Water Industry (Financial Assistance) Bill

I do not necessarily regard the proposals as a scandal, as the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) seemed to suggest when moving his amendment, but I share many of his general concerns about the financial engineering. I say that as the very proud Member for the Cities of London and Westminster. I do my bit to stand up for the banking fraternity and for large corporates, many of which are based in my constituency. Deep concerns have been raised by the amendments, however. The amendments will not be put to the vote; they are testing amendments that will enable us to have a useful debate on this matter. I would not wish this debate to be seen as hostile to Thames Water. I have had fairly positive dealings with it over the significant amount of work that is being done in my constituency, in the City of London and in the City of Westminster. It is carrying out a huge amount of work there, and there is no doubt that it has been very disruptive, but I hope that central London will have a far better water system in the years to come as a result. Deep concerns have been raised about how necessary it is to spend as much as £4.1 billion. It is quite respectable for the right hon. Gentleman to raise his concerns, although I suspect that he might have been less concerned if the huge amount of building work had been due to take place on the other side of the river, perhaps in Wapping rather than Rotherhithe. We all know that there has been a lot of disruptive work. I have seen it happening in my constituency with Crossrail. I have always been a firm supporter of Crossrail, although I have often said that there were no votes in taking that position. Indeed, votes have been lost through so doing. We are proposing to spend a huge amount of money on the Thames tunnel, and I am not convinced that that is entirely justified. I do not disagree with what has been said by the hon. Members for Hammersmith (Mr Slaughter) and for Islington North (Jeremy Corbyn). Significant work clearly needs to be done to improve the quality of the water in the Thames, although, compared with early Victorian times, it is now wonderfully clean. That is no cause for complacency, however. The financial structuring of the Thames tunnel project seems almost to provide an incentive for Thames Water to adopt a bells-and-whistles approach. As I mentioned earlier, the total bill has gone up from the £1.6 billion that was being touted four or five years ago to the present figure of £4.1 billion. The impact on bill payers will be enormous, particularly in these times of austerity, which will be with us for some years to come. I suspect that the measures will go through, but Thames Water customers will be up in arms only when they are faced with an additional £80 a year on their bills, much of which will be justified on environmental and other grounds. By that time, it will be too late, as the permission for the project will already have been given. I hope that the Minister will look seriously at this, and make his own representations to Thames Water. This brings to mind an important point made by the right hon. Member for Bermondsey and Old Southwark about the more general problem of financial assistance for a range of deals that are already in train, particularly in relation to private finance initiatives in schools, hospitals and roads that have already been built but which have not been fully paid for. The financial engineering that could be put in place could be detrimental to the Treasury, and to taxpayers and ratepayers, for a considerable time to come. This has been a worthwhile debate, in that it has allowed us to discuss those matters. No one disputes the fact that we need to do something about the Thames Water area and the Thames tunnel, but there is a notion that that should be driven by Thames Water alone. As I have said, Thames Water has no disincentive to raise the cost, knowing that it will be reflected in higher bills in perpetuity. We had a good history lesson from the hon. Member for Hammersmith earlier, and we clearly need to do some work to ensure that the arrangements are fit for the 21st century, rather than being set in aspic in the 19th, but I am concerned about the financial arrangements. This relates to my more general concern about the controversy that will inevitably surround many City-related financial deals in the future. It will do great discredit to the large amount of financing that goes on if there is a sense that the wool is being pulled over the eyes of taxpayers and residents in this kind of scheme. That will undermine the credibility of the important infrastructure work that needs to be done in the interests of us all as users of Thames Water's products.