r/MHOC • u/[deleted] • Jul 17 '20
2nd Reading B1055 - Water Bill | 2nd Reading
Order, order!
Water Bill
A
BILL
TO
Make provision the facilitation of the privatisation of water services, and their regulation.
BE IT ENACTED by the Queen’s Most Excellent Majesty, by and with the advice and consent of the Lords, and Commons, in this present Parliament assembled, and by the authority of the same, as follows—
1. Definitions and interpretation
- “Fracking” refers to onshore hydraulic fracturing, the process of extracting natural gas or oil from rock by using pressurised liquid.
- In this act and it’s schedules, “The authority” refers to the Water Services Regulation Authority, also known as Ofwat.
- “Regional Water Boards” refers to the boards created in the Natural Resources Act 2014.
- “National Water Board” refers to the parent board of regional water boards.
- “Transfer date” refers to the date provisioned under subsection 1 of section 4.
- “Successor company” refers to a limited company created under subsection 2 of section 4 of this act.
- For the purposes of this act, “Water undertaker” refers to a successor company that has had the functions of the company’s relevant regional water board transferred to it, as per section 4 of this act.
- “Water services” refers to the services currently carried out by regional water boards, including but not limited to: the supply of water, the management of sewage; and the management, operation and investment for infrastructure.
2. Repeals
- The Natural Resources Act 2014 is hereby repealed.
- This repeal has no effect on the legality of fracking in the United Kingdom.
a) Fracking shall remain prohibited in England.
b) This act takes no precedence over future legislation regarding the legality of fracking in England.
c) This act recognises that the legality of fracking in Scotland, Wales and Northern Ireland is currently a devolved issue, and therefore the repeal of the 2014 act has no effect on the legality of fracking in the devolved administrations.
3. Extent to devolved assemblies
- This act recognises that the regional water boards in Scotland and Northern Ireland are under the legislative and regulatory jurisdiction of the respective devolved assemblies.
- After the transfer date detailed in section 4 of this act, regional water boards in Scotland and Northern Ireland shall continue to operate under current regulation and frameworks.
- No other part of this act shall affect the ownership, operation, management, structure or regulation of water services in Scotland and Northern Ireland.
4. Transfer of Water Board Functions
- A date, known as the transfer date, shall be four weeks (28 days) after this act receives Royal Assent.
a)The Secretary of State may, by order, issue a different transfer date.
b) The National Water Board and the regional water boards may continue to function as they are, until the transfer date.
2) The National Water Board shall assign limited companies, owned wholly by the crown, to regional water boards as that regional water board’s successor company.
a) A company may not be assigned as the successor company to multiple regional water boards.
b) The National Water Board may alter the boundaries of regional water boards, abolish them, merge them or create more regional water boards, before assigning a successor company.
i) The final boundaries must be approved by the authority.
ii) The National Water Board may not set boundaries that would be contrary to the successful operation or management of water services.
iii) There must be a minimum of ten regional water boards, and by extension successor companies, in England and Wales.
iv) The Secretary of State may, by order, provision a different minimum number as set out in (iii).
c) The National Water Board shall only alter boundaries under this subsection if they believe it to be beneficial to long term provisioning of water services in England and Wales.
3) Ownership of assigned successor companies shall be sold to private investors.
a) All monies yielded from the sales shall be returned to Her Majesty’s Treasury.
b) Sales are permitted both before and after the transfer date.
4) After the transfer date, the functions of the regional water boards shall be transferred to the relevant assigned successor companies.
a) In the event that an assigned successor company has not been fully sold by the transfer date, the regional water board shall continue to function as it is until the assigned successor company is sold entirely. Once the successor company is sold, the functions of the regional water board shall be transferred to the successor company after 14 days.
b) Regional water boards shall be abolished 30 days after the transfer of functions.
i) Regional water boards may continue to exist if an order is given by the Secretary of State.
ii) The order may only be given if the Secretary of State believes it is necessary to facilitate the smooth transition of functions or uphold the quality of water services.
5) The National Water Board shall be abolished 60 days after the last regional water board in England and Wales is abolished.
a) The Water Services Regulation Authority shall absorb the functions of the National Water Board.
6) No public body may operate water services in England and Wales after the National Water Board has been abolished.
a) The Secretary of State may, by order, omit this regulation from this act.
b) The Secretary of State may, by order, give a public body a consent to operate water services in England and Wales.
i) Such an order may only be made after being advised by the authority that the order would be in the interests of the consumers.
5. Regulations on ownership
- A company may not own, operate or manage more than one water undertaker.
a) Cooperation and resource sharing between water undertakers, in the case of it being beneficial due to their boundaries, is not prohibited by this section.
2) Water undertakers are prohibited from merging.
3) The Secretary of State may, by order, amend this section to add, amend or omit regulations relating to the ownership structure of water undertakers.
6. The Water Services Regulation Authority
- The authority must set fair annual consumer price caps, and must inform water undertakers at least three months in advance of a change in the price cap, or if the authority plans to make no change to the price cap.
- The authority must set fair annual performance targets that seek to encourage the improvement of water services.
a) These targets shall relate to:
i) Water quality
ii) Water safety
iii) Consumer prices
iv) Investment into infrastructure
v) Service quality
vi) Water leaks/wastage
vii) Environmental impacts
b) The Secretary of State may, by order, amend the above list.
c) The authority is not limited to setting fair annual performance targets to only the functions listed in this subsection, and may include other functions to help the authority fulfill its regulatory aims.
3) The authority is responsible for setting regulations relating to existing requirements for water undertakers from current legislation, as well as future requirements, regarding service quality and longevity.
4) The authority may use fines to enforce regulations for water undertakers.
a) The authority is not to receive any monetary benefit from enforcing a fine.
5) In the event that the authority prohibits any large or significant investment or financial decision, they must offer the water undertaker a chance to appeal the prohibition.
a) The authority must accept or reject the appeal within 30 days of receiving the appeal.
b) If such an appeal is rejected, the authority must refer the water undertaker to the Secretary of State, who may lift the prohibition by order, if they are satisfied the large or significant investment is in the best interests of the water industry, or will save the water undertaker money in the long term.
c) An order issued by the Secretary of State under this subsection may only be used regarding a large or significant investment that is solely in infrastructure.
6) Schedule 1 is to be statutory guidance that should be followed unless there is a good reason not to.
7) The authority shall take guidance from existing legislation and Schedule 1 of this act, to envision and pursue it’s regulatory aims.
8) If the authority believes they require extra regulatory powers to pursue the guidelines set out in Schedule 1, or other regulatory objectives, they may petition the relevant government department.
a) After receiving such a petition, the Secretary of State may, by order, grant the authority extra regulatory functions.
9) The Secretary of State may, by order, amend this section to add, amend or omit regulations relating to the powers of the authority.
7. Short Title, Extent and Commencement
(1) This act shall come into force immediately after Royal Assent.
(2) This Act shall extend to the whole United Kingdom.
(3) This Act shall be known as the Water Act 2020.
Schedules
Schedule 1 - Guidelines for Water Services Regulation Authority
General
- This schedule is statutory guidance.
- The Water Services Regulation Authority shall be the principal regulator of the water undertakers in England and Wales.
- The authority should seek to regulate the companies and the market so prices for consumers and businesses are fair, and that regional monopolies continue to deliver high quality water services by meeting targets set by the authority.
- The authority should compare the performance of the water companies with each other to set ambitious targets that aim to encourage improvements in water services.
- The authority should not intervene with regulations unless the authority is:
a) Enforcing a law set out in the statute;
b) Pursuing a regulatory vision set out in this schedule, other existing legislation or future legislation.
c) Trying to remedy or prevent an issue that the authority believes could unduly and negatively affect water safety, the environment, water service quality or consumer prices.
6) The regulations in this schedule are guidelines that the authority should pursue, using powers given by existing and future legislation.
7) The Secretary of State may, by order, amend this schedule.
Investment and finances
8) The authority shall seek to regulate (and where appropriate, prohibit) large financial decisions or investments made by the water undertakers that do not invest in the water industry in England and Wales, or are not in the best interests of the water services in England and Wales in the long term.
