A Labour minister today warned drinking water could begin to run out in Britain by the mid-2030s unless action is taken.
Environment Secretary Steve Reed said a lack of water infrastructure – such as pipes, sewage systems and reservoirs – was ‘holding back economic growth’.
He claimed the UK could end up in a situation faced by ‘some Mediterranean countries’ where ‘demand for drinking water will start to outstrip supply’.
Mr Reed gave a series of TV and radio interviews this morning as he announced a new review of the water industry.
The independent commission, chaired by ex-deputy governor of the Bank of England Sir Jon Cunliffe, could consider abolishing regulator Ofwat among other measures.
The review is being launched amid huge public anger over rising water bills, sewage pollution and bumper bonuses for the bosses of water firms.
But, during his round of interviews, Mr Reed signalled the Government would not step in to block ‘eye-watering’ fresh hikes in bills that are wanted by companies.
Figures published by Ofwat yesterday revealed the massive scale of increases – up to 84 per cent – that water firms want to impose over the coming years.
Environment Secretary Steve Reed said a lack of water infrastructure – such as pipes, sewage systems and reservoirs – was ‘holding back economic growth in this country’
The water firms provide supplies to England and Wales
These would see the average consumer bill in England and Wales rise by 40 per cent between now and 2030, rising to £615 per year.
Thames Water, the UK’s biggest provider, which is in emergency talks over a £15billion debt pile and worsening finances, has asked for a 53 per cent rise.
In the largest proposed increase, Southern Water customers could be hammered with an 84 per cent increase over the same period.
Ofwat is due to make a final decision on bills increases on December 19, with companies going to the negotiating table with regulators between now and then.
Speaking to Sky News, Mr Reed said proposals to raise water bills by 84 per cent by 2030 were ‘eye-watering’.
But he added it was ‘a negotiation between the independent regulator and the water companies’.
The Environment Secretary did not rule out abolishing Ofwat if Sir Jon’s review of the water sector recommended it.
He said: ‘I don’t rule that out. What I’ve asked Sir Jon to do is a root-and-branch review of the entire sector – that includes looking at regulation and the regulator.
‘We need to make sure that the regulator and the regulations that they’re applying are strong enough to ensure that we get the outcomes that we want.
‘That is a sufficient water supply, affordable bills and our rivers, lakes and seas cleaned up of the pollution that is filthy in them today.
Speaking to LBC radio, Mr Reed said a lack of water infrastructure was preventing the building of homes ‘that we need in parts of the country’.
‘Cambridge, for instance, lacks clean water supply,’ he said. ‘Oxford lacks sewage systems sufficient to allowed house building to go ahead.
‘By the mid-2030s unless we take action to increase water supply – reservoirs as well as infrastructure – then the demand for drinking water will start to outstrip supply, in a way that already happens in some Mediterranean countries.
‘We cannot allow the water system, the water sector, to continue in this way.’
Mr Reed said the Government not advocating to renationalise the water industry because it would cost billions of pounds and take years.
He told ITV’s Good Morning Britain: ‘You see the state that the economy is in. And frankly, it would cost tens of billions of pounds to nationalise the water sector.
‘And if we were to decide to spend that amount of public money, which we won’t, it would also take years to unravel the current ownership model.
‘And during those years, investment would dry up and water pollution would get worse.’
Mr Reed said the problems with the water industry are ‘failures of regulation and governance, not ownership’.
He added that Sir Jon’s review will aim to ‘reset the sector so that we can bring in the investment that we need to stop the massive bill hikes’.