Mr. Chris Jones:

To pick up on some of the factual questions there, the key point to start with on financials is that we are a private company. All of our funding has to come from charges to our customers or money we raise in the private capital markets. In rough terms, we spend approximately £300 million a year on operating and maintaining our business and service to supply a population of approximately 3.5 million people. We spend getting on for £350 million to £400 million a year investing in asset legacy issues and new environmental and water quality standards. Our investment is more than our running costs, which is unusual. We then have just shy of £150 million to service the debt we have raised in the past to fund our previous investment. That is how our financials work out.

Without boring the committee with our history, one of the reasons we are set up the way we are is that we started off, unusually, as an exercise on a blank sheet of paper. Myself and my colleague who set the business up in this way thought the key thing to do was secure long-term secure funding for investment. Our business has a massive infrastructure need. We are 27 years into that programme and our asset condition has improved hugely as have our standards and the leakage situation. Leakage is about 20% on our network which is about the economic level for us in a rural network. While we have made massive strides in all those areas, we continue to have a major investment programme for the foreseeable future. For us to get that access to secure finances was crucial. We are not in the government sector so we do not have, for good or ill, the option of government financing. Our not-for-profit non-shareholder business model was all designed around making a virtue of that. People are very keen to invest in long-term infrastructure if it has a secure revenue source to go with it. That is why we are structured as we are.

Water poverty is a significant issue for us. Large parts of Wales are not relatively prosperous. As a consequence, approximately 15% of our customers are in what we consider water poverty which is that above a threshold, perhaps 3% of their disposable household income goes to pay water and wastewater charges. As a company, we are helping approximately 65,000 customers a year currently with loosely subsidised charges, which is to say a lower level of charge because they have a lower level of household income. Our aspiration is to grow that to the target we have set of 100,000 customers by 2020. Ultimately, our aspiration is that every customer has a bill which is affordable. To achieve that, we will need the support of government and others to have access to the data which shows who actually needs and deserves that support. We have done a great deal of customer research around this issue and have strong buy-in from our customers to support those who genuinely cannot afford to pay. In part that is because we are a not-for-profit company and customers have confidence that we are putting some of our money into supporting those customers and keeping the bills of the disadvantaged down.