Steve Reed speech on the Water (Special Measures) Bill
A speech by Secretary of State for Environment, Food and Rural Affairs, Steve Reed on the introduction of the Water (Special Measures) Bill to Parliament.
I’m delighted there’s so many people here from the many, many sectors who have an interest in water.
It’s important that we’re all here together from the different sectors because it is only by being together that I think we can find the answers to finally resolve this very profound problem that we have with the state of our water in this country.
If we were standing where we are now in the summer of 1858, we’d be overwhelmed by noxious fumes rising from the Thames, the result of a toxic mix of untreated sewage, refuse from livestock, chemical waste from factories.
The smell became so bad people were fainting in the streets, Parliament had to soak their blinds in a chloride of lime. Public health was at risk.
The stench, notorious in history as the Great Stink of 1858, reached such a point that the then Chancellor of the Exchequer, Benjamin Disraeli, was compelled to intervene.
On 15 July, Disraeli addressed the House of Commons. He lamented the demise of the Thames into, I quote, “a Stygian pool reeking with ineffable and intolerable horrors” and asked for leave to introduce a Bill that, in his words, would “attempt to terminate a state of affairs so unsatisfactory and fraught with so much danger to public health”.
This legislation became law on 2 August.
In step, civil engineer Sir Joseph Bazelgette was tasked to revolutionise the sewage system.
Between 1859 and 1875, 82 miles of underground sewers and over 1,000 miles of street sewers were built under Bazelgette’s guiding hand, stopping the free flow of sewage into the Thames.
This prevented bacteria entering drinking water, saving thousands of lives from cholera.
Bazelgette’s work was remarkable. But it was not in isolation. Water infrastructure was being built around the country.
Near Manchester, John Frederick Bateman was masterminding the Longendale Chain, a suite of reservoirs to supply fresh drinking water to Manchester and Salford.
And in 1896, construction of the Elan Aqueduct began - a series of pipelines and tunnels engineered by James Mansergh, covering 73 miles round hills, through valleys and over rivers to bring clean water from the Welsh Elan Valley to the city of Birmingham.
These feats of Victorian engineering were extraordinary.
They brought water to thousands of people, saved countless lives by tackling disease, and, in many cases, still supply fresh drinking water to our cities, towns and villages to this day.
The world has changed significantly since those times, but the problem of water pollution is all too familiar to us today.
In Bazelgette’s London, there was a population of 2 million. Fast forward to today and it’s close to ten. The UK population as a whole has grown from less than 20 million to 67 million.
With more people, we generate more waste, we put greater demands on our water supply, and today’s lifestyle has become reliant on water to fuel it.
We use water to cool power stations, vital to our electricity supply.
We use water to supply our leisure industries.
We use it to grow the crops that put food on our plates.
Those pressures on demand are made worse by our changing climate, with more frequent and prolonged floods and droughts putting strain on the system.
Of course, there have been upgrades and new infrastructure built in the intervening years, including the Thames Tideway Tunnel literally beneath our feet, but fourteen years of Tory failure have left much of our infrastructure in disrepair.
Instead of protecting our waterways, water companies were allowed to pay out multi-million-pound bonuses and billions in dividends and the Conservatives were too weak to stop them.
The result? This year’s annual boat race here in Putney was overshadowed by health warnings telling rowers not to enter the water due to high levels of sewage.
Lake Windermere – one of the most beautiful spots in our country, inspiring generations of writers – is now better known for the sewage scandal than for Jemima Puddleduck.
It faces multiple sources of pollution – including agriculture run-off, storm overflows and septic tanks.
Our British countryside instils a deep sense of pride in all of us. But when I speak to people up and down the country, they feel their local river, lake or beach is now under threat – places they’ve visited all their lives, taken their children and their grandchildren to, are made filthy by pollution.
Our green and pleasant land is no longer so pleasant. Pride is turning to despair.
Water companies must be held accountable for their role in this – and they must take responsibility.
But, as we know, it’s not just about pollution. Supply problems are becoming increasingly common.
Surely, it’s not right that in 21st century Britain, Brixham residents recently had to boil their water because of a parasite in the tap water.
More severe droughts linked to climate change are set to leave parts of our country facing significant water shortages by 2050, particularly in the southeast, with water companies forecasting that England needs to find an extra five billion litres of water a day by that same year.
Yet despite this rising threat, no new reservoirs have been completed since 1992, with the resulting lack of resilient water supplies stopping us from building the new homes and critical infrastructure we need to grow the economy.
Firmer action should have been taken over the last 14 years to ensure money was spent on fixing the water and sewage system, not syphoned off for bonuses and dividend payments.
