Water Sector: Public Ownership

I beg to move, That this House has considered e-petition 762640 relating to a referendum on public ownership of the water sector. It is a pleasure to serve under your chairmanship, Mrs Barker. I begin by thanking Ashley Paul Smith, who is sitting in the Public Gallery, for pulling together this petition. It has now received 208,000 signatures, and counting—I am sure that that number is already out of date. As the founder and chair of Windrush Against Sewage Pollution, Ash has been investigating the sewage scandal since 2016. Members will likely be aware that his efforts were dramatised earlier this year in Channel 4’s “Dirty Business”, which exposed the long-term impact of the private model on our water sector.

That brilliant documentary was based on an example relating to South West Water and Devon. Many people in my area would like South West Water to become a company for the public benefit and mutualised. Does the hon. Gentleman agree that that would be a good model for South West Water?

As I run through my speech, the hon. Gentleman will find a theme of strong support for public ownership of the water sector throughout. We absolutely must look at that option. Ash’s petition calls for “a binding national referendum on whether the water industry should be returned to public ownership…A referendum would give the public back its voice about its water.” For too long, our water sector has been in the hands of shareholders rather than the public, who pay for and rely on its delivery.

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My constituents in Morecambe and Lunesdale are really cross about the level of their water bills, and they get more cross when they see the profits being taken out of the water industry. Does my hon. Friend agree that that anger is fair and justified, and that some change needs to come?

I absolutely agree that there is huge frustration out there, which I will refer to later in my speech. I give way to my other hon. Friend.

My constituents in Putney are angry about Thames Water. They can see that they are paying more but getting less because of the model that we have. Does my hon. Friend agree that Thames Water needs to go into special administration and that all our water companies need to be nationalised?

I will certainly come to that subject later in my speech. My view is absolutely that there needs to be fundamental change in how we ensure that people have access to affordable, safe and secure water supplies.

I will make a little progress; otherwise, I am not going to get past the next few paragraphs. In 1989, Prime Minister Margaret Thatcher sold off our then publicly owned water and sewerage industry for £5.2 billion, arguing that privatisation would bring desperately needed investment to the sector. She told the Commons that she believed it would be a better deal than nationalised water. She hoped it would “proceed successfully”, encouraging the Opposition at the time to “wait and see in the light of the facts rather than pontificate.” —[Official Report, 28 November 1989; Vol. 162, c. 577.] Years later, here we are: we can see in the light of the facts that the private model for water has been far from a success. It has been an economic, environmental and public health failure. I will take an intervention now.

My constituents in Manchester Rusholme have seen a £57 increase this year, yet it is safe to say that there has been very little to show for it. Just last week, United Utilities had to pay a further £900,000 in fines for dumping raw sewage. Does my hon. Friend agree that the Government must treat water reform as a strategic priority to tackle the cost of living crisis as well as the crisis in our waterways?

The short answer is yes—I absolutely agree.

Will my hon. Friend give way?

I will make some progress, and then I will. The current model is absolutely an economic failure. Private companies have paid out, in 2024 prices, around £83 billion—an average of £2.4 billion a year—as dividends, while loading the companies in debt. Often, those loans were taken out simply to increase the amount of cash extracted as dividends when profits alone were not enough. As we know, crucial infrastructure has been left to fail. Not a single new reservoir has been built since 1992, and water companies have overseen the waste of around 3 billion litres of water a day through leaky pipes.

Last year, Severn Trent reported profits of £850 million, which is an increase of 45% on the previous year, yet my constituents’ water bills have risen by around 10%. There have also been occasions when Severn Trent has not been as quick to carry out repairs as it could have been. Does my hon. Friend agree that the situation needs to change, so that monopoly providers do not make huge profits at the expense of hard-working families while public confidence in the sector continues to decline?

I absolutely agree. As my hon. Friend will hear throughout my speech, the evidence clearly shows us that the model is failing in a range of areas. I know that my hon. Friend the Member for Bournemouth West (Jessica Toale) and the right hon. Member for South Holland and The Deepings (Sir John Hayes) want to get in; I will make a little progress first, then I will give way. The model has also been an environmental disaster. In 2024, under the administration of water companies, raw sewage was discharged into rivers and seas in England for a record 3.61 million hours. In the first six months of this year alone, raw sewage was discharged into rivers and seas during dry weather a total of 7,280 times.

Will the hon. Gentleman give way?

I will make a little progress first. According to Environment Agency data, today, just one in seven of England’s waters is in good ecological condition.

