Water Companies: Borrowings

Baroness Hayman of Ullock Excerpts

Monday 5th September 2022 Lords Chamber

[Lord Goldsmith of Richmond Park (Con)]

My noble friend makes an important point. Although I do not have the numbers at the tips of my fingers, it is very clear that the record levels of investment would not have happened had the sector not been privatised. We would not see anything like that level of investment if we were to renationalise the sector. Of course we care about the manner in which executives are paid, incentivised and all the rest of it, but that is why we are now able, as a consequence of the Act that noble Lords voted through, to require total transparency through Ofwat for the first time, in a way that has been lacking until now.

[Baroness Hayman of Ullock (Lab)]

My Lords, data that has, rather appropriately, been leaked shows that water companies’ replacement of water and wastewater pipes stands at an astonishingly low average of 0.05%, with even the best performers replacing only 0.2% of their network every year. Does the Minister believe that we should be replacing our pipe network slightly quicker than what works out to be once every 2,000 years? With a growing proportion of our pipes failing, and with many over 100 years old, just how bad can water wastage and sewage spillage become?

[Lord Goldsmith of Richmond Park (Con)]

I have to admit that I am not familiar with the leak that the noble Baroness describes, but there are certainly problems with leaks, and not just in government. We have a serious need for investment in the pipe network, which has been made a lot worse by record heat this summer. As noble Lords will know, the heat causes the ground to shift, which imposes significant stress on pipes. A record number of pipes now need to be fixed, which requires investment. But there is a clear obligation, which is associated with very severe penalties for companies not investing in tackling this problem. The Government have been clear that this will remain a priority.