Charlie Maynard MP: speeches

Speeches

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  I am sorry, but with spill per overflow, I again think we are drinking the water industry’s Kool-Aid. We are doing its metrics, and that is not doing anybody any favours. We are talking about spill per overflow; what we should be talking about is how many hours. We have that information. Why are we not saying how many hours? Let us think about it. We could have a spill for one hour or a spill for a month. That is just one, in that metric. It is missing a huge amount of what is going on. Please can we move away from these metrics towards spill hours, at a minimum?

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  On that point, may I intervene?

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  I thank the hon. Member for his kind words, and I look forward to his support in some of the votes at some point. In the meantime, if he has recommendations on the wording that he would like to put forward, I ask that he please do so. These new clauses are already in place, so maybe that is impossible, but let us by all means try to improve them.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  The point about “relevant time” is fair and deserves to be clarified. I completely agree on the issue of statutory consultees and have no issue with that either—that would make much more sense, because there is a real failure in that regard. I will go a step further—I have lived experience in this regard—and give a special shout-out to Thames Water employee Richard Aylard, who for two years dutifully showed up every six weeks with West Oxfordshire district council to hash through these issues. I learned a lot from him and am grateful to him, as well as to Jake Morley, Lidia Arciszewska, Phil Martin, Laurence King, Alaric Smith and Alistair Wray. They sat through all that, and we all learned together. It is important that everybody knows what came out of those meetings. When sewage treatment works’ capacity is calculated—they are very much under-capacity in my patch and, I am sure, in those of other hon. Members—there are four criteria. The first is the population or population equivalent, which is normally optimistically understated. The second is per capita consumption. Thames Water has a high per capita consumption when it suits the company and a low per capita consumption when it suits the company, so again that is understated. The third is the Environment Agency multiplier, which is typically 3.0, and is discounted far too often. When there is a known record of spills, Thames Water is still allowed to discount the EA multiplier, often from 3.0 down to 2.4; that is a 20% cut, which means that the capacity can be 20% less. That is a real problem, and it is being done repeatedly on sewage treatment works that have dumped sewage left, right and centre for years. The fourth criterion is infiltration. Some 47% of the capacity of west Oxfordshire’s big nine sewage treatment works comes from infiltration. That means that our pipes are leaking. There is not enough science on this matter. If we were to put in flow meters, we would have the information, but it seems that we Lib Dems are the only team in the room, alongside the hon. Member for Waveney Valley, that advocates flow meters. If we want to solve these problems, we have to get serious about the information.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  We wish to press the new clause to a Division. Question put, That the clause be read a Second time.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  I beg to move, That the clause be read a Second time. Good morning, everyone. I will highlight two key points about new clause 28, which concerns what happens when companies that have gone into special administration come out of it. Subsection (1) refers to considering “the merits of changing the law to provide that a water company exiting a special administration regime becomes a company mutually owned by its customers.” Subsection (2) states that that would involving considering “the general merits of mutual ownership of water companies in such circumstances, and…what model of mutual ownership would be most suitable.” We are not saying that companies have to be this or that; we are just advocating considering this possibility. Private companies have made an absolute mess of our water sector, have added no value over the past 36 years and have ramped up nearly £70 billion of debt. When the companies come out of special administration, we have an opportunity to do something different and not to repeat the mistakes of the past. I want the Committee to take that on board. We are not asking for a commitment; we are just asking for consideration. Hon. Members all know how badly the private companies have treated us, our rivers and our communities. These companies are monopolies, so they have absolute power. Unfortunately, our regulators have completely failed in their task. If they have failed in the task, and if we do not have absolute confidence in the regulators—I do not think that anybody who will be voting today does—we must not give water back to the private sector. Globally, this is standard. It is what the rest of the world does with its water sector. Even in the US, the vast majority of the water sector is mutually or municipally held. Chile may be the one shining example of private capitalism that we can point to in this regard, but there are almost no other countries in the world that do as we do. We are asking the Committee to do what is standard, rather than what is unusual. The Under-Secretary of State for Business and Trade, the hon. Member for Harrow West (Gareth Thomas), has written about the benefits of the mutual ownership model, which he states forces water companies “to operate in the interests of consumers; where environmental considerations such as disposal of sewage would take precedence over profit.” That is our request. I rest my case.