Plans to jail water bosses who block watchdog investigations have moved a step closer to becoming law after a Commons debate.
Environment Secretary Steve Reed said on Tuesday that billpayers “are rightly angry about the state of our waterways”, as he vowed to “clean up the mess once and for all”.
The Water (Special Measures) Bill passed its third reading on Tuesday unopposed, and has now reached the final stages of its passage through Parliament.
MPs have agreed to give regulators the power to block water executives from receiving performance-related bonus payments, if they do not meet standards related to the environment and customer service.
(The Bill) will introduce stricter penalties, including imprisonment where senior executives in water companies obstruct investigations by environmental regulators, and it includes provisions for automatic and severe fines for wrongdoing
Company bosses will also face up to two years in prison if they obstruct investigations by regulators, including the Drinking Water Inspectorate.
Ministers saw off attempts by opposition parties to amend the Bill, including from Conservative shadow environment minister Dr Neil Hudson.
He said authorities should be able to dock water companies’ ability to charge customers by the same amount as the fines they face for poor behaviour, effectively removing fines from bills.
Dr Hudson said: “This is very important.
“A toxic cocktail of poor behaviour of water companies and rising bill prices has led to many people feeling they’re getting poor value for money and not getting the quality water services they deserve.”
Conservative former minister Graham Stuart had earlier intervened in the shadow minister’s speech and said it would be a “disgrace” if fines are “swallowed by the Treasury rather than used to improve water”.
MPs voted against the amendment 325 to 180, majority 145.
They also voted 322 to 181, majority 141, against a Conservative amendment to set up a Water Restoration Fund, which would hold fines paid by water companies and distribute money to improve habitats and the ecological status of waterways.
Proud of this brilliant team that have steered the Water (Special Measures) Bill through Parliament.
— Steve Reed MP (@SteveReedMP) January 28, 2025
This government is cleaning up the Tory sewage crisis. pic.twitter.com/sQgcYPHPz8
Shadow environment secretary Victoria Atkins said: “The public rightly wants to see the Government addressing water quality and yet, rather than use water company fines to restore water bodies, that money will now be going into the gaping hole of the Treasury’s coffers, presumably to try and undo some of the damage caused by the Chancellor’s disastrous growth-blocking, tax-hiking, job-cutting and investment-plummeting budget.”
Labour MP Clive Lewis backed a Liberal Democrat-led amendment to block water company shareholder bailouts by cancelling debts, if those firms fall into administration.
He accused the Government of “inconsistency”, after ministers backed public ownership for railways and renewable energy, but not water.
“Many of us on this side ran on a manifesto commitment to reduce the cost of living,” he said.
“That commitment is one which I think every Labour MP here believes in, but the cost of corruption, of extraction by private water companies, should under no circumstances – as is currently configured in this Bill – land on the heads of our constituents, should any of these companies go bust or be taken into special administration.”
The Norwich South MP later added: “Investors, shareholders, creditors, they should be the ones that take the haircut, they should be the ones that foot the bill because of what they’ve done to our water. This should not be landing on our constituents’ heads.”
Liberal Democrat environment spokesman Tim Farron described the proposed new law as “OK, even good in part”, but he told MPs: “No water company chief executive is going to quake in their boots if they are not held to targets that are ambitious and enforceable with penalties, and that actually mean something.
The cost of corruption, of extraction by private water companies, should under no circumstances – as is currently configured in this Bill – land on the heads of our constituents, should any of these companies go bust or be taken into special administration
“The water industry staff do amazing work giving us the world’s cleanest drinking water, working their socks off to tackle repairs and repair leaks, to bolster the infrastructure, to oversee the operation of wastewater treatment systems and serving our communities – they are just as much victims as their fellow billpayers of the utterly failed system we are faced with.”
Mr Reed said: “Our rivers, lakes and seas are awash with pollution, the legacy of 14 years of Conservative failure is the highest level of sewage spills on record, economic growth held back by a lack of water supplies and now painful bill rises to fix the problems they left behind.
“The British public are rightly angry about the state of our waterways. It has been left to this Government to clean up the mess once and for all.
“The water sector needs a complete reset.
“It needs reform that puts customers and the environment first, and a new partnership with the Government to invest for the future and upgrade our broken infrastructure.”
He added: “(The Bill) will introduce stricter penalties, including imprisonment where senior executives in water companies obstruct investigations by environmental regulators, and it includes provisions for automatic and severe fines for wrongdoing.
“We’ve also extended powers so the environmental regulators can recover costs for a wider range of future enforcement the polluter, not the public, will pay.”
