Steve Reed made the comments and stressed that demand for water will start to outstrip supply by the mid-2030s unless action is taken.
The delays in Thames Water upgrading the Oxford Sewage Treatment Works has caused delays in major housing developments being approved.
The Environment Agency has been objecting to planning applications as a result, with planners imposing conditions to say work will not proceed until the upgrades are complete.
Thames Water has said “due to the size and complexity” the initial upgrade is only expected to be completed in 2027 with a full solution not being delivered until 2031.
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Oxford Sewage Treatment Works (Image: Ed Nix) Speaking to LBC radio, Mr Reed said: “The lack of water infrastructure is now holding back economic growth in this country, so we can’t build the homes that we need in parts of the country.
“Cambridge, for instance, lacks clean water supply. Oxford lacks sewage systems sufficient to allowed house building to go ahead.
“And a third point here is that by the mid-2030s unless we take action to increase water supply – reservoirs as well as infrastructure – then the demand for drinking water will start to outstrip supply, in a way that already happens in some Mediterranean countries.
“We cannot allow the water system, the water sector, to continue in this way.”
Environmental campaigners have previously raised concerns about major developments in Oxfordshire, including the recently approved 1,400 home scheme at Bayswater Brook.
Windrush Against Sewage Pollution (WASP) said the planning applications for the two developments do not adequately address concerns about the impact of increased sewage on Oxford’s current sewerage network.
Writing to the councils, the group also argued that the new housing plans contradict local planning policy, which requires there to be sufficient evidence that utilities have the capacity to support each development.
Part of Thames Water’s plan to improve the infrastructure is the controversial proposal for a new reservoir south west of Abingdon.
This would be as Gatwick Airport, holding 150 billion litres of water, and has faced repeated local opposition.
Mr Reed told the House of Commons that there would be an independent review into the water industry.
He said: “The commission will ensure we have the robust regulatory framework we need to attract the significant investment required to clean up our waterways, build new infrastructure to address water scarcity, and restore public confidence in the sector.”
Oxford City Council leader Susan Brown said: “We continue to press for an urgent resolution to build the infrastructure necessary to help clean up our rivers and support our local communities.
“Without this, there is a major risk that we negatively impact the Government’s agenda to deliver 1.5m new homes in the next five years, and to grow the UK economy, supported by Oxford’s world-class life science and technology sectors.”
In a statement, Oxfordshire County Council said: “Oxfordshire County Council and the county’s other local authorities are involved in ongoing talks with Thames Water about the need to improve Oxfordshire’s sewage infrastructure.”
A Thames Water spokesperson said: “We’re working closely with Oxford City Council and the Environment Agency to help deliver Oxford’s housing needs while protecting the environment. It is important to remember that we’re not statutory consultees for individual planning applications, but we do seek to comment with concerns when approached by the local authority. We also comment on Local Plans for wider housing needs as they are developed. We’re currently finalising plans to upgrade our Oxford Sewage Treatment Works to increase its capacity. Due to the size and complexity of the initial upgrade this is expected to be completed in 2027 with a full solution being delivered by 2031. We will continue to engage and keep stakeholders updated on our progress.”
An Environment Agency spokesperson said: “We share the council’s aim of wanting Oxford to thrive sustainably. To achieve this, there must be the necessary wastewater infrastructure to ensure the city can grow and have the healthy environment we all want to see.
“Our legal duty is to provide advice to local planning authorities where development could cause significant risks to the environment. We will object to planning applications where necessary and offer advice on action to help address these risks.
“We continue to advise and support Oxford City Council in considering solutions that will ensure sustainable development in Oxford.”