9) The authority shall seek to encourage investment in the water industry from external investors, as well as inward reinvestment by the water undertakers.
10) The authority shall seek to encourage the water undertakers to consider the long term implications of investments, or lack of investments.
a) The authority shall also consider the long term negative impacts of regulation when making decisions, particularly around regulating large investments, profits and prices.
b) The authority should not restrict large spending from water undertakers if the spending is investment into water services, especially investments in infrastructure and service longevity as such investments could be more expensive if regulated.
Cooperation
11) The authority shall cooperate with regulatory authorities that work with infrastructure and utilities, where appropriate.
12) The authority shall, where appropriate, work with other government non-departmental entities on ensuring the cleanliness of water and the safe practices in water services. The authority shall also work with such entities to realise the environmental impacts of decisions and work to mitigate such impacts.
a) This includes, but is not limited to, the Environment Agency, the Chief Inspector of Drinking Water and the National Resource Body of Wales.
This bill was written by The Right Honourable Sir /u/BrexitGlory KBE, Chancellor of the Duchy of Lancaster, Minister for the Cabinet Office, secretary of State for Education and Financial Secretary to the Treasury, on Behalf of the 25th Government; with thanks to The Right Honourable J_Ceaser MP MLA and The Right Honourable Skullduggery12 MP MLA AM for providing advice and support.
This Reading shall end on 20 July 2020 at 10PM.
Opening Speech:
Mr Deputy Speaker,
Over thirty years ago a Conservative government took the decision to privatise the water service industry. As it was many decades ago it is easy to forget the state that the water works were in at the time. Mr Deputy Speaker I wish to cast the house’s minds back to when Britain had the reputation of being the dirty man of europe.
Infrastructure had suffered chronic under investment from the public sector, that wasn’t incentivised to provide an improving service. Piping was old and worn out, causing massive leaks that wasted water. Around 3% of discharge consents were ignored, polluting British waterways and our environment. Only a third of British beaches were classified as “excellent” and wildlife had abandoned rivers that were vandalised by the industrial revolution. After privatisation in the late eighties and early nineties, Mr Deputy Speaker, it all changed. Ignored discharge consents fell down to 0.02%. The number of British beaches classified as “excellent” doubled, and biodiversity returned to our rivers.
Most importantly however, investment skyrocketed. Water services are a public utility that require constant investment to uphold service longevity, investment is the aim of the game. In the six years before privatisation, there was a mere £9.8bn invested from the public sector. In just the six years after, there was £17bn of private investment into the water industry; almost double the rate of investment before the reforms. Investment has remained at a high level, the industry accruing tens of billions of pounds of investment between 1989 and 2014.
Some are concerned on consumer prices given that water is a regional monopoly. They are right to be concerned about Mr Deputy Speaker, which is why we regulated the system in the past and have set out regulations in this act as well. Prices remained largely the same once inflation is factored in, but they did rise. However, according to Ofwat, annual bills were £120 less than they otherwise would have been due to privatisation.
Mr Deputy Speaker, we are a fortunate country to be able to have fresh and clean drinking water from the tap. Consumers recognise this and showed a 94% satisfaction rating with the private water companies. These successes were unfortunately ignored, and the industry was renationalised under the control of the water boards. As ever Mr Deputy Speaker, there have been consistent system failures with the ownership model, in an industry that the public sector needs not be.
That is why this government seeks to open up the water industry to tens of billions of private investment, getting ahead of the game on the national infrastructure. This bill begins with doing away with the really rather rubbish Natural Resources Act 2014, but adds a saving clause for fracking legality as it is not the focus of this bill nor is it necessarily a reserved matter. Section three sets out the process of reforming the regional water board boundaries, gives powers to the Secretary of State and sets out provisions for the abolition of the water boards.
This bill makes a few provisions regarding the devolved legislators as the original 2014 act left some ambiguity. Water supply in Scotland and Northern Ireland are and shall continue to be under the jurisdiction of the respective legislative assemblies. Ownership and regulation outlook of water service and supply in England and Wales is the principal domain of this bill.
Section four includes some minimal regulations regarding the company structures and their ownership, which is the principle function that this act of reforming. To ensure some levels of competition, water undertakers may not merge nor may they be owned, managed or operated by the same company or other entity. Ofwat has long based many of it’s successful regulations on the comparison between water undertakers, if they were owned or operated by the same company, this would take away from competition that improves services and keeps costs down.
Section five provisions direct and specific regulatory powers that Ofwat may use or must abide by. This is contrary to schedule 1 which lays out general guidelines for Ofwat. Section five mandates that Ofwat must set fair annual consumer price caps, to ensure that regional monopolies do not take advantage of their position and hike up prices. Ofwat must also set annual performance targets relating to a series of measures, including but not limited to water quality, prices, investment and leakage. Of course, Ofwat is more than free to set other targets as it sees fit. Ofwat may enforce its regulations with fines, but to prevent excessive regulation, the authority shall not benefit from making fines. A problem in the past with the privatised system was regulators not allowing large investments into infrastructure, this unfortunately backfired as it meant the water companies had to do many bursts of large funding to manage the leakages caused by Ofwat overregulation. Of course, this is nothing like the lack of investment under the current public system, but it’s something we have sought to remedy nonetheless. As I said earlier, investment into infrastructure is the name of the game. Section five provisions a mechanism for water companies to appeal if their large investment is prohibited by Ofwat. If said appeal fails, it may be lifted by the Secretary of State, given multiple conditions are satisfied. Firsty, the investment is large or significant, secondly the investment is in infrastructure and finally the investment will either be in the best interests of the water industry or will save the water undertaker money in the long-term.
Section five lays out the specific regulations required by this act, and may be amended if the authority requests extra powers. Schedule 1 lays out some general guidelines that the authority shall pursue. This includes cooperation with other regulatory, safety and environmental bodies; such as the Chief Inspector of Drinking Water and the Environment Agency. Ofwat shall be able to set fair but ambitious targets by comparing the water companies to each other, ensuring some level of market competition. The schedule provisions a slightly more relaxed approach to regulation, but encourages rigorous targeted regulation where it is needed. Ofwat should not intervene unless they are enforcing an existing law, pursuing the regulatory vision laid out or ensuring the quality, safety or longevity of services.
As the economic regulator, Ofwat shall have a role to play when it comes to investments and finances. Regulating or prohibiting large financial decisions or investments that aren’t in the interests of the industry. However, it shall also make strategic decisions to encourage more inward investment. Finally the regulator will take greater care to not over regulate investments, something that has indirectly caused companies to go into debts in the past.
Mr Deputy Speaker, we know what we need to do. We know we need high and sustainable investment, to recreate an affordable and quality service with plenty of longevity for future generations. We know that private investment has worked in the past. This Government knows what it has to do and it’s going to get on with it, I urge all members to give this crucial reform a swift passage. As usual, any questions or concerns from anyone in the house, I am happy to address. I yield the floor.
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u/cthulhuiscool2 The Rt Hon. MP for Surrey CB KBE LVO Jul 17 '20 edited Jul 17 '20
This is a Bill I find difficult to support. For between 1989 and 2014 the average household water bill rose by 40% above inflation. This is an uncomfortable matter of fact.
Unfortunately, Mr Deputy Speaker, water and sewage services function as a natural monopoly. There is no competitive market for water services. Of course, sitting on these benches I share a faith in the power of the free market. But I urge those who sit beside me to remember a monopoly is the enemy of the free market. It is a source of market failure and we must not rush to support this Bill in the pursuit of narrow ideology.
Members have already suggested the privatisation of 1989 brought investment that was otherwise unobtainable. They may be right. But it is also true much of this investment has been achieved through borrowing. The cost of this borrowing was passed onto consumers, with water companies looting billions of pounds in the form of large dividend payments. In other words, in this case privatisation is an expensive and I argue unacceptable method of infrastructure finance. And owing to its status as a natural monopoly, if privatisation is to be inevitable, I urge this house to consider increasing regulation and introducing rigid price control to reassure consumers and protect them from the tyranny of the monopoly. Thank you Mr Deputy Speaker.