I am angry that over a decade of Conservative failure means customers will now have to pay higher bills to fix the system - this did not need to happen.
But while I can’t undo the failure of the past – I can stop it ever happening again.
We’ve inherited a broken water system that affects us all – from the health and happiness of communities to the quality and resilience of our food system and the natural environment.
These are systemic issues that require a proper reset with a reformed water sector in a new partnership with government to bring in the vast quantities of investment that are needed.
It will take all of us - government, regulators, environmental groups, investors and industry bosses - working together to clean up our water.
Which is why we have invited all of you here today.
We cannot reform the water sector overnight but we are delivering on our manifesto commitments and the work of change has begun.
That change will come in three stages.
The first stage is the package of common-sense measures I announced in my first week as Secretary of State for the Environment.
Funding for vital infrastructure will now be ringfenced, meaning it can only be spent on upgrades that benefit customers and the environment - not diverted to pay bonuses, dividends or salary increases.
Where money for investment is not spent, companies will refund it to their customers.
For the first time in history, customers will have the power to summon board members and hold water executives to account through new customer panels with teeth.
And we will strengthen protection and compensation for households and businesses when their basic water services are affected, including consulting on doubling the compensation customers are entitled to when their water supply is interrupted.
The second stage is the Bill we introduced into Parliament just yesterday.
It represents a significant increase in enforcement powers for the water regulators so regulators can take tougher and faster action to protect customers and the environment.
It will make sure the water companies are held to account.
Where there is persistent law-breaking, this Bill will make it easier for the Environment Agency to bring criminal charges.
It will create new tougher penalties - including imprisonment - for water companies if companies obstruct Environment Agency and Drinking Water Inspectorate investigations, and offences will be triable in both the Crown and Magistrates’ Courts, where previously the punishment in most cases was merely a fine.
The Environment Agency will get new powers to recover the costs of their enforcement activity from water companies, and ensure the Environment Agency has the resources, including staff, to take the enforcement action needed to hold polluters to account.
The previous Conservative government weakened the regulators by cutting their resources.
This government will make the polluter pay to get that firepower back.
Fixed Monetary Penalties will also be imposed by the Environment Agency as Automatic Fines - including for pollution and water resources offences, and for failure to comply with information requests and reporting requirements.
We will lift the current £300 cap on the penalties to reflect the scale of damage pollution is having on our waterways.
Since 2020, water chief executives have paid themselves over £41 million pounds in bonuses, benefits and incentives – despite the damage their companies have been causing.
This Bill will give Ofwat new powers to ban bonuses for the executives and senior leadership of water companies unless they meet high standards when it comes to protecting the environment, their consumers, financial resilience and criminal liability.
Water executives will no longer get away with polluting our rivers, lakes and seas – and then awarding themselves a bonus.
They will be held accountable – and if they fail to meet these standards, companies may need to remove executives from post or take other corrective actions.
To increase transparency, we will ensure there is independent monitoring of every single sewage outlet, including emergency overflows which are currently not fully monitored.
We will require water companies to install real-time monitors so the public and regulators have full transparency on where sewage spills are happening – within an hour of them happening.
Companies will publish this data in a clear, accessible format - which will be independently scrutinised by the regulators and used as evidence in their investigations and there will be a new statutory requirement for water companies to publish annual plans to set out the steps they are taking to address their pollution incidents to ensure they do not keep happening.
This Bill is a significant step forward in fixing our broken water system.
It is an immediate down payment on the wider reform that’s needed after years of failure and environmental damage.
It holds polluting water companies to account after years where there has been no accountability.
But we also face a much wider set of issues.
Water companies need to attract the levels of private investment required to upgrade crumbling infrastructure and keep pace with population growth.
Major infrastructure projects to increase water storage capacity and sewer upgrades must be delivered at speed.
We need to better prepare for future impacts of climate change such as flooding and droughts, which are already causing significant impacts to our farmers.
We need to better serve customers and the environment at a local and regional scale, with a catchment-level approach to tackle pollution sources such as chemicals, agriculture and road run-off.
We need to reform the entire water system to resolve these very deep-rooted and complex problems which brings me to stage three of our long-term plan for change.
The government will carry out a full review to shape further legislation that will fundamentally transform how our entire water system works and clean up our rivers, lakes and seas for good.
We will ensure the framework that underpins our water sector delivers long-term stability, with clear, achievable targets that reflect the needs of customers and the environment at a catchment, regional and national scale, as well as enabling housing delivery and supporting the government’s growth mission.
