Government has shown lack of leadership in regulating water industry, peers say

Ministers have been told to make urgent corrections in how they are handling the ongoing sewage issue, peers have set out in an open letter.

The Government should offer better guidance to regulators on balancing investment and bill rises, peers said (Rui Vieira/PA) (PA Wire)

The Government has shown a “lack of leadership and deep-rooted complacency” in regulating the water industry, peers have said.

A letter by peers said its response to the Industry and Regulators Committee’s inquiry into the handling of the sewage problem was with a “dismissive brevity and complacent tone”, with ministers told to make urgent corrections such as introducing better protection for vulnerable customers facing sharp bill rises.

The committee has written an open letter to Environment Secretary Therese Coffey describing the need for investment in water as “huge” and urging the Government to announce proposals for a social tariff that would keep bills affordable as soon as possible.

A Government spokesman rejected the Lords’ conclusions, saying the Department for Environment, Food and Rural Affairs (Defra) takes its job of regulating the water industry “incredibly seriously”.

Peers are concerned that the £10 billion investment plan to upgrade infrastructure later this decade will not be enough to ensure security of supply or adequately protect the environment.

In particular, the Government must give clear guidance on the trade-off between much-needed investment and the level of customer bills

Lord Hollick, Industry and Regulators Committee

The industry also may not be able to attract the investment it needs under the current system of regulation, with companies facing a “cumulative backlog”.

Further consultation on banning plastic in wet wipes was described as “unnecessary and deeply damaging to the environment”.

Defra said it must consult with the devolved governments to introduce a UK-wide ban and that it intends to consult “shortly”.

Peers want the Government to provide more than just guidance on how water companies offer support to people struggling to pay bills as there is a disparity between regions which the committee members described as a “postcode lottery”.

Ministers should say how they plan to attract this investment and provide targets for key areas of infrastructure that need upgrading and instruct Ofwat, the regulator, on how to strike the balance between more investment while keeping bills affordable.

There should also be compulsory metering to charge people for water based on how much they use, which the committee said would help to reduce demand.

Sadly, the only thing that is becoming clear in the murky, polluted waters of the sewage crisis is a lack of leadership and deep-rooted complacency

Lord Hollick, Industry and Regulators Committee

Lord Hollick, chair of the Industry and Regulators Committee, said: “While the Government has begun to set out its vision for the sector, our cross-party committee has concluded unanimously that there is insufficient policy or drive to meet the Government’s targets.

“Sadly, the only thing that is becoming clear in the murky, polluted waters of the sewage crisis is a lack of leadership and deep-rooted complacency.

“The Government must therefore provide firmer policy detail and greater guidance to regulators, who cannot be left to resolve these huge challenges by themselves.

“In particular, the Government must give clear guidance on the trade-off between much-needed investment and the level of customer bills.

“We look forward to the response from the secretary of state, setting out how she intends to do this.”

A Defra spokesman said: “We take our oversight of the water industry incredibly seriously and firmly disagree with these conclusions.

“We are delivering increased investment, stronger regulation and tougher enforcement right across the sector.

“This includes being the first government to set ambitious targets for water companies to address storm overflows, which the High Court has ruled go even further than existing law.

“We agree that more needs to be done. That’s why we are introducing unlimited penalties for polluters, driving the largest infrastructure programme in water company history, and have set clear expectations for water companies to deliver the changes that we all want to see.”