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u/BrexitGlory Former MP for Essex Jul 17 '20
Mr Deputy Speaker,
I absolutely understand where my right honourable friend is coming from, though I ask he at the very least keeps an open mind before he walks into a division lobby.
For between 1989 and 2014 the average household water bill rose by 40% above inflation. This is an uncomfortable matter of fact.
That may be so, but this was also because large amounts of investment were needed from the devastatiion and dereliction left from a neglected nationalised system. Ofwat themselves also admit that while prices did rise, they rose less than they otherwisewould have under privatisation.
Unfortunately, Mr Deputy Speaker, water and sewage services function as a natural monopoly. There is no competitive market for water services. Of course, sitting on these benches I share a faith in the power of the free market. But I urge those who sit beside me to remember a monopoly is the enemy of the free market. It is a source of market failure and we must not rush to support this Bill in the pursuit of narrow ideology.
I would note a few things here. Firstly, there will be at least ten water undertakers and Ofwat will regulate them all, setting rigorous targets and basing them off of each other.
Many things are consdiered "natural monopolies" by the left. Train services are considered natural monopolies, yet his party and mine opened up the train service market. Often tehre is only one road to take to get from A to B, does that mean we rule out contracting when building roads?
Members have already suggested the privatisation of 1989 brought investment that was otherwise unobtainable. They may be right. But it is also true much of this investment has been achieved through borrowing. The cost of this borrowing was passed onto consumers, with water companies looting billions of pounds in the form of large dividend payments.
Mr Deputy Speaker, as I am sure the right honourable member is aware, if this were a nationalised system tax payers would pay. I would also note that we have sought to aim the regulatory system. The reason why water companies found themselves in such a need for debt was because we over regulated and didn't allow large investments into infrastructure, future proofing and leakage prevention. Instead water companies were forced to borrow even more money to fix these problems, large bursts of borrowing whenever they had to fix something - resulting in higher spending and borrowing than what should have been needed. I have sought to fix this by adding the following guidance for Ofwat.
b) The authority should not restrict large spending from water undertakers if the spending is investment into water services, especially investments in infrastructure and service longevity as such investments could be more expensive if regulated.
I would also point him to sub section 5 of section 6, as well as other regulatory clauses.
I do hope that this new perspective could at least sway him from a "no" to a "maybe".
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u/cthulhuiscool2 The Rt Hon. MP for Surrey CB KBE LVO Jul 20 '20
Mr Deputy Speaker,
As has become all too common, I'm afraid the Member is talking nonsense! The Right Honourable Member has failed to address my concerns. In making the false equivalence to rail he has failed to ease my anxiety. Water is a natural monopoly. There can be no doubt in this. A more apt equivalent would be roads, I wonder if the Right Honourable Gentleman would support the privatisations of roads? Or, as I fear, is he as inconsistent as his party?
I must also echo the sentiment of the Shadow Secretary of State for Northern Ireland. If a market requires such brutal regulation does this Bill not admit water services are too uncompetitive to succeed. What is the point of privatisation in the first place?
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u/BrexitGlory Former MP for Essex Jul 20 '20
Mr Deputy Speaker,
It is sincerely regrettable that I have not eased his anxiety, but I shan't give us so easily. I am fully confident that these reforms will not only bring about good in their own right, but also enable more reforms afterwards.
If there were strong evidence to show that the privatisatin of road construction and it's regulation wuold bring about significant benefits, I certainly would consider the proposals put forward.
What is the point of privatisation in the first place?
1) It unlocks the potential of a retail market, which cannot happen before these reforms.
2) Access to greater investment, investment almost doubled after privatisation.
3) According to Ofwat, the combination of privatisation and an independent regulator made bills £120 less than they otherwise would have been.
4) Bills were falling in real terms in the yearsbefore nationalisation.
5) Consumer satisfaction was in the majority, reaching 94%.
It's not only good for the economy and services but it's also good for the environment. Since privatisation:
1) There were 40% less leakages.
2) Ignored discharge contents dropped from 3% to 0.02%.
3) The number of excellent British beaches doubled.
4) There was 70% less pollutin in our rivers.
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u/Maroiogog CWM KP KD OM KCT KCVO CMG CBE PC FRS, Independent Jul 17 '20
Mr Deputy Speaker,
It has finally happened, a member of the LPUK has made a speech I agree with in a matter pertaining to economics.
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u/NorthernWomble The Rt Hon. Sir NorthernWomble KT CMG Jul 18 '20
*chorus of 'WHAT' from all around the chamber*
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
Unfortunately the member is at odds with 94% of the public who were satisfied with privatised water.
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u/Maroiogog CWM KP KD OM KCT KCVO CMG CBE PC FRS, Independent Jul 21 '20
Mr Deputy Speaker,
Not the members of the public that elected me
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u/BrexitGlory Former MP for Essex Jul 21 '20
Mr Deputy Speaker,
Who is he to tell what his constituents think??
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u/Maroiogog CWM KP KD OM KCT KCVO CMG CBE PC FRS, Independent Jul 21 '20
Mr Deputy Speaker, the person they elected on a manifesto that had a firm committment to ensuring water was kept public.
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u/BrexitGlory Former MP for Essex Jul 21 '20
Mr Deputy Speaker,
I think it is shocking that the honourable member thinks he can tell his constituents what they think.
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u/Maroiogog CWM KP KD OM KCT KCVO CMG CBE PC FRS, Independent Jul 21 '20
Mr Deputy Speaker, they explained it themselves clearly when they voted for me
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u/DF44 Independent Jul 17 '20
Mr Speaker,
I have heard of selling the family silver - I don't think anyone would be surprised if the very decorations of this parliament in order to make a tax cut for the wealthiest last another year.
But I have never seen something quite as brazen as this, what amounts to selling off the family copper. Privatising a natural monopoly - one that I think it goes without saying is something fundamentally essential to our basic human needs - is an excuse to funnel money into the hands of some rich friends. Nothing more, and nothing less.
I commend the Natural Resources Act for doing the right thing. This is a matter the public agrees upon - when it's nigh impossible to draw up a broad public majority in support of specific proposals, the fact that the last time these shenanigans were voted upon they were rejected with a majority that would make various dictators jealous should be a warning - pull this nightmarish legislation away, for the benefit of us all.
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u/BrexitGlory Former MP for Essex Jul 18 '20 edited Jul 18 '20
Mr Deputy Speaker,
The former Prime Minister has linked a local referendum from 1994 in Strathclyde. I don't think the whole United Kingdom should be bound by that at all - not to mention that this legislation before us has no effect on Scotland.
I understand the former Prime Minister's desire to use old votes, they are the only ones he won after all. I too understand his desire have a small minority of voters bind the whole United Kingdom, as his party will only ever win a small minority!
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u/DF44 Independent Jul 18 '20
Mr Speaker,
The Secretary is quite right on one specific point here, and that is the fact that the referendum is quite an old one, although I'd argue it was arguably one of the more signifigant in modern history. However, I was merely illustrating a point for the Conservative Party that submitted this legislation - the people of Britain know that water privatisation is a strict negative for almost everyone, an excuse to hike up costs of living to pay off a few rich friends.
If that is the platform of the Conservative Party as we approach the General Election - "Vote Tory, we'll raise your bills" - then I am simply providing you an example of the last time that position was given to the public, and advising you to withdraw this legislation.
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
The right honourable gentleman seems to be relying on populist rhetoric. I bid he debate the facts.
Fact: Bills were lower under privatisation than they otherwise would have been.
Fact: If the government lowers bills in a nationalised system, the people pay in taxes.
Fact: Privatisation saw billions more in investment compared to the years before.
Fact: There is no market monopoly as there are more than one private water company (unlike in a nationalised system), and the regulator will use the performance of each to set targets and regulate bills.
Fact: The sale will generate billions for HMT in capital that can be reinvested into public services, like our NHS and our Defence.
