Water (Special Measures) Bill [Lords]

Debate between Clive Lewis and Graham Stuart

Report stage
Tuesday 28th January 2025 Commons Chamber

[Clive Lewis]

That is my personal view; I put that on the record.

These companies have legal obligations first and foremost to their shareholders, which means short-term profit maximisation. When water was privatised, to quote from Unison’s recent report on this matter, to

“ensure the commercial success of the companies, the government wrote off all the existing debts of the RWAs”—

regional water authorities—

“(£6.5 billion in total) and gave the private companies £7.7 billion of public subsidies in tax relief on profits.”

It has come to my attention that even some former chief executives of water companies fear for the future of the industry, because good investors have by and large exited it. It is now the Macquaries and vulture capitalists of this world that dominate shareholding.

This issue goes far beyond regulation. Indeed, our own regulator, Ofwat, has been found wanting, as its own growth duty prioritises business as usual. In other areas, the Government have quite rightly recognised and embraced the value of public ownership, such as in rail and with Great British Energy. Unfortunately, when it comes to water companies there seems to be an inconsistency in Government policy. Many of us on this side of the House ran on a manifesto commitment to reduce the cost of living, and that commitment is one that I think every Labour MP believes in. However, the cost of corruption and of extraction by a private water company should under no circumstances, as is currently configured in the Bill, land on the heads of our constituents should any of these companies go bust or be taken into special administration.

Water is a monopoly industry, which means that bill payers and taxpayers are the same. What message would it send to our constituents if they are asked to pay, via their bills or via tax, to make a payout for the mistakes and excesses of privatised water?

[Graham Stuart]

Doubtless the behaviour of the privatised firms should be looked at closely, but one of the fundamentals of having a state-run system for such long-term assets was that they were chronically under-invested. They could never win out in the political battle between schools, hospitals and long-term water infrastructure, and only privatisation allowed the record investment that has gone in since. The hon. Gentleman ought to recognise that in trying to get the balance right.

[Clive Lewis]

I do recognise that, and not for one second am I calling for nationalisation, which is the model the right hon. Member was talking about. There is a plethora of possibilities for public ownership, from mutualisation through to giving regional authorities more scope, and even working with the private sector. We must ensure that the public have a critical say over the future of water, and there are multiple forms that public ownership can take. I am not necessarily in favour of 1970s-style nationalisation, which is pretty much what they have in Scotland at the moment.

I will, however, ask those on the Front Bench to consider new clause 8 and ensure that our constituents—the people we came into politics for—do not foot a single penny more for the failures of privatised water. Investors, shareholders and creditors should be the ones who take the haircut. They should be the ones who foot the bill because of what they have done to our water. This should not be landing on the heads of our constituents. This is a political choice, and I urge my Government to make it clear that we will always back the public, not the private companies that have got us into this mess.