Thames Water: Contingency Plans

Debate between Sarah Olney and Matt Rodda

Friday 15th March 2024 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

Thank you very much, Mr Deputy Speaker, for granting me the opportunity to have a debate on this important issue.

Since 2020, Thames Water has dumped over 72 billion litres of raw sewage into rivers in London, polluting our waterways and damaging our natural environments. It has done so while accruing billions of pounds of debt and increasingly failing to provide basic services to the nearly 25% of the country it supplies, including my constituents in Richmond Park. Despite this, Thames Water executives have paid themselves almost £8 million in bonuses over recent years, lining their pockets while the company they run continues to pollute our rivers and streams.

For my constituents in particular, the name Thames Water has understandably become a byword for poor quality, slapdash repair work, damaging environmental practices, and barely concealed contempt for its bill payers.

[Matt Rodda (Reading East) (Lab)]

I am grateful to the hon. Member for giving way. My constituents have suffered quite seriously from similar issues, including interruption to water supply to a large part of Reading recently and, indeed, considerable sewage discharges in the river, which, outrageously, are sometimes visible to passers-by who use our bridges and walk by the riverside.

[Sarah Olney]

The hon. Gentleman is absolutely right about sewage discharges. We have had a recent one in Teddington lock in my constituency, causing a great deal of distress to local people.

During my time as the MP for Richmond Park, I have received dozens of reports of Thames Water’s negligence. In 2020, more than 1,200 homes in Richmond were left without central heating or hot water for five days when water from a burst pipe ingressed the gas network. Last year, a burst water main on the Manor Circus roundabout went unattended for days, delaying the completion of roadworks that were causing chaos in the area. My residents in north Kingston have had to make their peace with constant congestion caused by an unending series of emergency repair works—all because this failing water giant cannot get its act together. That is just a mere snapshot of the chaos that Thames Water causes for my constituents every day.

To add insult to injury, Thames Water is now planning to build a pipeline across a nature reserve in my constituency. The controversial Teddington direct river abstraction project will allow Thames Water to take water from the Thames and replace it with treated sewage just above Teddington lock. The pipeline’s construction will put a rare and valuable ecosystem under threat and subject my residents in Ham and north Kingston to years of building work. This project is only necessary because Thames Water is losing hundreds of millions of litres of water a day through leaks in its system.

My constituents are yet again suffering, because the company has spent years paying out hundreds of millions of pounds in dividends to shareholders, instead of investing in its infrastructure. They have to live with the congestion on the streets, the threat of major construction in their parks and the sewage running through their river. Now, they are picking up the tab for Thames Water’s total mismanagement of its finances. I was recently contacted by a constituent who has seen his water bill rise by just over 60% between 2020 and 2024. Every year, more and more of my constituents’ income is going towards propping up a company that shows an utter disregard for them and their community.

It was therefore infuriating to see recent reports in the Financial Times that Thames Water has been lobbying the Government and the industry regulator, Ofwat, to let it increase bills further, pay dividends and face lower fines as it seeks to avoid financial collapse. This is despite Conservative Ministers already bending over backwards to avoid cracking down on polluting water companies. It is extraordinary that the country’s largest water company could be allowed by this Government to give its executives millions in bonuses while failing to fulfil its basic functions, but that is the situation that has been allowed to occur for far too long.

Over the past few weeks, I have therefore been calling on Conservative Ministers to publish their contingency plan, Project Timber, for what they will do if Thames Water goes bust. Frustratingly, my demands have continually been refused, with the response being that “it would not be appropriate” to publish the plan. This is despite what is now overwhelming public interest to do so.

With the news this week, however, that Thames Water was the only water firm that had refused to contribute to a new £180 million anti-pollution fund, the alarm bells became deafening about its financial status. And when I asked the Prime Minister at PMQs this week whether he could confirm that this broken company will still exist by the end of the year, he was unable to answer. That is why, today, I stand here to call not only for the publication of Project Timber, but for further, more drastic action.

Last month, the Government passed new legislation, which allows the High Court to appoint a special administrator to take over a failing water firm. With Thames Water clearly unable to pay its debts and with its latest refusal to contribute investment to combat sewage, I believe the threshold has now been met for the Government to take this as a course of action.