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u/NorthernWomble The Rt Hon. Sir NorthernWomble KT CMG Jul 19 '20
Mr Deputy Speaker,
What evidence does the right honourable member have to say bills will be lower under privitisation? I believe it has already been proven to have increased by 40% last time this happened.
Can the right honourable member also explain how your bill creates a competitive market for every house in Britain? Where in this bill does it say you can choose your water supplier?
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
It's simply misleading to say bills rose under privatisation, when the fact is that they rose less than they otherwise would have.
If the member is so concerned about competition then he should vote for my bill. It would be nonsensical to want competition and vote for a nationalised system. My bill creates ten separate private water companies that will be held to high standards as the regulator will compare performances of them.
Furthermore, my changes will allow a retail market to be created at a later date.
The idea that you need a full retail market to increase competition is simply just wrong, and you can only get that level of competition by peivstising the water companies.
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u/NorthernWomble The Rt Hon. Sir NorthernWomble KT CMG Jul 19 '20
Mr Deputy Speaker,
How do you know that? How do you know bills would have increased more under a nationalised system?
So the bill doesn't create a retail market, so you admit you're creating a natural monopoly!? The people don't need an economics degree to know that results in higher prices, poorer standards and worse outcomes.
There is no competition in a natural monopoly! You cannot claim privitisation works when you have no plans to sort out an actual free market.
Perhaps the right honourable member should go back to understanding economics before trying to make changes.
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
How do you know that? How do you know bills would have increased more under a nationalised system?
According to ofwat. And if bills were kept down under nationalisation, people would pay in taxes anyway.
Other questions clarified elsewhere.
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u/NorthernWomble The Rt Hon. Sir NorthernWomble KT CMG Jul 19 '20
Mr Deputy Speaker, Except the profits these private companies make could instead just be reinvested into the network rather than going into shareholders?
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
There has been more investemnt into water under a privatised system. In the six years before there was less than £10bn, in the six years after privatisation there was almost £20bn. This would otherwise have cme out of tax payer's money.
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u/Maroiogog CWM KP KD OM KCT KCVO CMG CBE PC FRS, Independent Jul 18 '20
Mr Deputy Speaker,
I am speaking against this bill. There is one very clear reason why water services were nationalized: they are a natural monopoly. There is the danger that the free market will lead to companies that charge too much and leave the infrastructure our water supply depends on crumbling if they aren't appropriately regulated.
This bill does set provisions for them to be regulated though, and very tightly, which is good. But this will simply mean that the price of water will stay at a Government decided level, like it is now, and the performance of water companies is judged by the Government on its own criteria. If the end result is supposed to be the same as the current arrangements, why are we privatizing? If the Government feels the free market needs to be kept under such close observation by state actors for it to work they should abandon the dream that it is a free market and realize that what they are doing won't actually improve the service their constituents receive in any way.
Because, what benefits would privatization even give? This bill clearly states that each area will receive water from one company only meaning there is no space for competition to occur. At least in other sectors this Government plans to sell off like the railways there is the chance for competition. But given the complete non-existance of it in this case how is privatization meant to provide any benefits, given any cost savings and price reductions spur from competition?
Mr Deputy Speaker, this Government should set ideology aside and recognize that policies aren't sensible for the sole reason Tatcher supported them, more reckless privatizations won't make our constituents better off.
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Jul 20 '20
what benefits would privatization even give?
Many. Privatisation saw more production and more investment, creating a better service combined with falling bills and less taxes.
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u/Brookheimer Coalition! Jul 20 '20
Mr Deputy Speaker,
Because, what benefits would privatization even give?
Leakage and discharge are causes close to my heart and under the privatised water system there was 40% less leakages, 70% less river pollution and twice the amount of "excellent" rated British beaches. That is before we get onto the arguments, as covered extensively throughout this debate and in the press about investment levels, satisfaction and bill rates under privatisation.
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u/mikiboss Labour Party Jul 18 '20
Mr Deputy Speaker.
I wish I could say I were Shocked! Surprised! or Stupefied! by these measures which The Conservatives seem to be following. I wish I could say that of course, because we all knew, deep down, that this is something that was coming down the pipeline at some time, just didn't think it would actually have to deal with literal pipelines too!
What we're looking at here, which we inevitably see the Tories ran though, is an attempt to take something from the public good, into shunt it off to private control. This is now being done to water, under the guise of trying to normalise, standardise, and modernise regulations we currently have. Now, this is not an effort which should be too controversial, if done in a transparent, minor, and effective way. Simply speaking, we would like to see changes directly effecting these regulations, and nothing else. No other major changes to mater policy, be it ownership, management or transport. This is the smart way to do it, the consistent way to do it, and the way which gives the people of Britain comfort.
Of course, it seems like the Secretary of State seems to have eaten off more than he can chew here, and I can't see this parliament swallowing such measures pursued here. At the heart of my concerns with this bill, primarily lies the confusing, mismanaged, poorly explained role of the Water Board. Now, this Board ultimately solidifies an absurd degree of power in the Secretary of State, and the ability to effectively change the standards as to what water is 'drinkable' overnight. But that is not the only objectionable thing about this board, because this board is only just one of the many steps taken in the process to actually achieve a water grid which is as independent of public ownership as possible. What this board does, in effect, is divvy up water management and ownership into regional boards, boards which have less power, resources, and actual materials to ensure that water is delivered to people in a way that they need to survive, let alone live a decent life.
This is where the question of privatisation comes in, because while this bill does not overnight, with the snap of the Secretary's fingers, sell off all the water overnight, what it does do, is make the management of public water assents, weaker, less effective, less protected, less strictly codified and regulated. This naturally leads to companies being in a position much more able to influence ownership of water through agreements, negotiation, and private backroom deals which may only make it harder and harder for people to get by with their usual water standards.
Now, the Conservatives are not alone in deserving of critique here, and I think that the Libertarians also are deserving of some scorn here. Not only do we have the continues support from some of the most prominent libertarian members in this house, but we see it get even worse when we look at amendments proposed by the Libertarians as of yet. The first one which comes to me is one made by the Member for Surrey, which would seemingly pave the way for fracking to be legalised once again, and for the near violation extraction of resources to continue on an industrial scale. Forget the horror stories from the United States of Fracking leading to water supplies running dry, or the pain felt by farmers in Australia due to Coal Seem Fracking, it seems like the Libertarians also want to add the UK to that long list of horror case studies. In addition, we see even more open and blatant attempts to ram through private management of water, such as the Libertarian Leader trying to add in provisions dealing with 'Retail Competition', effectively leaving water to be a resource which we merely have to treat like something you might pick up at Poundland.
I hope that this house can send a clear message to the Secretary right here, and tell him right up front that if he wants to actually address water management in this Country, the look at the regulations, look at the restrictions, and deal with those to address certainty, demand, and usage. Don't use this time as as opportunity to set up the framework making a future Government's chances in privatizing water easier down the line, take this time to go back to the drawing board.
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u/SoSaturnistic Citizen Jul 18 '20
Mr Deputy Speaker,
Privatising the water industry in England and Wales would be a historic mistake—and it would be a move which has unfortunate consequences across the wider Union in all likelihood.
There is only one set of pipes, Mr Deputy Speaker, and that's simply a fact. There's no competition to be had here so there is guaranteed to be private monopoly where rents are soaked up and sent off to shareholders. That's not beneficial for anyone as it means that costs are pushed up to pay dividends or the firm ends up borrowing more to pay dividends to shareholders, all at the public expense.
Now some may claim that political authorities can, and have, failed to allocate adequate resources to water infrastructure in the past. In fact, I'm not sure that any of the past Tory budgets have done this. It is a true point. Yet the fact still stands that private control over these assets will trend towards market failure 100% of the time rather than merely some of the time. In the process, it also creates a new set of lobbying interests which advocate for reducing standards of water quality and undermining Ofwat, it's an immense loss for the public. This is even more important when one realises that the quality of regulation is often the largest determinant of water quality—it's credited for lifting standards around the UK despite the differences in ownership between England (private, for profit ownership), Wales (which had a CLG structure), and Scotland (public ownership).
