Water Bill

Debate between Mark Garnier and Meg Hillier

2nd reading
Friday 28th March 2025 Commons Chamber

[Dame Meg Hillier]

I thank my hon. Friend for that point. I hear his passion and his helpful iteration of those historic examples. However, I would also say that we need to be clear about who the shareholders are—very often, they are our pension funds. Pension fund trustees have a fiduciary duty to ensure they are maximising the income for those pensioners. If that does not happen, we know that, effectively, the taxpayer picks up the tab. A reality of privatisation was a drive to have a shareholder society. We can argue about whether that was the right or wrong thing to do, and I think we would probably agree in many respects on that. However, that is the reality of the situation now.

Earlier today, before the House was sitting, I was on a call about constituents who had lost money in an investment and are in a desperate situation. In that case, it was because of criminal activity by a fraudster. Their life savings have gone. The people who have invested and bought those shares, often very humble families who have worked hard all their lives, need some compensation. A student debating society might be tempted to say, “Let’s take it all back, and forget about the impact,” but we cannot forget about the impact, because it often falls on low-paid, hard-working people who are taxpayers too—they would end up paying a double whammy.

[Mark Garnier (Wyre Forest) (Con)]

I thank the Chair of the Treasury Committee for her wise words about the risks that shareholders take when they invest. Has she considered the alternative? At the moment, we are talking about privatisation versus nationalisation, but the alternative is mutualisation, where a water company’s customers would own and control the company on their own behalf.

[Dame Meg Hillier]

It seems there are an awful lot of mind readers in the Chamber today, because the hon. Gentleman anticipates my comments. I am proud to be a Labour and Co-operative Member, so I have thoughts on how, one day, we may be able to move to that nirvana of co-ownership.

We have seen too often that dividends and bonuses are paid without investment in infrastructure, which is where my hon. Friend and I would agree. We have a privatisation model that was supposed to deliver investment on the back of people investing in shares. In return for getting a dividend, there would also be an investment, but we have not seen enough of that.

Of course, under Ofwat rules, water customers bear a share of the cost. In Hackney, under Thames Water, which has been a poster company for the problems in this sector, bills are going up by more than a third. A number of constituents who are very worried about their water bills have written to me just in the last fortnight. When we talk about money in this place, we sometimes talk about millions or billions of pounds, but £100 a month is a great deal of money for many of my constituents.

To set that in context, I have a number of fantastic street markets in my constituency—ones where people can buy fruit and veg, and clothes and underwear at a reasonable price—and I also have the lovely Broadway market, where sourdough bread costs about £5 a loaf. I have constituents who do not have £5 left at the end of the week, let alone at the end of the month—those are the margins that people are working with. Water bills are therefore a significant issue, which is another reason why I am delighted to be here today, supported by colleagues of all parties who want to talk about the challenges of water.

On the face of it, the argument for nationalisation sounds appealing to many, but there is a cost—and it is not a hidden cost: to those who bought shares in good faith, to those pension funds that are investing, and in the upheaval of turning around these companies. Where would we get the people to run a nationalised water company? It is likely to be the same executives, if they would take the pay cut. There is not a wealth of expertise.

I spent a decade examining the work of Whitehall, and there are some excellent civil servants in this country who have done amazing work—many of the civil servants who did not do such amazing work appeared before the Public Accounts Committee—but finding somebody overnight with the technical and management expertise to run a major water company is a challenge.

To take the corollary, I am passionate about seeing insourced services in our hospitals, but after having intense conversations with executives at my local hospital, I know that, when the public sector has not done something for many years, it takes a very long time to build up the expertise. Let us take catering. If hospitals do not cater well, they could kill patients, so they need to make sure they have the management structure in place to deliver those skills. It is the same with water companies—it is not as easy as saying, “One day it’s private, and the next day it’s national. No problem at all.” The upheaval would be immense, so we need a measured plan, and I think this Government have begun to develop that plan, for all the reasons I will outline.

I will talk a little about what the Government will do to improve the situation, and then I will talk about the Bill, but I want first to touch on the comments of the hon. Member for Bristol Central (Carla Denyer). I am very interested in her passionate commitment to citizens’ juries. She has been elected, which is a privilege as we all know, to represent her constituents in this place, yet months after her election, she wants to pass responsibility for this big, difficult decision to a citizens’ jury, rather than taking responsibility for that decision as an elected MP.