We will invite views from a range of experts covering areas such as the environment, public health, consumers, investors, engineering, economics - as well as campaigners and this will include a public consultation to test the proposals and bring in a diverse range of views.
I will set out further details on the review later during the autumn.
Meanwhile, PR24 will proceed as planned to bring in much-needed investment.
By strengthening regulation and enforcing it consistently, we will create the conditions needed in a well regulated private sector model to attract the global investment required to rebuild our broken water infrastructure.
A sector that has been associated with decline and cover-ups will become one of growth and opportunity.
It will unlock the biggest ever investment in our water sector, and the second biggest private sector investment into any part of the economy for the entirety of this Parliament.
This will help build nine new reservoirs and multiple large-scale water transfer schemes, 8,000 kilometres of water mains pipes and upgrade 2,500 storm overflows so they’re fit for purpose.
It will clean up our rivers, boost economic growth around the country by creating tens of thousands of jobs, and increase the resilience of our water supply that underpins every single home and every single business in the UK.
This is the change the country voted for. Greater investment to restore pride in our countryside; to ensure our landscapes remain places of beauty, attracting millions of visitors every year to support our rural economies; to provide opportunities for sports and recreation in clean waters, whether it’s rowing on the Thames, going for a morning dip at the local bathing spot, or fishing in a chalk stream; it will protect wildlife and biodiversity-rich water habitats that, in turn, can help us tackle the ever-growing impacts of climate change.
This is my approach, because it is the most effective way to clean up our water.
Nationalisation, which some have advocated, would cost billions of pounds and take years to unpick the current ownership model, leaving sewage pollution in the meantime to get worse and halt the much needed investment.
I am more interested in a model that works.
The people represented in this room have the skills, ingenuity and determination to turn the sector around.
The stronger regulation introduced today sets the foundations for the investment we need and will ensure we deliver a better service for customers and the environment.
To generate sustained, long-term change, we must also recognise the need to restore nature.
This includes increasing tree planting and protecting habitats that store water such as peatlands and wetlands, which act as a natural barrier to flooding and reduce storm surges.
We will work with farmers to reduce agricultural run-off in our rivers and lakes, including progressing efforts to improve slurry storage and promote regenerative models of farming.
We will pioneer solutions through agri-tech, such as using satellite data and AI to apply fertilisers more precisely, and in Precision Breeding, such as higher yielding crops that could reduce the need for fertilisers that run into our rivers.
And we must all take individual responsibility for our own water use to reduce strain on the system.
Data obtained by Water UK showed every person in the UK uses an average of 152 litres of water a day – and 94% of us underestimate how much we use.
We have a target to reduce the amount of water used per person by 20% by 2038, and we will help consumers make more efficient water choices to achieve this, including working towards a Mandatory Water Efficiency Label for products, and working with regulators and industry on the rollout of smart meters to enable faster leak detection and repairs.
There’s a memorial on Victoria Embankment that commemorates Sir Joseph Bazelgette. It praises the man who “put the Thames in chains”. But this does not reflect what he did. Bazelgette freed the river so it could be used once more by the Londoners – and the wildlife - who relied on it.
As we face a renewed crisis in our waterways today, we too need to free our rivers, lakes and seas from the pollution that is killing them.
Our waterways should be a focus of national and local pride but they have been left filthy by years of pollution and underinvestment, for which there has not been enough accountability.
This government will reform the sector so we can invest in our waterways, boost economic growth, and clean up our polluted rivers.
This is a government of service focused on improving peoples’ lives.
I’m offering the water sector a reset and a new partnership to help us achieve that together.
There’s a lot of work to be done. And it won’t be done overnight.
My immediate focus is to make sure, from now on, that customers and the environment always come first, and that the water sector can attract the investment that’s needed.
Looking further ahead, our review will deliver a radical, long-term approach to reform the water sector and ensure we can sustain our communities and the environment in the decades to come.
I want to thank everyone who’s campaigned to bring this issue to the fore, and to those who work daily to protect our natural environment – the charities, eNGOs, national parks, Defra’s arm’s length bodies – and those who work in the water sector because they care about improving it.
While I’m clear there is work to be done – I want to thank the water companies for working with me and signing up to my initial package of reforms.
I know, with the right approach, we will deliver the change this country wants to see.
Some of my fondest memories as a child are camping under the stars at scout camp, rock pooling down in Cornwall and paddling in the sea.
This is our opportunity to make sure our children – and their children – have the chance to create those same wonderful memories - to splash about in our lakes, row on our rivers, or spot a kingfisher on a summer’s day.
This is our opportunity to clean up our water once and for all.
Let’s seize that opportunity together.
Thank you.
ENDS