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  I beg to move, That the clause be read a Second time. New clause 32 is about procurement. I will read out the key point: “The Authority must issue rules requiring relevant undertakers to use competitive procurement processes in respect of procurement relating to water infrastructure.” What are we getting at here? There is an unholy trinity that is causing trouble inside our water sector: too much debt, regulatory capital value—a concept that is misfiring big time—and the ownership model. I hope that the Government will take on that unholy trinity and find a stake. The new clause addresses RCV, because it is not working in the water sector. I touched on that in our last sittings, so I will not drag the Committee through it again. Regulatory capital value encourages as big an asset base as possible, which gives water companies an incentive to source product as expensively as possible—to pour really expensive concrete. It has been going on over the last few decades, so I am not pinning the blame on this Government, but I am asking for their help to stop it. It is not in the customers’ interests for us to continue to have faulty procurement processes that encourage water companies to buy things expensively. With new clause 32 the Liberal Democrats are trying to highlight that problem and address it. I suspect that the provision will not be passed, but I am going to be talking about it. RCV is the issue, and I am interested to see if the Government will recognise it as such and look to address it.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  That may be a chink of light, because all I have heard from the Government so far is “Only private companies welcome here.” My understanding is that the Cunliffe review’s remit purposely excludes ownership. If that is now on the table, it is great news, because it is one of the fundamental problems in the water sector. If the commission’s remit now includes ownership structures, I am delighted. I would love the Minister to clarify the point.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  Two-hundred million is a really big number. In my patch in Witney, we have sewage treatment works as far as the eye can see that are undercapacity and are leaking sewage all over the place—at Bampton, Cassington, Carterton, Witney, Milton; you name it. It is awful, and I am sure that is the case in other constituencies, too. Two-hundred million pounds is miles higher than any of their spend, so—correct me if I am wrong—all those sewage treatment works are going to carry on without the new procurement processes because they are below the £200 million threshold.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  We all welcome one another, but I meant the fact sheet. I really appreciate your going to the trouble of putting it together; I thank your team as well. I have read it diligently and done my best, but I have a quiz question for you. The first bullet point refers to giving “the power to recover HMG funding should there not be sufficient funds to pay HMG back at the end of a SAR.” Then, under the heading “Context”, the penultimate bullet point states: “If this shortfall occurred, and Ministers decided to use this new power, the Secretary of State and Welsh Ministers must launch a consultation prior to this power being used. This will ensure that those affected (e.g. water billpayers) are able to provide their views. It will also ensure that the shortfall recovery mechanism is implemented in a way that means costs are recovered fairly.” To me, that completely confirms paragraph 69 of the explanatory notes published by the Department for Environment, Food and Rural Affairs, which says that the Government will make the bill payers, as opposed to the creditors, pay for the costs. Please confirm, if you could.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  I completely agree with the hon. Member. Using West Oxfordshire as an example again, we have installed Grampian conditions, which I encourage other Members to look into, where we have said, “You may not occupy this house.” We could not stop the houses being built by arguing that there was insufficient capacity, but we could put a Grampian condition in force that says, “Those houses may not be occupied. Any buyer knows this, so they will not buy them.” It is flagged to any buyer so that they do not buy a house they cannot occupy, which will continue until the capacity has been added. That puts some heat underneath the water companies to get on and increase their sewage treatment works capacity. I really encourage the Government to look into those. We have vast amounts of housing that will be built, and under the current law, they will be steamrolled through and the capacities will not keep up. That is a real problem for everybody, and it puts more pressure on our rivers.

