Water Sector: Public Ownership Debate
Full Debate: Read Full DebateDepartment: Department for Environment, Food and Rural Affairs
Calum Miller
Main Page: Calum Miller (Liberal Democrat - Bicester and Woodstock)Department Debates - View all Calum Miller's debates with the Department for Environment, Food and Rural Affairs
Water Sector: Public Ownership
Calum Miller Excerpts(1 month, 2 weeks ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Barry Gardiner (Brent West) (Lab)
I hope I do not shock my hon. Friend the Member for Colne Valley (Paul Davies), who made an excellent speech in opening this debate, when I say that I do not want a referendum to bring the water industry back into public ownership. I just want Ministers to get on and do it. The Secretary of State has the power under the Water Industry Act 1991 to petition the High Court for any water company to lose its licence for either poor performance or insolvency.
Poor performance? Discharging untreated sewage into our waterways across England and Wales 568,674 times in just one year—I call that poor performance. That is the reason that Ofwat and the Environment Agency have been imposing fines of more than £100 million a time on water companies. No river in England meets good chemical status, and only 14%—one in seven—achieve good ecological status overall.
Section 94 of the Water Industry Act sets out that companies have a principal duty to provide sewerage systems. They also have a principal duty to comply with their statutory duties under regulation 4 of and schedule 2 to the Urban Waste Water Treatment (England and Wales) Regulations 1994. The Secretary of State can apply to put a company into a special administration regime if it has contravened, or is likely to contravene, any principal duty. They have; she should.
On insolvency, let us turn to Thames Water’s disservice of my constituency of Brent West. Under section 24 of the Act, the company can be taken into an SAR if it
“is or is likely to be unable to pay its debts”.
Thames Water’s gearing is 88%. Major pension funds have written off their £956 million stake in the company, and it has failed its licence obligation to maintain investment-grade status.
Barry Gardiner
No, I will not.
The company’s credit rating is now junk status. The only way it claims it can pay its bills is if the regulator allows it not to do its job of meeting its environmental performance obligations.
For goodness’ sake, we do not need a referendum. We need a Secretary of State who is prepared to use the legislation that was provided for the purpose of defending the public.
John Milne (Horsham) (LD)
It is a pleasure to serve under your chairship, Mrs Barker. Sometimes public ownership is best, and sometimes private is; I have no ideological view either way, but when it comes to the water industry, privatisation has been nothing short of disastrous. The main reason is inadequate regulation. In their blind assault on quangos and the civil service, which continues to this day, the Conservatives cut funding for the regulator so badly that it entirely lost the ability to do its job. No one noticed all the sewage going into our waterways, because there was no one left to look.
Left to their own devices, water company bosses responded by extracting billions from the industry in excess profits while allowing the fabric of the system to slowly rot. It has all been exposed now and we know the sorry truth, but however angry we feel, in most cases that money cannot be recovered because the original investors sold out long ago. In my area of Horsham in West Sussex, Southern Water was one of the worst offenders. Things were so bad that the former CEO Matthew Wright now faces criminal charges for presiding over fraudulent sewage data. Painful as it is, we are now obliged to pay for the same infrastructure investment all over again through higher bills.
Calum Miller
My constituents have strongly supported this petition because they feel ripped off by Thames Water. Does my hon. Friend agree that the Government’s refusal to consider special administration for Thames Water sends a signal to all other water companies that investing money in paying off bondholders is more important than sorting out the mess that is their infrastructure?
John Milne
My hon. Friend makes a strong point with which I very much agree. We have to find the funds to fix decades of neglect at a time of crisis in the national budget. For that to happen, it is absolutely essential that we be able to trust the water companies to do their job honestly the second time around. I flat out do not believe that we can do that without changing the present system of private ownership.
Personally, I am not opposed to renationalisation if it really can be done free, but I would be more confident asking for a mutual ownership structure, because that is clearly achievable. Mutual ownership prevents excess bonuses and profiteering. Residents can be confident that any new public money going into the industry will be spent on genuine improvements. Alongside that, we need a stronger regulator with the power to enforce quality.
More than 200,000 people signed the petition. That is a huge number, but I do not doubt that many millions more would have signed it if they had been aware of it. We put our blind trust in the water industry once, and it was abused. Once is enough.