House of Commons

Monday 6th January 2014 Commons Chamber

Monday 6 January 2014

The House met at half-past Two o’clock

Prayers

Monday 6th January 2014 Commons Chamber

[Mr Speaker in the Chair]

[Mr Speaker]

Paul Goggins is a colleague held in affection and esteem in all parts of the House and at this very difficult time our thoughts are with him, with his wife, Wyn, and with their children, Matthew, Theresa and Dominic.

Oral Answers to Questions

Monday 6th January 2014 Commons Chamber

The Secretary of State was asked—

[Mr David Nuttall (Bury North) (Con)]

1. What assessment he has made of the performance of primary schools which have attained academy status.

[The Secretary of State for Education (Michael Gove)]

I associate myself and those on the Front Bench, Mr Speaker, with your generous words towards Paul Goggins and his family. We all wish him a very speedy recovery.

In 2013, the proportion of pupils who achieved the expected standard in reading, writing and mathematics improved significantly more in sponsored academies than in local authority schools.

[Mr Nuttall]

I wish you, Mr Speaker, and the whole House all the best for 2014.

I am most grateful to the Secretary of State for that reply. Having been judged inadequate by Ofsted in each of the past two years, Elton primary school in my constituency is now the subject of a consultation with a view to its becoming an academy. Will my right hon. Friend reassure me and those parents who have concerns that all the evidence suggests that such a move is more likely to be beneficial than detrimental to their children’s education?

[Michael Gove]

My hon. Friend is absolutely right. Parents are naturally nervous whenever there is a change of management or leadership in any school and so they should be—they care about their children. The evidence points to the fact that when primary and secondary schools have been converted to academies, they have made significant improvements. One of the most controversial academy conversions happened in Haringey when Downhills school was taken over by the Harris chain. That met furious opposition from the unions and some Labour MPs, but children in that school are now flourishing at last, as are children in so many other academy schools.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

Does not the evidence show that the most important factor is the quality of teaching in our schools? Thousands of schools around the country have chosen not to go down the academy route. Will the Secretary of State join me in congratulating Ranworth Square primary school in my constituency, where the majority of children are on free school meals but where last summer 93% achieved at least a level 4 in English, maths and writing?

[Michael Gove]

That is a significant achievement and I am delighted to be able to congratulate the head and the team of teachers at that school. Many schools that I hugely admire have chosen not to go down the academy route. Thomas Jones primary in west London is one of the most outstanding schools in the country—100% of its children reach the level to which the hon. Gentleman refers—and is not an academy. For schools that are foundering or facing difficulties, however, academy solutions have, in an overwhelming number of circumstances, brought the improvement in results that we would all love to see.

[Jake Berry (Rossendale and Darwen) (Con)]

Will the Secretary of State update the House on what steps he has taken to enable good primary schools to expand, and parents to open new primary schools, in areas where new housing has created high demand for places?

[Michael Gove]

To facilitate expansion, we have made sure that all local authority schools receive additional support through the targeted basic need and basic need funding, which the Government have made available in more generous terms than any previous Government. We have also seen 174 new free schools open, giving parents a choice of new, high-quality schools to ensure that their children have the best possible start in life.

[John Mann (Bassetlaw) (Lab)]

When a primary academy in a village goes belly up and all the parents start moving their kids, who will step in to bail out that school and ensure that the village retains a school for the future?

[Michael Gove]

Without knowing the specifics of the case to which the hon. Gentleman alludes, I am cautious about venturing into too much detail. Whenever any school enters difficulties, whether it is run by an academy chain or a local authority, the Department for Education is always ready to ensure that an appropriate sponsor is in place to rescue that school.

[Mr Philip Hollobone (Kettering) (Con)]

How many academies were there in May 2010, how many are there now and what has been the improvement in educational attainment as a result?

[Michael Gove]

There were just over 200 academies in May 2010—203, I believe—and there are now more than 3,000. As Ofsted reported in its most recent annual report, the biggest increase in the quality of good and outstanding lessons ever in the history of the inspectorate has occurred under this Government.

[Caroline Lucas (Brighton, Pavilion) (Green)]

2. How many applications his Department has received to establish free schools; and what proportion of such applications have been successful.

[The Secretary of State for Education (Michael Gove)]

The Government received 1,103 applications to establish free schools in the first four rounds of applications and 27% of those applications were approved.

[Caroline Lucas]

I am grateful to the Secretary of State for his response. Why has his Department been using all its legal might to prevent the release of free school applications and decision letters, even after the Information Commissioner ruled that there was a strong public information argument in favour of releasing them? Surely if public money is being used, in the public interest there has to be an absolute right for that information to be put in the public domain.

[Michael Gove]

I note what the hon. Lady says, and we have extended the freedom of information legislation to cover academies, which was not the case before this Government came to power. It is, however, important that we protect those individuals who made proposals for schools that were not accepted, from the programme of intimidation that has been directed at many brave teachers by the National Union of Teachers and other extreme left-wing organisations. I make no apologies for protecting from intimidation those public-spirited people who wish to establish new schools.

One of the great things, however, about the free schools programme is that it implements Green party policy. In 2010, in the Green party education manifesto, the Green party leadership said that we should

“Move towards ending the need for private education by creating a programme of voluntary assimilation of private schools into the state sector.”

That is just what we have done.

[Mr Speaker]

The Secretary of State’s authorship of the Green party manifesto is not required.

[Mr Rob Wilson (Reading East) (Con)]

I hope that the Secretary of State will shortly announce the approval of the Maiden Erlegh free school in my constituency, but is he as concerned as I am by Labour’s secret plan to review free school premises and buildings? Is that not simply a back-door way to destroy the free school movement? [Interruption.]

[Michael Gove]

I share my hon. Friend’s concerns absolutely. We all know that, despite the occasionally brave forays into no-man’s land by the hon. Member for Stoke-on-Trent Central (Tristram Hunt), who has tried to defend parent-led academies, the majority of Labour Members—as we can hear from their catcalls and jeers—oppose free schools and greater parental choice and support the attempt of the hon. Member for Cardiff West (Kevin Brennan) to undermine those schools. We will fight them every step of the way.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

On behalf of the Opposition, I should like to thank you, Mr Speaker, for your words about our colleague, the right hon. Member for Wythenshawe and Sale East (Paul Goggins), and his wife, Wyn. Our thoughts and prayers are with them for a speedy recovery.

In December, we learnt that the Prime Minister’s flagship Discovery free school will be closed. The failings of this episode have let down the people of Crawley, who will hold the Government to account. We know that the Discovery school was opened against the advice of the Montessori Schools Association, so will the Secretary of State tell the House how many free school applications Ministers have approved against the advice of Department officials?

[Michael Gove]

The advice of officials in this case was quite clear, and we accepted it. That is why the Discovery free school was opened.

[Tristram Hunt]

That says it all, does it not? We in the Opposition are in favour of innovation and autonomy in schools, but all we ask is that that is underpinned by basic safeguards and standards. National Audit Office reports reveal that low-scoring applications were waved through by Ministers against official advice, so let me give the Secretary of State another chance to set the record straight. Did Ministers approve applications for the Al-Madinah free school, the Discovery free school or the Kings Science academy free school against the advice of officials—yes or no?

[Michael Gove]

If the hon. Gentleman had been listening, he would know that I answered the question that he has just asked first time round. I pointed out that the advice from officials was to open the Discovery school. It was also the advice of officials to back Kings Science academy and to back Al-Madinah school. In all three examples, we took the advice of officials, but let me make it clear that it is entirely appropriate for Ministers to overrule officials at any given point. Officials advise and Ministers decide. But in these three cases, we took the advice of officials and appropriate safeguards were in place. One of the problems that Opposition Front Benchers have is that they support free schools in the abstract, but when it comes to the tough decisions necessary to improve education in this country, at the first whiff of grapeshot, they shy away and surrender.

[Patrick Mercer (Newark) (Ind)]

The Secretary of State will be aware of the delight with which the rebuilding of Newark academy has been greeted in Newark, yet the establishment of the free school at the same time seems to be competing for small numbers of students who are needed inside the maintained schools. How does he answer that charge?

