Thames Water: Government Support

Robbie Moore Excerpts

Thursday 3rd April 2025 Westminster Hall

[Robbie Moore (Keighley and Ilkley) (Con)]

It is a pleasure to serve under your chairmanship, Ms Lewell. I thank the hon. Member for Sutton and Cheam (Luke Taylor) for securing this really important debate. It was good to listen to all the contributions. As we all know, water is vital and we use it every single day, so it is deeply concerning that we have such great challenges in our water industry, particularly those that have been highlighted with Thames Water.

Under the last Government, we uncovered the true extent of the issues with our water system by increasing the monitoring of storm overflows, which no political party or Administration had previously attempted. Back in 2010, just 7% of storm overflows were monitored, but when we left office, 100% were monitored. That gave the Government and our regulators a proper and true understanding of the way in which those storm overflows were being used by our water companies.

[John Lamont]

I pay tribute to all the work that my hon. Friend did as a Minister. He has highlighted the percentage of overflows that are now being monitored in England. I am sure he is aware of research by Surfers Against Sewage confirming that 100% of storm overflows in England are now being monitored. In Scotland, the figure is only 4%. Does that not show the huge difference between what is happening here in England, which is not ideal by any stretch of the imagination, and what is happening in Scotland, which is far, far worse?

[Robbie Moore]

I thank my hon. Friend for his intervention. Yes, that is the point: for any Government, regardless of political colour or make-up, to deal with the challenge, they need to understand the true extent of what they are dealing with.

It is frustrating that north of the border only 4% of storm overflows are being monitored. In reference to what is happening with Scottish Water, and to what the devolved Administration north of the border are doing in the Scottish Parliament to tackle challenges of pollution, how can any proper strategy be put in place with no reference point? That is why it is important to get to the 100% level of monitoring that we now have in England, which resulted in the last Administration being able to roll out the plan for water, which was about stronger regulation, tougher enforcement and more investment.

The hon. Member for Sutton and Cheam mentioned the Thames tideway, which has 25 km of underground capacity that has now been extended from Acton to Abbey Mills. A £5 billion investment has been put into the project, which is now fully operational, having opened in February; I was lucky enough to visit and to go down into it before it was opened. The great thing about the project is that it is now draining about 34 of the most polluting combined sewer overflows in the Thames area, which will help to improve the quality of the water in the Thames.

The hon. Member for Sutton and Cheam rightly raised the concerns about increasing water bills, the lack of trust in Thames Water and the poor level of service that his constituents are experiencing. The hon. Member for Twickenham (Munira Wilson) picked up on the same issues and referred to the meeting that I had with her and with the hon. Member for Richmond Park (Sarah Olney), in the short period for which I was lucky enough to be a Minister in the Department, about the challenges with the Teddington project. I urge the Minister to address those concerns, because challenges arise when there is no proper environmental impact assessment. Concern about the project is rightly being raised—it was certainly a concern that I had—so I urge the Minister to continue to put pressure on Thames Water.

The hon. Member for Clapham and Brixton Hill (Bell Ribeiro-Addy) rightly raised the concerns of constituents on Clarence Avenue and in Brixton, relating to water shortages resulting from Thames Water not carrying out its duty to the level of quality that her constituents expect. She also raised concerns about the bill increases of approximately 30% or 31% for some of her constituents.

The hon. Member for Richmond Park mentioned the statutory duties that a water company is bound to meet and referred to the poor satisfaction levels that Thames Water is delivering. The hon. Member for Swindon North (Will Stone) rightly raised the challenges that his constituents are experiencing with flooding, and Thames Water’s refusal to take responsibility. Finally, the hon. Member for Bexleyheath and Crayford (Daniel Francis) mentioned challenges relating to Thames Water’s bill increases and the poor service that his constituents experience.

Thames Water is probably the most distressing example of our water system going wrong. Bills are rising by about 33% this year, but unfortunately the Government have failed to take serious action and consumers are paying for it. That comes in addition to the pressures of the cost of living, council tax rises and so on. Rightly, there is huge frustration that Thames Water shareholders have simply wrung the business dry of capital, failed to invest to expand its supply, and failed to invest to clean up sewage spills. Thames Water’s exceptionally poor level of service deliverability has already been mentioned.

