Water Supply Disruption — House of Lords, 2018-03-06
Topic: Environment
John Eric Gardiner (Conservative, Centre-right): My Lords, I entirely agree with the noble Baronesses about the courage and fortitude of the emergency services, often in very difficult circumstances, and I begin by thanking them. I was on the conference call with the chief executives of the water companies, Ofwat and Water UK, and from the update that I have received during the course of the day it is very clear that the priority is to restore the water supply, particularly for vulnerable people and for hospitals and other institutions in the care sector. I think we are all in agreement—which may be an inconvenience—that the water companies clearly need to do better. Some are better than others. It is very important that Ofwat conducts a review and looks at the issues of preparedness and lack of preparedness. We are expecting an interim report on that by the end of the month so that we are clear about this. I emphasise "interim"—obviously we want a thorough report but we want early consideration of those matters. There have undoubtedly been some failings, and I think some of the water companies have acknowledged that as well The noble Baroness, Lady Jones of Whitchurch, in particular asked for some reassurances. I have outlined the numbers of households that were without supply this morning and the intelligence that we got from the water companies at the 10.30 am meeting as to their plans for restoration of supply during the day. I will obviously get constant reports on that, as will my honourable friend I think there has been general reflection on this—indeed, my right honourable friend reflected on it in his speech last week at the Water UK City Conference. He called on the boards of water companies to address urgently pay, terms and conditions and so forth, to demonstrate value for money, to up their game and to lower bills. Ofwat will report to the Secretary of State on corporate behaviour by the beginning of April. If Ofwat needs further powers, it should include that in that report Ofwat is taking enforcement action. For instance, a large fine was imposed on Thames Water for missing the leakage target and it has set the lowest cost of capital ever for the 2019 price review. I should say that water bills have in fact fallen in real terms over the last five years by 5%, and since 1994 bills are 3% higher. Since privatisation, £140 billion has been invested in infrastructure, but we need to do more. Simply put, in a country like ours we need to invest more, and we are going to look to the water companies to do so I was quite shocked by some of the leakage figures and tried to imagine what they meant in terms of millions of litres per day; it is really extraordinary. Ofwat has set a challenging target of 15% by 2025, and the 25-year environment plan also set out that leakages should be minimised and go down year on year. We will ask Ofwat to consider the campaign on insulating pipes, which was mentioned by the noble Baroness, Lady Bakewell, as part of its review. That is something else that we need to work on The points that the noble Baroness has made have been absolutely fair. I thought it was very interesting to see different chief executives’ reports into the issues that they were facing. One of the things that we are continually assessing is the situation with the thaw. As we all know, the pipes burst on the thaw, and of course the rapid thaw has probably precipitated some considerable bursts in smaller pipes rather than in the mains. This has been one of the practical issues; there have been many small bursts as the thaw has been so rapid. I think we all look forward to hearing more about what Ofwat reports on preparedness, and on what better work needs to be done in preparing should we have a similar occurrence in future, as undoubtedly we will with the climate as it is.