[Michael Gove]

I will look closely at the particular case that the hon. Gentleman raises. I know that he has been an effective champion for good school provision in Newark, and I shall ensure that I look closely at the pupil numbers to which he alludes.

[Karl MᶜCartney (Lincoln) (Con)]

3. What steps his Department is taking to improve the quality and quantity of apprenticeships.

[Andrew Stephenson (Pendle) (Con)]

14. What steps his Department is taking to improve the quality and quantity of apprenticeships.

[The Minister for Skills and Enterprise (Matthew Hancock)]

There were 868,700 people undertaking an apprenticeship last year—more than ever before. We have already taken steps to increase standards and remove low-quality provision, and we will take further such steps.

[Karl MᶜCartney]

I am pleased to hear that our Government are providing more support to young people who do not wish to pursue an academic course at university. Does the Minister agree that we need more participation in the apprenticeship scheme by small and medium-sized enterprises such as PK Automotive in Lincoln, which has joined larger firms such as Siemens in my constituency, and worked with local institutions such as Lincoln college and LAGAT, to help to deliver real opportunities for young people?

[Matthew Hancock]

Yes, I do. I am delighted to say that 2,200 people in Lincoln are participating in apprenticeships. As is the case in many other places throughout the country, that is a record number. Of course apprenticeships are valuable in companies large and small. In fact, a majority of apprenticeships are in small businesses, but we need to ensure that the benefits of apprenticeships are communicated to all employers.

[Andrew Stephenson]

Sara Underwood, a higher apprentice with Rolls-Royce at Barnoldswick in my constituency, was recently awarded the Mary George memorial prize as part of the Institution of Engineering and Technology’s young woman engineer of the year awards. Will the Minister join me in congratulating Sara on her achievement and Rolls-Royce on its exceptional apprenticeship scheme?

[Matthew Hancock]

I am delighted to join my hon. Friend in recognising the work that Sara has done not only to win the prize that she so thoroughly deserves, but as a true ambassador for apprenticeships as she goes around explaining the benefits of apprenticeships to young people, employers and the wider economy.

[Andrew Gwynne (Denton and Reddish) (Lab)]

A recent survey by The Times Educational Supplement showed that three quarters of young people did not receive information about apprenticeships in their careers lesson, so does the Minister still stand by the words of the Secretary of State to the Education Committee in December that the Government have no plans to address and amend careers guidance?

[Matthew Hancock]

As my right hon. Friend the Secretary of State said to that Select Committee, we will shortly publish new guidance on careers education. As we have set out many times, a far more important—if not the most important—thing for young people’s inspiration and motivation is people who themselves are successful in their careers, so that is what our careers advice policy focuses on.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I thank the hon. Gentleman for his replies to these questions, but how does he propose to deal with the real dearth of engineering apprenticeships—female ones—when frankly there will not be enough role models to go around? We need good careers advice in classrooms, but it needs to be targeted so that we get young women, especially, into engineering and STEM—science, technology, engineering and maths—subjects.

[Matthew Hancock]

Of course role models can be of either gender, and I am sure that many men can think of women who would be role models for themselves. Under this Government, the number and proportion of applications for apprenticeships in engineering are up, and the number of applications to study engineering at university is up. There is much more to do, but we are moving in the right direction.

[Robert Halfon (Harlow) (Con)]

Does my hon. Friend agree that university technical colleges will make a huge difference to apprenticeships? May we have a commitment from the Government that we will have one in every town after the next election?

[Matthew Hancock]

I am a great enthusiast for UTCs, not least because they prepare people to go into not only apprenticeships, but an academic career. They can open up opportunities for young people, and we work hard in the Department for Education to ensure that as many people as possible get those opportunities.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Does the Minister believe that schools are providing adequate careers guidance about the availability of apprenticeships in the light of Sir Michael Wilshaw’s comments:

“It is worrying that the new arrangements are failing to provide good guidance or to promote vocational training options and apprenticeships”?

[Matthew Hancock]

I am clear that the strength of guidance, inspiration and motivation needs to increase, and that the best place to get that motivation is from people who are in careers. We have inspirational apprentices such as Sara Underwood, who was mentioned by my hon. Friend the Member for Pendle (Andrew Stephenson), who explain the benefits of apprenticeships. I explain the benefits of apprenticeships, and it should be incumbent on all of us in the House to explain that opportunities are available to allow people to prosper.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

4. What systems his Department has in place for management of failing academies and free schools.

[The Secretary of State for Education (Michael Gove)]

The Department monitors schools through scrutiny of performance data and Ofsted reports. All free schools are visited by an education adviser in the first and fourth term of opening. Concerns are investigated immediately. It is for an academy trust to ensure that appropriate action is taken to bring about rapid improvement. If it does not, we use the intervention powers in the funding agreement.

[Mr Stuart]

The recent action taken on Al-Madinah and the Discovery New School by Lord Nash, the Under-Secretary of State, followed his setting out in detail the requirements those schools had to follow in order to turn themselves around and required his personal supervision of those schools. What role will school commissioners have in future to ensure that we no longer have Ministers trying to run schools from a desk in Whitehall?

[Michael Gove]

Inevitably, we inherited a situation in which funding agreements were the principal method of ensuring that both academies and free schools acted in conformity with the principles that all of us would expect. We are not intending to abandon the principle that it should be for Ministers to sign and, if necessary, revisit funding agreements, but a new system of regional schools commissioners working to the Office of the Schools Commissioner can ensure that we have the local intelligence that we need in order to respond more quickly, and that there is a greater number of high-quality sponsors to help drive school improvement.

[Mark Hendrick (Preston) (Lab/Co-op)]

Fulwood academy in Preston had a recent Ofsted report that stated that pupil achievement, quality of teaching and leadership and management were inadequate. The head teacher Richard Smyth has received extra funding for free school meals, disabled pupils and special educational needs. Why should that man remain in post when he has been at the school for three years and is himself inadequate?

[Michael Gove]

I am grateful to the hon. Gentleman for drawing my attention to those concerns about the principal. I am aware that there are concerns more broadly about Fulwood academy, and I will write to him about what we propose to do.

[Neil Carmichael (Stroud) (Con)]

The key point is how swiftly responses are made to those schools that are failing. Does the Secretary of State agree that the important thing is leadership and management, and that includes the role of governing bodies, which should contain fully skilled governors to do the job?

[Michael Gove]

I entirely agree with my hon. Friend. I am grateful to him for his work not just on the Education Committee but more broadly in making it clear that we need to recruit an even stronger cadre of school governors. I pay tribute to the many thousands of superb school governors that we have in place at the moment, but we need to attract more people, particularly from business, to take on that role in what is an increasingly autonomous school system.

[Alex Cunningham (Stockton North) (Lab)]

The Secretary of State said to the Education Committee that he would consider publishing the list of failing free schools and saying whether they had been approved against the advice of officials. Will he give us that list now?

[Michael Gove]

I was asked earlier by the shadow Secretary of State whether I would specifically refer to the three schools that have, understandably, been brought to the attention of the public because of their difficulties. I made it clear to him, as I am happy to make it clear to the hon. Gentleman, that in all of those cases, the advice from officials was clear that the school should open.

[John Howell (Henley) (Con)]

5. What progress he has made on encouraging the take-up of academic subjects at GCSE and A-level.

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

Since this Government took office, we have seen the number of students taking EBacc subjects, core academic subjects, rise by 60%. We are also seeing record numbers of students taking maths and science at A-level, which is good news because those are the subjects that universities and employers want to see students study.

[John Howell]

I want to raise with the Minister the issue of academic subjects, and languages in particular. I am glad to hear that the introduction of the EBacc has reversed the decline, but what is she doing to ensure continued success?

