Talk about your water bill. Should we? In more detail. Joining us, David Black, CEO of offwalk. Good to see you. Thanks for joining us. What are we going to do about these water companies?

So, what we've sent out today is the largest ever investment package in the water sector, a 300% increase in investment, and that will enable water companies to make serious progress on reducing sewage spills, further reducing leakage, and driving up performance across the board.

Have they got away with it for so long? I mean, there's literally in the Thames outside, there's poop in the Thames. What are we going to do about it?

So, with regard to the Thames, there is a 4.6 billion pound super sewer which has been constructed, and shortly to commence operations. And so that will result in a 95% reduction in sewage discharges in the tidal Thames. But that's merely the start. There is a huge amount to do, and so we haven't. So the price review will enable companies to get on and invest to address these issues. We've also got new powers to prevent company chief executives from taking bonuses where they haven't been earned and new powers to crack down on dividend payments. So we think the sector needs to change. This is the start of the changes.

Steve Reid, now in power, of course, minister at Defra, when he was in opposition, he said he wanted criminal sanctions against water company execs who failed to prevent sewage contamination. Is that reasonable?

So, yes, we look forward to working with the government. The environment agency has criminal powers to take action against companies. We think there is a strong case for extending that to company senior leadership, and we look forward to working with the government as they work through their special measures package.

So you agree, as the head of ofwat, that execs who don't do enough to give us clean water should find themselves in the dock?

There is a case for doing that. I think we have to be careful. That's not a. I don't see that as a magic bullet. We need to see the investment, we need to see companies that own the problem. We need to see them taking action. That's what we're focused on. We're here to protect customers interest. So this is. So we have. We have and will continue to impose penalties. Their investors feel the pain. And that is about. All about motivating change in companies, but not criminal sanctions. My sense is, so criminal sanctions can be used, but the burden of proof from criminal sanctions is very high, and therefore we tend to see them used very infrequently where they are.

How much proof do we need.

So companies are legally allowed to discharge sewage in emergency conditions, and so that's.

What constitutes an emergency.

And so that's what the Environment Agency and ofwat are investigating and taking enforcement action at present. But what we need to do is much bigger than that. It is about changing the sector. They've now got the data on these issues, they've got the plans. We need to see them implement those plans. This is a very ambitious set of plans that companies have set out. This, as I say, will be the biggest ever investment package in the sector. This is about driving change. It will take time. This needs to be a sustained improvement, and that's what this price view starts.

It's been like this for a long.

Time, so, yes, far too long. And so. But there's a lot of talk about the problem. It is time for action, and that's what this price is.

How concerned are you that companies like Thames Water might go into administration?

So Thames finances are in a poor state. That's very clear. And we continue to monitor Thames very closely. They have two big problems. One is their poor operational performance. So they need to address those issues in order to make themselves attractive to investors. They have a turnaround plan. They have a new chief executive and a new chair. So they need to get on with executing that turnaround and showing that they can demonstrate that they can do better for customers. And they need, over the next twelve months, to raise new funding from investors.

Is temporary nationalization an option?

So the so called special administration process is an option if the company becomes insolvent? It's not insolvent at present.

You said they might be by next September, though. Next May. Forgive me.

Yes, but it's not. So, at the moment, the company is seeking to work through a private sector solution and we will continue to work with them as they work through that.

To that end, is there a concern that if you are too tough on water companies, they might find themselves in that position and they throw in the towel?

So we're here to protect customers. We will make sure that customers don't pay more than they should do for this. It's then up to investors. There are various options. Companies have to work through these issues, and so the problem sits with the boards and their investors, and we'll make sure that we protect customers interests, and that's what we've done with setting the settlement out for Thames. Today. There is provision for an unprecedented level of investment in London and the Thames Valley. They need to get on and do that. They also need to raise new equity and we will continue to monitor their progress on these issues very closely.

Talk to me about bills. How much are they going up?

So bills are going up by around pound 19 a year on average, before inflation every year for the next five years. And so that's going to be very challenging for customers who faced a cost of living crisis, face rising energy bills. So we appreciate that's very difficult. That's why we've scrutinized company plans, why we have pulled out 16 billion pounds of costs that we thought were excessive and inefficient, and why we're asking companies to double their support for customers in need of a helping hand.

Do you subscribe to the View that actually drinking water is actually relatively cheap here in the UK and we take it for granted and actually we should be paying an awful lot more for it?

I think people do take their drinking water for granted. It's not until the service stops that people tend to appreciate it most. That said, 400 pounds a year, pound 450 a year is a big bill for many customers. Many people do not have very much extra to spare to pay higher water bills. So it's absolutely right that we look very hard at water bill prices and make sure that customers get the best value for money in order to fix the nation's sewer systems. It's going to cost more. That's why bills need to rise. But we'll make sure that those rises are no more than what's fair and needed to address.

And do you have a timescale for fixing our antiquated water sewage system?

So we're looking ahead both the next five years, but also to a 25 year long term delivery strategy. So it's not just about sewer systems. We need to build new reservoirs. So the package we've announced today will fund nine new reservoirs going forward. So we need to safeguard the nation's drinking water supplies to climate change and population growth. We'll see serious progress on reducing sewage discharges, but it won't be finished by 2030. There's still much more to do.

Fascinating stuff. You've got a big job ahead of you, haven't you?

Good to see you.

Thank you. Really appreciate it. Thank you.