Water (Special Measures) Bill [Lords]

Debate between Steve Reed and Calum Miller

2nd reading
Monday 16th December 2024 Commons Chamber

[Steve Reed]

The Conservatives had 14 years to fix the system and they chose to do absolutely nothing. They have left it to the incoming Labour Government to clear up the mess they left behind.

The truth is that the water sector needs a complete reset. It needs reform that puts customers and the environment first for once, and a new partnership with the Government to invest for the future and upgrade our water infrastructure.

[Calum Miller (Bicester and Woodstock) (LD)]

My constituents do not understand why they may be facing a 50% price increase from Thames Water, partly to service a £3 billion loan. The Secretary of State talks about resetting the water industry. Will he consider taking Thames Water into a special administrative regime, so it can be properly reset and the inappropriate debt built up under the previous Government written off to the benefit of taxpayers and consumers?

[Steve Reed]

There is a process by which any company would go into administration. That situation has not yet arisen with any company. The Government are, of course, closely monitoring the situation with Thames Water, but as things stand the company remains viable and I reassure consumers in that area that there is no threat, and would be no threat, to water supply in any circumstance.

The Government have a three-stage plan to deliver change and bring in the biggest ever investment in our water sector. That started with the initial reforms I announced in the week following the general election. It continues with the Bill before the House today. It will be completed with the water commission, led by Sir Jon Cunliffe, and further legislation that will follow on from that.

In my first week as Environment Secretary, I met water company chief executives and announced a set of immediate reforms to start the process of change. Money earmarked for investment to upgrade water infrastructure will now be ringfenced, so it cannot be diverted for other purposes, including paying bonuses or dividends. If it is not spent on what it was intended for, it will be refunded back to customers as discounts on their bills. Water companies agreed to formally change their company objectives to place customers and the environment at the heart of everything they do. They will set up powerful new customer panels to scrutinise key decisions. Customers who face frequent water outages—like the constituents my hon. Friend the Member for Hastings and Rye (Helena Dollimore) talked about—or contaminated tap water, as residents and businesses experienced in Brixham in Devon, will now receive more generous compensation and they will get it faster.

We promised in our manifesto to put water companies under special measures to clean up our water. The core provisions of the Bill do precisely that by strengthening the powers of the regulators and holding water companies to account for poor performance.