It is a pleasure to follow my hon. Friend the Member for Newbury (Richard Benyon), who spoke with passion and real understanding about what is a complex issue. The water industry was privatised nearly a quarter of a century ago now, and it is reaching a crossroads. While I agree with my hon. Friend about the levels of investment that privatisation has delivered—which is well in excess of £100 billion in the last 25 years—we are reaching a stage where we now need to look for different solutions. My hon. Friend touched on a number of them in his remarks, and I was very impressed by his description of City analysts and their attitude to the regulated sector, and the challenge of gearing. As he said, the high level of gearing is causing inflexibility. That is leading to unimaginative solutions to the problems that beset companies such as Thames Water, which serves not only the London area, but the area I have the honour of representing: Swindon.
My hon. Friend mentioned abstraction from the Kennet, and I should commend the Save Water Swindon campaign, which is all about encouraging householders to be sensible in the use of water. It has had a marked impact and continues to this day. Indeed, only a couple of weeks ago I was helping Thames Water promote that campaign.
All that is detail, however, but today’s debate presents us with an opportunity to look more broadly at the challenge facing the industry. I am grateful to the Backbench Business Committee for accepting the application made in my name and that of my hon. Friends the Members for Dover (Charlie Elphicke) and for Skipton and Ripon (Julian Smith). There is quite a geographical spread between our constituencies, which shows that this is an issue for the whole country, not just the area I represent.
Although cost-of-living issues are very much the stuff of current political debate, the issues raised today long predate the current political spat. This debate has to be about value for money for local consumers and businesses and finding better ways for our water industry to operate.
Despite the interesting contribution of the right hon. Member for Holborn and St Pancras (Frank Dobson), who is no longer in his place, there is no doubt that 25 years ago privatisation was the right course of action. There was no alternative for the industry if we were to seek and secure new forms of capital investment. The achievements of Bazalgette and the Victorians lasted us for a long time, but we have by now reached a stage where renewal and reinvestment are essential.
Now, after nearly a decade of continued price rises, householders are rightly asking themselves, “Why us?” In the context of the current monopoly, who can they turn to? The situation is worse than the Henry Ford scenario of “You can have any colour you like, as long as it’s black,” because there is nowhere else for consumers to go.
I understand why the regional model was adapted from the previous nationalised structure. In many ways that made sense in terms of bringing together infrastructure with water supply, and I can think of the example of Severn Trent with its assets over the border in Wales, but I ask this question: is the regionalised model sustainable for the long term? Is there not a better way of dealing with the industry?