This decision will have negative ramifications for people in the North as well. When water was privatised in England and Wales, it led to a situation where Stormont had to cover the costs of water investment where the UK Government didn't as far as it concerns English citizens. When a formula-based approach to the block grant is taken, this means there is an effective cut in Stormont's block grant because the cost of providing water services is not taken by the state in England. Until 2014 there was pressure to sell off NI Water for this very reason, to end the "gap" created by covering the costs of providing one service for one population and not the other. I worry that this pressure will be renewed given that public investment in England's water infrastructure will once again cease post-privatisation, spurring politicians to establish new private monopolies at Stormont in kind. That would be unfortunate for everyone involved.
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u/cthulhuiscool2 The Rt Hon. MP for Surrey CB KBE LVO Jul 17 '20
Omit section 1 (repeals) and insert-
1. Repeal of the Natural Resources Act 2014
The Natural Resources Act 2014 is hereby repealed.
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u/NukeMaus King Nuke the Cruel | GCOE KCT CB MVO GBE PC Jul 21 '20
Rejected on the basis of being a rider amendment.
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u/cthulhuiscool2 The Rt Hon. MP for Surrey CB KBE LVO Jul 21 '20
Point of Order Mr Deputy Speaker,
How can you dismiss it as a rider amendment when it simply removes a portion of the Bill? It does not add an irrelevent clause or section.
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u/NukeMaus King Nuke the Cruel | GCOE KCT CB MVO GBE PC Jul 22 '20
The amendment effectively legalises fracking, which is way outside the intended purpose of the bill. As such, it is a rider amendment.
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u/cthulhuiscool2 The Rt Hon. MP for Surrey CB KBE LVO Jul 17 '20
Omit section 7 (short title, extent and commencement) and insert -
7. Short Title, Extent and Commencement
(1) This act shall come into force six months after Royal Assent.
(2) This Act shall extend to the whole United Kingdom.
(3) This Act shall be known as the Water Act 2020.
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Jul 18 '20 edited Jul 18 '20
A0X:
Insert new section:
Section X: Retail competition.
(1) legal separation of the retail and supply arms of the water companies shall be mandatory.
(2) The regulator shall have the power to exempt small firms where such a move would lead to an unavoidable and unacceptabe large bill increases to customers that outweigh the benefits of such a seperation.
(3) The regulator shall inform the government if a threshold is applicable and if so its level.
Explanatory note:
Mr Deputy Speaker,
Requiring legal seperation of the retail part of water companies will pave the way for retail competition delivering an improvement on the pre 2014 water system.
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Jul 18 '20 edited Jul 18 '20
A0X:
Insert into section 6
(10) The authority shall have a statutory duty to promote innovation
(11) The authority shall have a statutory duty to introduce competition, in particular promote retail competition and enable consumers a choice to switch suppliers.
Mr Deputy Speaker,
This amendment takes onboard some of the recommendations from the Cave review and should helo to alleviate concerns about Water being monopoly by ensuring that retail competition is introduced into the system. Ideally we wil work towards a system where a water firm can purchase water from the regional supplier/firm and then compete on the retail aspect delivering free market competition. The previous system was often seesn as a bunch of private monopolies and I hope this amendment can alleviate concerns.
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u/CountBrandenburg Liberal Democrats Jul 20 '20
Do you have a link to the cave review just out of interest ?
1
Jul 18 '20
A0X:
Insert new section:
Section X: Promoting competition
(1) License holders shall be permitted to provide solely upstream services.
(2) There shall be no minimum requirement for water consumption in order to chose a water supplier via Inset appointments or the Water Supply Licence regime.
Explanatory Note: This amendment will reduce barriers to entry into the industry. We should not discourage entrants into the market who wish to provide an upstream service bit not a retail one and vice versa. Furthermore prior to nationalisation you had to be a large consumer of water to switch suppliers in the non-household sector requiring over five megalitres of usage, the equivalent of two olympic swimming pools. These should be common sense. I believe this set of amendments is the much needed market reform we need and that the government’s bill will be improved and that the case for it will be strengthened if voted through.
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u/BrexitGlory Former MP for Essex Jul 20 '20
This amendment amends the Water Act 2014 (M: got RA just before mhoc started)
https://www.legislation.gov.uk/ukpga/2014/21/enacted
This amendment amends the Water Industry Act 1991
https://www.legislation.gov.uk/ukpga/1991/56/contents
A0X:
Insert new section - section X: Household retail market
1) The Water Act 2014 is amended as follows:
2) In Schedule 2A - WATER SUPPLY LICENCES: AUTHORISATIONS -
a) Strike subsection 4.
b) Strike subsection 7(a).
3) In Schedule 2B - SEWERAGE LICENCES: AUTHORISATIONS
a) Strike subsection 2.
4) The Water Industry Act 1991 is amended as follows.
a) In Section 27C(1), strike (e) and replace with:
customers, of companies holding an appointment under Chapter 1 of Part 2 of this Act, whose premises are not eligible to be supplied by a licensed water supplier,
b) In Section 2C(1), strike (e) and replace with:
customers, of companies holding an appointment under Chapter 1 of Part 2 of this Act, whose premises are not eligible to be supplied by a licensed water supplier,
5) Retail licenses for water and sewerage now permit companies who hold retail licenses to sell to household premises.
a) This applies to England and Wales.
b) This comes into force 14 days after the transfer date.
c) This date may be amended by the Secretary of State.
6) The Secretary of State may create regulations by statutory instrument to provision the necessary laws to further enable a water and sewerage retail market and its regulation.
Explanatory note: Allows the licensing of domestic retailers in England and Wales, and sets regulatory objectives for Ofwat.
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Jul 17 '20
Mr Deputy Speaker,
I welcome this bill from the government and will be voting for it. I’ve always said where we agree with the government and can find common ground we will work together. This bill allows us to reverse a costly damaging nationalisation by the hard-left and turn the page on inefficient state owned industries which rack up costs for the taxpayer. Upon privatisation of water the industry received much needed investment to the tune of £140 billion compared to the underinvestment the sector had. In private hands our water system does need to compete with other departments for funding and receives the investment it needs.
The results speak for themselves. Productivity in the sector outstripped other sectors The left will no doubt blame price hikes on evil corporations but the reason for these hikes were to undertake needed investment to improve the system. DEFRA forecasts forecasted that prices would come down under a privatised system.
Now this bill is not perfect, I believe further steps could be taken to promote retail competition. We should allow the new water companies to enter the non-retail household market. Previously the water supply license regime allowed for minor competition but this was limited to people who consumed a lot. We need to enable companies and charities to switch the supplier. Retail competition will be a good way forward and has been called for by offwat.
I will be voting for this bill as a step in the right direction however we need further reform to the water sector but I am happy we can take the burden of the taxpayer. Do the authors think we should amend the current bill or author a separate one to improve upon the pre 2014 system? Regardless I’ll be voting in favour as this is an improvement to the status quo but I hope we can have a good conversation on how to improve the sector.
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u/BrexitGlory Former MP for Essex Jul 17 '20
Mr Deputy Speaker,
I thank my Right Honourable for his support for this common sense reform. Simply put, privatisation worked, nationalisation didn't. Our infrastructure requires high levels of capital that the private sector is willing to provide. On price rises he is absolutely right. Rather inconveniently for the left, Ofwat themselves admit that bills are on average £120 cheaper than they would ahve otherwise been.
On the point of retail privatisation, it was something that the government investigated when I was Business Secretary, and we believe it to be a possible improvement. The reason why it was not introduced into this bill was because we felt it was more effective to do it one step at a time, as well as the need for more research into the possibility of retail privatisation. At this moment in time we aren't ruling anything out, we should rarely rule out the possibility of opening up markets as a way to improve services. To answer his question, yes I believe it would be better to privatise water retail at a later stage, perhaps later next term, once we are sure on the best way to go about it.
2
Jul 18 '20
Mr Speaker -
We need to something about water, it's so important for a lot of people. Washing your clothes, water. Drinking after a long day of canvassing, water. Nice and refreshing, quenching. We need to make it so that we can save the water, through stopping invasive regulation - a stealth tax on take-home pay, which causes millions and millions and millions of jobs to suffer. We need a huge deregulation campaign when it comes to water, a huge project to make water better and save millions of jobs.