That is why I now speak on behalf of the Liberal Democrats in calling on the Government to put Thames Water into special administration. Under these new proposals, the taxpayer would not be liable for any debts, and the special administrator could restructure this failing firm into a company for the public benefit. That would ensure no interruption in service for millions of households across the capital and the south of England, while allowing the company to be stabilised—no longer relying on its failing board. Further, by enacting those special measures, Thames Water could restart efforts to stop harmful sewage discharges into rivers and lakes. This would also guarantee no further executive bonuses are paid, following the near millions which have been paid to senior officials in recent years. We therefore face two options: to continue allowing Thames Water slowly sink into financial ruin, or to act now to restructure this failed company and start getting it working again for the public benefit.

To conclude, after years of letting Thames Water pollute our rivers, fail to perform basic functions and charge customers higher and higher bills, enough is enough. Rather than continue to let the asset strippers run Thames Water into the ground, the Liberal Democrats are clear: we cannot let this situation continue. Thames Water is no longer a functioning company, and the Government have a choice: either bail them out with taxpayer money, or listen to our calls to put it into special administration to then be reformed into a company for the public benefit. After years of Conservative Ministers refusing to take action, this vital step is needed to safeguard customers, steady the ship and get our country’s largest water company functioning again.

Commercial Rent (Coronavirus) Bill

Debate between Sarah Olney and Matt Rodda

2nd reading
Wednesday 24th November 2021 Commons Chamber

[Sarah Olney]

I absolutely agree. We see a maelstrom of different pressures on businesses at the moment, and many of my retail businesses are experiencing difficulty in getting stock for a number of different reasons, many of which will be familiar to Members. There are increased energy costs, and we are still facing quite an uncertain Christmas.

Hospitality businesses across the country are keen to open their doors to Christmas parties, but there is still a lot of uncertainty about the public health situation, which will prevent many of them from being able to make the revenue they would expect. That will obviously have an impact on their ability to pay their debts. As the hon. Member for Brentford and Isleworth (Ruth Cadbury) said, it is not just their rent debts; they have VAT bills, rates bills and loans to repay. There are so many different debts mounting up as a result of lockdown, and there is still a great deal of uncertainty, coming from a number of different sources, on whether businesses can count on the revenue to service all those debts. There are a lot of pressures facing businesses.

[Matt Rodda]

Does the hon. Lady agree that the Government need to get on top of the supply-chain issues, particularly in our ongoing relationship with the European Union, the issues in Northern Ireland and the cross-channel issues? These could potentially have a serious impact on businesses and families this Christmas. It is high time the Government got on with developing a positive relationship with our neighbours.

[Sarah Olney]

I entirely agree. I would now normally be at the Public Accounts Committee, which is currently looking at the readiness of UK ports for Brexit, how well our port and logistics sectors are dealing with Brexit and how well the Government have prepared them. The picture is mixed, but there is no doubt that there is more disruption to come, because we have not yet implemented all the checks that will be required in due course. Some will come in on 1 January, and there will be others in July 2022. It is fair to say that we are still not through this huge period of uncertainty, and there is a great deal more still to come.

I welcome this Bill, but I would like to see the Government do more to help our retail, hospitality and personal services sectors, and all the other sectors that make up our high-street economy, because of all the positive impacts a thriving high street has on our local communities. I want to see the Government go a bit further to support businesses on our high street.

I am keen for the Government to consider scrapping the upward-only rent review clause that is often in new leases. Richmond High Street, in particular, is suffering from this clause. We now have very high rents for all our retail units, which is a private sector matter but we are finding that it creates a barrier to entry for new retail, hospitality and other businesses that might want to take up a town centre lease.

Leases are based on old-fashioned ways of doing business, and we often find that landlords put an upward-only rent review clause in leases. When the lease terms are renewed, the clause means that a firmly established business that has generated a great deal of business as a result of its location will find that its landlord puts up the rent to such an extent that the business cannot service it with its revenue. I am keen that leases and rent payments should reflect underlying market conditions, which would help a huge amount. More needs to be done. We talk about leasehold reform a lot in this place, but I also want to see it for commercial rents. I would welcome the scrapping of upward-only rent reviews.

I echo the hon. Members for Chesterfield (Mr Perkins), for Reading East (Matt Rodda) and for Brentford and Isleworth (Ruth Cadbury), who mentioned the business rates review, which is urgent because we want to help businesses to have better control of some of the costs of doing business. There is no doubt that business rates are a key part of that, and we are keen to see a review as soon as possible. A review has been promised for many years, and business rates are a fundamental part of the business costs that are continuing to be a deterrent to new entrepreneurs.

We very much support the Bill, which is the right thing to do. We want to support our town centre businesses, and there is more that could be done, particularly on rent and rates. We are keen to support the Bill, but we need to scrutinise the arbitration clauses a little further.

