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EFRA chair Neil Parish MP speaks out on water nationalisation in England

Industry
3 December 2018
Neil-Parish-MP

The chair of an influential House of Commons committee has spoken out over suggestions that the water industry in England should be taken over by the government.

Writing in the new edition of The House magazine, Neil Parish MP, chair of the Environment, Food and Rural Affairs Select Committee, says:

“Years of underinvestment in our water infrastructure meant that by the time the industry was privatised in 1989, we had a creaking, pipe-leaking network. The track record of government-owned water infrastructure speaks volumes – underinvestment, dire infrastructure and spiralling costs.”

Mr Parish goes on to say:

“Under public ownership, investment was delayed and kicked into the long grass – forced to compete with spending priorities such as health and education.”

The committee which Mr Parish chairs published a major report called ‘Regulation of the Water Industry’ in October 2018. Writing about the report he said: “We found the water industry is facing a number of challenges. As the UK’s population increases and the impact of climate change becomes more apparent, pressure will be put on water resources and the industry’s ability to provide a reliable and safe supply of water to commercial and domestic consumers. Their investment and expertise will be vital.”

With leakage down by a third since the mid-1990s, Mr Parish noted that cutting-edge research and development by private water companies means it is now much easier to detect a leak:

“As we face hotter summers with more droughts, and colder winters, which see more pipes burst, fixing these leaks to prevent water wastage takes on greater significance. Far better investment comes from private companies and their shareholders than the public purse.”

In his article, Mr Parish also questioned the wisdom of government funds being used to take over the industry. He said:

“And what about the upfront cost of renationalisation? The Social Market Foundation estimated that renationalisation would cost the British taxpayer £90bn. Using this estimate, that would add 5% to our national debt, equal to 13% of all government spending. It is a titanic purchase – and will end the same way.”

Mr Parish also noted that water and sewerage bills are set to fall by more than 4% in real terms. The reduction is contained in water companies’ draft business plans for 2020-2025 submitted to the industry’s independent economic regulator Ofwat.

The full article in The House magazine can be found here.

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