Utility Week

UTILITY WEEK | 15TH - 21ST JUNE 2018 | 11 Policy & Regulation punishing water companies over sewerage discharges into the River Thames. Baroness Young, a former chief executive of the Environment Agency, in the House of Lords last month dismissed the mooted body as a "watchpoodle" . Shane Tomlinson, director of consultancy E3G, says that, like many other environmen- talists, he is "very disappointed" about the lack of teeth proposed for the new agency. Black says he is not "too worried" about the agency's powers, pointing out that the Committee on Climate Change already per- forms an effective role as statutory adviser on tackling emissions. And on the absence of enforcement mech- anisms, Black adds: "I'm not surprised that the government didn't hand this new body a massive stick with which to beat it." Noting the UK's own targets for tackling carbon emissions are tougher than the EU's, he says: "It's not clear in climate change terms how necessary it is to hold the govern- ment's feet to the fire." However, the Lords rejected the govern- ment's environmental protection plans in an amendment to the EU Withdrawal Bill, which the Commons will have to accept or reject in the week Utility Week goes to press (12 June). In response, a group of around 20 Con- servative backbenchers that include former London mayoral candidate Zack Goldsmith, have tabled a replacement amendment that would equip the new agency with legal enforcement powers. It also fleshes out the environmental principles that the new agency would have to abide by, such as the "polluter pays" principle. Gove appears to have been stung by the backlash. Following the furore over the new envi- ronment agency, correspondence was leaked to the Daily Telegraph showing that Gove had put up a Cabinet fight for the watchdog to have stronger powers. And last week, he told the Policy Exchange the government may respond to the Lords' concerns. Tomlinson says the ball is now in the gov- ernment's court to prove it is not watering down environmental protections as the UK moves from the EU's orbit. He says: "Replacing the European court with no court is not acceptable. Hopefully the government will listen and see that it has to create something with more teeth." Gove has spent the last year seeking to show that Brexit and environmental protec- tion can be reconciled. Next week we may have a clearer idea which matters more. "The use by some companies of opaque finan- cial structures based in tax havens and high gearing is deeply concerning" "Change having been promised in many cases, hasn't happened, or hasn't happened quickly enough. Change has to come" Michael Gove's Water UK City conference speech: 3bn Litres of water lost each day through leakage £140bn Investment in the network since privatisation to repair existing assets £18.1bn Amount paid to shareholders of the nine WASCs between 2007 and 2016 £18.8bn Total profit over same period 95% Proportion of profit paid in dividends to shareholders. Michael Roberts responds to Michael Gove: £150bn Amount invested since 1989 to reduce leakage 1/3 Amount by which leakage has been reduced since 1989 £25bn Amount put into cleaning up rivers,since 1989 70% Yorkshire Water plans to reduce its gearing to 70% by 2020 5% Amount by which customer bills will have fallen between 2015 and 2020 GOVE SAYS: ROBERTS SAYS: "[Michael Gove's] letter unwittingly risks paint- ing a distorted picture of the water industry… "It would be wrong to give the impression that all the issues which Mr Gove raises apply to all companies in the sector – or that nothing is being done even where they do apply." Michael Gove letter to Ofwat chairman Jonson Cox, 31 January 2018 Michael Roberts, chief executive of Water UK responds to letter, 2 February 2018 Gove quick to act • June 2017 Following the general election, Michael Gove is reappointed to the Cabinet as secretary of state for the environment • July Defra publishes pro- posals to ban the sale of diesel and petrol powered cars and vans by 2040 • January 2018 Michael Gove signals a crackdown on executive pay and offshore financial arrange- ments in letter to Ofwat chairman Johnson Cox • Defra publishes 25-year environment plan • March In a keynote speech at the Water UK City Conference, Gove accused some water companies of exploiting their monopoly power by "playing the system" • May Government publishes proposals for post-Brexit environmental protection regime Head-to-head: The two sides of the water debate

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