[Elizabeth Truss]

I agree with my hon. Friend’s concerns. Under the previous Government, we saw a drop in compulsory languages in 2004 and a decline in the numbers of students taking languages. Over the past year, we have seen a 14% rise in the number of students taking languages at GCSE, and we expect that to feed through to A-level. From this September, we are introducing compulsory languages from the age of seven, so that all our children get the experience of learning languages and are able to build up a level of fluency that will help them in their future careers.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the hon. Lady agree that where it is right for a young person to pursue academic subjects it is good that they do so, but many young people in our schools are never given a full choice and the option to do more practical subjects? Is that not part of the reason why the excellent report “One System, Many Pathways” by the Skills Commission, which I co-chair, should be looked at closely by her Department?

[Elizabeth Truss]

I think it is good for students to be doing both academic and practical subjects. In countries such as Germany and Poland, which have improved their programme for international student assessment— PISA—scores, all students do a core of academic subjects, including languages, sciences, history and geography, until they are 16. It is an important principle that students need to do both, because that is what will help them to get good jobs when they leave school.

[Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)]

Given that the new primary maths curriculum no longer includes the chunking method in division calculations, will the Minister confirm that the revised key stage 2 assessments in maths will give credit for a pupil’s working only when the traditional long or short division methods are used, and not when the discredited chunking method is used?

[Elizabeth Truss]

First, I pay tribute to my hon. Friend for all the work he did on the maths curriculum, which is now a world-leading one. Some of our teachers recently went to Shanghai to see how maths is taught there, and they found that Shanghai is three years ahead of England in this regard. One thing they noticed was that the chunking method is not used in Shanghai—long division is used instead. When those teachers brought that back to England, pupils said, “This method is great. Why aren’t we doing this? This long division is much easier than the confusing strategies we have been taught.” So I can say that when we introduce the standard assessment tests with the new national curriculum, chunking will not be rewarded in method marks—long division will.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

On the take-up of academic subjects at GCSE and A-level, does the Minister accept that we should all be careful about making a direct link between educational underachievement in our coastal towns and part of East Anglia, and recent high levels of eastern European migration, because there were educational challenges in those areas long before eastern Europeans showed up and children of immigrant descent can be some of the most aspirational in our schools system?

[Elizabeth Truss]

I absolutely agree with the hon. Lady. I certainly notice in schools in my Norfolk constituency that emigrants from Poland have helped to improve results in some subjects, and I completely disagree with her leader, the shadow Secretary of State, in respect of making implications about the impact of migrants on academic performance.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

6. What plans he has for future funding for students in the further education sector; and if he will make a statement.

[The Minister for Skills and Enterprise (Matthew Hancock)]

We announced the 16-to-19 funding policy changes for the academic year 2014-15 last month, and we will confirm the allocation of funding for individual institutions by the end of March.

[Debbie Abrahams]

Oldham sixth-form college and Oldham college were notified, without any consultation, that their funding would be cut by 17.5%. That has a devastating impact on young people in our area and it is anticipated that 700 young people in Oldham will be affected. Long-term youth unemployment in Oldham has more than doubled since November 2010, and we know that the national figure is 1 million people. Given the Prime Minister’s pledge that our young people should “earn or learn”, is this move not another example of this Government’s hypocrisy?

[Matthew Hancock]

Not only are unemployment and youth unemployment falling—thankfully—from the very high levels we inherited from the Labour party, but we have had to make savings in the 16-to-19 budget. We think it is fair to make this change affecting those who have already had two years of post-16 learning; many 18-year-olds in full-time education do not study as many hours as 16 or 17-year-olds. I also say to the hon. Lady that her Front-Bench colleague, the hon. Member for Manchester Central (Lucy Powell), said on television earlier that she wanted the deficit to fall faster. I am not sure that she got the memo from the shadow Chancellor, but Labour has opposed every single cut, no matter how difficult.

[Caroline Nokes (Romsey and Southampton North) (Con)]

College principals from around Southampton have been keen to emphasise the valid reasons why 18-year-olds may need an additional year at sixth form, which include ill health, their possibly suffering from disabilities, and, of course, the need to improve GCSE results so that they can go on to study their A-levels. What reassurance can the Minister give me that these young people, who are in need of the most support, are not going to be penalised? They are the most at risk of becoming NEETs—those not in education, employment or training.

[Matthew Hancock]

When my hon. Friend sees the impact assessment, I think that she will be reassured on some of those points. As I have said, this is a difficult decision and not one that we will take lightly, but the alternatives are also difficult, and 18-year-olds have already had two years of study post 16 and, indeed, they often study for fewer hours than 16 to 17-year-olds. I look forward to discussing with her, once we have published the impact assessment, exactly why that decision was made.

[Richard Burden (Birmingham, Northfield) (Lab)]

I am afraid that the Minister has not answered the point that the hon. Member for Romsey and Southampton North (Caroline Nokes) raised. Some 71% of the over-18s in further education are on vocational courses and they are often the people who need a second chance and additional support, yet he is cutting funding for them by 17.5%. Why is he hitting those who need support?

[Matthew Hancock]

As I said to my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), once the hon. Gentleman sees the impact assessment he will be able to have a full view of the value of the policy.

[Mr Speaker]

I was looking for Dr Huppert. He popped up a moment ago but has popped down again. Never mind. We will accommodate him on some other occasion.

[Sir Tony Baldry (Banbury) (Con)]

My experience of the Banbury and Bicester job clubs is that young people who have dropped out of education or training often find it difficult to get back into education and training. Can my hon. Friend reassure me that those youngsters who have been NEETs but want to get into further education will be given support to do so?

[Matthew Hancock]

Of course. The massive expansion of apprenticeships and the introduction of traineeships were designed to do precisely that. There is a huge focus on ensuring that those who are in education and those who are NEET get the opportunities to fulfil their potential. Raising the participation age is another part of the plan for dealing with the problem. There are many policies designed to have that effect. The changes across the piece are all about ensuring that, within the funds available, we give everybody the best possible opportunity.

[Mr Steve Reed (Croydon North) (Lab)]

7. What steps he is taking to ensure accountability and oversight of all publicly funded schools.

[The Secretary of State for Education (Michael Gove)]

We have reformed Ofsted’s inspection framework to make it clearer, tougher and fairer. We are also introducing new, more intelligent accountability measures in school league tables.

[Mr Reed]

Ministers say that the Education Funding Agency is the only means of oversight for free schools. How many free schools are currently being investigated by the EFA?

[Michael Gove]

The EFA is not the only means of oversight for free schools. As we know, Kings Science academy has been the subject of a specific investigation by the EFA. We also know that the Al-Madinah school, which has come to the attention of the Department and Ofsted, has also been facing a difficult scrutiny process.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

My right hon. Friend, along with Lord Nash, has been assiduous in responding to colleagues’ concerns about academy chains. Will he consider changing some of the Education Funding Agency’s requirements so that in future pre-warning actions can be delivered when schools go into improvement status, not just into special measures?

[Michael Gove]

My hon. Friend makes an important point. It is important that we are energetic in using the warning notices. More than half of local authorities have not used warning notices when schools have been underperforming, but where the best local authorities have used such notices, and indeed where the Department, on the advice of the EFA or others, has used them, we have seen real improvement.

[Mr Dave Watts (St Helens North) (Lab)]

Does the Secretary of State believe that it is acceptable for head teachers of academies to refuse to respond to complaints taken up by MPs? If he does not, when will he act to ensure that MPs receive proper responses?

[Michael Gove]

I think that MPs deserve proper responses from all those charged with spending public money. I will look more closely at the specific case the hon. Gentleman mentions, but it is important to recognise that the principals of academies are more accountable than the heads of local authority schools—[Interruption.] “Facts are chiels that winna ding”. That is as a result of the greater accountability they face, and not just to the taxpayer through the EFA, but to the Charity Commission. We should be satisfied that the improved governance that academies and free schools have means that they are more directly accountable to taxpayers and elected representatives.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will my right hon. Friend reassure the House that the changes to the accountability system for schools will benefit all their pupils, not merely those on the C-D grade borderline?

