Water Companies: Financial Resilience

Lord Cromwell Excerpts

Tuesday 23rd July 2024 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

The water special measures Bill that we will bring in front of your Lordships shortly is going to deliver on our manifesto commitment. As well as strengthening regulation, it is designed to make sure that the water industry will be fundamentally changed and transformed. It will ensure that water company bosses are not rewarded with bonuses if a serious environmental breach is committed. It will strengthen and enhance the ability of regulators to bring robust charges against water companies and executives when they have committed offences, including through automatic and severe fines. It will also require that water companies install real-time monitors, so that we can actually see what is going on. I also reassure the noble Lord that this is just a start.

[Lord Cromwell (CB)]

The Ofwat website refers to an £88 billion programme of investment that will go into the infrastructure, and describes this as

“initially … funded by shareholders or through borrowing, with these costs then recovered”

from consumers over five years “and beyond”. Does the Minister have any concern as to whether that money will actually be raised, and does she share my concern about the financial resilience of consumers to pay for it over time?

[Baroness Hayman of Ullock (Lab)]

As the noble Lord quite rightly says, Ofwat has set out a record £88 billion upgrade so that we can deliver the cleaner rivers and seas, and better services for customers, that we need. It is absolutely not right that the public should pay the price for years of mismanagement in the water sector. Any water bill rises are the result of these years of failure, but it is important that we do not put too much on to vulnerable customers, so officials are exploring options for improving affordability measures in the sector.