Labour’s water reforms ‘a gift to shareholders’ and ‘an insult to every community impacted by sewage’

The Labour Government’s proposed reforms to the water industry – via its Clean Water Bill, announced in the King’s Speech – have been met with widespread criticism from environmentalists and campaigners.

In his speech to parliament, written by Keir Starmer’s government, King Charles said:

My Government will improve critical infrastructure with legislation to clean-up the water industry.

Alongside the speech, the government published much more detailed briefing notes explaining its plans for each area of planned legislation.

Uncertain plans

Challenges to Keir Starmer’s leadership, following Labour’s reckoning at the local elections earlier in May, mean that there is huge uncertainty over whether those plans will come to pass.

Regarding the Clean Water Bill, the notes said:

This once-in-a-generation Bill will shift the sector away from a system where water companies mark their own homework by putting in place stronger, active supervision and oversight through a powerful new regulator capable of integrated management of the water system.

They went on to say:

The Bill will strengthen confidence in the water sector – restoring the public’s trust, giving investors the stability to back long-term upgrades, and providing the clarity needed to support economic growth. It will ensure the sector plays its full part in delivering clean water and a healthy environment.

The briefing also said that the Bill would:

put consumers firmly first with a new Water Ombudsman to ensure complaints are taken seriously and resolved quickly.

And it would:

create a new, independent and integrated water regulator by bringing together the relevant functions of Ofwat, the Drinking Water Inspectorate, the Environment Agency and Natural England.

Somewhat surprisingly, the government’s own notes acknowledge the failings of the water sector, which it linked to privatisation.

The notes said:

The water industry in England and Wales was privatised in 1989, water supply and sewerage are delivered by 16 private companies. However, unlike most markets, water companies are regional monopolies with limited competition.

England and Wales are unusual in having a fully privatised water system, whereby companies own the assets, infrastructure, and operation of water services.

The water system, regulation and the regulators have failed customers and the environment. In the 37 years since privatisation the population has grown by 11M, climate change and aging infrastructure has created unprecedented demands on the water system and reform is now needed.

This has been compounded by a failure of regulation, with a system that relied too heavily on water companies marking their own homework.

It added that:

water companies are not delivering what is expected of them, both by regulators and the public.

And said:

transformative change is therefore needed to secure a system that will work for the long-term. This Bill delivers that change.

The Bill was heavily criticised by democratic ownership campaigners, environmental non-governmental organisations and anti-sewage pollution activists.

British Steel nationalisation shows water sector could be renationalised too – campaigner

We Own It lead campaigner Sophie Conquest told the Canary:

This government’s proposed reforms for the water industry are a gift to shareholders.

The water white paper sets out plans for a ‘tailored approach’ for each water company, giving them even more scope to bend and break the rules for profit. Measures like ‘constrained discretion’ will give polluters more room to dodge fines.

Regulation of the water sector has been a decisive failure. Despite this government promising to be tough on polluters, the EA hasn’t completed a single prosecution for sewage dumping committed in the past 5 years.

The Labour Government has been in power since 2024, before which the Conservatives were in government from 2010.

While our pockets empty and our rivers fill with sewage, this government is busy handing over even more power to the polluters. The public have had enough.

This government’s decision to bring legislation to nationalise British Steel shows that they absolutely can nationalise key infrastructure. And they can do it quickly.

They must now do the same for water. Under public ownership, we can ensure that households’ money is being used to fix infrastructure and lower bills.

Thames Water is already in breach of its licence, and has buried itself in a mountain of debt. It has wrought havoc on our seas and rivers, all while charging households eyewatering bills for the privilege. It’s outrageous that the utility has not yet returned to public hands.

This government should be acting in the interests of the 82% of us who want to see water in public hands, starting with the collapsing Thames Water.

Privatisation has ‘failed’ – campaigner

Windrush Against Sewage Pollution (WASP) founder Ash Smith told the Canary that the Clean Water Bill is based on a review whose independence he questioned, and said the Bill did nothing to address the evidence that privatisation of the water sector had “failed”.

Smith was portrayed by David Thewlis in Channel 4’s docudrama, Dirty Business.

The Canary previously reported that the public responded to Dirty Business – which exposed the damage done by the sewage scandal – with “widespread praise”, whereas discussions on social media about water companies, the regulator and public bodies was “overwhelmingly negative”, according to the government’s own analysis.

Smith said:

The water regulation changes proposed are based on the instantly accepted report from the Cunliffe Commission, which far from being the independent review it claimed to be, was designed, directed, administered, and reported on by Defra – the government department responsible for water industry regulation and its failure. Cleverly, in classic ‘Yes, Minister’ style, it investigated itself.

Its terms of reference directed Sir Jon Cunliffe to make regulation more attractive to shareholders and to dismiss taking water into public ownership, despite the compelling evidence that privatisation has failed.

We regard it as a massive retrograde step that, rather than addressing regulatory capture and corruption, makes compromise more likely with a single body. This vital aspect was ignored by the review, which was being steered by Defra into a forward-looking approach, thereby burying many serious issues that have arisen over the years, some of which were exposed in Dirty Business.

Smith added that the Bill proposes to make regulation of the sector “supervisory” which would mean that responsibility for “criminal pollution” by water companies will be for the regulators to resolve.

He added:

It is time people woke up before it is too late. Ironically and cynically, even contemptuously, one might say, the environmental champion, King Charles, has been made to usher it in, no doubt reassured by the major NGO’s usual weak challenges.

Bill is ‘an insult to every community impacted by sewage pollution’ – anti-sewage campaigner

Surfers Against Sewage CEO Giles Bristow said:

The government’s self-proclaimed ‘once-in-a-generation’ reforms will do little more than prop up a broken industry built on pollution for profit. The Clean Water Bill is an insult to every community impacted by sewage pollution and and every bill-payer forced to fund rising water bills while shareholders continue to profit.

The reality of this Bill is that the Government is choosing to keep the profit motive and ignoring alternative ownership models for the water industry. Regulation alone cannot fix a system that rewards pollution and failure. Only a fundamental reset of the water industry will.

It’s clear from last week’s election results and the Prime Minister now fighting for his job that the same old tweaks around the edges of this broken system just don’t cut it.

This weekend, people across the country will take to beaches, rivers and lakes to demand better. The public mandate for bold action is undeniable.

Concerns about independence of water commission, which ‘avoided’ underlying problems

River Action CEO James Wallace told the Canary:

River Action welcomed the new Government’s decision to review the failing water industry and the performance of environmental regulators. However, we are deeply concerned that the Independent Water Commission has failed to be truly independent and has avoided addressing the underlying structural problems around water company ownership, governance and investment.

While we remain hopeful that the forthcoming Water Reform Bill will deliver a far more ambitious and effective regulatory regime, the Government continues to ignore the fundamental damage caused by a wholly privatised water industry.

Until water companies are owned and operated for public benefit and environmental protection, rather than shareholder profit, no amount of regulatory tinkering will stop polluters from continuing to pollute for profit.

We are also concerned by the continued lack of meaningful action on agricultural pollution, which is one of the biggest sources of river pollution. Any serious attempt to restore our rivers must tackle not only sewage discharges, but also help farmers tackle the unchecked runoff of slurry, fertilisers and other agricultural waste into our waterways.

The chaos at the top of the Labour party makes it less likely that the government will be able to successfully pass all the bills it proposed in its King’s Speech, but public anger over the state of the country’s water companies is unlikely to subside any time soon.

Featured image via the Canary