Contribution
It is a pleasure to serve under your chairship, Sir Jeremy. I congratulate the hon. Member for West Dorset (Edward Morello) on securing this important debate.
My constituents in Shipley, with the lovely River Wharfe and River Aire flowing through, have been outraged at the levels of water pollution in them. They face high bills, while leaking infrastructure causes damage to roads and homes. Companies such as Yorkshire Water have been failing us for years now. We suffered last year from a failure to invest in new reservoirs, with an almost year-long drought starting in the spring.
I very much welcome the fact that this Labour Government have come in with a determination to tackle those issues. I was pleased to vote for and support the Water (Special Measures) Act 2025, which made sure we took immediate action to clamp down on the obscene bosses’ bonuses, including those that the chief exec of Yorkshire Water was receiving. Very sadly, the Kelda holdings company, which owns Yorkshire Water, also paid her a sort of behind-the-scenes £1.3 million extra payment, which I and others have been urging her to donate or give back. I hope that in future the companies meet the spirit of the legislation.
I welcome the work of Sir Jon Cunliffe in bringing forward the Independent Water Commission. I put in a submission to the review, setting out some actions that I felt were necessary for fundamental reform of the water industry, so that it works better in the interests of customers and the public by clamping down on the illegal discharges of sewage, which are all too frequent. I am pleased to see that the Government have addressed quite a number of those issues in the water White Paper. I put on record my thanks to the People’s Water Commission, a group of campaigners, researchers and experts who came together to engage the public on their views about water. I particularly thank Becky Malby, a local resident who is involved in the Ilkley Clean River Group.
I sit on the Public Accounts Committee; I do not know whether that is part of my entry on the Register of Members’ Financial Interests. The Committee has recently undertaken two reports, the first on water regulation and the second, not yet published, on environmental regulation. I will briefly quote findings from the first report:
“Ofwat has failed to prevent companies taking excessive dividends, increasing levels of debt and setting up complex company structures, all of which have reduced their financial resilience. The sector’s risk profile has risen and customers must now pay investors higher returns as a result.”
To illustrate the point, my own Yorkshire Water bill shows that 23% is just to finance debt, while 17% is spent on infrastructure investment. How can that be? Unfortunately, there is no end in sight for the bill payers being made to pay that debt. I urge the Minister to say how she will change the gearing of those companies that are so indebted. Despite the figures of £104 billion in investment and, for Yorkshire Water, £8.3 billion, it does not seem as if the shareholders are actually putting their hands in their pocket. It is the customers who will have to pay for the infrastructure upgrade and for the past failure of companies to invest.
I would like to draw attention to a couple of other points on which I would welcome the Minister’s reassurance. I warmly welcome the creation of a new regulator, as the Public Accounts Committee has recommended. How will we ensure that it has the right skills and resources? The previous Government cut funding to the Environment Agency, which meant that it failed to do its job of prosecuting some incidents; I am pleased that under this Government we now have many cases in hand. The regulator needs skills to take action on the finances, given the complex structures.
How will we ensure that customers’ money is going where they want? How will the regulator take action on pollution and work with the Environment Agency on how farmers, who face many regulations, can play their part in cleaning up our rivers and seas? I urge the Minister to take all the actions in the water White Paper to make sure that companies such as Yorkshire Water are properly held to account in future.