Water Industry

Debate between John Redwood and Stephanie Peacock

Wednesday 10th June 2020 Commons Chamber

[Stephanie Peacock (Barnsley East) (Lab)]

As the Minister stated, this statutory instrument removes the seven-year sunset clause in relation to the Thames Tideway tunnel, to allow the 2013 regulations to continue. Those regulations, which Labour supported, enable the creation of infra- structure providers. To date, the Thames Tideway tunnel—nicknamed the “super sewer”—is the only project created under the regulatory regime. It is reportedly on budget and on target for completion by 2024. At 25 km long when completed, it will reduce the amount of overflow water and sewerage pumped into the Thames by 94%. It would appear that the regulatory model for this project has been successful and therefore should be allowed to continue. That would enable other large or complex projects to make use of the same funding model, as the Minister outlined.

As we are a few years off the tunnel’s planned completion date, can I ask the Minister to provide an update on the progress of the Thames Tideway project, as well as what plans she has to review the tunnel’s effectiveness when finished? I would also be grateful if she could outline the Government’s strategy for managing the inheritance of major assets, such as the tunnel, to water and sewerage companies from the infrastructure providers that build them. Thames Water customers paid an average of £19 of their annual household bill last year to finance this project, while the company avoided paying corporation tax and its executives pocketed hundreds of thousands of pounds in bonuses. It is important that those who pay for the asset through their bills should retain some of the benefits if the asset is to be part of the water or sewerage utility base.

I note that there will be no new sunset clause. Is that a wise decision, given the fact that this is the only project being undertaken in this way and it has not yet been completed? Will the Minister elaborate on her decision not to put in place a new sunset clause? The scale of infrastructure projects under this regulatory model demands a rigorous oversight and review process. The removal of a sunset clause will benefit a number of future large and complex infrastructure projects. What steps will the Government take to ensure that this regulatory and funding model is best suited to such multimillion pound projects?

Every effort must be made to increase customer confidence. In recent years, customers have faced rising water bills, while those at the top have received multimillion-pound packages, huge bonuses and dividends. In Yorkshire, the average annual water bill for this year will be £406. That is almost a 60% real-terms increase since the Yorkshire Water Authority was privatised in 1989. Labour is not opposing the amendment to the regulations today, but we are clear that a wider conversation needs to take place on making water bills affordable for customers.

Billions of litres of water are lost each day due to leaks, causing water shortages and environmental damage, yet a recent report found that unless action is taken now, parts of southern England will run out of water within 20 years. With a growing climate change crisis and increasingly extreme weather, there must be a larger strategy to tackle current and future challenges for our water and sewerage systems.

[John Redwood]

Does the hon. Lady agree that part of the answer to the south-east’s problem is more reservoir provision? We have a massive expansion of housing with no additional provision and we will need a lot more for agriculture, because we will want more market gardening.

[Stephanie Peacock]

The right hon. Gentleman makes an important point and I am sure the Minister has heard it.

I would like to conclude by asking the Minister this: what are the Government doing to encourage water and sewerage companies to reinvest in existing infrastructure to promote reduced household water consumption, prevent leaks, improve services to customers and protect our natural environment? I look forward to the Minister’s response.