Their first review cut water bills, even in the south-west, and then, admittedly, as my hon. Friend the Member for Wallasey (Ms Eagle) explained, there was a constant battle and a need to bring something forward. I fully accept that it was a slow process. I personally went to see the Chancellor of the Exchequer to make exactly that point—to say that we needed, frankly, to get our fingers out and do something about
bill payers in the south-west. I do not think that anybody argued that as vehemently as me and Linda Gilroy, my colleague in Plymouth, Sutton at the time. Even the hon. Lady, in all fairness, will be aware of the work that went on.
In the south-west we have a high percentage of people, including pensioners and families, with high and essential water needs. In fact, there are more than in any other English area, and some of them are being supported through the WaterSure scheme.
South West Water bill payers are the victims of a botched privatisation process. We have too large an area, with a massive need for capital investment, including cleaning up our shoreline, and very few bill payers to meet those costs. It is a dreadful situation, and one that was not thought through but driven through purely for ideological reasons. This Bill develops the market in water further, with a new retail market. The proposed changes are interesting, but they are not embraced entirely by the water companies, which are asking questions about the need for a provision to allow for retail exits, about why the system is voluntary, and about whether there will be a level playing field for all retailers.
South West Water has expressed concerns about the Government’s ill-considered and risky-to-implement proposals on the relaxation of the selling of licences without reforming abstraction methods, and says that it can foresee problems for rivers. During this debate, people have been tweeting me about the importance of the chalk streams. Indeed, several hon. Members on both sides of the House have touched on that point. The Secretary of State talked about new sources of water. However, if my local water company is saying that it has concerns, I have to be concerned. Equally, if the general public and Members of this House have concerns, the Minister must respond to them when he winds up.
Water companies across the UK, many of them based overseas, are making significant and increasing profits, with soaring dividends for shareholders. I am sure that they would say that the picture of their accounts is much more complicated than that which appears in the headlines, and that, in some cases, they hold significant debts, but that just means we need greater transparency so that we can fully understand where the pressures exist. The new chair of Ofwat has suggested that some of the financial arrangements that these companies pursue are complex, or perhaps they could be otherwise described as hidden, and that they are running a debt in order to minimise tax payments in the UK, but—surprise, surprise—they are still managing to pay out huge dividends. As we have heard, they have announced £1.9 billion in pre-tax profits and given £1.8 billion back to the shareholders. This is a system for the few, not the many. People in Plymouth have been paying through the nose for a basic commodity while shareholders seem to be benefiting. No one denies that shareholders are people who have backed a company for a decent return, but we need to understand that it is a decent return and not an excessive one.
Water is a commodity that needs to be valued because it will potentially become even more scarce as climate change kicks in further. If we do not prepare well for the decades and century ahead, we could be left with water in short supply or prices rising further for the taxpayer. At a time of soaring utility bills, high inflation
and stagnant wages, water customers really do need to feel that they are getting a fair deal from their supplier. South West Water has invested in new technology in Plymouth—I recently saw it for myself at its treatment works in my constituency—and there are, at last, some improvements to the local sewage works, but it needs to offset that capital expenditure and the benefits to customers against its profit and dividend levels.
The Bill does not put in place measures that achieve transparency or affordability. The notion of a national scheme to assist with affordability, which has been discussed over very many years, and in depth by the Walker review, needs to be implemented. This Bill could have been the vehicle to do that—another wasted opportunity. Some companies are doing some of the work on a voluntary basis, including, in all fairness, South West Water, but it makes much more sense to bring them all together into some sort of national scheme—to get them all signed up and have a level playing field where good companies feel that everybody else is pulling their weight.
My hon. Friend the Member for Wallasey and the hon. Member for Thirsk and Malton raised a very important point about access to data, particularly in relation to the Department for Work and Pensions. I urge the Minister to do all he can to press the DWP to sort itself out on this one; it is almost a no-brainer.
My constituents find it impossible to understand why the regulator seems to have no teeth and simply rubber-stamps increases in bills. I am sure that the Minister will say that is not the case, but that is how it is viewed by my constituents. We know that the regulator has to perform a complex balancing act, with requests for increases from companies because they need to develop major schemes such as new ring sewers, new reservoirs, and so on, but my constituents are not convinced that anybody is listening to them. No one would argue against the vital work on infrastructure, protection against flooding and drought plans, which the Bill champions, but what is missing is the fairness agenda. The Government fail to understand that if my constituents feel they are being unfairly penalised while shareholders, perhaps overseas, are benefiting, this legislation will have failed and this Government will have failed them.
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