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Water (Special Measures) Bill [HL]

I thank noble Lords for their contributions on this aspect of the Bill on fines and penalties. Amendment 67 was tabled by the noble Lord, Lord Sandhurst, whom I thank for his points on variable monetary penalties. Currently, there is no limit on the maximum variable penalty for water industry offences, whether the case is tried summarily in the magistrates’ courts or in the Crown Court. This amendment would not provide additional protection or assurance. However, we recognise that there are concerns about ensuring that there are robust protections for civil sanctions. So the Government will consult on the offences for which the civil standard of proof may be used and on the cap for new civil standard variable monetary penalties. This cap will not be limited to offences triable only in a particular court—we believe this is a proportionate safeguard. The House will also have the opportunity to debate and vote on secondary legislation containing the cap before any changes are finally made.

I reiterate that unlimited penalties issued to the criminal standard will still be available to the Environment Agency, along with all its other existing enforcement tools. Existing legal protections, including the right to appeal, will also be maintained. There are proportionate safeguards and legal protections for the use of those penalties, which will strengthen the enforcement of minor to moderate offences. Therefore, we do not believe this amendment to be necessary, and I hope that the noble Lord agrees.

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Clause 5 allows Ministers, when making secondary legislation, to interpret existing powers to impose monetary penalties so the civil standard of proof can be used. Regulators can currently impose civil penalties when they are satisfied “beyond reasonable doubt” that an offence has been committed. These civil penalties are imposed by the regulators, rather than through the courts. The criminal standard of proof is appropriate for severe offences—for example, when there is a major impact on human health, quality of life or the environment. The high investigatory burden is not proportionate for minor to moderate offences, which have a far lower impact. Clause 5 will allow these offences to be enforced more quickly, cost-effectively and proportionately by enabling penalties to be imposed using the civil standard of proof. This is in line with penalties available to other sectors that apply the civil standard of proof. The Environment Agency already has civil standard penalty powers for other enforcement regimes such as climate change.

These penalties will be in addition to existing enforcement options that can only be imposed using the criminal standard of proof, including prosecution and, I stress, unlimited, uncapped variable monetary penalties, which will remain unchanged. The Government will consult on the offences for which the civil standard of proof may be used, and on the cap for the additional new lower standard of proof variable monetary penalties. There are no plans to remove unlimited penalties for severe offences. Parliament will then debate and vote on the secondary legislation before we make any changes. Clause 5 will strengthen the powers of water industry regulators and help to drive improved performance in the sector.

I turn to Amendment 72, tabled by the noble Baroness, Lady Bakewell of Hardington Mandeville, and introduced by the noble Earl, Lord Russell. In his introduction to this amendment, the noble Earl made some really important points about fresh water and maintaining quality and improvements through the Bill. On his questions about the water restoration fund, it was launched in April 2024 to use money from water company fines and penalties for environmental improvements. Applications for funding are being reviewed. Clearly, we have been waiting for the spending review before moving forward with this, but we now have the headline figures agreed, which means we can now work through the exact details. We will be able to provide more information once that work has been finalised, but at least now we can start to move forward.