[Michael Gove]

My hon. Friend is typically acute in getting to the heart of the matter. The change to judging schools on how well each student progresses from the moment they arrive until the moment they take their GCSEs, across a broad range of eight GCSEs, will mean that not just academic excellence but creativity and technical accomplishment will be counted in determining how well each school has improved—and of course we will move away from the distorting impact that a focus on the C-D borderline has had in the past.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

9. What steps his Department is taking to tackle the rising costs of child care.

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

First, we are increasing the supply of child care to bring down costs, reversing the decline in childminders by giving top childminders automatic access to Government funding, enabling the creation of childminder agencies which will be a one-stop shop for parents and childminders, and getting better value out of school sites by encouraging schools and nurseries to open from 8 am to 6 pm to support working parents. Secondly, we are supporting parents with costs through tax-free child care, which will be available from next year and give working parents up to £1,200 per child.

[Barbara Keeley]

Despite budget cuts of £100 million since 2010, Salford council is aiming to provide 25 hours of nursery care for our three and four-year-olds. This extra funding for our nursery schools will make a great difference to hard-pressed families. However, 56 out of 76 schools in Salford will lose out from September because of Government changes to their funding allocations. Why are the Government acting to undermine the attempts we are making in Salford to support our hard-pressed parents who need child care?

[Elizabeth Truss]

I assure the hon. Lady that we are in fact increasing spending on early intervention and child care across the country. We have increased early intervention spending from £2.1 billion to £2.5 billion, and we are increasing the funding for two, three and four-year-olds as well. The reality is that under this Government the costs of child care have stabilised, whereas under the previous Government they went up by over £1,000 a year.

[Chloe Smith (Norwich North) (Con)]

I welcome my hon. Friend’s urgent drive to ensure that parents get the places to which their children are entitled. I welcome it in Norfolk, where £33 million is allocated for more school places. I also welcome it in terms of child care, for which 500 more two-year-olds in my constituency will be eligible. Will she join me in getting more information to parents on how they can access that flexibly?

[Elizabeth Truss]

I completely agree with my hon. Friend. We are keen that school nurseries, which typically operate two sessions a day, do it more flexibly to help to support working parents so that they can take up three five-hour slots a week that may fit in with their part-time jobs. At the moment, too many school assets are empty between the hours of 3 pm and 6 pm or before school. We can use them better and get better value for money.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

Given that under the hon. Lady’s Government the cost of child care has risen by 30%, or five times faster than wages, and by a staggering £304 on average in the past year alone, what help with these costs is she providing to parents during this Parliament?

[Elizabeth Truss]

The hon. Lady is cherry-picking her statistics. Many studies show that costs have stabilised under this Government, and they are in line with inflation. Her colleague in the House of Lords, Baroness Hughes, admitted that she got it wrong when Labour was in power, when costs went up by £1,000 a year. We have upped the amount of free child care for three and four-year-olds from 12 and a half hours a week to 15 hours a week, supporting hard-working families, but we are not making unfunded promises such as spending the bankers levy 11 times.

[Mary Macleod (Brentford and Isleworth) (Con)]

I congratulate the Minister on what this Government have done on child care. There have recently been proposals for universal child care. Will she give an estimate of the costs that that might entail?

[Elizabeth Truss]

The Department for Education has worked out that universal full-time child care for children aged one to four would cost £18 billion.

[David T. C. Davies (Monmouth) (Con)]

10. What assessment he has made of the findings of the recent PISA report as they relate to England; and if he will make a statement.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

15. What assessment he has made of the findings of the recent PISA report.

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

The PISA results for 2012 showed that England’s performance has stagnated in the league tables, with no improvement over the entire period of the previous Government’s time in office. In contrast, Germany and Poland reformed their education systems and saw a significant improvement in their results, and east Asia also moved ahead. That is why this Government are learning from the success of those other countries by increasing school freedom and accountability and focusing on core academic subjects.

[David T. C. Davies]

The PISA results also showed that things in Wales have not only stagnated, but gone backwards, and that educational standards in England are still far higher than they are in Wales, where the Welsh Assembly’s Labour Minister recently had to make a fulsome apology on the front page of the Western Mail for his party’s abysmal failure. Why does my hon. Friend the Minister believe that educational standards in England are so much higher than those under the Labour-run Welsh Assembly?

[Elizabeth Truss]

My hon. Friend is absolutely right and the Welsh Minister was right to apologise for letting children in Wales down. The reality is that the Welsh Government caved in to the unions and abolished national tests and league tables, and their results in maths have plummeted to lower than 40th in the PISA tables. That shows how vital it is that we increase accountability in this country and keep up the pace of our reforms to make sure that we push ahead like countries such as Germany and Poland, rather than fall behind like Wales.

[Mr Bailey]

The PISA report emphasised the potential benefits of raising standards through collaboration between schools. The 2010 teaching White Paper committed £35 million to school collaboration. Why has that commitment not been fulfilled?

[Elizabeth Truss]

We absolutely encourage collaboration, which is one of the reasons why we sent 50 teachers over to Shanghai to see how they do things there and to put that in place in our classrooms. We have already seen the results in some of our schools in England, including improved practice in the classroom and improved teaching results.

[Simon Wright (Norwich South) (LD)]

11. What steps he has taken to raise the attainment at school of children from less affluent backgrounds.

[The Minister for Schools (Mr David Laws)]

Disadvantaged primary pupils each attract £953 of pupil premium funding this year, while secondary pupils attract £900. Next year this will increase to £1,300 and £935 respectively.

[Simon Wright]

According to research recently published by the Department, more than 23,000 disadvantaged children in the east of England are entitled to, but are not claiming, free school meals. What steps is the Minister taking to increase take-up and to ensure that schools do not miss out on valuable pupil premium funding?

[Mr Laws]

My hon. Friend is entirely right to raise this very important issue. It is a concern that the take-up of free school meals varies so much across the country. That is why the Department has now introduced an eligibility checking service to make it easier and quicker to check which families are entitled to free school meals. I can tell my hon. Friend that under-registration for the east of England has actually fallen from 23% to 18% over the past year.

[Pat Glass (North West Durham) (Lab)]

Children from disadvantaged homes and those with special educational needs are most likely to be hit by the cuts to 18-plus funding. When the Secretary of State met the Education Committee just before Christmas, he told us that he regretted the cut, but that it was the best worst option. These children are the closest to being not in education, employment or training; are they really the ones who should be hit hardest and first?

[Mr Laws]

The Minister for Skills and Enterprise, who covers this area, has already responded to this point. These are very difficult decisions that we are having to take as a consequence of the budget deficit we inherited from the previous Government. It is a difficult decision, but I believe that the analysis will show that it is justified.

[Karen Lumley (Redditch) (Con)]

21. Obviously, the pupil premium plays a great part in providing help for disadvantaged children, including those at Woodrow First school in one of the most deprived areas in my constituency of Redditch. Will the Minister congratulate head teacher Richard Kieran, who provides an imaginative curriculum due to the pupil premium?

[Mr Laws]

I am delighted to be able to join my hon. Friend in congratulating the head teacher of Woodrow First school. I was particularly pleased to be able to visit that school with my hon. Friend at the end of last year to see the fantastic work that is being done, and I was also encouraged by the strong support she is giving to all the schools in her area.

[Nic Dakin (Scunthorpe) (Lab)]

Is the Minister really satisfied that the cut in 18-plus funding, which will hit youngsters from the least affluent backgrounds, is the best he can do for those young people?

[Mr Laws]

As has already been made clear, this is not a cut that will disproportionately affect those from the backgrounds mentioned by the hon. Gentleman.

[Mr David Ward (Bradford East) (LD)]

12. What steps his Department has taken in relation to the principal of Kings science academy in Bradford following the conclusions of his Department’s audit report.

[The Secretary of State for Education (Michael Gove)]

Responsibility for a principal’s performance rests of course with the governing body of an academy, not the Department for Education. One thing I should say is that, as the hon. Gentleman will be aware, there is an ongoing police investigation, which I have to be careful not to prejudice.

[Mr Ward]

That is disappointing, because of course the head of a maintained school would have been on his bike long ago. May I ask the Secretary of State about a comment made by a spokesperson for Alan Lewis who said:

“At no time has Mr Lewis had responsibility for the financial management or governance of the academy”?

If, as I have been told, the report by the auditors recommended to the school by Mr Lewis was presented directly to him and amended as a result of his comments, does the Secretary of State agree that that provides evidence of involvement in both financial management and governance within the school?

