Our water supply matters. It mattered on local doorsteps when we were campaigning and it matters nationally as our infrastructure ages, increases in populations and housing add pressure to supply and waste treatment, our environmental awareness grows and bills increase. Water is on everyone’s agenda and rightly so.
“It was the Conservatives that introduced 100 per cent monitoring for storm overflows and set out a plan to transform our infrastructure to ensure safer, cleaner waters.”
When Labour left office in 2010, only 7 per cent of overflows were monitored.
Our determination to collect the data, set out more investment, stronger regulation and tougher enforcement to tackle every source of pollution and ensure a clean and plentiful water supply in England that has brought our water – from rivers to bathing waters, from wastewater treatment to the quality of our drinking water – to the foreground of public attention. I would also like to pay tribute to the many campaigners who have worked over the years to highlight the need for change in so many different areas.
Our Plan for Water, published in April 2023, committed to a twin track approach to improving water supply resilience, with action to reduce water company leaks and improve water efficiency, alongside investing in new supply infrastructure. To protect our water, we increased the monitoring of storm overflows in England to 100 percent – more than any other nation in the UK.
You can read more here: Plan for Water 2023
I do recognise the concerns raised about the principle of taxpayer support for private investors. However, since privatisation, total capital investment has outstripped dividends by 250 per cent and has delivered around £200 billion of investment through private finance. This has delivered a range of benefits to customers and the environment, including world-class drinking water. Leakage is down by one third since the mid-1990s, two thirds of beaches are now classified as excellent compared with less than one third 25 years ago and customer satisfaction levels are around 90%. Supply interruptions to customers have decreased five-fold and pollution in our rivers has significantly decreased with wildlife returning.
Ofwat, the independent regulator, protects the interests of consumers by controlling prices, making sure water companies carry out their statutory functions and are financially resilient, as well as holding them to account on overall performance and the delivery of essential services.
Independent evaluations have shown that water bills would be higher if water companies were still nationalised – according to Ofwat, they are around £120 less than they would have been without privatisation and independent regulation.
In 2024-25, water companies in England and Wales will invest more than £14.4 billion– the highest annual investment on record. This investment will help build 10 new reservoirs, increase the capacity of dozens of wastewater treatment works and see more than 2,000 km of pipes repaired and replaced. This country would not have seen this level of investment if the water industry were in public ownership as they would be competing for the same pot of government money alongside the NHS, the armed forces, the police, prisons and schools. I am of the belief that renationalisation would be a backward step that would cost the taxpayer, reduce investment, and stifle innovation.
The previous Conservative government was also very clear that water companies must not profit from environmental damage and, from March 2023, Ofwat had increased powers under the Environment Act 2021 to hold them to account for poor performance. In addition, Ofwat could take enforcement action against water companies that did not link dividend payments to performance for both customers and the environment. That includes updating water companies’ licences to better safeguard the interests of customers, and barring water companies from making pay-outs to shareholders and removing money or assets from the business if they lose their investment grade credit rating. We introduced legislation to introduce unlimited penalties on water companies which breach their environmental permits and expand the range of offences to which penalties can be applied - from breaches of storm overflow permits to the disposal of hazardous waste - giving the Environment Agency the tools it needs to hold water companies accountable.
Fines from water companies were being reinvested into the new Water Restoration Fund, which will deliver on-the-ground improvements to water quality and support local groups and community-led schemes which help protect our waterways.
Finally, in June 2023, under the previous administration, the Environment Agency launched the largest criminal investigation into unpermitted water company sewage discharges ever at over 2,200 treatment works. The Environment Agency funding is closely monitored to ensure it can carry out its duties and functions effectively with the agency’s RDEL (Resource) grant having been increased to £96 million in 2022/23 from £56 million in 2020/21. You can read more here: Environment Agency investigation into sewage treatment works
Our election manifesto promised to continue building on these measures by giving regulators additional powers to block the payment of bonuses to executives who pollute our waterways and bring criminal charges against persistent law breakers.
From the TV license to energy bills, Conservative Ministers didn’t hesitate to take steps to support families, individuals and businesses with rising costs. While the last Government had a proven track record of working to help keep bills down, one of the first actions of this new Labour government was to sign off on one of the biggest increases in water bills. Average bill increases for customers is anticipated to be £94 over the next five years. However, customers supplied by Southern Water, which is 91% of my East Grinstead and Uckfield constituency (the other 9% under Thames Water), can expect a significant £183 rise.
What we need to be focused on is ensuring these companies deliver for customers and for the environment, and that is what this new Labour Government should be prioritising. It is worth pointing out that, under Labour in Wales, there were 50 per cent more spills on average from each storm overflow than in England. The average number of spills per overflow was 33 in England – but 54.9 in Wales, which saw 115,525 discharges in total and untreated sewage discharged for a total of 1,002,324 hours through storm overflows (DEFRA, Press Release, 27 March 2024,link; The Rivers Trust, 4 April 2024,link)
I hope that the new Labour Government will utilise the strong regulatory environment they inherited to push water companies to ensure they invest and continue to deliver on the public’s priorities. As to how they will improve water resilience and ensure a plentiful supply of water, much remains unclear. I hope Ministers will clarify their plans soon and I will follow any developments very closely.
You may also be interested in these statements: Water Pollution: Agriculture September 24 and Thames Water September 24
