Mr. David Gibney:

Firstly, water charges and water poverty are linked. Probably the best comparison we can make in terms of our climate and water services is with the United Kingdom. In 1989, water charges were introduced in the UK for the first time. Since then, every single year the price of water has gone up by double the rate of all other goods in the economy according to the retail price index. Because of that, a quarter of all households are now experiencing water poverty. A large part of that is as a result of borrowing. For instance, seven of the biggest water companies in the UK, including Northumbrian Water and Thames Water, borrow excessive amounts of money to fund their water infrastructure. Northumbrian Water borrows at an interest rate of 11%. It does so because it is borrowing from its own bank, which is the owner of Northumbrian Water.

The average household in the UK is now paying £80 per year to fund the debt and interest rates, which ends up being 21% of a water bill. That 21% is servicing the debt. We do not want to go down the road of borrowing because we will end up in debt. Then instead of the money going into water infrastructure it goes to servicing debt for big banks.

In Detroit, it is estimated that 46% of what they pay for water bills goes towards servicing debt. We therefore have big concerns about the terms of reference that were given to the expert water commission, which specified only one way of funding water through borrowings. We would much prefer if the funding went directly through general taxation which would avoid getting into debt on that side of things.