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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
First, may I congratulate my hon. Friend the Member for North Cornwall (Dan Rogerson) on introducing this debate in an extremely timely manner. Perhaps if it was this time yesterday he would have been extolling the Government to take yet more action, and I am very glad that we were able to deliver. It has been a feature of Parliamentary life that when two or more south-west MPs are gathered together, the issue of water charges is raised, and as the Minister responsible, I am well aware of its importance to a huge number of his and other hon. Friends’ constituents in various constituencies across the south-west.
This is a really important issue for those people, and I recognise the important point that my hon. Friend made at the end: welcome as the measure is, he and other Members from all parts of the House will continue to push on this issue until they feel that greater parity has been achieved in water charges. As he knows, the average water and sewerage bill for household customers across England and Wales is £356, but the average for South West Water, before we implement these changes, is £517. He and other hon. Members will have dealt with cases of constituents, many of them in extremely straitened circumstances, whose bills are considerably higher. I recognise that this is an ongoing discussion and one that I am keen to continue to have with hon. Members across the south-west.
I am delighted that the Government were able to announce details of support for customers of South West Water in the autumn statement yesterday. Every South West Water household bill, as my hon. Friend says, will be reduced by £50 a year. That follows the commitment made in the Budget earlier this year to use public expenditure to support households facing high bills. The Government had to act. In her review, Anna Walker identified the fact that households in the south-west of England faced the highest water bills in the country, because at the time of privatisation, South West Water had the lowest levels of infrastructure required to protect drinking water quality and safeguard the wonderful environment that my hon. Friend so accurately described. This was the biggest challenge facing any water company at privatisation and in the 20 years that have elapsed since then, South West Water has invested around £2 billion to raise sewerage standards to the same level as elsewhere.
Local people have benefited though improved water quality, reduced leakage, cleaner beaches and bathing water, but—and it is a very big but—the cost has been met by those customers. The Government recognise that circumstances faced by customers of South West Water are exceptional and unfair. We are now addressing this historic issue and will contribute to the cost of reducing bills. We looked very closely at Anna Walker’s recommendations, and that was a feature of the debate that my hon. Friend secured some months ago in this Chamber. We decided that each household customer should receive an annual discount on their water bill. I am very grateful to all the south-west MPs who have doggedly raised this issue and demanded action. It is in the hon. Gentleman’s character to be big enough to recognise the input from Members of all parties and, of course, to Linda Gilroy, who raised this question in her time in the House.
This is a fairness measure: a payment to all South West Water household customers to redress an historic unfairness. This debate comes just ahead of the water White Paper, of which a key theme is affordability. South-west MPs have often raised with me and my predecessors individual cases of people in their constituencies who really struggle to afford their bills. Thankfully, even before yesterday’s announcement, South West Water had taken action to address the region’s particular set of circumstances and to tackle affordability problems. The company has a free debt helpline that helps customers to set up payment plans, it offers water metering and water conservation advice, and it recognises that many people are able to reduce their bills and to use water more efficiently by having a water meter.
I echo the words of my hon. Friend the Member for North Cornwall about Chris Loughlin and his team. I have worked closely with them, and they have an absolute and genuine determination to address the issues. South West Water works with local citizens advice bureaux and other experts, and it has introduced a range of initiatives to help those who find it difficult to pay their bills. It has established an advice gateway with south-west citizens advice bureaux and it trains and sponsors CAB debt advisers. Advice agencies such as the CAB can refer struggling customers to the company’s water care scheme and can obtain benefit entitlement checks, tariff checks, water efficiency advice and free efficiency devices.
South West Water also has a scheme for customers who are in debt, and I am very impressed by that work. I have been into households with advisers and seen the impact that they can have on the bills paid by people on low incomes just by installing a very few items or by changing those people’s behaviour, including what they do and how they use water throughout the day. That can have an enormous effect on household bills, but I recognise that, in this context, it might still be only a relatively small proportion of bills. In doing that, South West Water and companies with similar schemes have recognised the benefits to customers, and also to the company. I applaud such schemes, which are designed by water companies to tackle local problems in their region. Many companies in other Members’ constituencies have similar excellent schemes.
Water affordability problems are not confined to the south-west. Across England and Wales, 23% of households spend more than 3% of their disposable income on water and sewerage charges. Some 2.5 million households are spending more than 5% of their disposable income on water. That is a very important issue and one that the Government take very seriously. That is why water affordability will be a key theme in the upcoming water White Paper. We will commit ourselves to a long-term and a short-term set of actions to ensure that water bills are affordable.
WaterSure, to which my hon. Friend the Member for North Cornwall referred, will continue. It will be supported by social tariffs, which will enable water companies to design locally appropriate schemes. We believe WaterSure is really important, but we recognise that its criteria mean that it deals only with families who have a relatively large number of children—three or more—or with elderly or infirm people who require more water because of their circumstances. I have been persuaded by the many moving cases that have been put to me by colleagues about the circumstances of particular constituents.
I recognise the importance of WaterSure in addressing the concerns of those individuals, but I also recognise that about 50,000 people are currently claiming. WaterSure can therefore only ever help a small group of people in water need. That is why company social tariffs, on which we are consulting, are so important. When the consultation ends in January, we will quickly announce the guidelines for those enormously important tariffs.
Dan Rogerson
The Minister is being very helpful. On the groups who are covered by WaterSure, the south-west not only has many people on low incomes, but it has an ageing demographic because of the huge inward migration of older people and the outward migration of younger people. If WaterSure could be established with a national coverage, it would ensure that when people spend their active working life in another water region of the country and then end up in the south-west—I hope, to live a happy and long life in retirement—we had a fairer distribution of the cost. Otherwise, that will all have to be funded within the region.
Richard Benyon
My hon. Friend makes a very good point. However, the other important point to note is that the fact that the south-west has a much higher percentage of households on meters is good for those particular people, because they very often use much less water than larger families or households in multiple occupancy. That offers a really effective way not only of paying proportionally lower bills, but of managing problems—for example, they will know much sooner, if they are on a meter, if there is a leak. I applaud the work done by the company. We want to see such work developed not only in the south-west but elsewhere, and we will encourage that.
Andrew George
The Minister is speaking about the crux of what will no doubt appear in the water White Paper next year. The impact of the flat £50 per household reduction is welcome. It will apply irrespective of whether households are wealthy second home owners on water meters who therefore have relatively low bills or the large number of local families in straitened circumstances. It is those families for whom a nationally equitable solution is required because, despite the £50 reduction, they will still face considerable bills.
Richard Benyon
First, I can say to my hon. Friend that he will not have to wait until next year for the water White Paper, which is much more imminent. I cannot tell him precisely when, but it will be very soon. Secondly, the White Paper will examine the whole range of affordability issues and solutions. I hope that the package we introduce will make a real difference.
My hon. Friend and all Members who represent the south-west will recognise that that will require legislation, which is why I cannot promise that it will be delivered before April 2013. I wish it could, but we are convinced that primary legislation is required, although we hope to deliver it in time for the start of the financial year in April 2013.
Company social tariffs will allow water companies everywhere to reduce the bills of those who would otherwise be unable to afford them in full. In conjunction with the excellent existing support schemes and advice, companies will be able to design the right tariffs for their region. We want all companies to introduce social tariffs as part of a package of advice and support for customers about affordability and efficiency. I hope that hon. Members, advice organisations and environmental organisations will work with water companies to design the best schemes for their regions.
Before I conclude, I just want to express again my appreciation to hon. Members across the south-west for their efforts in bringing forward this matter, and my determination to continue this discussion in the future.