I am glad that my hon. Friend raised the public health and environmental issues related to the water system. I have received representations not only about sewage at Bournemouth beach but, most recently, about exceptionally high levels of E. coli in Christchurch harbour, which flowed out of the Stour river in my constituency. Does my hon. Friend agree that the public interest of clear accountability in such contexts should always come before shareholder interest?

I absolutely agree that transparency and accountability are crucial. As will be made clear in my speech, and, I am sure, the contributions of other Members, that is a major issue in the current model. The model has also been a health disaster. According to Government advice, swimming in open water can increase the risk of gastrointestinal illness. Bathing water quality in England seriously lags behind that of its European counterparts. According to Best for Britain, the percentage of bathing waters in England that are rated poor quality is more than five times that in the European Union.

The hon. Gentleman is well known for his courtesy, as he has just illustrated by giving way. Even more shockingly, around 80% of water companies are foreign owned—in other words, the majority of their shareholders live abroad, in all kinds of places, including China. Most users of water would be shocked to hear that. The Government have an obligation not to allow key utilities to fall into foreign hands.

I absolutely agree, and under this Government work has been taking place to ensure that we have control over our vital services in the UK. The Government are aware of the failures; their response so far has been to tighten regulation of the sector. In January, Ministers published a White Paper titled “A New Vision for Water”, which was broadly in line with the recommendations made by the Independent Water Commission, also known as the Cunliffe commission. The commission was tasked with establishing key changes to improve the water sector regulatory system, including the creation of a stronger integrated water regulator that is more streamlined and more closely embedded in the affairs of the water companies; regional planning systems; a new water ombudsman; a clearer national strategy through revamped strategic policy statements to regulators; and national targets.

The hon. Gentleman is being very generous with his time. Does he agree that, as well as putting water companies into public hands, which I agree with, the companies should also be required to do more to support people to harvest their rainwater? That would reduce water bills and the amount of water being pushed into the sewers, which causes discharges into our rivers and seas.

I absolutely agree with and support the hon. Gentleman’s point. The issue is also about how we look after our water in the future; unfortunately, it would appear from the last few years that such innovative and sustainable initiatives would not happen under private models.

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I will bring in the hon. Gentleman later, but first I will make a bit of progress. While the steps I mentioned signify some progress—and they are welcome—they only tinker at the edges of reform. I am concerned that the Government have failed to address the fundamental error of the past four decades: while water remains a commodity, it will never deliver an outcome in the interests of the public or the environment. It was disappointing to learn that the Government did not even permit the Independent Water Commission to consider alternative ownership models, including whether public ownership was an option. That signifies a further issue, which is the continued lack of democratic inclusion in the decisions that affect the sector.

My hon. Friend is making an excellent argument. In 2025, our regional water company, Yorkshire Water, discharged untreated sewage into our regional waters for 285,000 hours. Does he agree that that shows the failure of the private sector?

I absolutely agree. As a fellow Yorkshire MP, I know only too well the issues with Yorkshire Water and their impact on citizens in our region. Public ownership is incredibly popular among the public—Ash’s petition demonstrates that, as does opinion polling. In May this year, YouGov reported that 82% of Brits believe that the water companies should be run in the public sector, compared with just 8% who believe that that they should remain private. That is a marked increase from the 59% in favour in 2017. That support is not limited to Labour voters, of whom 84% are in favour: 66% of Conservative and Reform, 83% of Liberal Democrat and 87% of Green voters are also in favour. The public overwhelmingly back the public ownership of water—in my view, with good reason. Public ownership would mean that the £22 billion earmarked for shareholder returns and interest over the next five years would go instead towards repairing our broken water infrastructure, paying off debts and letting water company staff do their jobs properly.

I thank my hon. Friend for being generous with his time; many Members want to participate. I promised that I would raise this issue for my Liverpool Riverside constituents, who are complaining about United Utilities. It increased the cost of bills by 9% and then took a profit of £779 million. We are faced with crumbling Victorian systems. Does my hon. Friend agree that as a Government we need to do what we promised in our manifesto and in-source immediately?

Again, as I run through my speech, my hon. Friend will see the position that I am taking on public ownership. I absolutely agree that it beggars belief to see money being siphoned off from the water sector into private hands. As has already been mentioned, many shareholders are not even in the UK while our citizens are suffering badly. The £22 billion earmarked for shareholder returns alone would help address water poverty, which 1.8 million households faced between 2024-25. Look across the water: Paris took water back into public hands in 2010. Once that move was made, a range of social subsidies were introduced to help safeguard access to water for all. Crucially, public ownership is essential if we want to restore public trust. Last year, the Consumer Council for Water’s annual survey found that trust in the water sector had hit an all-time low. The high cost of bills, repeated violations of environmental standards and continued enrichment of company bosses has left the public disillusioned.