[Michael Gove]

I am grateful to the hon. Gentleman for his question, and for the dogged and persistent way in which he has sought to ensure that we can improve the situation at Kings science academy. I would say that Mr Lewis was responsible for commissioning a report, to which the hon. Gentleman quite rightly draws attention, that has played a part in helping to ensure that Kings science academy moved from a difficult position to a better one, but I must stress that I do not want to say anything that might prejudice an ongoing police report.

[Kevin Brennan (Cardiff West) (Lab)]

I can understand why the Secretary of State wants to protect his flagship policy, but we have had mismanagement, nepotism and fabricated invoices. Mr Lewis is not just a benefactor; he is a landlord who will receive £12 million in rent in years to come from the school, as well as a vice-chair of the Conservative party and a major Tory donor. Is that anything to do with the fact that the Secretary of State has refused to take any action whatsoever against anyone since this scandal broke?

[Michael Gove]

I am grateful to the hon. Gentleman for raising this issue. It is important to place on the record the fact that Mr Lewis is receiving for the property an appropriately guaranteed market rent—less than he was receiving for it beforehand. It is important to stress that, and it is also important to state that as soon as my Department was made aware of allegations of the misappropriation of public money, it contacted Action Fraud and a police investigation is now ongoing as a direct result. I should also add that my Department was in touch with the economic crime unit of West Yorkshire police to ensure that appropriate steps had been taken; it was reassured that those appropriate steps had been taken. The law must follow its course. It is entirely right for the hon. Gentleman to raise questions in Parliament, but it would be entirely wrong for me to prejudge the police investigation.

[Stephen Mosley (City of Chester) (Con)]

13. What assessment he has made of the benefits and disadvantages of the use of tablet devices in schools.

[The Minister for Skills and Enterprise (Matthew Hancock)]

Technology, well used, can be a powerful tool to help teachers drive up standards, and evidence shows that the use of technology can have the biggest impact on those most disengaged from learning.

[Stephen Mosley]

Technology such as tablets can be very beneficial in the classroom, but it can also put huge strain on parental finances. What support can the Government offer to make sure that all children, irrespective of their family circumstances, have access to the technology that they need in the classroom?

[Matthew Hancock]

My hon. Friend makes a very important point. In fact, during the past year the number of tablets in secondary schools has gone up by 50%, and the number in primary schools has more than doubled, while we also have a special capital fund for colleges to fund such IT. However, this is about more than physical resources; it is about changing the way teaching is done to make the best use of this tool to drive up standards.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Education (Michael Gove)]

It is important that I draw to the House’s attention the fact that Ofsted, the Government’s school inspectorate, has changed its guidance to clarify the vital importance of not favouring one style of teaching over any other. In the most recent guidance that Ofsted has issued, it stresses that inspectors must not give the impression that Ofsted favours a particular teaching style.

I use the opportunity that you have given me at the Dispatch Box, Mr Speaker, to emphasise that point in order to stress to all teachers that we want them to deploy their creativity, skill and intelligence to raise standards for all children, and not to stick to any outdated rubric in doing so.

[Miss McIntosh]

I welcome the Government review of less well-funded local education authorities, such as North Yorkshire, but there is a very urgent problem with transport for 16 to 18-year-olds attending sixth-form or higher education colleges. Will the Secretary of State address that problem as urgently as possible?

[Michael Gove]

My hon. Friend is absolutely right to raise that issue. We are looking not only at how we can better support all schools in sparse, rural areas, but specifically at how disadvantage funding for institutions that educate 16, 17 and 18-year-olds can better take account of transport costs.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Has the Minister had any recent discussions with ministerial colleagues about the law on child neglect? Is he giving any consideration to updating what many professionals argue is an outdated law that can hamper their ability to intervene and protect vulnerable children?

[The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson)]

I am grateful to the hon. Gentleman for asking that question, if for no other reason than that I get to answer a question. This is an extremely important issue. I know that he agrees with me about the utmost need to make further inroads into eradicating child neglect in our society. There are two definitions of child neglect which relate to criminal law and civil law. I assume that he is talking about the criminal aspect and the work that is being done in the Ministry of Justice, with which I have had discussions. This is an ongoing issue and I am happy to discuss it with him further.

[Graham Evans (Weaver Vale) (Con)]

T2. What steps is my hon. Friend taking, working with the Treasury, to equalise the VAT treatment of sixth-form colleges, such as the outstanding Mid Cheshire college in my constituency, to bring them in line with school, academy and free school sixth forms?

[The Minister for Skills and Enterprise (Matthew Hancock)]

I am a passionate supporter of sixth-form colleges. I recognise the work that they do, in particular Mid Cheshire college with its outstanding status. I have regular discussions with the Treasury. However, we do not think that we will be able to find the resources in the current spending round to solve the problem with VAT that my hon. Friend raises. I will continue to work with the Treasury to try to find a solution.

[Mr Graham Allen (Nottingham North) (Lab)]

T3. Ofsted inspections often critique, but usually deliver only advice from a small bag of short-term fixes, many of which have failed before. Will the Secretary of State meet me to discuss how Ofsted can be given the power to deliver 10-year strategic interventions to help schools deliver school readiness at four and 11, so that improvements are sustainable, unlike Ofsted’s short-term fixes?

[Michael Gove]

I am grateful to the hon. Gentleman for raising that issue. I believe that we will have an opportunity to meet and talk tomorrow. I met some great head teachers from his constituency last year and their direct testimony weighed heavily with me. I know that he has talked to them about how we can ensure that Ofsted provides even more support in the future. Other schools have noticed a significant change in the way in which Her Majesty’s inspectors provide support after an inspection, which is sometimes necessarily tough and stringent.

[Karen Lumley (Redditch) (Con)]

T5. There is a theme to my questions today. Will my right hon. Friend join me in congratulating Arrow Vale RSA academy in my constituency, which he also visited recently? It has gone from strength to strength since it converted. Will he commend Guy Shears, the principal, for being an outstanding leader and for leading it into being an outstanding school?

[The Minister for Schools (Mr David Laws)]

I am delighted to do so. Again, I was delighted to join my hon. Friend in visiting that school. It was impressive to see how rapidly that head teacher and his senior leadership team have turned around a school whose performance was previously extremely disappointing.

[Clive Efford (Eltham) (Lab)]

T4. The Association of Colleges has said that young people from disadvantaged areas and black and minority ethnic groups will be hardest hit by the cut of 17.5% in the funding for 18-year-olds. That is borne out by the assessment that has been carried out by my local college, Greenwich community college. Why have the Government not issued an impact assessment on this proposal, given the severe impact that it will have on disadvantaged groups?

[Matthew Hancock]

As I said in my earlier answers, we will publish the impact assessment very soon. The crucial question is how, in the context of getting the country out of the budget deficit mess that was left by Opposition Members, we can make decisions that will have the best possible impact on the ground. Is it fair to fund 18-year-olds, who usually take fewer hours of education per week, at the same rate, or should we reduce the funding for all 16 to 19-year-olds instead?

[Mike Freer (Finchley and Golders Green) (Con)]

T6. Does the Minister agree with the shadow Secretary of State that Labour failed on vocational education, and does he agree with me that the Government’s rectifying of that mistake means that we now have more employer-led apprenticeships than ever before?

[Matthew Hancock]

I try not to be partisan at the Dispatch Box, as you well know, Mr Speaker, but it is absolutely true that we are driving up standards in vocational education across the board and in apprenticeships. It was a real pleasure to visit McDonald’s in my hon. Friend’s constituency, which does a brilliant job on vocational in-work education. The previous Government made the intellectual error of thinking that just because people have not attained yet, we should not have high expectations of them. We are reversing the consequences of that error.

[Andy Sawford (Corby) (Lab/Co-op)]

T7. Further to the question asked by my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt), will the Secretary of State tell the House now which free schools were approved against the advice of officials? Will he commit to publishing a full list of them?

