Water Industry

Debate between Lord Benyon and Julian Smith

Tuesday 5th November 2013 Commons Chamber

[Richard Benyon]

The Select Committee produced many good things with which I agree. If that is what it said at the time—I am afraid that many of my memories of the last three and a half years merge into one—I would probably not agree, because there was bold ambition in the water White Paper, which was reflected in many of the comments made about it by many different people.

[Julian Smith]

I pay tribute to my hon. Friend’s work as a Minister. He is speaking passionately about the White Paper and the Water Bill, but does he agree that the financing of these companies still looks dodgy to many of our voters? I would appreciate it if he commented on that before he concludes.

[Richard Benyon]

I shall talk about debt and gearing shortly, and I think my hon. Friend will find me in agreement with him on those issues.

Let me explain why I believe the Water Bill is only a work in progress when it comes to delivering the ambitions of the water White Paper. In the next Parliament, I really hope we will see a Bill to address the needs of abstraction reform. It would be impossible to bring that forward as part of the Water Bill because there are tens of thousands of abstraction licences, on which many of our constituents and the businesses that employ them depend for their water supply. Trying to create a new abstraction regime from the one created back in the 1960s is a Herculean task that will require thoughtful legislation to make sure that the taps still flow and that we do not suck dry aquifers like the Kennet, which provides a very important water supply to the constituents of my hon. Friend the Member for South Swindon (Mr Buckland). That, however, has been the cheapest place from which to suck water, and it is only through the construction of good infrastructure and investment that we can do this in a sustainable way that keeps bills down, keeps water flowing and supports our economy. Further legislation, then, is needed.

Let me make a further point about investment before I reach my final point. If we want to see continued investment from pension funds—whether they be British or from overseas—sovereign wealth funds and other investors, we need to recognise that this is a relatively fragile and competitive market. I shall give the House an anecdote about the frequent visits I made to speak to the investor community to make sure that it saw that our ambitions in the water White Paper and the Water Bill were consistent with continued high levels of investment.

Some time ago, there was a hiatus concerning a rather technical issue that might well have gone over the heads of most people in this country. It related to the licence modifications that Ofwat wanted to create. This brought me in touch with a new breed in my life—City analysts, many of whom, in the words of my children, were “wusses”. They took an instant view that the regulated sector was not the place in which to invest, so the water sector saw quite a high risk of much needed investment being reduced. It took a Herculean effort—by me on the bottom echelons of the Government, right up to the higher levels—to make sure, first, that what Ofwat was trying to achieve was understood. In my opinion, it might have had a virtuous reason for what it did, but perhaps went about it in the wrong way. It reminded me that if we want to see continued levels of investment, we have to make sure that we explain what we are doing. Ultimately, the need to deal with infrastructure problems needs to feed through to bills, and we need to explain that we want to see a vibrant regulated sector in this country.

Oral Answers to Questions

Debate between Lord Benyon and Julian Smith

Thursday 9th December 2010 Commons Chamber

[Richard Benyon]

The right hon. Lady is a great expert in that field, and I pay tribute to her on that issue. It is an absolute priority for our Department, and it is being taken forward as part of the waste review, not only to ensure that the difficult wins are achieved, but to consider how we can continue to encourage local authorities to deal with areas where, on recycling, there is still a long way to go.

[Julian Smith (Skipton and Ripon) (Con)]

T9. At meetings throughout the dales in recent weeks, constituents have complained that the Yorkshire Dales national park authority is distant and aloof. How will the Minister ensure that in future national park authorities will be more thoughtful towards the communities they seek to represent?

[Richard Benyon]

I am very pleased with the response so far to our review of national park governance. We like national parks and want to support them, but the Government’s firm view at this point is that we should review how they are governed to ensure that they are accountable to local people, and that local people can take part in their decision-making processes. That is the purpose of our review, and I hope that my hon. Friend’s constituents are taking part in it.