstances. That was one of the most significant findings. We think part of the reason is that they have been allowed to self-monitor for the last 12 years or so.
One of the Minister’s innovations in the Environment Act is to increase the amount of monitoring, using the latest technology, so that we can understand, in real time, the impact of discharging sewage into our river systems. We have not been able to do that until now, other than through individual lab testing. Monitors will be placed upstream and downstream of the outfalls, and that will have a transformative effect, not least in allowing the public to know whether there has been a sewage discharge before they intend to visit a river.
However, it is not all about sewage. Water companies have to deal with an increasing volume of plastic and other non-biodegradable material being flushed down our toilets, and that includes wet wipes. I support my hon. Friend the Member for South Leicestershire (Alberto Costa) in his move to promote a private Member’s Bill to ban the use of plastic in wet wipes, which act as a dam in the sewerage system.
A combination of excessive amounts of non-biodegradable material gets caught up in meshes and added to by fats, oils and greases coming out of food service establishments to create fatbergs—we had evidence that some are as big as blue whales. Those need to be removed from the sewers, and water companies are spending £100 million a year of their scarce resource on removing that material. Some 7 million wet wipes a day go into our sewers, so we as individuals can do something about that to try to reduce that problem.
The problem is not all about the water companies; it is also, we found, due to diffuse pollution from agriculture. That, in fact, accounts for slightly more of the causes of pollution than sewage from water treatment plants. Intensive livestock and poultry farming is putting significant pressure on particular catchments. I think there are 14 across England where development is on hold because of the nutrient load already existing in our river systems. One of the worst is in the River Wye catchment, where it appears that there has been particular pressure, building up over a number of years, from poultry farming. We have therefore called for a nutrient budget to be calculated for each catchment, and for the Environment Agency’s good resources to be used to review it so as to establish a framework that would allow development to take place without adding to the nutrient load in the receiving waters.
Going back to the water companies for a moment, we were alarmed by the degree of permit breaches, which were brought to our attention not so much by the Environment Agency or the water companies themselves but by citizen scientists doing their own investigations under freedom of information requests. We think it is important that the Environment Agency and other regulators get a proper picture of the true number of sewer overflow discharges, because we fear they may be higher than is currently permitted.
We have made a number of suggestions about how, in considering how to allocate resource from the spending review, the Department for Environment, Food and Rural Affairs should consider giving additional resources to the Environment Agency so that it can adequately undertake its enforcement, which has, all too often, been slow—to put it mildly. We have seen an increase in fines imposed as a result of prosecutions in the last few years—two have been very significant—but, by and large, fines for enforcement of clear breaches, with discharge above permit levels, have been a routine cost of doing business. We do not think that that is appropriate, so we think that greater enforcement must be undertaken by the environment network.
We have also called on Ofwat to prioritise the long-term investment in waste water assets as a key outcome of its next pricing review period. As the Minister is here and will be finalising the strategic pricing statement guidance to Ofwat in the coming weeks, we strongly encourage her to consider giving greater priority in the next pricing review to capital investment by water companies, to allow them to invest more in improving the treatment capacity available across the network.
We have a large number of recommendations. I do not have enough time to go into them all, but I will conclude by saying that one of our recommendations—which I think will have some resonance in this covid environment, in which many people have been using rivers for recreation—is that each water company should seek to get bathing water quality status in at least one river stretch or water body within its area before 2025, and then routinely seek to do so in subsequent pricing periods. I look forward to responding to any comments that Members might have on the report.
I thank the Environmental Audit Committee and its Chair for their comprehensive, detailed and extensive report. Of course, I have not been able to take all of it in yet, given that its publication date was today. My question is about the topic on which the Chair ended—namely, the capacity of the Environment Agency to deal with discharges into rivers, whether they are permitted or not. At the start of this week, we saw that the Environment Agency has been briefing staff not to pursue smaller-category incidents. I wonder whether the Chair of the Committee agrees that funding the Environment Agency to protect our rivers is crucial, and that it needs to be able to fully follow up on any incidents and not ignore even minor ones, which can later be found to be more significant.
I congratulate the right hon. Gentleman’s Committee, and him in particular, on the campaign he has waged over the years on the issue of the purity of our water systems. I look forward to the Committee’s work on monitoring the implementation of these recommendations.