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  I beg to move, That the clause be read a Second time. There are only three new clauses to go; I will highlight the key parts of new clause 33. Subsection (2)(1A) states: “When participating in a planning consultation, or when otherwise providing advice in relation to a planning matter, a water undertaker must provide full and accurate information, and an honest assessment, in relation to its current and future ability to fulfil its duties under subsection (1)” Subsection (3)(2C) states: “Where, in providing information required under subsection (2A), an undertaker expects not to be able to fulfil its duties under subsections (1) and (2), the undertaker must establish a plan to meet its requirements by a relevant time.” What does that mean? It means that if an undertaker does not have sewage treatment work capacity, they must commit to draw up a plan to install it by a relevant time. The “relevant time” means that if 200 or 2,000 houses are being added and the sewage treatment works do not have sufficient capacity, then the undertaker will be saying, “By the time those houses are occupied, we will have increased capacity by the amount required.” This is all very common-sense, but many hon. Members will have been district councillors in their time—I currently am one—and I am sure they will have seen it happen time and time again in planning committees where, guess what, the response from the water utility is: “Fine, no problem. Hook ’em up.”

• 16 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fifth sitting) · Hansard source

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  These timelines are too slow. Setting the date at 2035 for monitor installation will mean that this is done at a much slower rate than the rate over the last seven years. That is disappointing. Targets set for 2045 and 2050 are too far away. We do not need to, and should not, move that slowly. We must do better.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  Frankly, it is pretty worrying that we do not have maps of sewer networks around the country. That is a pretty fundamental thing that we would want a water utility company to have. I acknowledge that they do not, though, and nowhere in the new clause am I proposing that the network is mapped. I am simply saying that we should take the existing maps and get them into the public domain by default. Currently, it is necessary to make a freedom of information request to access them. I suggest that the Minister might be being a little disingenuous in saying, “We’re just being asked to monitor, but we want to act.” The Government can do both. It is not the case that if we are monitoring, we are not acting; there is plenty to be acting on and plenty to be monitoring. Also, when I hear, “If we put in flow monitors then we would need to cover the quality,” I think, “Yes—all of it. Let’s do it now.” It is not an either/or, and I do not like the occasional suggestion that there may be an either/or. Having said all that, I beg to ask leave to withdraw the motion. Clause, by leave, withdrawn. New Clause 12 Environmental duties with respect to chalk streams “(1) The Water Industry Act 1991 is amended as follows. (2) After section 4, insert— ‘ 4A Environmental duties with respect to chalk streams (1) Where a relevant undertaker operates, or has any effect on chalk streams, that undertaker must— (a) secure and maintain high ecological status of such chalk streams, and (b) clearly mark chalk streams which are of high ecological status. (2) In this section “high ecological status” relates to the classification of water bodies in The Environment (Water Framework Directive) (England and Wales) Regulations 2017.””— (Tim Farron.) Brought up, and read the First time.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I beg to ask leave to withdraw the motion. Clause, by leave, withdrawn. New Clause 26 Rules about performance-related pay “(1) The Water Industry Act 1991 is amended as follows. (2) After section 35D (inserted by section 1 of this Act) insert— ‘ 35E Rules about performance-related pay (1) The Authority must issue rules prohibiting a relevant undertaker from giving to persons holding senior roles performance-related pay in respect of any financial year in which the undertaker has failed to prevent all sewage discharges, spills, or leaks. (2) The rules issued under subsection (1) must include— (a) provision designed to secure that performance-related pay which, if given by a relevant undertaker, would contravene the pay prohibition on the part of the undertaker, is not given by another person; (b) that any provision of an agreement (whether made before or after the issuing of the rules) is void to the extent that it contravenes the pay prohibition; (c) provision for a relevant undertaker to recover any payment made, or other property transferred, in breach of the pay prohibition. (3) For the purposes of subsection (1)— (a) “performance-related pay” means any payment, consideration or other benefit (including pension benefit) the giving of which results from the meeting of any targets or performance standards on the part of the relevant undertaker or the person to whom such payment, consideration or benefit is given; (b) a person holds a “senior role” with a relevant undertaker if the person— (i) is a chief executive of the undertaker, (ii) is a director of the undertaker, or (iii) holds such other description of role with the undertaker as may be specified.’”