Water Industry: Financial Resilience

Baroness McIntosh of Pickering Excerpts

Tuesday 4th July 2023 Lords Chamber

[Lord Benyon (Con)]

We think that the model that operates at the moment is the right one. We have seen more investment, but if the Government took back control, that would, in effect, put the onus back on the taxpayer. That would mean that I or the Secretary of State would have to get in the queue behind the health service, pensions, and all other areas of government spending to get the right levels of capital investment we need in the water industry.

We think that the £56 billion can be afforded at a relatively modest increase of around £12 per household. For roughly £1.20 a day, households receive the water they need and sewage and dirty water are removed from their homes, and there has been a massive increase in spending on the infrastructure we need, some of which is still in need of changes. Through this model, we have delivered a better outcome for the consumer and for the taxpayer. We have concerns, and I share the noble Baroness’s concerns, certainly about the issues relating to Thames Water and one or two other companies. Ofwat has been proactive in trying to resolve the concerns with those companies, and we are watching the situation very closely.

[Baroness McIntosh of Pickering (Con)]

My Lords, I declare my interest as co-chair of the APPG on Water. My noble friend will recall that alarm bells rang some years ago when a number of water companies were based offshore in places such as the Cayman Islands, which seems singularly inappropriate. I congratulate my noble friend on putting in the statutory and legal effect that dividends and bonuses must now be linked to environmental performance. Does he imagine that that will have an immediate effect or will it take some weeks and years before it comes into force?