Water Industry: Financial Resilience
Debate between Rebecca Long Bailey and Rebecca Pow(1 year, 5 months ago)
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Rebecca Long Bailey (Salford and Eccles) (Lab)
Water companies were sold with no debt when they were privatised in 1989. In fact, they were given a £1.5 billion green dowry by the Government. Since then, they have taken on borrowing of £60.6 billion, diverting income from customer bills to paying dividends and interest payments. As a result, water bills have increased by upwards of 40% in real terms. Does the Minister honestly think that consumers hail privatisation as a success?
Rebecca Pow
Ultimately, the customers pay for investment in the industry, but over a very long period, as the hon. Lady will know. If a company did not pay out dividends it would struggle to get access to finance to fund future investment. That would limit the level of investment and have an impact on future customers. Companies have to pay up front for a lot of that investment, because they need to secure a large amount of funding to pay for it. To avoid customer bills increasing drastically to pay for that, companies have to secure the money by raising debt or equity. She knows how it works. The regulator has to ensure that that system is fully functioning, the water companies are resilient and we have all the resilient water supply that we require.