It is clear there is a considerable, ongoing lack of public trust in the water industry with some even calling for it to be nationalised. While I do appreciate the difference between water and, for example, energy providers in which it may be possible to switch provider to save money, under the current legislation, household customers are not able to change their water supplier or sewerage service provider. The water or sewerage company that supplies your property will depend on where you live and, as a result, is an area we have very little choice over.
There are currently 11 regional water and wastewater companies in England and Wales (i.e. companies providing sewerage services), and a further five water-only companies with domestic customers usually being served by their regional supplier. I understand there are also some specific geographical areas served by small, limited companies (new entrants). Some customers receive water and wastewater services from different companies.
I am not aware of any forthcoming plans to change this and indeed the Labour government has repeatedly said that it has no plans to renationalise the water sector with their current Environment Secretary saying, I have ruled out nationalisation is that it would not resolve the problems we face” and “would cost towards £100 billion of public money”. You can read more here:
Independent Water Commission - Hansard - UK Parliament
Historically, privatisation of the water sector has delivered around £200 billion of investment through private finance and this country would not have seen this level of investment if the water industry were in public ownership. This has delivered a range of benefits to customers and the environment, including world-class drinking water, excellently classed beaches and improved customer satisfaction, as well as two-thirds reduction in leakage.
Pre-privatisation, the water industry was starved of investment as it was forced to compete for funds directly with schools and hospitals, for instance. I am, therefore, of the belief that renationalisation would be a backward step that would cost the taxpayer and, given the challenge to public finances, reduce investment and stifle innovation. Since privatisation, supply interruptions to customers have decreased five-fold, leakage has been cut by a third, and pollution in our rivers has significantly decreased, with 80 per cent less phosphorous and 85 per cent less ammonia. In addition, our bathing waters continue to improve, with 93 per cent being classified as “good” or “excellent”, which is an increase from 76 per cent in 2010. This is not to say that all is rosy in this realm, however.
Regarding the Water Bill, a Private Members' Bill that has been introduced to the House of Commons by Clive Lewis MP, I understand that the Bill seeks to set targets and objectives relating to water, specifically in relation to the ownership of water companies and to climate mitigation and adaptation. It also seeks to require the Secretary of State to publish and implement a strategy for achieving the targets and objectives. It includes measures to establish a Commission on Water to advise the Secretary of State on that strategy and it also requires the Commission to set up a citizens' assembly on water ownership.
I have concerns about some measures, including the proposal to establish a citizens' assembly. While I appreciate that a citizens’ assembly or convention may have some advantages over conventional policy-making, I do not believe that it would be the right approach in this context. Previous experiences in Canada, for instance, included citizens in decision‑making processes but I understand that they failed to produce impactful or long-lasting results.
Furthermore, the Government has already announced the launch of an independent commission to review the water industry, although I am unconvinced that this is needed and whether this is just the Government pushing decision making into the long grass.
As you may know, the Water Bill is yet to be published so it is difficult to comment further without seeing the text of the Bill.
I would like to highlight action the last Government took regarding water companies. For example, the last Government banned water company bosses receiving bonuses if their company had committed a serious criminal breach. Furthermore, thanks to the last Government's efforts to increase overflow monitoring, 100 per cent of overflows are now monitored, up from 7 per cent in 2010 when Labour were last in power.
I understand that the Water Bill's Second Reading is scheduled for 28 March and I hope the Bill is published as soon as possible.
