The privatisation of the water industry has failed and it should be brought into public ownership, the Labour MP Clive Lewis has said.

In an early day motion laid before parliament, Lewis said the industry had proved it was not capable of building the infrastructure required to deal with the impact of climate breakdown, including increased flooding and droughts.

Lewis and other MPs will challenge water industry representatives and the regulator Ofwat on Wednesday as MPs on the environmental audit committee (EAC) seek answers on what progress has been made to tackle sewage pollution in rivers and seas.

“Water companies in England have incurred debts of £64bn and paid out £78bn in dividends since they were privatised, debt-free, in 1989 … Water companies paid out £1.4bn in dividends in 2022 even as 11 of them were fined in the same year for missing performance targets,” Lewis said.

Climate change threats, which are making flooding and drought more severe, required a change to the way the industry was managed to build in resilience, Lewis said.

MPs are putting pressure on the industry as the regulator Ofwat prepares to announce whether it will allow Thames Water, which has total debts of £18bn, to hike customer fees by more than 40% and avoid high fines for pollution, in order to get the equity funding it needs to continue operating.

Ofwat is due to give its first public view on private water firms’ business plans in June. The government has assembled a team, under the banner of Project Timber, to draw up contingency plans to rescue Thames if needed, which could include the bulk of its debt being added to the public purse.

But Lewis said a government bailout of Thames Water would send a dangerous signal to other utilities that reckless decisions carry no private risk. He urged Ofwat to reject Thames Water’s request to increase bills, face lower pollution fines and continue to pay dividends.

The EAC will push Stuart Colville, the deputy director of the industry body Water UK, on what progress has been made in the industry to cut pollution. An inquiry by the EAC in 2022 into sewage pollution found that rivers were being subjected to a chemical cocktail of sewage, agricultural waste and plastic pollution which was suffocating biodiversity and putting public health at risk.

But discharges of raw sewage and pollution into waterways from treated sewage have continued and last year water companies discharged raw sewage into rivers and coastal waters for a record 3.6m hours, an increase of 105% on the previous 12 months. The scale of the discharges of untreated waste made 2023 the worst year for storm water pollution.

The data showed that failure to maintain assets and a lack of capacity at treatment plants were the main reasons for the scale of raw sewage flowing from high discharging overflows.

Guardian analysis showed that more than 2,000 overflows owned by a number of companies discharged raw sewage into rivers and seas at a scale that should spark an immediate investigation into illegal breaches of permit conditions.

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Figures obtained by the BBC on Wednesday revealed United Utilities dumped millions of litres of raw sewage into Windermere in the Lake District in February after a fault took 10 hours to fix.

The bathing water season began on Wednesday, meaning the Environment Agency will begin the testing of 451 bathing water areas across England.

The risk to public health from sewage pollution was exposed in Devon, where the UK Health Security Agency said 16 cases of cryptosporidium, a diarrhoea-type illness, have been confirmed. The waterborne disease can be caused by swallowing contaminated water in rivers and streams.

This Saturday thousands will take to coasts and rivers across the UK to protest about the state of the nation’s waterways, in paddle-out events coordinated by Surfers Against Sewage.

Protests are taking place at West Pier in Brighton and at Gyllyngvase Beach in Falmouth, as well as the Great Ouse river in Bedford.

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