Andrew Percy: Water firms must invest to protect consumers

I have had experience of trying to deal with all three, and the experience can be different depending on which water company one has to deal with.

We have been lucky and unlucky. We have seen considerable investment in the constituency in recent years, but that came after year after year after year of regular flooding.

Bizarrely, over the last year or two, parts of the constituency have faced hosepipe bans because of a lack of water, while other parts have at different times been under several inches, if not feet, of water.

Much of it has been surface water, and hence within the remit of the water and sewerage companies. My constituency, apart from a few bumpy bits, is generally very low-lying, below the high-tide mark, and consequently most of the communities I represent rely on a pumping system to keep them dry.

We have had some good experiences with Severn Trent, and have welcomed its investment in Westwoodside and Crowle.

In Goole, which is covered by Yorkshire Water, we have had a very different experience historically, although it has improved a great deal recently. Goole has been flooded in at least four or five consecutive years out of the last seven or eight, including 2010 and 2011, when major assets failed in the town. At the time I was at pains to remind Parliament, and also Yorkshire Water, that sometimes it is the people who pay the bills who are the last to find out when something has gone disastrously wrong.

In 2011, I was in my wellies going from door to door and from street to street. We were under rising water, because our pumping system had completely failed. Over a period of about 12 to 18 hours, we all saw water levels rising. It was obvious that something had gone very wrong with our pumping system, particularly the big pumping station at Carr Lane.

I became very angry when speaking to Yorkshire Water on the telephone because it was impossible to obtain any answers. The company failed to communicate with residents at what was the most important time for them – when they were being flooded. Many of those people have medical conditions that require treatment, but power was going off, and there was still no communication. When the local authority, East Riding of Yorkshire Council, tried to descend on the site, it was initially warned that it would not be allowed to enter, so it had to invoke its powers.

Since then the position has changed significantly, thanks to the outcry from me and from local residents, and I am pleased to say that we have had a completely new experience with Yorkshire Water. The company has invested £3.6m over the last 18 months to improve our pumping capacity by 20 per cent, and December 18 will see the publication of a flood catchment study which it has funded and has cost a quarter of a million pounds.

That is all great news, but I must nevertheless ask why my residents and my constituency were put in such a position in the first place.

Yorkshire Water has tried very hard since then, and I feel very positive about what it has done, but we should not have been put in that position, particularly in view of Yorkshire Water’s dividends. There has been an improvement since 2010 – the company’s dividend is now significantly lower in relation to its post-tax profits – but the statistics for 2005, 2006 and 2008-9 were pretty appalling, at the very time when we should have benefited from investment.

Meanwhile, the Yorkshire Water household bill, which I pay every year along with other residents, was £264 in 2005. By 2009-10 and 2010-11, when we were under many feet of water owing to that lack of investment and an inability to maintain assets properly, it had risen to £330.

Profit for utility companies is something that is established, and I have nothing against it as long as it is accompanied by investment, but all is not well. We need either beefed-up powers for Ofwat, or the creation of further bodies to deal with water companies that are making huge profits while not investing in communities such as mine which are particularly prone to flooding.

Although Yorkshire Water’s profit-to-dividend ratio has improved since 2010, I am afraid that of Anglian Water is moving in a different direction. I hope Ministers will consider introducing new powers to allow companies making excess profits to be ordered to cut bills and to beef up the powers allowing Ofwat to require investment in our infrastructure when these profits are too high. The Government must stand up for consumers.

*Andrew Percy is the Conservative MP for Brigg and Goole who spoke in a Commons debate on the water industry. This is an edited version.