Water (Special Measures) Bill [Lords]

Charlie Maynard Excerpts

2nd reading
Monday 16th December 2024 Commons Chamber

[Steve Reed]

I have to say to the hon. Gentleman that there is very little point in monitoring sewage in the water if all you do is watch the sewage increase and keep on flowing into our rivers, lakes and seas. The Conservatives seem to be satisfied with the failure they presided over. The Labour party will fix the problem that they left behind.

If you find cracks in the wall of your house and ignore it for years, the problem gets worse and the cost of putting it right escalates. That is exactly what the Conservatives did to our water system. They refused to bring in the investment early enough, so ageing infrastructure crumbled even further and the cost to bill payers has rocketed.

[Charlie Maynard (Witney) (LD)]

We are about a month away from Thames Water signing up for another £3 billion of debt. If that happens, 46% of the bills of every customer in that catchment will be spent on interest expenses, and that is without even paying down the £20 billion of debt. How is that helping anyone?

[Steve Reed]

I thank the hon. Gentleman for his intervention. One of the reasons the Government commissioned a review into governance and regulation is because of the failure of the current system that the previous Government allowed to continue.

I share customers’ anger about the scale of water bill rises they seem likely to face. They are rightly furious at being left to pay the price of Conservative failure. I am grateful that the party opposite has indicated support for the Bill. It is just a shame its support has come so late. In December last year, while they were still in government, I called a vote on introducing a ban on unjustified bonuses for water bosses, but they refused to do it. They could have acted at any point over the past 14 years, but they would not do it. There have been many times in history when Labour has had to clean up the Tories’ mess, but rarely quite so literally as cleaning up the raw sewage polluting our country’s waterways.

--- Later in debate ---

[Charlie Maynard (Witney) (LD)]

I believe that this Bill is disappointing. It almost totally ignores the financials of the companies, and that is the root of the problem. Unless we fix the financials, we will not fix the problem. Thames Water, for example, has £17 billion of debt, and it is currently expected to have a further £3 billion of debt by the end of January. If that happens, it will cost Thames Water an extra £334 million a year, which means that 46% of the bill of every single one of the 15 million bill payers will be funding interest payments—before the £20 billion of debt that the company will have is paid down. How does that make sense? How do we get this working again? That is not the route to a solution.

The reason Thames Water is not in special administration is that, officially, it is unable, or unlikely to be able, to pay its debts. You do not need a GCSE in business to know that if a company currently has £16 billion of debt and £1.2 billion of cash flows, it is unlikely to be able to pay its debts. I believe that our Government are running scared. They are worried about being sued by big bad American vulture investors, and that is why they are not putting Thames Water into the special administration regime—a regime that was explicitly set up for exactly this purpose. I say to the Government, “Please, do not let Ofwat approve a price rise for Thames Water. Put the company into special administration and start to deal with the problems, because we will not be able to deal with them until we deal with the financials.”

I have one minute and 17 seconds in which to ask the Government to steal some of these ideas. Yes, they should reform the three regulators, by putting them all together. In respect of clauses 10 and 11, why should consumers pay for financial losses following Government financial assistance? Why should not creditors and shareholders pay for those losses? It seems pretty weird to me. Pollution baselines should be established for each catchment; we should get that straight. Environment Agency permits for individual sewage treatment works should be reset. The capacity for each STW should be established, and the agency’s Environment Agency 3.0 multiplier should be applied to every one of them. There should also be volumetric flow meters, for which clause 3 does not provide—we are not getting them. I invite Members to read clause 3 themselves. We are getting event duration monitors but not flow meters, and that means we are back in the same place where we have been for the last 14 years. We need flow meters, so please can we insist on that? Finally, we need to haircut the debt: we need to get that £20 billion down to £5 billion. That should be the key focus, because then we will be back on a stable footing and able to invest as we need to.