Environment secretary: I will fix the water sector
This government will reform the water sector to provide stability for investors and confidence for customers, says Emma Reynolds
It’s no secret that our rivers, lakes and seas are in dire need of attention. There has been a whole system failure from water companies to regulators, underpinned by short-term thinking and a lack of strategic direction from previous governments – this has not worked for consumers, the environment or investors.
I refuse to let that continue and will create the conditions necessary for a thriving and stable sector that is attractive to new investment.
We can learn the lessons of the past and reflect on how we have pushed through moments of turmoil in other vital sectors. We can look back on the global financial crisis, which saw sweeping and successful reforms that vitally restored public trust in the financial system.
From my time as a former Treasury minister and having spent time working in the City, I know that in those situations, capital only flows where there is trust, clarity and confidence.
That is what we are going to create. Our plans for a new water regulator will replace the fragmented system to give investors clarity, companies clear expectations, and customers confidence.
Earlier this week I co-hosted an investor roundtable with the Global Infrastructure Investor Association, committing to a partnership between investors and government with a shared understanding of the need for change.
Clarity
I heard loud and clear from investors the importance of clarity, pace and changes that fairly recognise the risks they take.
This builds on discussions that I had last month with water company CEOs on the government’s vision for progress – one that ensures companies meet the public’s rightful expectations while receiving the long-term strategic direction they need from government to commit to long-term plans.
I set out to investors why we must work in partnership to deliver a water system that serves everyone. One that drives economic growth, improves outcomes for consumers and the environment, and provides predictable returns and manageable risk for investors.
What became clear in these discussions is that although the scale of the challenge in our water sector is undeniable, so too is the appetite to fix it.
We have secured £104bn in private sector investment – this represents one of the largest infrastructure programmes in the UK economy.
And as we get spades in the ground it will drive economic growth, creating 30,000 jobs, and building the resilient water systems essential to delivering the 1.5m homes this government has committed to build.
Our upcoming White Paper will set out how we will create the conditions for a thriving sector, giving investors the confidence they need by knowing they will earn a fair return on their investment.
We will also publish a Transition Plan providing clarity on how the reform transition will take place.
The direction is set. The opportunity is clear. We are ready to deliver in partnership, together.
Emma Reynolds is secretary of state for environment, food and rural affairs