Ofwat: Strategic Priorities

Part of the debate – in the House of Commons at 3:23 pm on 9th June 2022.

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Photo of Luke Pollard Luke Pollard Shadow Minister (Defence) 3:23 pm, 9th June 2022

It is a pleasure to follow so many people who are passionate when it comes to talking about water. As someone who worked for South West Water a very long time ago, I say that we need more people who are passionate about water, but we need more people who are passionate not just about sewage but the other aspects of water today. Many of those present have heard me rant about sewage for quite some time from both the Front Bench and Back Benches, and I will come on to that, but first, as we correctly focus on sewage, I want to talk about some of the other issues in the Ofwat strategic policy statement that I do not want this debate to neglect.

Water matters: every drop matters, but every drop is carbon-intensive, and we must not forget that every drop we use—every drop we waste—has been pumped and purified and treated at enormous cost, not just financial but also environmental. Water companies are tightly regulated, and what goes in their business plans is what they will be doing in the next price review period. It is therefore important that the SPS guidance is not only strict, clear and ambitious but accountable so that we can see where progress has been made and put pressure on Ofwat and the water companies to up their game if they are missing those targets.

The SPS that the Minister has released has many of the right words. I have a lot of time for the Minister not only because she is a fellow south-west MP—that automatically gets her some bonus points in my mind—but because she has fought hard on it. I must say that good progress has been made. I just want to ensure that the words in the SPS have teeth and that Ofwat has the powers to ensure that they are not just good words in a document and that we will see the transformative change that we need.

I want to talk about four areas. First, there is the absence of a strategy in the SPS to decarbonise our water industry. I would like us to have a clearer sense of what that looks like. Secondly, we need to strengthen the nature restoration part of the proposals in the SPS. I have seen in previous price review negotiations how many innovative nature-based solutions—the upstream thinking—have been squeezed out in those negotiations, especially for those companies who did not get their price review approved the first time round. We need to ensure that nature-based schemes are protected, encouraged and grown rather than squeezed out.

Thirdly, I agree with the Chair of the Select Committee, Philip Dunne, that we need a new approach to water sector regulation. I have some proposals to pitch to the Minister. Finally, I will echo concerns from across the House on sewage. It is simply unacceptable in 2022 that water companies routinely discharge tonnes and tonnes of sewage into our water courses, our rivers and our seas. It is not just about human effluent; we must equally be concerned about plastic pollution and the chemicals contained in that.

As a south-west MP, and I think the only MP in the Chamber whose water company is South West Water, I have a specific question for the Minister. We are in a cost of living crisis, but South West Water has had the highest water bills in the country since privatisation because that part of the water industry was privatised with 3% of the population and 30% of England’s coastline. That meant that 3% of the population were paying for the coastal clean-up of nearly a third of our country. The dowry given to South West Water did not pay for it, so south-west bill payers have been paying through the nose for a long time to have a cleaner environment—which we do value. The high water bills in the west country have been recognised by the Government, and that is why they provide a £50 contribution to bills in two £25 payments. However, I understand from proposals published at the last general election that the £50 payment will end during this Parliament. Will the Minister confirm whether that is still the plan? As we face a huge cost of living crisis, can we focus not only on energy bills—gas and electricity—important as they may be, but recognise how high water bills, especially in a region that has the highest water bills in the country and some of the lowest wages, are a significant accelerator of that?