As the right hon. Gentleman will know, however, my anxiety about the report is its timidity with regard to the operation of the water companies themselves. My view is very clear: as long as those companies operate as profit-making organisations, I do not see how they will act on long-term investment or, to be frank, the standards of behaviour we would expect of either a body in public ownership or a not-for-profit organisation. I wonder whether this report will result in opportunities for the Committee to look at the whole issue of ownership and management of the water companies themselves.
Other Members have indicated that they would like to ask questions, but before I call them, perhaps you would like to respond to those two questions, Mr Dunne.
Thank you very much, Chair; I certainly would. I thank the hon. Member for Blaydon (Liz Twist) for her contribution to this issue. I attended a debate, I think in this Chamber, in which she raised issues about the Tyne. She has been a strong champion in her area, trying to make sure that that river is cleaned up. In response to her specific query, the Environment Agency took the view that water companies could be relied on to self-monitor. It is palpable that that has failed, so we are calling for the Environment Agency to be adequately resourced so that it can perform its functions appropriately.
I do think there is help on the way through technology. Technology now exists, to an extent that it has not in the past, that allows for continuous monitoring of water quality within water bodies, and for that information to be passed through telemetry back to a database. That information can then become available to the public and the water companies themselves so that if there has been a sudden incident, they can pick up on it. There might have been a breakdown in a system, and if that information is available in real time, those companies will catch it much quicker than they have been able to do hitherto. That will not involve as many employees of the Environment Agency being on hand to do the testing themselves physically and then go back to their laboratory, so it will speed up the whole process of identifying problems in the system. I think that will ultimately be to the benefit of all of us, our rivers and all the species that rely on them as arteries of nature. I am hopeful that there are solutions and that the Environment Agency will receive a good settlement from the Department for Environment, Food and Rural Affairs. I hope that the Minister will take that on board.
In response to the right hon. Member for Hayes and Harlington (John McDonnell), I reciprocate by offering him my thanks for supporting my private Member’s Bill 18 months ago. He will not be surprised to hear that I take a slightly different view from him on the issue of ownership of the water companies. In the 10 years before the water companies were owned by the state—as they were up until 1991, I think—the collective capital investment of the water companies into water treatment capital expenditure was of the order of half a billion pounds a year. In the next 10 years, it was of the order of £1 billion a year, so under private ownership there was around double the investment in water treatment specifically.
Having said that, there are issues about the nature of current ownership and the fact that several of the companies have been leveraged through private equity ownership, which has caused some challenges regarding available capital expenditure. At least one of those companies has suspended dividends for the last three years, I think. There is recognition on those company boards that they need to change some of their behaviour.
I am sure that the right hon. Gentleman will seek to promote the report’s recommendation that, in the event of persistent material breaches of permit conditions, it would be inappropriate for water company boards to pay themselves significant bonuses without taking proper action to remedy those breaches. I am sure he will agree with that and not regard it as timid.
As the Member of Parliament for Stafford, which has a number of significant waterways, including canals and rivers, I welcome this Environmental Audit Committee report. Does it address whether the recent Environment Act 2021 has done enough to tackle storm overflows and specifically water pollution?
That is an excellent question, which gives me the opportunity to highlight some of the things that have happened through that Act and beyond it, which the Government are doing to get on top of some of these issues.
First, amendments about monitoring and other amendments were made to the Act during the course of its passage, in particular the requirement on water companies to reduce sewage discharges progressively over time. That was added in the House of Lords and I very much welcome it, because it reflected the core of my private Member’s Bill.
Secondly, as we have just discussed, the Government will issue—as they usually do—a new strategic policy statement to Ofwat. We do not yet know what that statement will say, but we have seen a draft of it and all the indications are that the Government will consider adjusting the prioritisation of capital expenditure, so that at least some more, I hope, will go towards water treatment. We are currently at about £1 billion a year being spent on these issues through the water industry national environment programme. Personally, I would like to see that amount doubled, but we will have to see where the Government come out on that.
The Government have also set up a storm overflows taskforce, which is doing important work in advising the Government on other things that can be done. One of the elements in the Environment Act is a requirement for a report to be published by September of this year that will give the Government an opportunity, and a focus within DEFRA, to require an update and to get all the actors in this area—all the different water companies and the regulators, as well as the campaign groups that are helping the Government—to pull together to come up with other measures that can be taken outside of legislation.
There are other matters—as the Minister might prompt, there are a lot of other issues—but those are the ones that leap to mind. As I said at the outset, she has put a great deal of personal commitment behind this process and I hope that, for her own sake and that of the rivers, during her tenure we start to put in place the building blocks to transform the quality of rivers across the country.