— (Tim Farron.) This new clause creates a new section in the Water Industry Act 1991 to require Ofwat to ban bonuses for water company bosses if they fail to prevent sewage discharges, spills, or leaks. Brought up, and read the First time.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I beg to ask leave to withdraw the motion. Clause, by leave, withdrawn. New Clause 22 Prohibition on bail-out of water company shareholders and creditors “(1) The Secretary of State and His Majesty’s Treasury must not directly or indirectly discharge, assume, or guarantee any debts of legal entities in any water company group subject to proceedings under section 24 of the Water Industry Act 1991 (special administration orders made on special petitions), except in accordance with subsection (2). (2) The special administrator of a water company may reduce the debts owed by the regulated entity to its creditors by up to 100 per cent, taking into account the future forecast expenditure over the short, medium and long term and subject to the administrator’s confidence in the company’s ability to accommodate this spending. (3) The prohibition set out in subsection (1) and the reduction of debts set out in subsection (2) must not include pension, wage and other obligations owed to employees, excluding any past or current member of a board of directors, within the water company group.”— (Charlie Maynard.) This new clause aims to allow up to 100% of debts to be cancelled in the event of special administration proceedings, taking into account the scale of investment required to hit the future targets established by the Authority. Brought up, and read the First time.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I beg to move, That the clause be read a Second time. We have covered this already, so I will be brief. I highlight subsection (2): “The special administrator of a water company may reduce the debts owed by the regulated entity to its creditors by up to 100 per cent, taking into account the future forecast expenditure over the short, medium and long term and subject to the administrator’s confidence in the company’s ability to accommodate this spending.” We have already discussed this. I am not going to go through it further, and I am not going to push it to a vote, so I will leave it at that.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I question what value regulated capital value, given how completely out of whack it is with reality, is bringing to the table. I do not have all the answers, but I question whether this has any utility to the conversation. What is happening here is that a business is generating £1.2 billion of cash flows, and it has this enormous balance sheet and this enormous regulated capital value. Because of those essentially false premises—I believe that we do not actually have assets of that value—regulated capital value is essentially a figment. We are grappling with things that have no basis, and we would do well to reconcile and to look at the facts—at what these assets are actually worth—and then to build out from there.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I beg to move, That the clause be read a Second time.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I beg to move, That the clause be read a Second time.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I have the name of one here: Thames Water Utilities Cayman Finance Holdings Ltd. Why Cayman? If I say “Cayman”, people say “tax haven”. That is why it is there. We should be doing our best to stop that. Last I looked, London was still a financial capital, and equity and debt could still be raised in this country, and I sincerely hope that remains the case. So I do not see a good reason to have holding companies offshore. Hon. Members might be happy to hear that that was all I wanted to say on new clause 19. New clause 23 is also being considered in this tranche, and I will highlight proposed new subsection (2DZB)(b), which refers to “a process for agreeing capital expenditure necessary for service improvements, bill increases, and changes to operating costs while the undertaker is subject to the Special Administration Regime”. We have to spend a huge amount of money on our water utility companies, because they have not been spending enough over the last decade or two. When a special administrator is appointed in such instances, the goal is to ensure that the special administrator takes that future spend into account in considering how much debt needs to be cut. We do not want to come out of special administration with debt that is still high, which will prevent the investments from being made that will be required over the next. That is the goal of the new clause.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  It is very kind of the Minister to have so much faith in, and be so charitable towards, Ofwat, given its record over the last decade or two, particularly with regard to its management of water companies’ financials. We will not press new clause 23, but would like to call a vote on new clause 19. Question put, That the clause be read a Second time.