[Michael Gove]

I pointed out that three schools had been the subject of concern for the Education Funding Agency and others, and as I pointed out to the hon. Member for Brighton, Pavilion (Caroline Lucas), the overwhelming majority of schools put forward for approval were turned down. Something like 17% of the lowest-scoring schools were approved, but no school that has subsequently caused concern to the EFA or anyone else was approved against the advice of officials.

[Julian Smith (Skipton and Ripon) (Con)]

T9. I thank the Secretary of State for listening to North Yorkshire MPs about the sparsity factor in the schools formula. Will he meet me about Upper Wharfedale school, deep in the Yorkshire dales, which is suffering from cuts in bus services for out-of-catchment parents and high demand for special educational needs places?

[Michael Gove]

I would be delighted to meet my hon. Friend to discuss that school and its students.

[Hugh Bayley (York Central) (Lab)]

T8. When does the Secretary of State expect that builders will start on site rebuilding Carr infant school in York, which he wrote to tell me about last June? The school asks whether it will now get a dining room big enough for all 320 pupils who will become eligible for free school meals under the Deputy Prime Minister’s proposal.

[Michael Gove]

A feasibility study is being undertaken, and building work should commence within 12 months. I should say that thanks to the reforms introduced in our free schools programme, schools are being built more cheaply and faster than ever before under this Government.

[Henry Smith (Crawley) (Con)]

As was previously mentioned, Discovery new school in my constituency had its funding withdrawn last month. Would my right hon. Friend consider a reapplication for continued funding from a reconstituted trust?

[Michael Gove]

We will look at any proposition to open a free school to ensure that it will provide welcome additional capacity. The decision that we took with respect to Discovery was difficult, but it emphasises one thing about this Government: we acknowledge that some schools will fail and some will fall into difficulties, but we have been faster and more determined than any previous Government in turning around or closing failing schools. The fact that things will go wrong in the education system is an inevitability, but having an Education Secretary who is prepared to act quickly and determinedly to deal with that is not an inevitability, it is the dividing line between the Government and the Labour party.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Is the Secretary of State aware that since his decision to make school-based work experience placements optional rather than compulsory, an estimated 64,000 school pupils have missed out on work experience in the past year? Will he explain why he is taking opportunities to access the world of work away from young people, particularly when we have almost 1 million young people unemployed?

[Michael Gove]

We have not abolished work experience, we have removed work-related learning at key stage 4. That was a recommendation of Alison Wolf’s report on vocational education, which the Opposition Front Benchers welcomed 100%. If the hon. Lady has a problem with that policy, she should take it up with them instead of merely reading out a question from a Whip who has not bothered to do his research.

[Sir Bob Russell (Colchester) (LD)]

British success in the north American war of 1812 to 1814 was as important to this country as the victories at Trafalgar in 1805 and Waterloo in 1815. Does the Secretary of State agree that it should be part of the history curriculum, particularly as this August will be the 200th anniversary of when the White House was burned down by the East Essex Regiment?

[Michael Gove]

On all the visits that I have made to my hon. Friend’s constituency, I have always had cause to thank people not just for the superb way in which history is taught in Colchester and across Essex but for the distinguished contribution that public servants in Essex, both in uniform and out of it, have made to this country. The war of 1812 to 1814 was a cousins’ war, and it is only appropriate that we remember that as we attempt to—[Interruption.] I see that one of my ain folk is objecting to that. All I would say, brother mine, is that in the shadow of Burns week, we should extend the hand of amity, as I do to my American cousins. Even as we remember their valour, we should also celebrate the fact that we work together in the brotherhood of man today.

[Toby Perkins (Chesterfield) (Lab)]

The Minister for Skills and Enterprise is struggling desperately to understand the impact of his policy on the most deprived 18-year-olds, so let me tell him about the impact of that policy in Chesterfield. It means that 655 students in this year’s cohort would not get the funding, which the principal of the college in Chesterfield tells me will directly impact on those students who do not achieve well in GCSEs, and clearly be very divisive. The principal told me that the assumptions made for this policy are alarmingly naive and fundamentally incorrect—

[Mr Speaker]

Order. The hon. Gentleman’s inquiry has concluded. What does the Minister think of it?

[Matthew Hancock]

I think much as I thought about five minutes ago when I last answered that question. This is a difficult decision, but the impact assessment—which, of course, I have studied—is very clear about taking difficult decisions to deal with the catastrophic mess left by the Labour Government. We are having to take decisions, and we will take them to put this country on the right track.

[Andrew Selous (South West Bedfordshire) (Con)]

What would be a realistically ambitious date by which to expect significant improvements in England’s programme for international student assessment scores?

[Michael Gove]

Ten years.

[Ian Paisley (North Antrim) (DUP)]

Will the Secretary of State confirm that he intends to visit Northern Ireland very soon, and that he will meet educationists there and convince them and confirm that A-level and O-level students will not be wrongly or poorly affected because of their A-level qualifications or transport ability, regarding qualification to colleges and universities on the mainland UK?

[Michael Gove]

I absolutely will. It is vital that we reassure students and teachers in Northern Ireland that the qualifications they sit will be valued, and that access to universities in the rest of the United Kingdom will be upheld. I am proud that our kingdom is united, and that there are students in Northern Ireland who see themselves as part of a family of nations and a community of learning across these islands. I will uphold their right to equal access to institutions of higher and further education in these islands as long as I hold this office.

[Charlotte Leslie (Bristol North West) (Con)]

Proposals and actions for a royal college of teaching continue apace. Although I am sure the Secretary of State would agree that it is not for politicians but for teachers to drive that potential body, can he provide assurance that the Government will give all appropriate support and as fair a wind as possible to the proposal, which could be a game changer for teaching and, of course, ultimately for our children?

[Michael Gove]

The more that teachers take control of their own destiny, and the more the profession is in charge of improving education, the better. I think the best thing about a college of teaching is that the Government stand well back and wish it well.

[Fiona Mactaggart (Slough) (Lab)]

One of the discoveries in the OECD PISA research is that Britain is one of only five countries in that study where a child’s achievement in reading is more closely connected to their parents’ education and achievement than to any other factor. What will the Secretary of State for Education do about the poor achievement in reading by children of poorly educated parents?

[Michael Gove]

The hon. Lady is absolutely right, and that is one reason why we are working with schools across the country to ensure that children have the chance to decode fluently through the phonics screening check highlighted by my hon. Friend the Member for Bognor Regis and Littlehampton (Mr Gibb). That is why I have encouraged every primary school to expect that children will read at least 15 if not 50 books a year, and why I believe we must ensure that the scandalous level of educational inequality to which the hon. Lady draws attention is at the heart of everything the Department for Education does. Whether it is the pupil premium, which was drawn up and brought into Government by my hon. Friend the Minister for Schools and the Deputy Prime Minister, or the academies and free schools programme that we are highlighting, everything we do is intended to erase the scandalous level of educational inequality that we inherited and to which I know the hon. Lady objects.

[Several hon. Members]

rose—

[Mr Speaker]

Order. We must move on.

Flooding

Monday 6th January 2014 Commons Chamber

15:34

[The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)]

I wish you a happy new year, Mr Speaker. With your permission, I should like to make a statement about flooding over the Christmas and new year period.

I chaired a further meeting of the Cobra committee a short while ago. I am sure that the House would appreciate an update on the latest position on the severe weather that affected parts of the country over the Christmas and new year period, which caused extensive damage. Our thoughts are with all those who have been affected and whose homes and businesses have been damaged. Tragically, seven fatalities in England between 23 December 2013 and 5 January 2014 are associated with the severe weather conditions. The House will want to join me in expressing our deepest sympathy to their families and friends.

Late December saw a number of rain bands crossing the country in quick succession, accompanied by strong winds. Their cumulative effect meant that, by the start of Christmas week, the ground was saturated and river levels were high. On 23 and 24 December, there was widespread rainfall across the entire country—there was more than 100 mm on Dartmoor, 90 mm in Cumbria, and 70 mm in parts of the south-east—resulting in a number of rivers bursting their banks.

