Digital Economy Minister Paul Scully said the incident – which saw the bank details of thousands of customers posted on the dark web – was part of a "sharp rise in ransomware attacks" on British companies.
He said cyber criminals were increasingly seeing ransomware as a "profitable business" but insisted legislation was not a "silver bullet" to address the issue.
Ransomware attacks occur when criminals break into a network and steal or block access to important files until a ransom is paid.
The attack on South Staffs Water was debated in the Commons this month, with Dudley North MP Marco Longhi revealing that he and thousands of his constituents had their details stolen.
Mr Scully said that over the last few years British companies had suffered a "sharp rise in ransomware attacks". He said: "Cyber-criminals are increasingly seeing ransomware as a profitable business.
"The Government are committed to addressing that issue, as evidenced by the national cyber strategy that was published in December 2021."
Mr Scully added: "Legislation is not a silver bullet to address all cyber-threats. While it is important, it is only one of a broad range of activities, initiatives, programmes, and policies that are in place as part of the UK’s broader national cyber strategy.
"If we are to limit the likelihood of such attacks being successful in the future, we have to raise the collective security and resilience of the whole country, and make everyone better equipped to resist and respond to those who would do us harm.
"The security and safety of our country is a top priority of the Government.
"Our national cyber strategy, backed with investment of £2.6 billion, sets out how the Government are taking action to ensure our people, businesses and essential services are secure and resilient to cyber-attacks."