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I beg to move, That the clause be read a Second time. This is a very nuts and bolts thing. I believe we are here to try to make a better water sector. I will rattle through the clause, which would mean that each relevant undertaker “must publish a map of its sewage catchment networks”, and that maps published under the provision “must illustrate…pumping stations, pipes and other works constituting part of the undertaker’s sewerage network…must be published within 12 months of the passing of this Act…must be made publicly accessible on the undertaker’s website.” I am a district councillor as well as an MP and in my ward of Standlake Aston and Stanton Harcourt, parish councillors, members of the public and campaigners have grappled for information and failed to find it. Many people do not know how to do a freedom of information request. This means that people do not know where the sewage is going from and to, and that leads to confusion and means that the problems are further away from us. Putting these maps in the public domain, making them easily accessible and making sure that not only the pumping stations and the treatment works but the pipes connecting them all—which are not automatically clear —are always in the public domain and always easily accessible means that we are getting to a solution quicker. That is all this new clause is about. I am probably going to get a response saying, “We have to wait for the water commission”, in which case I would express some disappointment, because these things do not cost any money and they mean we move quicker to solve problems. I would really like a culture of, “If that’s a good idea, let’s do it”.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  I will speak first to new clause 19, which has three parts. Proposed new section (2DZA), which I will cover very quickly, essentially ensures the financial stability of water or sewerage undertakers. I think we discussed that at length in the debate on new clause 4, which I will not rehash, as I think we all know each other’s views. Proposed new section (2DZB) has two subsections, (a) and (b). Subsection (a) is “a prohibition on water or sewerage undertakers having offshore holding companies”. Why would a UK-regulated water company need an offshore holding company? Maybe to dodge some tax? Maybe to make it as untransparent as possible? I would like a straight answer as to why we are not going to kill this possibility off today. Do we really need to push this out another six, maybe 12 or maybe 24 months—until maybe never—with the water commission? I do not know. I think each of us could just find our way to saying that offshore holding companies are not good for our rivers, our citizens or our country. I really hope we get there. It is getting a bit late, but there is something I would really like Members to engage their brains on. It is a difficult and complicated subject, but it is the key to understanding what is going wrong with our water companies. It is called regulated capital value. What is in proposed new section (2DZB)(b)? It would introduce “a requirement that the Regulated Capital Value for each undertaker is annually reconciled against the market values of the undertaker’s equity and debt.” What on earth is regulated capital value? The key thing to remember is that it decides how much money the water companies make, so a higher regulated capital value is good for water companies. The bizarre thing is that regulated capital value has not really been a proxy for enterprise value, which basically means the equity value of the company—what the shareholders’ value of the company is worth—plus the net debt. That was set up—this is really one of the original sins—back in the mists of time, around 1989 and beyond, when the companies were originally privatised. It has been carried forward every year: “Take last year’s, and add a bit for inflation and a bit for capex. Never, never, never reconcile it with reality.” That is what has gone on for decades. Now we have this thing called regulated capital value, which is the critical thing the water utility companies are focused on: “This is how we make money, so we want this number as big as possible.” What we are advocating here is taking that apart, because of the reality on the ground. I will take Thames Water as my usual guinea pig. Many, many of Thames Water’s equity shareholders have declared that their holding in Thames Water has no value. That includes OMERS—the Ontario Municipal Employees Retirement System—and the UK’s Universities Superannuation Scheme, and I think the Abu Dhabi Investment Authority may have done it as well. They have said, “Our equity is toast. It’s written off.” The debt is not that hard to calculate either, because people can just look at what Thames Water is trading at; these are bonds, and people can see what discounts they are trading at. People can add that up, and they have a number that is much, much smaller than the regulated capital value of Thames Water today. But if it is a water company or Ofwat, they say, “Let’s just put a big pair of mufflers on and ignore that fact,” because it is safer to be in fantasyland.

• 14 Jan 2025 · Water (Special Measures) Bill [ Lords ] (Fourth sitting) · Hansard source

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  With respect, I feel that we are living in parallel universes. I will take Thames Water as an example, whose debt is 14 times the level of its cash flows. The Minister is saying that financial resilience could be threatened, but I spent 25 years in finance, and that ratio is very threatening. Is Ofwat closely monitoring that? Moody’s and Standard & Poor’s have put Thames Water into junk bond ratings—seven ratings under the investment grade—and we are pedalling on regardless. Could the Minister give a view on Thames Water’s levels of debt, and whether they are threatening to the company?