My Lords, I declare a historic connection with the water industry in the sense that I was the chairman of a water-only company more than 10 years ago, but it means I know a bit about the water industry and perhaps that is helpful after the last Intervention, because the truth of the matter is that this is not just a problem of the water companies.

First, it is the problem of those people who controlled the water companies. The way in which it was operated was a great mistake. There were two regulators and the Environment Agency was almost always overturned by Ofwat. Ofwat was leaned on by successive Governments to keep down the price of water. So I start by saying that we must have a system in which we are paying for the big changes that we know about—and, because I have been around for such a long time, I remember why privatisation took place. It was not anything to do with Mrs Thatcher wanting to privatise. It was because, when it had been public ownership, both municipal and national, there had never been investment. It is all right for the noble Baroness to say that that is what we want; if you look at the history, it is about the worst history of public investment that we ever had. We had Surfers Against Sewage and the filthiest water: the worst water in northern Europe. When we signed up to the water directive, as we did when were sensibly in the European Union, it was quite clear that we did not meet the standards. The Daily Telegraph used to say, “Oh well, of course our water is better than anywhere else because they drink bottled water in France”. The truth was that our water did not meet the standards of the whole of Europe.

The privatisation took place to get private money into the water industry, to make the changes that were necessary—and, for a bit, it worked. I was the Minister responsible after that had been done and it was murder to try to deal with it. As these companies brought new technology and the rest into it, they had to charge more and therefore we had all the arguments about keeping the water price down. Unfortunately, we have to recognise that water is not cheap and it is going to be more and more expensive. For example, Essex & Suffolk Water—which is about 200 to 300 yards outside Anglia, where I am affected, so I do not have a direct connection—has announced that it cannot provide new water for any new or extended industry until 2036. That is the effect of climate change and of not having the water we need.

We have to be frank about our problem: we are going to have to spend a lot more money on water, make it much more efficient, use new technology and do that through the privatised system that we have. There is no point in arguing about it; it is not going to be nationalised. The Government have made that quite clear and nobody else is going to nationalise it. So let us see how we can make this work. That is why I have come to be semi-supportive of this Amendment: the reality is that we have not been able properly to regulate water and we need to do so. Directors of companies in these areas need to be personally responsible when, for a period, they have clearly not done the job which they are supposed to do.

The noble Baroness wanted us not to have three years. Frankly, you have got to have a period in which you can see whether this a persistent problem or a one-off. We are going to have lots of one-off problems. I know it bores the Committee for me constantly to talk about climate change, but the point about climate change is that it is really climate disruption. It means that we have very significant changes in weather which we cannot predict in advance and therefore we can have real problems, with so much water that we cannot deal with it or not enough water so we cannot provide for people. That does not mean to say that the people of Tunbridge Wells do not have a very considerable complaint about the fact that, yet again, they have not been able to have the water that they ought to have.

What I want to say to the Government, therefore, is very simple. Because we know that people will have to pay more for their water, we have to be very careful to make sure that those who are providing it and those who have to deal with these problems are behaving properly. The reason I am attracted to tougher measures —although I would not support exactly the wording of this amendment—is really that we have to carry the public with us. There is no point in pretending that we are not all going to have to pay more for water. It is not because we have got to build reservoirs if we are going to have enough water for people to be able to drink. We are going to have to do much more about moving water from the north of England down to the south because, at the moment, it goes off on the way, and by the time it gets to Southern Water or to any of the other water companies in the south, they have real difficulty, and one understands that.

Therefore, because we are going to have to spend so much more money—and the only people who pay for that are the people who actually use the water—I think there are two things we have to do. One is not in this amendment. I do think we have to look at the way that we deal with the payment for water. It has always seemed to me that we should have a basic payment and then a very sharp, rising payment for those who use a great deal of water. I want to protect the family that is using water, but I do not see why they should be penalised by people who are using a great deal more water for swimming pools and the like. I want to see a rather different way of looking at it. I say that only to qualify what I am about to say about this amendment.

What this amendment seeks to do is to ask the Government seriously to consider how they can assure the public that, in paying the extra money they are going to have to pay for water, the companies concerned are using the best private enterprise mechanisms, they are using the best modern technology and they really are on the route to solving the problems which we have faced.

There is one coda. We have to be a bit careful about blaming the water companies for everything. A great deal of the pollution that we have is because of industrial farming, and we have to recognise that there is a real issue. For example, in the Wye Valley, where I have family, very large concentrations of chicken farms really do damage the water quality. There is nothing the water company can do with that, because this is runoff from the farms. In saying this, I do not want to look as if I am merely blaming the water companies. I am merely saying they do have a very major part to play and I would like the Government to make sure that the public feel that they are playing that part properly.