Water Industry: Financial Resilience

Clive Efford Excerpts

Wednesday 28th June 2023 Commons Chamber

[Rebecca Pow]

I thank my right hon. and learned Friend. Thames Water is a big water company that delivers on a wide scale. Ofwat is working very closely with the company on its plans, which will be looked over and submitted, and accounts will be submitted in due course, so that we have a resilient pathway. Customers, including his constituents, should rest assured that both their water and wastewater supplies will be protected.

[Clive Efford (Eltham) (Lab)]

This privatised industry knows that, at the end of the day, the banker of last resort is the British taxpayer. That is exactly where we are with Thames Water, which has been taking profits for the last 35 years and not investing for the future. Regardless of what went on before, we must have investment in what is in front of the industry, but Thames Water has failed to plan ahead. It has taken money but not done the job expected of it while being in charge of such an essential public service. What will the Government do to protect consumers and ensure that we plan ahead for the industry?

[Rebecca Pow]

Ofwat is the independent regulator and, as the hon. Member will know, the Government direct it through the strategic policy statement. It is Ofwat’s job to ensure that in the price review, when the water companies submit their plans—they are going over the draft plans now—they demonstrate that they will deliver on the Government’s targets on storm overflows, leakage and demand reduction. It is for Ofwat to ensure that companies will be resilient in delivering that infrastructure. There is a firm structure in place. Ofwat also constantly monitors companies’ gearing—debt-to-equity—levels, and the Government are confident that the regulator is taking reasonable measures to challenge companies to reduce those gearing levels where appropriate.