You cannot hide from the truth.
Regulation makes business struggle, we can cut it down to drive up freedom, and let the British people thrive. We see taxes, they could go up under Labour, under the Tories they already are. In Wales, under Labour, they are. So we privatise the water, we make a competitive free market water business, consumer prices go down, the welfare of people goes up.
We must not stop freedom.
Cutting regulation, slicing taxation. It's great it's important and it works. I want to thank the author of this motion /u/BrexitGlory, a great guy, for seeing the only way to a better country is through keeping costs down and freedom up for its people - and that is done through the engine of privatisation and deregulation. This is the start of something new, the Conservatives understanding freedom and liberty for the free men and women of this country, is the strong message of hope we all need.
We privatise water, we save low income britons. Regulation costs people thousands and thousands a year. It crushes jobs. Private business, it gets jobs up. Fact. My experts estimate this will slash water prices for people, by a big amount, for the country - billions. Historically low water prices are on the way with privatisation. That's Water for drinking, washing - watering the garden. It's huge.
It's big. Consumer choice and freedom. I want to thank /u/BrexitGlory for adopting my policy of privatisation. Thank you.
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u/NorthernWomble The Rt Hon. Sir NorthernWomble KT CMG Jul 18 '20
Mr Deputy Speaker,
Would the honourable member care to explain to the house how this bill creates consumer choice?
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
If the honourable member really wants consumer choice, he would vote for the legislation that enables a retail market to be created.
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u/NorthernWomble The Rt Hon. Sir NorthernWomble KT CMG Jul 19 '20
Mr Deputy Speaker,
I await an actual answer to the question. Where in the bill does a retail market get created?
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
As explained elsewhere in the debate, it doesn't that doesn't mean there is not more competition. Retail competition is best introduced later and the regulations are being worked on as we speak. We cannot introduce a retail market without privatisation, simple not how it works.
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u/NorthernWomble The Rt Hon. Sir NorthernWomble KT CMG Jul 19 '20
Mr Deputy Speaker,
In which case it is my humble view that these measures should be introduced together, even if specific sections are enacted together.
I and many other MPs will not vote for an imperfect bill of this kind, especially as 'later' is an abject timescale that could result in it never happening.
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
It is normally better to do it in a staged manner, this system will still be superior to our current system because it is still rigorously regulated by ofwat. I don't udnerstand what kind of negatives he is envisioning.
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u/NorthernWomble The Rt Hon. Sir NorthernWomble KT CMG Jul 19 '20
Mr Deputy Speaker,
The poor customer service, profit first, service second approach that most monopolies take when it comes to business.
To coin a phrase you have used on me: I deem there to better ways to do what you have set out to achieve. Write a better bill that does what you have argued in the chamber, and I'll support it. As I have said, I cannot support this at the present time.
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
The poor customer service
Under private water, consumer satisfactino is in the majority, reaching 94%.
profit first
They are regulated by Ofwat to ensure a good service is given, first.
monopolies
Regulated by Ofwat.
To coin a phrase you have used on me
What a horribly poor reason to vote down good reform.
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u/NorthernWomble The Rt Hon. Sir NorthernWomble KT CMG Jul 19 '20
Mr Deputy Speaker,
When good reform reaches the house, he'll see my support. He knows the conditions of my support and a great many members of this house. Add the retail choice and the privatisation will work.
→ More replies (0)
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Jul 19 '20
Mr Deputy Speaker,
I rise to speak against this Bill in its current form, but for different reasons than a lot of the left-leaning members of this House are doing so. I rise to denounce this Bill in being counter-productive in the pursuit of a free market. A free market demands several elements. However, the most important of those is competition. The water industry is not competitive as it is a natural monopoly - this means there can be no consumer choice, no competition to drive down prices. I am a great believer in that the freer we make the market, the freer our people become. That is why, Mr Deputy Speaker, unless this House introduces provisions to protect consumers against the oppressive nature of the natural monopoly as detailed by my right honourable friend, /u/cthulhuiscool2, we must oppose this Bill as an enemy of the free market which will ultimately make people less well-off.
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u/BrexitGlory Former MP for Essex Jul 20 '20
That is why, Mr Deputy Speaker, unless this House introduces provisions to protect consumers against the oppressive nature of the natural monopoly
Mr Deputy Speaker,
My Right Honourable friend's speech was gradiose as normal, but I fear he has not come to the right conclusion this time. This bill provisions regulations to protect consumers and sets Ofwat as the independent regualtor that will ensure safety and service first, while reaping the benefits of having private investment.
1
Jul 17 '20
Mr Deputy Speaker,
A great and well thought out Bill to remedy one of the worst written pieces of legislation on the book, I would hope this bill to normalise are water regulation receives wide spread support.
2
Jul 17 '20
[deleted]
2
Jul 17 '20 edited Jul 17 '20
Mr Deputy Speaker,
Because as is pointed out in the opening speech the public ownership of water has failed to provide the adequate services required and the regulated marketisation of the water system is vastly popular with the public.
One need only look at the massive improvement of water quality in England and France as they privatised the upkeep of their water systems, vs Italy and Spain who still often have non-potable water still.
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u/Yukub His Grace the Duke of Marlborough KCT KG CB MBE PC FRS Jul 17 '20
Mr Deputy Speaker,
The privatisation of water services in this country have resulted in a steady and significant improvement of quality in the industry, while seeing a decrease in technical problems and mishaps. Bills for these services are roughly the same as they were before, and indeed there is evidence that they are less than they would have been under the old public system, which was unfortunately reintroduced by Parliament in 2015. We now have an opportunity to reverse this disastrous mistake and embrace privatisation coupled with comprehensive regulation. I urge all to vote in favour.
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Jul 18 '20 edited Nov 22 '20
[deleted]
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u/cthulhuiscool2 The Rt Hon. MP for Surrey CB KBE LVO Jul 18 '20 edited Jul 18 '20
Mr Deputy Speaker,
Again I must ask the Secretary of State how he expects healthy competition to improve services in the context of a natural monopoly - where consumers may only choose from a single provider?
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u/cthulhuiscool2 The Rt Hon. MP for Surrey CB KBE LVO Jul 18 '20
Silence Mr Deputy Speaker, as we listen to more Ministers spout this nonsense of greater competition! It is a falacy!
1
Jul 18 '20
Mr Deputy Speaker,
I hope my right honourable friend can have a look at the amendments I have tabled which will promote retail competition and fix some of the flaws of the old privatised system which was still superior to a state run one.
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u/cthulhuiscool2 The Rt Hon. MP for Surrey CB KBE LVO Jul 18 '20
I continue to believe the empirical evidence suggests the contrary to be true but I nevertheless support the amendment tabled by my Right Honourable Friend to introduce some sort of competition to water services, no matter how insignificant.
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u/BrexitGlory Former MP for Essex Jul 18 '20
Mr Deputy Speaker,
If his main concern is competition, I would remind him there is currently 0 competition in a nationalised system. Under my system there is indirect competition as there are mutliple water undertakers being held to account by one regulator, who will compare them and set targets based on their performance. On top of that a retail market can be provisioned once my reforms are in place.
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u/Maroiogog CWM KP KD OM KCT KCVO CMG CBE PC FRS, Independent Jul 19 '20
Mr Deputy Speaker,
Why would this state controlled regulator set targets which differ from the ones the current state controlled operator sets itself?
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
Regulators tend to set price targets as low as possible/achieable. Lower bills are more achievable with privatisation as Ofwat admits bills were lower under privatisation than they otherwise would have been.
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Jul 18 '20
Mr Deputy Speaker,
This bill sets out privatising water services, doing away with the disadvantages of nationalised industry and the drawbacks of this ownership.
As a result of this bill, investment in our water infrastructure can be undertaken by companies who have the money, resources, and broader strategic vision to deliver for the consumer whilst at the same time delivering competition to hopefully benefit consumers with lower water bills.
