09:30 Gareth Thomas (Labour)

In October last year, the Select Committee on Environment, Food and Rural Affairs suggested that an independent review to determine whether the water industry was fit for purpose was required. The Chartered Institution of Water and Environmental Management went further, suggesting that such a review needed to examine the ownership of water companies. The Select Committee also raised concerns about the powers available to Ministers and Ofwat to improve governance and prevent pollution. With climate change approaching and a creaking infrastructure, the Committee argued that the need for change was urgent.

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09:48 Richard Benyon (Newbury) (Con)

We should encourage companies to look at employee share ownership schemes. That whole concept of finding ways to democratise capital is a huge, rich seam that we could collectively work on. Water companies are good places to encourage not just employees, but customers, to develop a higher interest in the ownership of that company, which is a better way to get more people involved without damaging any investment potential. I worry about Labour’s proposals for nationalisation right across the sector. It recently published its plans in a publication called “Clear Water”, but stopped short of explaining how the big challenges faced by the water industry, such as climate change and an increasing population, would be addressed by its substantial re-organisation of structures and ownerships. That publication makes no attempt to acknowledge the many improvements made since privatisation in 1989, let alone the further benefits such as falling bills, improved services and increased investment that companies have set out for the future.

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10:14 Darren Jones (Labour)

Many Members will know that British industry is lagging behind in the digitisation of our businesses, which is a priority if we are to unlock the productivity challenge in the British economy and help meet our climate change objectives. At Bristol Water, sensors have been installed across the entire network and big data analytics have been deployed. Those are new words for many sections of the water industry. In Bristol, we get our water from lakes and reservoirs around the Mendip hills and from the River Severn via the Gloucester and Sharpness canal. Water from the River Severn needs to be pumped into Bristol, which requires large amounts of energy. Water from the Mendips requires less energy due to gravity. Bringing together data on real-time energy prices with real-time water consumption requirements has allowed Bristol Water to build algorithms that decide when to pump water from where to where and at what time, helping to reduce over-pumping and generating significant savings on its electricity bill.

Reduced energy consumption and better management of leaks, alongside helping customers to reduce their water consumption, all make extremely valuable contributions to our climate change objectives. As a member of the Science and Technology Committee, I have been troubled to hear from Lord Deben, the chairman of the Climate Change Committee, about how far we are falling behind as a country in meeting our climate change objectives.

The Government must take the easy wins to ensure we get back on track to decarbonising our economy. Bristol Water’s approach seems to be an important and useful way to do that. I was therefore thrilled to hear about the work being undertaken in my constituency. I encourage the Government, Ofwat and other water companies to look at how we have digitised the network to improve efficiency and to contribute to decarbonising the economy in Bristol. I hope the Minister will tell the House how she is helping regulators and water companies to move in that important direction.

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10:27 Deidre Brock (Edinburgh North and Leith) (SNP)

Scottish Water has reduced energy consumption and increased renewable power generation. It has cut carbon emissions by more than 30% since it first reported in 2006-07. Driven by the Scottish Government’s ambitious renewable heat and carbon reduction targets, the amount of renewable energy the company generates is now more than double its electricity consumption. Ageing facilities are being replaced through major investment in projects such as Glencorse water treatment works outside Edinburgh. That energy-efficient plant was delivered on schedule and under budget, and now supplies cleaner, safer water to around half a million people in the capital, while having sustainability at the core of its operations. A hydro-turbine provides almost half the facility’s own energy needs, helping to keep water charges low for customers.

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10:35 Luke Pollard (Labour)

This debate has long been due. As someone who has worked for a water company, I believe we do not talk enough about water policy in this place; we need to talk more about it if we are to meet our Paris climate change commitments to create a fundamentally sustainable water industry, in terms of water usage, the chemicals used in it, and the contribution to the natural world.

Clearly, some serious and genuine concerns are being raised by members of the public and Opposition Members about the way that our privatised water system is run. The privatisation of water has not worked to deliver the benefits that it should in 2019. Too much money is being paid out in dividends and not enough investment is being made in fixing leaks and reducing water usage. Not enough is being spent on climate change mitigation or fundamentally fixing the broken system. We need better water resilience and better value for money for our customers.

The water companies are only part of that. My hon. Friend the Member for Keighley (John Grogan) was right when he talked about the need to look at regulation as well. I am certain that he and the right hon. Member for Newbury (Richard Benyon) will read carefully the water policies that I hope to publish, as Labour’s shadow water Minister, in the next couple of months. They will describe how we should deal with the fact that we need a better, reformed system, and additional policy levers to address climate change.

I have to say that we have seen moves in the right direction under this Government, but they frequently come from DEFRA press office announcements rather than from policies being fully implemented. I do not think that Ministers are cranking the handle sufficiently to achieve the change that could be delivered to our water industry if we showed greater concern about pricing and about investment in climate change, flood and drought mitigation. We know that more can be done, because in the latest round of price reviews and business plans, companies have published proposals that hint at a slow move in the right direction. One such proposal, which I am sure my hon. Friend the Member for Harrow West will have seen, is in the south-west: South West Water has proposed an element of mutual shareholding as part of its wider ownership base. If it can be done in the west country, it can be done elsewhere, so that could be encouraged as part of the wider debate.

Labour is suggesting that our new water system needs to consider sustainability and the public interest, not just private profit. The shadow DEFRA team is exploring what other water policies should accompany our proposal, so that we can tackle climate change, flooding, water scarcity, water usage, water pollution from plastics and microplastics, lead pipes—an issue of particular interest in some parts of England—and water affordability. When the next election comes—many suspect that that will be very soon—our manifesto will offer a full suite of policies not only on public ownership, but on a better system.

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