Water Industry: Financial Resilience

Kerry McCarthy Excerpts

Wednesday 28th June 2023 Commons Chamber

[Rebecca Pow]

Ultimately, the customers pay for investment in the industry, but over a very long period, as the hon. Lady will know. If a company did not pay out dividends it would struggle to get access to finance to fund future investment. That would limit the level of investment and have an impact on future customers. Companies have to pay up front for a lot of that investment, because they need to secure a large amount of funding to pay for it. To avoid customer bills increasing drastically to pay for that, companies have to secure the money by raising debt or equity. She knows how it works. The regulator has to ensure that that system is fully functioning, the water companies are resilient and we have all the resilient water supply that we require.

[Kerry McCarthy (Bristol East) (Lab)]

It has been reported that the companies are drawing up their business plans for 2025 to 2030 and that, on average, they are looking at a 25% increase in bills. Given what we have heard today, would billpayers in my constituency not think that rather than paying extra to water companies, they may as well just flush their money down the drain for all the good it will do to improve water quality, services and investment in infrastructure?

[Rebecca Pow]

All those plans are being assessed right now. The draft plans go to Ofwat, where they are analysed with a fine-toothed comb. All the things I have mentioned today will be scrutinised, so that we can deliver the infrastructure that is needed and have the clean and plentiful water supplies we require as well as a clean and healthy environment, with no undue impact on customer bills. All those things have to be taken into account to deliver the water supplies that the people we meet and the people we serve deserve.