Water Industry

Debate between Rehman Chishti and Charlie Elphicke

Tuesday 5th November 2013 Commons Chamber

[Charlie Elphicke]

I thank my hon. Friend for his customary generosity.

I will turn to the pressures that hard-working families are facing as we come out of a very difficult economic time for our country. The fact is that most people do not particularly care about politics. They vote us in every few years and decide the Government of the day, but they do not consider politics on a daily basis; they consider how they are going to keep the wolf from the door. They consider how they are going to get through the day, provide for themselves, their families and loved ones, raise their children, manage to pay their bills and get a better paid job. The Government have been very effective in ensuring that there is more employment and a return to economic growth, from rescue to recovery and onward to greater economic strength for our country.

Part of keeping the wolf from the door is dealing with the utility bills that cost all our constituents so much money. That is why water reform matters. People do not really have a choice, because there is not much competition. It is a natural monopoly and people have to pay their water bills. There is an opportunity to foster more competition and ensure that the industry is more effectively regulated than it has been. For many years nothing was done to keep on top of the water industry, particularly before this Government were elected. Now we have an opportunity to make further changes and look more closely at what the issues are and what might be done.

Before the Government were elected, there was a settlement with Ofwat and the water industry that was to last for five years. The assumptions on which the settlement was made have since altered. Retail prices index inflation has risen more quickly than it was expected that construction inflation would rise, and interest rates have been lower than expected. The result has been excess profits for the industry. Ofwat figures highlight a return on regulated equity in excess of 20% in some cases. Investment was allowed to fall in real terms after 2007, while customer bills have risen by more than inflation. Dividend payments are often greater than the profits made, which some would say is particularly unattractive.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I, too, pay tribute to my hon. Friend for the work he has done to bring the issue to light. In relation to bills and affordability, does he agree that it is completely and utterly unacceptable that bills have risen by 60% over the past 10 years, which clearly shows that the previous Government did absolutely nothing to help the consumer?

[Charlie Elphicke]

I thank my hon. Friend for that intervention. Certainly a better deal needs to be driven for the consumer than was driven by the previous Government. They also permitted a culture of industrial-scale tax avoidance, which was wrong.

--- Later in debate ---

[Rehman Chishti]

One of the key problems is that constituents at the bottom end of the income scale have over many years incurred a debt as a result of high water bills. Given the big profits made by these companies, surely they have a moral responsibility to help those people at the bottom end with the debts they have incurred.

[Charlie Elphicke]

My hon. Friend makes an important point, but I will leave it to my hon. Friend the Member for South Swindon, who has been studying those issues with considerable care and concern.

Secondly, there is the question of how we tackle tax avoidance. The unacceptable, even antisocial, tax avoidance culture in the water industry has meant that many companies have not paid tax for years. It is wrong that that situation has arisen. Everyone should pay their fair share. We need sustainable debt, not 100% mortgages. Under the previous settlement, these water companies have been allowed to become casinos. We have an opportunity to look carefully at that to see whether the position is safe, secure and sustainable for the future.

Big Society

Debate between Rehman Chishti and Charlie Elphicke

Monday 28th February 2011 Commons Chamber

[Charlie Elphicke]

My hon. Friend makes a powerful point. Air ambulances play an important role in many communities up and down the country. Such voluntary action to take responsibility and raise money makes such a difference.

That is exactly what the community is up to in the case of the port of Dover. What is the response of the community? It is getting together with the ferry companies to make a bid to buy the port. We are asking the Government to allow us the opportunity to make that bid. The proposal is led not by people who do not know what they are doing, but by people who are extremely experienced. The president of the Dover People’s Port community trust is Sir Patrick Sheehy, who used to run British American Tobacco, the massive cigarettes and tobacco combine, and another director is Algy Cluff, who opened up the North sea to oil exploration. The chairman, Neil Wiggins, who is in the Members Gallery, has expertise in buying, selling and managing ports all around the world.

That is the key point. There is so much talent and knowledge in our communities, which have the wherewithal and ability to take on serious responsibilities. That is why we have been able to go to the City, raise £200 million to buy the port, and put together a business plan that includes investment in the national interest of £100 million over the next five years, plus £50 million for the regeneration of the port. Anyone who knows Dover will see why it needs the big society and why it can be a landmark for the big society.

[Rehman Chishti (Gillingham and Rainham) (Con)]

Am I right in thinking that the whole point of the big society is empowering people to determine their destiny? My hon. Friend talks about the port of Dover, but the big society could come down to smaller initiatives in respect of, for example, development and planning, whereby local residents and not bureaucrats determine their destiny.