New Clause 1 — Legislative competence for water in Wales

Part of Water Bill – in the House of Commons at 5:15 pm on 6 January 2014.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington 5:15, 6 January 2014

I am pleased to follow Miss McIntosh. I see in the national press that she has had a little local difficulty. I hope that she can resolve the matter, because she would be a loss to the House if she were not returned at the next election—unless of course she were replaced by a Labour member.

I want to speak to new clause 14, which is in my name. It suggests to the House that before we move forward with further legislation, we stand back and look objectively at the performance of the water supply industry since 1989 when it was privatised. I am not part of this common agreement among some parties in the House that privatisation and competition have been a success and are the way forward. In fact, I deeply regret what has happened since privatisation.

I have set out the suggestion that before we go further, the Government should produce a report that examines some of the key issues affecting the water supply industry and the consumer. I am talking here about the cost of water to the consumer, the number of disconnections that took place during privatisation—although that is no longer allowed under the Ofwat regulations—the purity of water supplies, the leakages, the levels of investment, the profits and the dividends paid to shareholders, management remuneration, the levels of taxation, particularly taxation avoidance, by the water companies and also their adherence to employment, human rights and environmental practices across the world. I say that because the water industry is second only to the energy industry in ripping off the British public. Since privatisation, the water companies have stolen from the average consumer of water in this country. The Government need to expose that in a comprehensive assessment, which this House can debate, before we consider the future structure of the water industry.

Let me go through some statistics showing what has happened since privatisation. Since 1989, real water bills have risen 50%. Since 2005, there has been a 35% nominal increase and a 7% real increase in bills. Since 2010, bills have gone up by more than 12.5%. At the same time, individual family incomes have gone down by 5%. It is interesting to see where the money has gone. Most of it has gone into paying interest charges on water company debts or dividends to their owners and shareholders. Interestingly, most of those owners and shareholders are now overseas.

The performance of the companies has not really matched the rise in payments. I looked at, for example, the issue of leakages. A great deal has been said about the investment in the infrastructure of the water industry since privatisation. I represent a constituency that is served by Thames Water, which continues to lose up to a third of its water in leakages every year. Simon Hughes wrote an article in the Evening Standard, which excoriated Thames Water for its failure to invest in tackling that particular problem. Not only do the companies fail to tackle the leakages, but they are some of the worst polluters of our rivers. I asked the House of Commons Library to provide some recent information on the companies. South West Water was fined £50,000 plus costs for sewage discharge into Salcombe bay in November 2013. It was fined a further £50,000 for sewage discharge into the Tamar estuary. Thames Water lost a final appeal against pollution fines in 2011, and the estimated final cost of those fines was £400,000.