Water Industry

Debate between Alec Shelbrooke and Robert Buckland

Tuesday 5th November 2013 Commons Chamber

[Mr Buckland]

My hon. Friend is right to suggest that the breakdown of the arithmetic for individuals does not seem to add up. Thames Water intends to use a separate corporate vehicle to build this entity, but we must ask why the bill payer must bear the brunt of the problem.

Let me return to the question of leakages because the figures are quite startling. Although Thames Water is making progress in bringing the leakages down, and I give it credit for that, the figures are pretty disturbing. Last year, it was reported that Thames Water was losing 665 million litres of water a day, a leak rate of 25.7%. That was five times higher than the 5% that would have been saved by a hosepipe ban. The leaks would fill Wembley stadium every 36 hours.

[Alec Shelbrooke]

Would my hon. Friend care to elaborate on that for those who call for nationalisation? Is it not true that the state of the water industry and the state of the pipes the water runs through were caused by the lack of maintenance that happened when they were in Government hands? Since they have been in private hands, the investment has been put in to try to rectify that appalling problem.

[Mr Buckland]

My hon. Friend is right that the problem would probably be considerably worse had we left things as they were and expected the Government, with their declining pot, to invest and deal with leakages. The problems, however, remain and although Thames Water is working to try to deal with them, I believe that the company should concentrate on leakages before it advocates vast reservoir projects such as the one supported by my hon. Friend the Member for Broxbourne (Mr Walker).

It is not just Thames that has a problem of leakages. It probably has the most serious problem, but other companies such as United Utilities and Severn Trent also have considerable leakages. The most recent figures I have from Ofwat show that United Utilities is losing 457 million litres a day and Severn Trent is losing 441 million.

The Water Bill has been mentioned. The Bill is a good first step. It will be the first reform of the industry since privatisation, and it will bring choice for businesses, charities and the public sector, but as other hon. Members have said, we should be going further to allow that choice to be extended to residents and household consumers. I am glad to hear that the Bill will allow for a more joined-up approach to the water supply network, thereby in some ways dealing with the regionalisation issue that continues to bedevil the infrastructure. I am glad that there will be further improvements to the Ofwat regulatory system.

I am looking for a greater emphasis on developing social tariffs. How that is to be done will be a matter for detailed discussion, and while Government guidance, which has been welcomed, has already been issued about concessionary schemes for community groups, it is now up to the industry to act swiftly on social tariffs and to ensure that those who are the most vulnerable and who, like all of us, need access to a basic staff of life, can have that access without the fear of disconnection that was mentioned by the Opposition spokesman.

As I said, this is an issue of not only household and local significance but national resonance. I shall not repeat some of the points that were raised by hon. Members about excessive boardroom pay, rather exotic tax arrangements and capital expenditure, but it is important to note, looking at the figures based on current prices, that in real terms gross capital expenditure by the four major water companies in England and Wales has fluctuated and is on a downward path. My hon. Friend the Member for Newbury spoke eloquently about the cyclical nature of investment, which is hardly a solid foundation for attracting the much needed future and further investment in the water industry. While it is right to say that the Ofwat regime—Ofwat is currently looking at the 2015-20 price regime—is an appropriate exercise of regulatory power, we need to try and get through the cyclical problem that is causing the inflexibility in the industry that he talked about.

Today’s debate is a chance not only to make an important contribution to the ongoing discussion about the cost of living, but to look forward to the Water Bill, to ensure that we take the opportunity to get that piece of legislation right for the market, and to remember that value for money for businesses, and for the people we represent, must be at the heart of our deliberations and discussions today. We owe it to them to ensure that water bills are priced competitively, that the service is efficient and that there is a real sense of responsibility for the people that the water companies serve. If we help water companies along that road, we will have done the people whom we represent at least some service today.