Thames, Yorkshire and Northumbrian Water: Ofwat Proposed Fines
Debate between Baroness Hayman of Ullock and Baroness Blower(5 days, 1 hour ago)
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Baroness Hayman of Ullock (Lab)
My Lords, that needs to be part of the review that Jon Cunliffe is undertaking with the water companies. One of the purposes of that commission is to see if the way the water companies are operating and are regulated is fit for purpose.
Baroness Blower (Lab)
My Lords, during the passage of the Water (Special Measures) Bill, the Secretary of State said that the Government will ban bonuses if company executives fail to meet high standards. Good. Last week, Thames Water said that it will circumvent any such ban by increasing basic executive pay. Speaking as a Thames Water customer, I ask my noble friend: what is the Government’s response to that, and how do we imagine the ban can be enforced?
Baroness Hayman of Ullock (Lab)
The Government have been clear that we urgently need to restore public trust in the water sector, and the bonuses issue is an important part of that. We have been completely clear that, where company performance is poor, executives should not be receiving large bonuses, which is why we are giving Ofwat the power to prohibit bonuses where performance is poor. Like my noble friend and other noble Lords, I have read the reports that Thames Water is saying that it would put up executive pay if this came to pass. We are bitterly disappointed that a water company would react like that. It should be taking responsibility for its behaviour and the standard it sets, so we will be taking this extremely seriously and looking at how we can manage such situations.
Water Companies: Financial Resilience
Debate between Baroness Hayman of Ullock and Baroness Blower(6 months, 1 week ago)
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Baroness Hayman of Ullock (Lab)
Currently, the regulator is working with the company to look at the best way forward, and the company is looking for further investment.
Baroness Blower (Lab)
My Lords, speaking as a Thames Water customer who is not very confident or happy, I was pleased to hear that I might at least have drinking water going forward. All water companies are using financial engineering to overstate their investment and capacity to pay dividends. They all capitalise part of their interest payments, which is, frankly, a highly imprudent policy and was a major reason for the collapse of Carillion. Are the Government content with that?
Baroness Hayman of Ullock (Lab)
There are clearly serious problems in the water industry that have been building up for a number of years. We are looking at all options and ways forward to improve the situation, and, clearly, modelling of how companies operate will be part of those discussions.