New review into water industry launched in bid to tackle sewage pollution and ‘broken’ infrastructure
A new commission is to investigate Britain’s troubled water industry in a bid to tackle sewage pollution, “broken” infrastructure, and toughen up weak regulators.
The new Independent Water Commission will deliver the “largest review of the sector since privatisation”, the UK and Welsh governments said as they unveiled the plans.
Campaigners have warned against trade-offs between attracting investment, keeping bills affordable and protecting the environment.
It comes amid widespread anger at sewage-polluted waterways, water company bonuses and long-term failures to build new assets like reservoirs and sewers.
All 11 wastewater companies in England and Wales have this year been investigated by one of the public regulators, Ofwat, over mismanagement of their networks.
But the commission will also investigate how to reform the regulators themselves, amid concerns they lack resources and bite and have overseen private company profit despite record pollution levels.
It could even consider scrapping Ofwat and reforming the Environment Agency.
Water companies have been accused of underinvesting in new infrastructure while pocketing bonuses and shareholder payouts. Pic: PA
In December, water companies and the regulator will decide by how much to hike bills in order to fix some of these problems, with water firms on Tuesday requesting an even greater bill increase than had been expected.
Environment Secretary Steve Reed said: “Our waterways are polluted, and our water system urgently needs fixing.”
The water commission will “attract the investment we need to clean up our waterways and rebuild our broken water infrastructure”, he added.
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Mr Reed has ruled out renationalising the water industry to tackle pollution.
The new body will be chaired by former deputy governor of the Bank of England Sir Jon Cunliffe.
His findings, due in the second quarter of next year, will not be binding but inform further legislation to attract long-term investment and clean up the country’s filthy rivers and seas.
The Liberal Democrats, which has a base in rural constituencies and has made water issues a priority, said “more urgency” was needed.
Its environment spokesperson Tim Farron said: “Whilst a review of the industry is welcome, it should not be used as a tool to kick the can down the road on immediate reforms.”
The government should already be introducing “a new regulator with real teeth and power to get hold of these profiteering firms”, he said.
It follows earlier announcements by the new government to ringfence cash for infrastructure upgrades, and hike prison time and fines for polluting water company bosses.
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The government is concerned a lack of infrastructure is holding back growth, with lacking sewage or water infrastructure holding back new homes in Oxfordshire and Cambridge.
CEO of campaigning group River Action, James Wallace, called the steps “encouraging”.
But he warned, “water security and wildlife must not be sacrificed for growth and international investment”.
Greenpeace said the move was “long overdue” but needed to balance the demands of investors with a commitment to properly enforce environmental regulation.
Donald Trump’s victory was secured on an unequivocal promise to stretched American households that he would “end inflation”, but markets and economists are anticipating his second term will do the opposite.
A combination of corporate tax cuts, government borrowing, lower migration and swingeing tariffs on overseas imports are all expected to heat up the American economy and stoke price rises.
Bond yields on 10-year US Treasuries, effectively the price of borrowing for the American government, were up by 3.6% overnight, rising more than 15 basis points to above 4.4% as European markets opened.
That signals investors believe that borrowing will rise, and the Federal Reserve will be forced to slow rate cuts in order to tackle inflation.
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A clearer picture will emerge on Thursday when Federal Reserve chairman Jay Powell, who Mr Trump said will not be reappointed, announces the next move on rates.
Markets still expected a 0.25 percentage point cut (a similar move to that anticipated from the Bank of England earlier in the day) but Mr Powell’s comments will be scrutinised for signals of what Trump 2.0 means for the prospect of further cuts.
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But higher prices for consumers are not necessarily bad news for corporate America, with the dollar surging against sterling and the euro as swing states fell to Mr Trump, and Wall Street futures trading indicating a rally when they reopen with him confirmed as president-elect.
Shares in US banks were boosted with J.P. Morgan, Goldman Sachs and Morgan Stanley all up more than 6% in pre-market trading, along with Tesla, boosted by more than 13% as markets anticipate a dividend for Elon Musk’s campaign-trail support.
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Defence stocks were higher too and not just in the US – BAE Systems and Rolls Royce were both up – reflecting likely pressure on America’s NATO allies to make good on their commitments to increase spending.
Bitcoin was also positive in anticipation of a more benign regulatory environment from a president who used the campaign platform to launch his own cryptocurrency.
By contrast renewable holdings, the target of much of Joe Biden’s economic stimulus, were in negative territory, with wind and solar priorities likely to be replaced by a pledge to “drill baby, drill”.
Of most concern to America’s trading partners and allies will be Mr Trump’s promise to erect barriers to free trade.
The man who said tariffs “is the most beautiful word in the world” has pledged a 60% levy on Chinese imports and 10% on those from elsewhere, a deeply protectionist move that could trigger a trade war with China and the EU.
These can only increase prices in the US, with importers paying the levies at the point of entry, and other trading blocs likely to respond in kind.
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The EU has already imposed its own 35% tariff on Chinese EVs to the dismay of the continent’s carmakers the measure is intended to protect.
While these tensions play out, post-Brexit Britain, a relatively small player outside the major trading blocs, is likely to be a spectator.
Post Office campaigner Sir Alan Bates is yet to receive a reply from Sir Keir Starmer, despite writing to him over a month ago.
Sir Alan said he had written to the prime minister to remind him the “clock is still ticking” on a financial redress deadline for victims.
In his letter, he demanded a March 2025 deadline for compensation for sub-postmaster victims of the Horizon scandal.
Sir Alan confirmed to Sky News he was yet to hear back from the prime minister.
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“It was over a month ago,” he said.
“I sent him a reminder yesterday. I told him the clock is still ticking and it’s now five months from the March deadline, which I’m told is still achievable by other professionals.
“So let’s get on with it, that’s all we want. Get on with it.”
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