Water Industry

John Grogan Excerpts

Tuesday 22nd January 2019 Westminster Hall

[John Grogan (Keighley) (Lab)]

It is a great pleasure to follow the right hon. Member for Newbury (Richard Benyon), who has displayed his knowledge of not just the water industry but Momentum rallies, Venezuela and so on. His remarks put our party and our Front Benchers on notice that we have to get the detail of this policy right. It is a very radical policy, and I support changes in the water industry, but we will hear many mentions of Venezuela and Momentum rallies in any election campaign in which this is an issue. It is also a great pleasure to follow my hon. Friend the Member for Harrow West (Gareth Thomas), who opened the debate in a typically urbane and knowledgeable way. He is a great loss to our Front Bench, and I hope that one day he will be a Minister again in a future Labour Government.

[Gareth Thomas]

A £5 note is on its way.

[John Grogan]

I do not know whether that is a “thank you” or a bet.

I will speak briefly, but perhaps a little explicitly. I think that part of my hon. Friend’s speech was directed at our party’s own Front Benchers. At the moment, we are consulting on our plans for the water industry, and I hope nothing is set in stone. In developing our policy, we need to learn as much from Scotland, Wales and—if I may say so—Northern Ireland as we do from experts who reside in the north of London. My hon. Friend referred to the Secretary of State for Environment, Food and Rural Affairs and the shadow Chancellor competing, about a year ago. It was last spring—spring was in the air—and one of those gentlemen said:

“Far too often, there is evidence that water companies—your water companies—have not been acting sufficiently in the public interest.”

It could have been either of them; in this instance, it was the Secretary of State. On that occasion, he was as cruel and as vehement in his speech about the water industry as he was about the Opposition last week, so this is an open goal for the Opposition.

I will not repeat the statistics that my hon. Friend referred to when opening the debate, except for the basic statistic that the privatised water industry has taken out about as much in dividends as it has put in as investment, so the idea that the privatised water industry has brought new investment into the industry that would not have been made otherwise is wrong. However, what should be a Labour Opposition’s policy on changing ownership? I hope that the shadow Minister, my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard), can confirm that the submissions that my hon. Friend the Member for Harrow West has made will be considered very carefully in our current review of policy in this area.

I share with the right hon. Member for Newbury a love of employee share ownership schemes, particularly if they involve the whole of the company. I chaired such a scheme, which ran Hatfield, one of the last two deep mines in our industry. It has a different feel from any other form of capitalism. I hope we will consider that. I hope we will also consider the role of regulation, because any reference to external regulators seems to have gone from our paper. I do not want civil servants making all the decisions on the regulation of the water industry. It is a specialist role.

In Scotland, there is a publicly owned industry, but there is also an independent regulator. Incidentally, there is also competition in the business retail market in Scotland, which exists alongside public ownership of the industry. We have had some debate already about the precise form of ownership, but as I understand it, in Wales it is not employee-owned, but a not-for-profit model. I understand that the cost of debt for the Welsh industry is less than for any other industry in the public or private sector in the whole United Kingdom. I hope we learn from Wales, too.

If we are to take some of the water industry at least into the nationalised sector, why not let a thousand flowers bloom? I hope our Front Benchers will consider that. Why not have some on the model that my hon. Friend the Member for Harrow West mentioned and some where there is demand in the public sector? That would be one way of doing it, but it will be more costly to have all the water industry in the nationalised sector, as compared with my hon. Friend’s suggestion. We have to face up to the question of compensation. It is not good enough for an academic in north London to refer to how the banks were taken in distress into the public sector. Certainly they were, but they had virtually no value in their assets, and that would not be the case with the water industry.

Some of the water industry shares are owned by the workers of the water industry, and some are owned by the pensioners. I have had an interesting dialogue with an organisation called We Own It, which is contributing to the field. When I asked it about this question, it said—I paraphrase—that it did not really believe in compensation, but that it recognised that workers and pensioners somehow have to be looked after. We have to do better than that if we are to stand up with a general election campaign.

[Richard Benyon]

The hon. Gentleman makes a very good point. Polls are often cited to say that an enormous percentage of people want to take the companies back into national ownership. Of course, it depends on which way the question is asked. When it is phrased, “In order to do that, the Government would have to spend £90 billion of taxpayers’ money. Do you not think that could be better spent on other areas of the public sector?”, they nearly always agree. It depends on the question.

[John Grogan]

It does, but obviously if a Labour Government went down that road, they would then have assets on the public sector books to match that spend, as the right hon. Gentleman is well aware. The arguments are not black and white, as he admitted in his speech. We do have to think out the policy very carefully. I am a great believer in radical policies. I voted from the Back Benches in favour of some of them under the last Labour Government when those were perhaps not the flavour of the month. We have to get it right.

I will mention one other issue and then finish. The Environment, Food and Rural Affairs Committee, of which I am a member, did a report on the water industry. I commend some of the detail of that, and one detail in particular. The overflows from combined sewers owned by the water industry are a national disgrace. We have cleaned up our beaches in the past two or three decades, largely, dare I say it, because of European regulation.

We now need to clean up our rivers. Ilkley in my constituency is a great tourist destination, with swimmers in the Wharfe all the time. It connects downstream with the constituency of my hon. Friend the Member for Leeds North West (Alex Sobel) at Otley. We should not have sewage being discharged on a very regular basis. While I understand that various other things are going on in Parliament next Tuesday, I will be concentrating on the afternoon drop-in session of the chief executive of Ofwat and the Environment Agency. I hope they will address the issue of sewage and commit to cleaning up our rivers, just as we have cleaned up our beaches.