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Water Companies: Regulation and Financial Stability — [Mark Pritchard in the Chair]
23 October 2024
Lead MP
Tim Farron
Westmorland and Lonsdale
Lib Dem
Responding Minister
Emma Hardy
Tags
EconomyTaxationClimate
Word Count: 13441
Other Contributors: 24
At a Glance
Tim Farron raised concerns about water companies: regulation and financial stability — [mark pritchard in the chair] in Westminster Hall. A government minister responded.
Key Requests to Government:
The MP calls for a unified regulator, an end to self-monitoring by water companies, full cost charging for monitoring, community benefit model with special protections for Windermere, urgent action on sewage discharges, and shorter notice periods for license revocation. He also requests that the Government commits to these necessary changes.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The MP is concerned about the increase in sewage spills, inadequate regulation, climate change impact, and environmental damage to rivers and lakes. He cites specific statistics: a 54% rise in sewage spills from 2022-2023, over 464,000 combined sewer outflows last year at various locations such as Appleby, Kirkby Stephen, Staveley, Tebay, Greystoke; and £78 billion paid in dividends since privatisation. He emphasises the importance of water to Westmorland's tourism economy and biodiversity.
Alison Griffiths
Con
Bognor Regis and Littlehampton
The hon. Gentleman agreed that conflicting regulatory directives across agencies are part of the problem and urged for urgent addressing without waiting for a long-awaited review. The MP concurs with the need for a unified regulator to address conflicting responsibilities between environmental and business regulation.
Calum Miller
Lib Dem
Bicester and Woodstock
Thames Water wants to hike its prices by more than 50% over the next five years. The speaker highlighted that constituents' homes had been flooded with sewage, urging the regulator to insist on performance before profit.
Charlie Maynard
Lib Dem
Witney
Charlie Maynard highlighted the financial instability of Thames Water, noting that its debt is expensive and more than a third of customer bills are spent on servicing it. He criticised Ofwat for failing to take decisive action when credit ratings were cut and bondholders started negotiations with the company's creditors. Maynard argued that allowing such restructuring would benefit vulture funds at the expense of taxpayers.
Clive Jones
Lib Dem
Wokingham
Rivers in Wokingham are struggling due to insufficient regulation and corporate greed, with the previous Government failing to address pollution issues. The Rivers Trust research indicates no river stretch is in good health.
Danny Chambers
Lib Dem
Winchester
Chalk streams in Winchester are at risk due to lack of regulation and environmental damage caused by companies prioritising profit over pollution prevention. The Liberal Democrats advocate for reform to include environmental experts on water company boards.
Edward Morello
Lib Dem
West Dorset
West Dorset saw 45,000 hours of sewage released into rivers and beaches last year. The River Lim was declared ecologically dead. The speaker questioned whether the regulator should impose fines on water companies reflecting environmental damage. The MP agrees with Tim Farron's points, adding that Ofwat has fined water companies but has collected none of the fines.
Gideon Amos
Lib Dem
Taunton and Wellington
The speaker congratulated Friends of French Weir Park in Taunton for helping get bathing water status for the River Tone. He expressed concern about the potential removal of that status due to lack of investment.
Grahame Morris
Lab
Easington
He highlights the sewage discharge issues affecting his constituency, noting Northumbrian Water discharged raw sewage for over 280,000 hours in 46,492 incidents. He criticises financial mismanagement and environmental failure by water companies, citing £3.5 billion debt with £4.1 billion dividends paid out. Paid tribute to campaign groups and citizen scientists dedicated to improving water quality, emphasized the importance of looking at other regulatory systems and learning from them. Showed support for the Water (Special Measures) Bill.
Helena Dollimore
Lab Co-op
Hastings and Rye
The speaker thanked her hon. Friend and inquired about his support for the Government's commitment to cleaning up the water industry, specifically addressing the Water (Special Measures) Bill.
Jeremy Corbyn
Ind
Islington North
Corbyn criticised the private ownership of water companies, highlighting £78 billion in dividends to foreign-owned firms and £60 billion in collective debt. He pointed out Thames Water's £14 billion debt and lack of investment leading to flooding and maintenance issues. Corbyn called for public ownership to improve efficiency and reduce costs. He intervened to point out that over-abstraction upstream, particularly in chalk streams, exacerbates the problem of dried-up rivers during summer months, which destroys fish and ecological sustainability.