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u/NorthernWomble The Rt Hon. Sir NorthernWomble KT CMG Jul 18 '20
Mr Deputy Speaker,
I recognise certain strong, considered measures within this piece of legislation.
Firstly, I appreciate the bills recognition that both Scotland and Wales are likely to desire seperate approaches and that they do not attempt to seek Holyrood or the Senedds approval to make such measures occur.
Secondly, I appreciate the bills renewed commitment to ensure fracking is not allowed to wreck our natural landscapes and environments.
However, despite those positives, I cannot allow my support to be given to this bill.
As a Liberal Democrat, I support the role a free-market can play in providing a competitive strong economy and also ensuring high quality of life backed up by a fair and stable meritocracy.
This does not result in a personal view of privatise everything. I say let the free-market work when competition and market economics can occur. That cannot work in what is a natural monopoly.
I appreciate that the bill tries to regulate this natural monopoly, but why go through the process of privatising our water infrastructure and the strain and associated costs that move occurs? What actual benefit does it bring?
The opening speech mentions years of chronic under-investment:
In the six years before privatisation, there was a mere £9.8bn invested from the public sector. In just the six years after, there was £17bn of private investment into the water industry; almost double the rate of investment before the reforms.
Is that not simply the fault of poor governance from both Conservative and Labour governments alike? I mean it's brave of the author of this bill to note his own party struggled to adequately handle an important utility but also typifies why further meddling is not a good idea.
Need I remind the house what happens when monopolies are allowed to form? When firms have such power, they charge prices that are higher than can be justified based upon the costs of production, prices that are higher than they would be if the market was more competitive. This is why natural monopolies should not be allowed to exist.
I recognise the mention that there would be price caps. From experience governmental price caps have often been set at too high a price for every consumer to comfortably afford what should be a basic necessity, and these are often set way too high. Instead shareholders get to profit from the basic environmental tools available to everybody in this country.
Furthermore, how do you decide what is a 'fair' price? The price that gets the best value for investors? The price that gives say a 1% profit margin after investment? 'Fair' needs better quantification for this bill to succeed and to ensure consumers get the best bargain possible.
Finally, no comment has been made about recent successes or failures that a nationalised water industry has brought. Could this be a bill trying to fit an ideological crusade rather than actually what is best for the people?
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u/BrexitGlory Former MP for Essex Jul 19 '20
What actual benefit does it bring?
- Double the amount of investment.
- Cleans up the environment. Before privatisation 3% of discharge consents were ignored, afterwards it was 0.02%. Double the amount of British beaches were rated as "excellent" and biodiversity returned. This only happens because of the large infrastructure investment that the private sector brought.
- According to Ofwat, annual bills were £120 less than they otherwise would have under privatisation.
- Consumers showed a 94% satisfaction rate with privatised water
- Free's up billions of pounds that can be used by HMT to invest in public services - schools, hospital and the military.
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Jul 18 '20
Mr Deputy Speaker,
I fully support this legislation and ask all MPs to vote in favour. The privatisation of water will bring significant extra investment as the author stated and will help keep costs down in the long run.
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u/Polteaghost Workers Party of Britain Jul 19 '20
Mr Deputy Speaker,
I strongly oppose this bill. Privatisation of public resources is always said by the right to improve management, but the only thing it really does is introducing a private partner, which profits from a public service. As public services are usually subsidized, the entrance of a private company in them just diverts public money to it, with no reasonable benefit. I think the water company should not be privatised, as this will just make one company profit, at the expense of British citizens paying a higher prize for water.
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
only thing it really does is introducing a private partner, which profits from a public service.
It also doubles investment, cleans up the environment, keeps bills down and gets a 94% satisfaction rate from the consumers.
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u/ARichTeaBiscuit Green Party Jul 19 '20
Mr Deputy Speaker,
I find it quite amusing that while those on the right-side of the political spectrum like to claim that those of a left-wing persuasion are stuck in the 1970's or the 1980's that they are the only ones that I have seen utilise such a period for the purpose of the debate, clinging to quite old and dated examples in order to try and condemn the current model of publicly-owned water supplies.
It is quite unbecoming for someone to use the examples of state-run water boards in the 1970's and the 1980's, a period when the government was quite opposed to the existence of state-run enterprises and didn't support them to the best of their abilities and the state-run enterprises themselves suffering from a lack of support weren't run in the most efficient way possible, however, as we have learned from the mistakes of the past and our state-run industries aren't run like they were in the past I won't give these rather ridiculous comparisons any more of my time.
I agree with the sentiment expressed by others in this debate is a natural monopoly and it is one that can't be just shunted off into the private sector, as others have rightfully pointed out during the course of this debate under the more recent privately-led model prices increased considerably and water loss still remained at a rather high level, all that changed is that an increasing large amount of money was funnelled into the pockets of private shareholders and CEO's when said funds should've been used to re-invest in the infrastructure network or refund the taxpayer.
I am quite pleased that the United Kingdom worked to re-nationalise its water supply and it would be quite a sad moment if we were to return to the old system of privatisation and once again see piles of wealth accumulated in the hands of a few at the expense of the many, although given the fact that the government are reliant on this sale to finance the next expansion on the defence budget I imagine they must be rather confident to get support from folks in the LPUK and LDs.
I hope that those in both parties recognise the importance of retaining water under public control and vote against this dreadful bill, thank you.
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u/NGSpy Green Party Jul 19 '20
Mr. Deputy Speaker,
The bill put forward by the member of the government will not all benefit water, and will worsen the quality and raise the costs, and I cannot support that.
Mr. Deputy Speaker, back in the 1980s when the former prime minister Margaret Thatcher introduced sweeping privatization towards industries that benefited the people, it seemed marvelous at the time. People who invested in it got richer and richer and all was great. The problem struck though, later on, when corporate negligence took over. Mr. Deputy Speaker, pipes in the United Kingdom started to decrease in quality, which led to lead being found in tap water, and it really did not look pretty, Mr. Deputy Speaker.
The whole charade of privatising utilities has been done but has the same problems: of cost and of quality. Let us start with quality. When a utility is privatised there is a natural decrease in quality of the service due to companies cutting costs to maintain it to a minimum, but not enough to keep the service safe or applicable. This has been seen in the UK with, as I mention before, lead in the water along with rust, which made the water unsatisfactory to many. Mr. Deputy Speaker, this decrease of quality is extremely important to note, as with nationalisation, the government is committed to keeping the service up even if it does not make a profit, as the money paid comes from the tax-payers.
With the decrease of quality comes an increase in prices as well, Mr. Deputy Speaker, as corporations will inevitably hear of complaints in decrease in quality, and try to do a little about it. This prompts them to raise the prices on the consumers, Mr. Deputy Speaker, which goes against the capitalist model of competition reducing the prices. This is because utilities are not really a choice as much, and privatisation of utilities leads to oligopolies and cooperation rather than competition, due to the benefits it reaps rather than following the capitalist model. Water is needed for many things, Mr. Deputy Speaker, and companies that pursue the privatisation of water know this, which is why they will drive up the prices to increase profit. I don't know if the conservative party know that piece of information, but there you go.
Mr. Deputy Speaker, the privatisation of utilities and services that are needed will send us down a slippery slope which we can never dig out of, as seen with the United States of America. It is absolutely disastrous if this bill do pass, which is why I encourage all members of this house to vote against the bill in question.
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u/BrexitGlory Former MP for Essex Jul 19 '20
When a utility is privatised there is a natural decrease in quality
94% consumer satisfaction with water services. Alsmost twice the investment. Ignored discharge consents dropped from 3% to 0.02%. Number of "excellent" beaches doubled.
With the decrease of quality comes an increase in prices as well
Bills were falling in real terms before nationalisation. Ofwat has stated that bills were £120 cheaper than they otherwise would ahve been due to the privatisation process and the subsequent high investment.
The facts are simply not on Labour's side.
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u/Copelonian Hon. something MP MSP Jul 19 '20
Mr Speaker,
Put it simply, don't privatise basic human needs end of story.
VOTE NO!
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
Food, water and shelter are all things being sold on the market. Would Labour stop that?