Finance (No. 2) Bill

Debate between Sarah Olney and Matt Rodda

Committee stage & Committee of the Whole House (Day 1)
Monday 19th April 2021 Commons Chamber

[Sarah Olney (Richmond Park) (LD) [V]]

I wish to speak to clause 5 relating to the changes in personal income tax allowances and to clause 28 relating to the freezing of the lifetime allowance on pension pots.

There is no doubt that the last year has made unprecedented demands on the public purse, and it is right that the Government should be prepared to take difficult decisions on taxation as we move forward, as we all very much hope, out of the pandemic and into the changed world beyond. However, the Government made clear commitments in their 2019 manifesto that they would not raise income tax on working families and they have broken that commitment in this Bill. The freezing of the personal allowance and the higher tax bands means that more working people will pay tax and at higher rates than they would otherwise have expected.

Clearly the Government are banking on a consumer-led recovery and this tax burden on working families will reduce the amount of discretionary spend available to households, limiting their ability to spend on consumer goods. As housing costs increase to their highest ever levels, household budgets will continue to be squeezed, and piling additional tax charges on top will create an enormous burden for those who are already struggling to make ends meet. It is a particular insult to those in our NHS, who have sacrificed so much to keep us all safe this year and have been told to expect only a 1% pay increase for their trouble. Our nurses will have to give back more of that 1% in tax than previously despite all that they have already given. This is particularly galling when compared with the Government’s decision to delay a corporation tax increase. The Government have chosen to tax hard-pressed frontline workers first and large, profitable corporations later. Only those companies that have remained profitable throughout the pandemic would be paying corporation tax next year, which is why an immediate increase in corporation tax could have captured the windfalls or excess profits of those who found their revenues increased as a result of the unusual trading conditions of the last year. This would have been a far more equitable route to raising income than putting the burden on hard-working families.

On clause 28, I urge the Chancellor to carefully consider the impact on NHS pensions of freezing the lifetime pension allowance. I have heard a few stories from constituents about how this measure interacts with their final salary scheme. While a figure of a little over £1 million would rightly strike most as more than sufficient as a tax-free pension pot, senior doctors in the NHS are finding it extremely difficult to assess whether or not their overtime will result in their yearly calculation of their lifetime allowance being tipped over the threshold and result in a current tax bill. The British Medical Association estimates that the number of GPs taking early retirement has tripled over the past decade and puts this down partly to the uncertainty about their tax bills.

It is worth noting that when the lifetime allowance was first introduced in 2006, it was set at £1.5 million, rising to £1.8 million in the financial year 2010-11. Since the Conservatives came to power, it has reduced every year to the current level of only just above £1 million. Like the freezing of the personal allowance, this has the impact of catching more ordinary people in the taxation net, and again we see that the Chancellor wants to raise money off the back of hard-working NHS frontline workers while protecting profitable corporations.

This issue has been a problem for doctors for the last few years, so the Government have no excuse for not knowing that the freezing of the pension lifetime allowance would make the situation worse. Have the Government carried out an impact assessment of the measure on NHS retention of senior staff? I am extremely concerned, at this time when our senior NHS staff are exhausted and facing a huge backlog of elective surgery, that skilled staff should not feel compelled to take early retirement because of an unintended and avoidable tax consequence.

The Finance Bill seeks to tax hard-working families and penalise those who have been working so hard to keep us all safe this year, and the Liberal Democrats cannot support these measures.

[Matt Rodda (Reading East) (Lab)]

I want to offer my support to the shadow Minister, my hon. Friend the Member for Ealing North (James Murray), who put his case very fairly. I want to illustrate what that means in my constituency of Reading East and perhaps develop some of the points he made.

I particularly want to raise the growth in the use of food banks, which has been very significant across the country, and our area is typical in so many ways, as indeed it is in many instances. The growth in the use of food banks illustrates why the Budget was such a complete failure, because the Government failed to offer real help to many families. In particular they offered very little to those in the greatest need, as we heard from the shadow Minister, and very little to those who are self-employed and have recently set up a small business. Indeed, the3million campaign group rightly pointed out that, although a small number will benefit from some measures offering further support for recently set-up small businesses, most will not, and that has been widely recognised in my constituency.

Before going into the detail of local food banks, I want to thank all the volunteers at our local council in Reading and many others, both businesses and individuals, who have helped support food banks by generously giving their time and putting the community and others first at what is a very difficult time for so many people. I have tried to keep in touch with the pressures by going to help myself and to receive regular briefings from food banks and other charities, and I want to describe to colleagues what this is like.