(1 day, 19 hours ago)
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Tristan Osborne (Chatham and Aylesford) (Lab)
It is a pleasure to serve under your chairmanship, Mr Twigg.
I thank my hon. Friend the Member for Ashford (Sojan Joseph) for securing this debate, and I am also grateful for all the other debates that we have had across Parliament on this issue. In addition, I thank the Environment, Food and Rural Affairs Committee for its detailed, scrupulous analysis and for undertaking to meet key stakeholders in the community—I have used some of that feedback for this speech.
In my view, South East Water is manifestly a corporate failure, which has been allowed to metastasise over the last 10 years. That has left customers paying the price for something that is ultimately a basic need in every single household. That failure stems from four key factors. South East Water failed to effectively monitor its management of the only product that it distributes; it failed to maintain its assets, from pipes to supply chains and ultimately the storage areas and the places where water was secured from; it failed to invest in its infrastructure; and it failed to respond to and communicate with not only MPs and council leaders but with other key stakeholders in the region, including the Kent Resilience Forum, leaving people exposed when incidents occurred.
Like others, I celebrate the resignations of key senior managers, but my focus now is on how we drive the company forward so that there is not a repeat of these incidents, which have gone on since before this Government—other incidents occurred from 2020 to 2023. More broadly, it must be said that incidents occur in other parts of the country, albeit on a smaller scale, so this represents a structural failure within the sector. I welcome the Cunliffe review and some of the reforms that we are making to water regulation, so that we can take some of these issues by the horns and deal with them. Fundamentally, though, my constituents want redress.
As my hon. Friend the Member for Ashford mentioned, we know from the statistics that 24,000 customers were impacted in December and that 22,000 were impacted in May. Although we did not have water shortages in my constituency, several key villages—Wouldham, Burham, Eccles and Larkfield—and the town of Snodland were placed in the “at risk” category. Although their water supply was not restricted, in effect they given a warning that it would be and had to prepare for that, and they are next to a key water supply station.
I was inundated by messages from concerned people over the Christmas period—“When is this going to happen?”, “What is going to occur?”—so I would say that the company first needs to fundamentally improve its communications, which I think have been lamentable. Nor do I think that it was particularly effective at communicating with Ministers on how it manages crisis situations, and the way it communicated with local council leaders, local community leaders, MPs and others was absolutely atrocious.
The senior management of the company has now changed, but what processes have been put in place to ensure an absolutely clear line of sight and experience in communication? Indeed, one of the outcomes from 2023 was that South East Water was supposed to improve communication, but it has clearly learned absolutely no lessons.
My second point is about the company’s failure to maintain its assets. I know that colleagues here today will talk about Pembury works, Bewl Water and parts of the supply chain, but water companies are supposed to present to Parliament five-year capital management plans and get support from their shareholders for where that will go in future, so there is a real question about whether shareholders were holding the company responsible. Also, why did the company’s own internal processes not even record some of these events?
It was quite telling that when David Hinton appeared before the Environment, Food and Rural Affairs Committee, he said, “Well, we couldn’t have foreseen some of these events.” Possibly not, but that was because the company was not monitoring the very things that it needed to monitor before those outcomes occurred. What is the company doing now, and what are the Government doing to press it to act on this?
Investment is also critical. With all the infrastructure expansion we are expecting in Kent—not only new homes but new businesses and industrial and commercial enterprises—there is clearly now demand for future water supply. Given the company’s questionable financial status in terms of worth, where are we heading on its financial sustainability? What are the Government doing to prepare for any financial outcome around financial market confidence in the organisation? Although this is not a Thames Water situation, in my view we are very close to something similar occurring.
Lastly, in my view—this was also the conclusion of the Committee—the company should be held to account according to the standards of public accountability. When water companies fail, how specifically do we intervene—as any businesses or consultancy coming into a business would—to direct some of that change? I worry that, without leadership, the company will drift and these incidents will repeat every six months or every year for the next three years. We need to know that there is light at the end of the tunnel, and my residents need to know that when they pay their water bill at the end of the month, they will get the service that they expect.
I will call the first Front-Bench spokesperson no later than 5.09 pm. I call Tom Tugendhat, who I am sure will be cognisant of that.