Water Industry

Debate between Lord Benyon and Luke Pollard

Tuesday 22nd January 2019 Westminster Hall

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

I congratulate my hon. Friend the Member for Harrow West (Gareth Thomas). As a Labour and Co-operative Member of Parliament, I listened intently to what he had to say with great interest and much nodding. He has been a real champion of the Co-operative movement over many years. My hon. Friend the Member for Leeds North West (Alex Sobel) and I, as young Co-operative MPs in this place, have a lot to learn about the championing of the Co-operative cause from the Obi-Wan Kenobi of the Co-op party— my hon. Friend the Member for Harrow West.

This debate has long been due. As someone who has worked for a water company, I believe we do not talk enough about water policy in this place; we need to talk more about it if we are to meet our Paris climate change commitments to create a fundamentally sustainable water industry, in terms of water usage, the chemicals used in it, and the contribution to the natural world.

Clearly, some serious and genuine concerns are being raised by members of the public and Opposition Members about the way that our privatised water system is run. The privatisation of water has not worked to deliver the benefits that it should in 2019. Too much money is being paid out in dividends and not enough investment is being made in fixing leaks and reducing water usage. Not enough is being spent on climate change mitigation or fundamentally fixing the broken system. We need better water resilience and better value for money for our customers.

The water companies are only part of that. My hon. Friend the Member for Keighley (John Grogan) was right when he talked about the need to look at regulation as well. I am certain that he and the right hon. Member for Newbury (Richard Benyon) will read carefully the water policies that I hope to publish, as Labour’s shadow water Minister, in the next couple of months. They will describe how we should deal with the fact that we need a better, reformed system, and additional policy levers to address climate change.

[Richard Benyon]

Can the hon. Gentleman give us a taster of those policies by saying whether he will compensate shareholders for the £90 billion that they own, and where he will find the money?

[Luke Pollard]

I thank the right hon. Gentleman for that. As his intervention came only on page 1 of my 12-page speech, perhaps he is pre-empting some of it. I suggest that he looks at the proposals that the shadow Chancellor, my right hon. Friend the Member for Hayes and Harlington (John McDonnell), and the shadow Business Secretary, my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), have published that talk about replacing the share capital ownership with bonds. There are already details of that available.

It is important to consider the debate in context, because large parts of the UK, as well as the rest of the world, are experiencing a water crisis. We like to think of England as a notoriously damp place where water is plentiful, but that is not the case for large parts of the country. We need to recognise that England is in fact in the lower quartile globally of available water resource per capita. More people are living in areas of water stress, and more population growth and house building is planned in areas of water stress—especially in the east of England, London and the south-east of England; we will need to not only reduce water use but transfer more water there. That suggests that we need a different system to handle some of those challenges.

As my hon. Friend the Member for Keighley hinted, droughts cause hundreds of millions of pounds of damage, and have led to hundreds of thousands of fish dying from over-abstraction and to serious decline in our wetland species. Sewage has also been pumped into our rivers. It is worth saying that thankfully that is less common than it was. Indeed, when I was a boy growing up in the west country, at one of our glorious beaches, swimming past floating turds was commonplace. It is not anymore, thanks to the investment that has been made, but more needs to be done on that with regard to our rivers. [Interruption.] The right hon. Member for Newbury throws his hands in the air, but bill payers in the far south-west know about that investment, because we paid for it with what for many years were the highest bills in the entire country—not just a wee bit higher, but double the nearest amount. We have paid for what has gone out in dividends, as well as for what has gone into the system.

We need better water resilience, because there is simply more demand. The latest statistics show that there will be 4.1 million more people in the south-east by 2045, and by 2080 there could be an extra 10 million. We need to think about how to deal with the amount of water used, where it comes from and how it is treated, to ensure that we minimise the effect on our climate. We are also facing increased flooding. That context is really important; it is why we need more debates about the structure and operation of our water industry, and why today’s debate is so important.

I have to say that we have seen moves in the right direction under this Government, but they frequently come from DEFRA press office announcements rather than from policies being fully implemented. I do not think that Ministers are cranking the handle sufficiently to achieve the change that could be delivered to our water industry if we showed greater concern about pricing and about investment in climate change, flood and drought mitigation. We know that more can be done, because in the latest round of price reviews and business plans, companies have published proposals that hint at a slow move in the right direction. One such proposal, which I am sure my hon. Friend the Member for Harrow West will have seen, is in the south-west: South West Water has proposed an element of mutual shareholding as part of its wider ownership base. If it can be done in the west country, it can be done elsewhere, so that could be encouraged as part of the wider debate.

Labour’s water proposals are pretty clear—and pretty popular, as it happens. Some companies have engaged in good practice, but not enough; as the right hon. Member for Newbury says, there are bad players and bad behaviour in our industry. Thames Water is the poster child for such bad behaviour, but sadly it is not the only one. We need better regulation and better ownership, so Labour has set out plans to take our water companies back into public ownership.

I pay tribute to my right hon. Friend the Member for Hayes and Harlington and my hon. Friend the Member for Salford and Eccles for putting together Labour’s clear water proposals, which set out our plan for public ownership of water companies. As our September 2018 booklet “The Green Transformation” states,

“Labour will…bring water back into democratic public ownership, lowering bills and providing levels of investment needed to drastically reduce leakage and tackle major sewage pollution incidents, which are still rising.”

I absolutely agree with the right hon. Member for Newbury that we need to guarantee the investment stream. There is a role for investment in our water companies, but our proposal is that the role of private ownership should come to an end.

Our “Clear Water” plan states:

“To ensure maximum openness, transparency and scrutiny, RWA boards will have a statutory duty to make information widely available and hold monthly public meetings in different locations each month. Meetings will also be broadcast live on the internet and all papers will be made public.”

Many good lessons can be learned from the operation of mutuals about how customers and employees can be brought into running better businesses. My hon. Friend the Member for Leeds North West said it well: we need better value from our water industry. We also need to look at regulatory responsibility. Our plan further states:

“Regulatory responsibility…will be absorbed into Defra, which will form a new public regulatory system in the form of a National Water Agency responsible for economic and performance standards and capacity-building.”

As we get closer to publishing further details, more information will become available.

Labour is suggesting that our new water system needs to consider sustainability and the public interest, not just private profit. The shadow DEFRA team is exploring what other water policies should accompany our proposal, so that we can tackle climate change, flooding, water scarcity, water usage, water pollution from plastics and microplastics, lead pipes—an issue of particular interest in some parts of England—and water affordability. When the next election comes—many suspect that that will be very soon—our manifesto will offer a full suite of policies not only on public ownership, but on a better system.

I am aware that the Minister needs to sum up soon. This has been a good debate, and I hope there will be many more to come as we make our case. The hon. Member for Taunton Deane (Rebecca Pow), who is no longer in her place, spoke very well about the need to address personal water consumption—one of the reasons I carry around my own water bottle, rather than using the House of Commons’s supply of bottled water. Indeed, it seems ironic that in a debate about the water industry, we are still using bottled water in this place, so perhaps the House authorities could look at that. We can all do things to address the challenge in our water industry. Ownership, management and our own consumption are all part of the mix.