Jessica Brown-Fuller
Lib Dem
Chichester
She expressed concern about the lack of accountability in the water industry, highlighting that companies like Southern Water are not addressing environmental crises and paying dividends to shareholders while racking up significant debt. She mentioned the potential harm caused by the Havant Thicket reservoir project, which could lead to a 73% increase in household bills and introduce recycled waste water into drinking supplies through an untested process.
Jim Shannon
DUP
Strangford
Jim Shannon highlighted the funding issues in Northern Ireland, where Northern Ireland Water reported a £185 million shortfall and required significant investment. He criticised large bonuses and dividends for shareholders despite service failures and poor ecological status of surface waters.
Joe Morris
Lab
Hexham
Joe Morris questioned whether the Liberal Democrats feel embarrassed about the weakening of regulators under their government, leading to sewage flowing into rivers like the Tyne and Coquet in Northumberland.
Julian Smith
Con
Skipton and Ripon
The speaker agreed that regulation, commissions, and initiatives proposed are necessary but also highlighted a massive breakdown of trust within the industry. He suggested bringing people together to talk about their different equities and priorities.
Luke Charters
Lab
York Outer
Charters thanked the hon. Member for securing the debate, expressing frustration over previous Conservative Government's weakened water regulation leading to toxic pollution in rivers Foss and Ouse. He praised the Secretary of State's statement on the independent water commission but urged for a centralised smart regulator akin to Sir Jon Cunliffe's model at the Bank of England. Luke Charters asked if Charlie Maynard welcomes the appointment of Jon Cunliffe as a financial stability expert, suggesting that they need to re-evaluate the system left behind by previous governments regarding water company instability.
Monica Harding
Lib Dem
Esher and Walton
The Thames borders Esher and Walton, and the River Mole is one of the most polluted rivers in the country. A quarter of the sewage poured into it is from her constituency, impacting health, environment, and democracy.
Charters
Con
York Outer
Shared his outrage over sewage levels in his constituency and advocated for considering different regulatory models to inform future policy changes.
Olly Glover
Lib Dem
Didcot and Wantage
In his constituency, over 90% of water infrastructure is managed by Thames Water, which has a de facto monopoly. The area experienced sewage spills for more than 11,000 hours in 2023 due to storm overflow issues and pump failures led to contaminated flooding. Thames Water was the worst performer regarding leaks with over 570 megalitres lost daily last year. Local residents are sceptical about the necessity of a proposed reservoir due to trust issues stemming from financial instability.
Richard Burgon
Lab
Leeds East
People in Leeds feel ripped off due to Yorkshire Water's intention to increase prices by 35% by 2030. He agrees that water companies should be brought into public ownership to prioritise public service and environmental good over profit for shareholders.
Robbie Moore
Con
Keighley and Ilkley
Mr Robbie Moore praised the UK's waterways for their environmental, public health, and economic benefits. He highlighted the previous Government's efforts to improve water quality through increased monitoring of storm overflows, investments by water companies, linking dividends to environmental performance, and launching a whistleblowing portal. However, he criticised the current government's approach as lacking clear action on promised improvements.
Rosie Duffield
Ind
Canterbury
She asks if the petition signed by 285,000 people supporting renationalisation of water companies has been let down by Southern Water's daily issues in Whitstable.
Roz Savage
Lib Dem
South Cotswolds
She criticised water companies for exploiting taxpayers and highlighted sewage dumping in her constituency's rivers, leading to environmental damage. She emphasized the need for a long-term vision focused on clean water as an essential public good, advocating for holistic approaches that involve housing developers and farmers to manage runoff and agricultural contaminants.
Sarah Dyke
Lib Dem
Glastonbury and Somerton
Data from Thames Water shows that Glastonbury and Somerton was the 16th worst constituency in England and Wales for sewage overflows. The speaker suggested that the commission should consider establishing pollution baselines and reduction targets.
Sarah Green
Lib Dem
Chesham and Amersham
The regulatory system for water companies is not fit for purpose, leading to uninvestigated pollution events and ineffective regulation. There is a need to address the statutory consultee status of water companies on planning applications.
Government Response
Emma Hardy
Government Response
The Minister outlined the Government's commitment to improving water industry performance, focusing on tackling pollution levels in rivers, lakes, and seas. She highlighted steps taken such as securing commitments from CEOs for infrastructure investment, introducing customer panels, and planning drop-in sessions with MPs for discussing amendments to the Water (Special Measures) Bill. The Minister also emphasized the importance of an independent commission led by Sir Jon Cunliffe and welcomed contributions from campaigners and organizations in shaping future legislation.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.