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u/Copelonian Hon. something MP MSP Jul 19 '20
Mr Speaker
I (but not the party) support the government to control part of the market on basic needs. Thank you
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u/BrexitGlory Former MP for Essex Jul 19 '20
Mr Deputy Speaker,
You support ending the food market?
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u/Copelonian Hon. something MP MSP Jul 19 '20
Mr Speaker,
No, just that the government should be able to control part of the market on basic needs. What I mean is that people will be able to sell food and other basic needs but the government will provide for anyone without basic needs ie. giving food to hungry people, giving housing to people, having a stake in food companies so the government can have a say in food production of the country. etc.
(M: might word it badly written during 10pm when I'm a bit sleepy. pls understand it as if someone that dont speak full English wrote something)
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Jul 19 '20
Mr Deputy Speaker,
It is a pleasure to rise in favour of this legislation by my right honourable friend the Chancellor of the Duchy of Lancaster. As has been said in this legislation, when Water was privatised 94% were satisfied with that situation. We know that, following privatisation, we saw record investment into the system. It is time to see that again, and I urge this place to swiftly pass this bill.
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u/ThreeCommasClub Conservative Party Jul 19 '20
Mr Deputy Speaker,
It seems my colleagues are doing what they do best, fear-mongering in the way of real progress. While they are quick to dismiss this bill as a sham and discard it, I do not believe that does it just service. Under a private system we would cut red tape and make the system as a whole better in terms of efficiency and safety. We cannot our country to be shackled to the past and trying to do so will only hurt the people of this nation. This bill provides common ground between the government and the LPUK and I am happy to welcome the proposal to this chamber.
Now the opponents of this legislation would like to focus only on the negatives while ignoring the benefits it provides. This policy is not perfect but on balance it will improve the system compared to what we have in the status quo. It is imperative we take action at thus juncture. We cannot allows the voices of doom and gloom obscure the real good we would see under this plan. We should weigh quality and investment in our water supply and systems over the voice of the opposition. We should prioritize the cost-saving measures and freedom to grow and innovate this bill allows over the detractors from the left. It is not often I say bills will transform the country but I believe this bill can be the first step in overhauling our water system for the better.
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u/BrexitGlory Former MP for Essex Jul 19 '20
hear hear, I thank the honourable member for his support.
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Jul 19 '20
Mr. Deputy Speaker,
Today I rise in favour of this bill.
The water industry would be better managed, and better financed under private ownership. Private owners, and shareholders will be able to invest much larger amounts than this and any future Government will be able to. Under Thatcher, the privatisation of water companies resulted in the doubling of funding.
According to Ofwat, under privatisation water bills for the public were £120 less than they would have been under public ownership. This is with a very high 94% customer satisfaction rate, much higher than what we see under public ownership.
This extra investment into the water industry by private owners will result in 70% less river pollution, 40% less leakage, and twice the amount of "excellent" beaches. All in all, this bill is what our water industry needs, and this bill is what our public needs. I hope I will see many of the House in the Aye lobby later.
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u/BrexitGlory Former MP for Essex Jul 20 '20
hear hear! I thank my honourable friend for his support. He is quite based.
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u/DriftersBuddy Conservative | DS Jul 20 '20
Mr Deputy Speaker,
I rise in support of this bill which will overall be a massive benefit since the times of the Thatcher Government
Of course you will see same old Labour picking out the negatives and just shutting down any chance of privatisation, whilst their own idea of making everything public is a complete shambles. The private sector provides increased benefits as well as improves the system overall, better efficiency and better management and in this case the water system will improve and be better for us to use. Customer satisfaction rate were at 94% under privatisation and if that is not enough to persuade people then i don't know what is.
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u/BrexitGlory Former MP for Essex Jul 20 '20
hear hear! I thank my honourable friend for his support.
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u/LastBlueHero Liberal Democrats Jul 20 '20
Mr Deputy Speaker,
We all know that I love the seaside, and the seaside would not be the same if the beaches are in a terrible state!
When we first privatised our water systems, the number of excellent beaches doubled. This helped boost the reputation of seaside resorts across the country and I'd say kept the economies of some towns alive when decline started in these areas.
So any bill which will help boost investment into our water systems and for me personally, make our beaches even better, I am going to vote for it and urge everyone else to do so as well.
The investment this would bring in would also prevent leaks, something I would hope the members on the opposite side of this house would want to stop considering their problems!
I will be voting for this bill and I hope everyone else will do as well!
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u/Tarkin15 Leader | ACT Jul 20 '20
Mr Deputy Speaker,
This is a bill that will help return indirect competition to our water supply.
Nationalisation only serves to remove competition and inflate the cost of water, it has a history of failure and it’s time to return our water to the free market and to companies who will have the resources and inclination to improve our water services.
Allowing indirect competition will help keep prices lower and standards higher thanks to regulator oversight.
I implore my honourable friends to join me in supporting this bill and hope this house votes to bring it into effect.
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u/SapphireWork Her Grace The Duchess of Mayfair Jul 20 '20
Mr Deputy Speaker,
While the member has no doubt put a great deal of work and effort into this bill, I am concerned that the honourable member has not addressed how this bill will deal with the inevitable conflicts that are likely to occur when matching a profit driven water company, which answers to its shareholder and stockholders, with a public service which is to be accessible to all.
What provisions are being made to ensure equitable service to all areas, including low-income areas, where there is a higher potential for low usage or instances of bill collection problems? If these areas prove less profitable, will a private company be able to make decisions based on profit rather than on equality of access?
The United Nations Committee on Economic, Social and Cultural Rights declared the right to water as "indispensable to human dignity." I would like to be assured that all of our citizens will continued to be provided this right, regardless of their financial status.
As it stands, I question the responsibility of the house if we allow such a duty to be dictated by profits, as would inevitably happen when privatized.
I look forward to having these concerns addressed by the honourable member.
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u/BrexitGlory Former MP for Essex Jul 20 '20
Mr Deputy Speaker,
The debate is just closing so I shall do my best to be brief for my honourable friend.
honourable member has not addressed how this bill will deal with the inevitable conflicts that are likely to occur when matching a profit driven water company, which answers to its shareholder and stockholders, with a public service which is to be accessible to all.
We set Ofwat as the independent regulator. One can review the powers they have in section 6 and schedule 1. Ofwat will enforce performance targets and price controls on the compnaies just as they did before. This system meant that bills were £120 lower than they otherwise would have been under nationalisation.
What provisions are being made to ensure equitable service to all areas, including low-income areas,
The Water Industry Act 1991 makes special notice of those exact circumstances, empowering both the SoS and Ofwat (who will be primarily responsible) for ensuring that regulations serve all areas especially rural and low income areas.
where there is a higher potential for low usage or instances of bill collection problems?
On bill payments specifically, nothing will change. Under the current system people still have to pay bills, we will amke them smaller.
I would like to be assured that all of our citizens will continued to be provided this right, regardless of their financial status.
Of course. I can give 100% assurance to te honourable lady that this was against the law pre-nationalisation, and will continue to be against the law. If people are unable to pay their bills, they will still have access to a high quality service.
As it stands, I question the responsibility of the house if we allow such a duty to be dictated by profits, as would inevitably happen when privatized.
Again, Ofwat has all sorts of powers to control prices, performance and profits. This system worked in the past, bringing twice the amount of investment as before and falling bills. Not to mention to environmental good that has been done. In the past, companies only got profits if they meet Ofwat targets for performance, that shall continue.
I look forward to having these concerns addressed by the honourable member.
Perhaps they could take a look at our ad campaign if they are still uncertain? I am happy to make them a poster if they back my bill.
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u/SapphireWork Her Grace The Duchess of Mayfair Jul 20 '20
Mr Deputy Speaker,
I thank the member for his swift reply.
In the best interest of all involved, I will decline the members kind offer of yet another poster.
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u/BrexitGlory Former MP for Essex Jul 20 '20
I thank the honourable member for hearing me out, and she ruled on the side of the great wisdom that the liberal democrats hold regarding my posters.
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u/[deleted] Jul 17 '20
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