The band of rain was accompanied by gusts of up to 90 mph in southern coastal areas. The strong onshore winds and large waves, combined with high spring tides, led to a surge that brought coastal flooding to parts of the south and west coasts. Further bands of rain moved across the country over the subsequent week and into the new year. The latest rainfall is still working its way down some of the slower-responding rivers, such as the Thames, and more rain is expected this week. There is a risk of groundwater flooding in Dorset and Wiltshire for some time to come and we need to remain vigilant.

Approximately 1,700 properties have been flooded in England so far, with Kent, Sussex, Surrey, Devon, Cornwall and Dorset particularly affected, although there were also impacts in the midlands and the north-west. In Wales, 140 properties were flooded, and there was also flooding in Northern Ireland and Scotland.

High winds led to many trees being uprooted, causing further problems, particularly for transport and electricity networks. Around 750,000 properties were left without an electricity supply, but electricity companies restored power to 90% of those within a day. A number of properties remained disconnected for longer in some cases owing to dangers connected to flooding and the complexity of the faults.

There was severe disruption to important transport links. Ferries were unable to dock at cross-channel ports and rail services were disrupted. A number of flights were diverted and Gatwick airport experienced severe disruption after losing the electricity supply to its north terminal.

Although it will be of little comfort to those affected by the recent floods, more than 220,000 properties were protected over the Christmas period. When added to the more than 800,000 properties that were protected during the coastal flooding in early December, our flood defences have protected around 1 million properties in total in England during the last month alone.

The Government are grateful for the excellent response from our front-line emergency services throughout the UK, and I pay tribute to the community spirit of all those who have rallied round to help their neighbours everywhere in difficult times. As far as England is concerned, I particularly praise the work of the Environment Agency, the local councils, and the transport and energy companies, whose teams worked tirelessly throughout Christmas and the new year period. The Environment Agency has deployed many hundreds of staff over the past six weeks to support communities.

The joint Environment Agency and Met Office flood forecasting centre consistently provided high-quality forecasts to predict accurately flood risks to allow for timely action on the ground. Some 147,000 homes and businesses have received flood warnings and advice since the beginning of December, enabling both individuals and organisations to take effective action before the storms struck.

More than 100 specialist flood rescue teams were on standby across the country as part of the national asset register managed by the Fire and Rescue Service National Co-ordination Centre. I am also grateful to members of Kent and Surrey fire and rescue services for calling off their planned strikes on Christmas eve, which coincided with peak river levels in those areas. I would also like to thank the military personnel deployed at very short notice to assist with flood defence preparations at Maidstone in Kent. The Thames barrier has been raised nine times in the past five days to safeguard more than £200 billion- worth of property in the capital.

There is still a complex picture across the country. Some areas are now focused on recovery, while others remain at significant risk of flooding, and, in many cases, repeated flooding. The Government are working closely with local councils, the insurance industry and others to ensure that people can receive the help they need quickly.

Today’s Cobra meeting agreed that, while we must remain ready to respond to further bad weather and the risk of surface-water flooding, our focus must turn to getting back into their homes the people who have had their Christmas and new year ruined and to supporting local communities with recovery. Tomorrow, the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis) will be chairing a ministerial recovery working group. People who have had their homes damaged should contact their insurance company for advice about claims and seek assistance from the local authority where necessary. My right hon. Friend the Secretary of State for Communities and Local Government has triggered the Bellwin scheme to help local authorities with immediate costs caused by flooding, and the Government are in active discussions with Kent and Surrey councils.

The Government emergencies committee, Cobra, has met eight times through the Christmas and new year period. I have held meetings with relevant ministerial colleagues and officials across Government Departments and the Environment Agency on a daily basis. Those meetings ensured that all relevant agencies and organisations were doing everything possible to support affected households. We will undertake a full assessment in the coming weeks, but initial reports have identified a number of positive aspects, as well as some areas where lessons need to be learned.

The majority of local councils and utility companies responded effectively, but the response of a few left room for improvement. All received early warning from the Met Office and the Environment Agency that severe weather was on its way. The Government contacted all local authorities in England to ensure that all possible action was taken to support affected households and to ensure local emergency plans and out-of-hours help were in place to provide immediate assistance. My Department contacted the Association of British Insurers and was assured that the CEOs of all member companies would get loss adjusters to affected properties rapidly. The ABI has ensured that guidance on what those affected should be doing about their insurance has been provided.

People have a right to a reliable energy network. Despite the sequence of major storms that have hit the country in the past few months, the electricity network operators deserve credit for their hard work in reconnecting an unprecedented number of properties—some 700,000—within hours and in time for Christmas. There are, however, lessons to be learned about how customers are supported and informed during power cuts. We welcome the additional compensation some operators have announced and acknowledge that the response of some companies could have been better. The best performing companies set a high standard, which I would like all companies to be able to meet. My right hon. Friend the Secretary of State for Energy and Climate Change is meeting with distribution network operators and Ofgem to discuss how the response can be improved for future events.

Flood management is a real priority for this Government. It has a vital role to play in protecting people and property from damage caused by flooding, and in delivering economic growth. Over the current spending review period, more is being spent than ever before. In addition, from 2015-16 onwards we will be making record levels of investment in capital projects. We will invest £370 million in 2015-16, and then the same in real terms each year, rising to over £400 million in 2020-21—a record investment. That will reduce the risk of flooding to a further 300,000 households, on top of the 165,000 households protected during the current spending round.

I would like to express the House’s sympathy to all those affected by the floods, and I convey my profound thanks to all those involved in responding across the UK. I can also reiterate the Government’s commitment to continue to invest in our flood defences to help us to continue to respond effectively to any future flooding.

15:44

[Maria Eagle (Garston and Halewood) (Lab)]

I thank the Secretary of State for advance sight of his statement and for updating the House at the earliest opportunity following the recess on the latest situation regarding the floods. I join him in expressing our deepest sympathies to the families and friends of those who have died. Our thoughts are also with the thousands of people affected. This is the worst series of winter storms to hit Britain in more than 20 years, so I also join the Secretary of State and I am sure Members on both sides of the House in thanking Environment Agency staff and the emergency services for their work over the past fortnight, since this period of extreme weather began.

Despite all the efforts of agencies and local government staff, however, it is clear that some communities have faced delays and difficulty in securing the help they need. The Prime Minister heard the criticisms for himself when he visited Yalding in Kent, which suffered severe flooding and where more than 100 homes had to be evacuated. One resident told him:

“We were literally abandoned… We had no rescuers, nothing for the whole day… The Environment Agency said it was up to the council and when I did get through to the council they said if you need sandbags, get your own. On Christmas Day we saw absolutely no one.”

Another resident said:

“The people he’s talking to, the Environment Agency and so on, weren’t here… I swam this road on Christmas Day pulling people out on my own. There was no one here on Christmas Day or Boxing Day.”

The Prime Minister was filmed next to an inflatable boat on his visit, but journalists reported that it had been ferried in 10 minutes before and departed soon after he left. Those affected by these floods do not need stunts or the buck-passing we heard from the Environment Secretary when he put the blame on staff absent over Christmas. They want to know that lessons are to be learned about why some communities faced significant delays in securing the help they needed, and they want to know why lessons do not appear to have been learned from previous flooding incidents, despite all the promises from Ministers at the time.

I welcome the fact that the Prime Minister has promised a review to ensure that lessons are learned, but can the Secretary of State assure the House and those forced from their homes that it will begin as soon as the current severe weather has subsided, and will he set out a clear time frame for when it will be concluded? Will he commit to returning to the House to make a further statement on its conclusions? Will he confirm that the review will focus specifically on preparedness for days such as Christmas day and Boxing day, including appropriate staffing levels, especially when storms are predicted?

Will the Secretary of State ensure that the review looks at whether there is sufficient clarity in the division of responsibilities among councils and the Environment Agency? Will the remit be wide enough to look at the performance of the energy companies? As he said, some companies clearly have serious questions to answer about the unacceptable delays in reconnecting homes, which ruined Christmas for many families, and it is also not clear that the Government acted with as much speed and firmness as they should have done in pressing those companies to act.