The last Administration took steps to address the challenges that constituents and residents face not only in the Thames Water area, but across England. We blocked bosses’ bonuses for water company executives, we ensured that dividends had to be linked specifically to environmental performance and we introduced unlimited civil fines by removing the £250,000 cap. More power was awarded to Ofwat so that it could impose levies on water companies in the circumstances. In August last year, Thames Water was fined £104 million for its failure to avoid sewage overflows. In other instances Thames Water was put under a cash lock-up, which prevents any dividends from being paid out without Ofwat’s approval.

[Bell Ribeiro-Addy]

How much of the fine that the hon. Gentleman mentioned has Thames Water actually paid? How was it allowed to pay out all these dividends in previous years, given the measures that he is setting out? I genuinely cannot understand how that was allowed to continue for so long.

[Robbie Moore]

That brings me nicely to my next point, which is the strength of the regulator. Ofwat has the powers to link dividends to environmental performance —a measure that was awarded to Ofwat—and to ban bosses’ bonuses for executives, but those powers are there should Ofwat wish to use them. What is the Minister doing to ensure that Ofwat is using the powers that it has been awarded, and to ensure that it is being robust in its actions as the regulator? Many hon. Members have rightly raised concerns that Ofwat has not been robust enough.

Much has been said in this debate about nationalising our water industry and particularly Thames Water, but it is false to assume that a struggling private company will cease to struggle purely because it changes hands. Indebtedness does not go away because a company is nationalised—not without a taxpayer-funded bailout, which would mean redress for the failures of Thames Water executives coming out of the pockets of working people. I mention again the example of Scottish Water, north of the border. There have been myriad mistakes at Thames Water, but it is the responsibility of the independent regulator, Ofwat, to right those wrongs and use the powers that have been awarded to it.

[Bell Ribeiro-Addy]

I have to ask the hon. Member why he is so against the idea of nationalising water. I am sure he agrees that the whole idea of privatisation is that there is some sort of competition, but there cannot be competition with water, and therefore we cannot guarantee a good service. We are seeing that at the moment, and we saw it under the Conservative Government for a number of years. Does he understand why privatisation cannot really work in this instance?

[Robbie Moore]

I thank the hon. Lady for her intervention, but I simply refer to the fact that since privatisation about £250 billion of private investment has been put into our water companies, not only to improve infrastructure but to help with service delivery—£250 billion that would otherwise have had to come from the taxpayer.

My second point is that the system should work if the regulator is being robust enough. The point that I come back to is that there is a clear argument that the regulator, Ofwat, has not been sufficiently utilising the powers awarded to it by the Government, and therefore it is right that the Government hold it to account to make it as robust as possible. North of the border in Scotland, with Scottish Water, only 4% of storm overflows are even being monitored, and the service and delivery that Scottish residents are facing is in some cases far worse than what we are experiencing from Thames Water. Simply having a nationalisation strategy does not demonstrate better roll-out and service delivery for customers.

There have been myriad mistakes at Thames Water, but it is the responsibility of the independent regulator, Ofwat, to right those wrongs.

[Charlie Maynard]

Could the hon. Member elaborate a little bit on that £250 billion number and where it comes from?

[Robbie Moore]

It is a figure that has been referenced since nationalisation initially took place, and has been well recognised as the amount of money that has been invested into our water companies by the private sector, for the benefit not only of Thames Water but of all the water companies across England.

What is the Minister doing to ensure that Ofwat is utilising the powers awarded to it, and does she have confidence in Ofwat being able to exercise its function? If not, what is the Minister doing about it? Furthermore, the Government need to take action to further protect consumers from the Thames Water fallout. The court settlement that Thames Water secured in February is designed to give everyone involved time to come to a sustainable plan, but I hope that the Minister will be able to reassure us today that her efforts are firmly going towards ensuring that the plan protects consumers.

Finally, I would like to talk about the broader reforms and support that we can offer our water industry. As I and others have rightly said throughout this debate, our water industry is crying out for further investment. We need to think further about how to utilise the opportunities for the water sector across the country. To that end, what consideration is the Minister giving to providing more opportunities for individuals and organisations outside of major water companies to influence improving the water sector, and has she considered the untapped potential to increase water supply and capacity to the thousands of people who are utilising water, and the hundreds of landowners out there who, with the right financial and planning incentives, may choose to further invest in the water industry? That may be an avenue that the Minister may wish to explore.

I again thank the hon. Member for Sutton and Cheam for securing this important debate.