Lord Katz (Lab)

My Lords, I thank the noble Earl, Lord Russell, for turning to the pressing issue of pollution in our waterways, on which I think we all agree. I endorse the comments of not just the noble Earl but the noble Baroness, Lady Bennett, and the noble Lord, Lord Davies, that we need change in the water sector. I understand the motivations behind these amendments, as I said in Committee, but I repeat what I said then: they would duplicate existing powers and cut across the Government’s work to create a unified and coherent system of incentives and penalties to turn around the water and wastewater sector. I absolutely agree that fining after the event is all well and good, but we want to create a system of proper incentives and deterrents to make sure that behaviour is altered and pollution does not happen in the first place. I take issue with the noble Baroness, Lady Bennett, saying that we are not doing anything—far from it. The Government’s recent water White Paper set out our long-term, sector-wide reset, which will be delivered through forthcoming legislation. One of the chief things we are doing is creating a single powerful new regulator which will ensure that any future criminal sanctions or escalations are applied within a coherent and unified enforcement system, rather than via overlapping offences and split accountability. There are quite a few different regulators regulating various aspects of the water sector, and this will bring it all together under one roof and stop water companies marking their own homework. This builds on the measures introduced in the Water (Special Measures) Act 2025, which expanded sentencing powers—including the toughest sentencing powers against law-breaking water executives in history—increased the range and scale of financial penalties, and enabled Ofwat to ban executive bonuses where standards are not met. Indeed, it has banned bonuses in, I think, six out of the nine water companies. This is action we are taking against water companies’ executives, so to say that nothing is happening is a little unfair, to say the least. The measures in that Act complement existing financial penalties for not meeting performance commitments, with more than £700 million returned to customers over the past five years. As I said, I understand the concerns expressed by the noble Lords, and I do not think there is much disagreement between us all on the need for action, but it is right that the package of reforms for the water sector be looked at holistically rather than piecemeal. The noble Earl, Lord Russell, will know that there will be ample opportunities to scrutinise the Government’s water White Paper in due course, and, with that, I ask him to withdraw the amendment.