Water Industry

Part of the debate – in the House of Commons at 4:24 pm on 5 November 2013.

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Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras 4:24, 5 November 2013

In 1995, 826 million gallons of water per day were leaking out of the water companies’ pipes. According to my calculations, that is 3,755 million litres per day. The companies now proudly proclaim that they are dealing with the leaks. They have got the figure down to the apparently minuscule 2,910 million litres per day. Once they had to admit they were getting it wrong, we could see that it was a farcical record. Frankly, they simply deserve—I do not know; perhaps total abuse is the word—for their failure, and so does the system that regulates them, and the Ministers and civil servants who are also involved.

During the recent period water companies have increased charges; under the Labour Government charges went down at first then gradually crept up again. One thing that has not gone down, of course, is the huge dividends that the water companies have been paying. Since privatisation, they have paid out £37 billion in dividends. As Charlie Elphicke pointed out, that is 21% of gross value added compared with comparable parts of the private non-financial sector, which come in at about 11% of gross value added.

Look at the figures for individual water companies: Severn Trent Water has paid £6.2 billion in dividends; Thames Water has paid out £6.3 billion; United Utilities in the north-west paid out £7.3 billion; and Anglian Water has paid out £6 billion. Then there is tax avoidance and, as the hon. Member for Dover pointed out, a large amount of that is the product of manipulation of the companies’ borrowing, to the infinite benefit of their foreign owners in particular, more so than to their British owners.

Then there is the bosses’ pay. Some of them are being paid more than £1 million a year for collecting rainwater and sending it down a pipe. I understand the Health Secretary suggested that some managers in the national health service might be overpaid. It may be the case that some are, but let us consider Leeds Teaching Hospitals NHS Trust, for example—two teaching hospitals, 12,000 staff and 1,200 doctors to manage. I do not think anybody in the world would think that the person responsible for managing that, who gets about £250,000 a year, does not have a rather more complex task than someone who collects rainwater and sends it down a pipe. We must get some sense of proportion.