Will the Secretary of State ensure that the review looks specifically at decisions taken on flood defence expenditure since 2010? His Department’s own figures, verified by the House of Commons Library, which I have here, show that expenditure on flood protection has fallen in real terms from £646 million in 2010 to £527 million this year and will be £546 million by 2015, meaning that we will be spending £100 million a year less at the end of this Parliament than at its start. Will the review therefore look at whether the right choices were made over how best to implement reductions to the Department’s budget, particularly in the light of the Environment Agency’s estimate that every pound invested in flood defences saves the country as much as £8 in flood damage?

Does the Secretary of State still believe that no other areas of his Department’s budget or those of its 28 arm’s length bodies were a lower priority than flood defences when it came to making decisions on reducing spending? Does that include, for example, the £7.3 million he spent in recent months on his failed unscientific cull of badgers—£4,100 for each animal killed?

Will the Secretary of State confirm that the review will consider the warning from the chief executive of the Environment Agency that

“Flood risk maintenance will be impacted”

by further planned budget and staffing reductions? In the meantime, will he reassure those living in areas at risk of flooding that, despite these warnings, he is confident that he can deliver the cuts in a way that will not reduce the Environment Agency’s ability to protect homes and businesses and respond when floods hit?

Will the Secretary of State reassure us that his failure to protect flood defence expenditure over other potential cuts has nothing to do with his personal scepticism about climate science? Has the Secretary of State listened to Sir David King, the Government’s special envoy on climate change, who has today again warned that

“storms and severe weather conditions that we might have expected to occur once in 100 years, say, in the past may now be happening more frequently....and the reason is—as predicted by scientists—that the climate is changing and as the climate changes we can anticipate quite a radical change in weather conditions.”

In the light of that clear warning, does the Secretary of State stand by his view that climate change will benefit the UK because of warmer winters? Will he now listen to the advice from his own independent advisers—the adaptation sub-committee of the Committee on Climate Change—who wrote to him towards the end of last year to express concern that his flood reinsurance scheme misses simple measures that would reduce cost, increase value for money and cope with increasing flood risk?

Finally, will the right hon. Gentleman look again at Labour’s amendments to the flood reinsurance scheme, which Conservative and Liberal Democrat Members opposed in Committee?

[Mr Paterson]

I am grateful to the shadow Secretary of State for her expressions of sympathy and her thanks to those who worked so hard in the Environment Agency and local councils through this difficult period.

The hon. Lady asked four questions about the review. She will have heard me say that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis) is meeting tomorrow to work on recovery, and I shall work across Government with my colleagues to look at some of the lessons learned. The hon. Lady justifiably touched on one area which is, I think, a weakness. Although the Environment Agency and the Flood Forecasting Centre have put out very accurate short-term forecasts and although an efficient system was in place for distributing that information right across those on the ground—district councils, power companies, other utilities, transport companies—we saw a patchy take-up of some of that information and a patchy reaction to it. Some reacted very rapidly and were very effective; others had to be accelerated in their actions after a succession of Cobra meetings. The hon. Lady has touched on an area well worthy of investigation.

On expenditure, the hon. Lady is, sadly, simply wrong. Since I have been in this post—

[Maria Eagle]

You are wrong.

[Mr Paterson]

I will tell the hon. Lady; the chronology is very simple. I met her former colleague, the noble Lord Smith, at a tremendous flood scheme in Nottingham, where £45 million had been spent, protecting about 12,000 properties. What was really revealing was not only the 8:1 gain on the properties protected, as she mentioned, but the huge gain in land on the far side of the river that had been blighted for decades. So there is no stronger enthusiast in this House for flood detection schemes than me. I agree with Lord Smith that if we had a programme of projects that we could press on with rapidly, I would do my best to get money from my colleagues in central Government. [Interruption.] All those Opposition Members chuntering have to get back to some pretty basic figures. When we came into office in 2010, this country was borrowing over £300,000 a minute, and we had to take some pretty difficult decisions. In the light of that and the dire economic circumstances, reductions in revenue inevitably had to be made. Following my meetings with the noble Lord Smith, we got an extra £120 million for capital and have consolidated that into an extended scheme that will see 165,000 properties protected up to 2015. What is absolutely unprecedented is our clear programme of a further £2.3 billion up to 2021 to protect a further 300,000 properties. For all the blather from the Opposition, the simple question for the hon. Lady is whether she will nod now and say that the Labour party will go along with our proposal to spend £2.3 billion on capital up until 2021. Mr Speaker and colleagues, it is very noticeable—[Interruption.]

[Mr Speaker]

Order. There is a cacophony of noise. It seems invidious to single out individuals, but I confess a degree of disappointment as I had always envisaged the hon. Member for Brent North (Barry Gardiner) as a future rather cerebral statesman, but at the moment that point seems to be some way off to judge by the cacophony he is generating. The hon. Member for Garston and Halewood (Maria Eagle) took a little longer than her allotted time, and I allowed for that, but it is only fair to allow the Secretary of State to give proper replies. The House will make its own assessment of those replies, but the right hon. Gentleman must be heard.

[Mr Paterson]

I am very grateful, Mr Speaker, and I will be quick.

The shadow Secretary of State has very publicly not endorsed our programme to increase spending on capital to £2.3 billion up until 2021, so the facts are that in this spending round this Government are spending more than any preceding Government and we propose to spend more up to 2021. That is something on which she needs to reflect before making further criticisms.

The Government believe in the value of flood protection schemes. They deliver a huge advantage for those in private properties and in business and they free up blighted land, and we will continue our programme. It is noticeable, however, that the news today is that the Labour party will not endorse our increased spending programme.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

May I add my congratulations to the Environment Agency and the emergency services, including the lifeboat crews and coastguards who rescued those who put themselves at risk? It is noteworthy that the flood defences held firm and protected the properties that the Secretary of State has highlighted. Will he commit to reviewing his Department’s maintenance budget to ensure that the flood defences that held will have proper maintenance? Will he allow drainage boards to use their own engineers to ensure that the main water courses are kept clear in the future, as the Select Committee on Environment, Food and Rural Affairs has recommended? Will he give the House some examples of imaginative partnership approaches, such as the Pickering pilot project, which is building a reservoir, starting tomorrow, to keep Pickering safe from future floods?

[Mr Paterson]

I am grateful to the Chairman of the Environment, Food and Rural Affairs Committee for her supportive comments. Emphatically yes, we want spending on maintenance to continue. That is why I added a further £5 million to that budget for 2015-16. For further information, although there was a 1% reduction in budgets across DEFRA, I have not passed that on to the flood budget. Again, that shows our absolute determination to protect flood schemes. My hon. Friend is absolutely right to praise partnership schemes. I have been around the country to look at tremendous projects, and only today I was on the Thames where there are prospects of extending the Jubilee river scheme that would require partnership spending by six local councils.

[Joan Walley (Stoke-on-Trent North) (Lab)]

Is it not the case that the sum being spent is way below what the Environment Agency said in 2009 would need to be spent to keep pace with climate change? Is not the real fact that, as the adaptation sub-committee of the Committee on Climate Change’s report states, the

“extreme events seen in recent years will become the new normal”

and that we need to do far more? We need urgently and immediately to review the cuts being made to the Environment Agency.

[Mr Paterson]

I thank the Chairman of the Environmental Audit Committee for her comments. Emphatically yes, we have reacted—look at what we are doing. I agreed a whole range of projects with the noble Lord Smith and we got them passed in a difficult spending round. We have agreed extra funding, as I have just told the Chairman of the Environment, Food and Rural Affairs Committee, for revenue spending and we have agreed, unprecedentedly, a programme of increased spending on capital up until 2021. We are spending more money in this spending round than in the previous four years, we have brought in partnership funding and we have set out an ambitious programme. We are reacting—the hon. Lady needs only to look at what we are doing on the ground.

[Mr David Heath (Somerton and Frome) (LD)]

Not unusually, a large part of my constituency is under water at the moment, and many people who live on the levels say that the situation is the worst that they can remember. I know that the Secretary of State understands this, but will he push the Environment Agency very hard to go ahead with the plans to clear the waterways and the rhynes and particularly to dredge the Parrett, the Tone, the Brue and the Axe, because if we have not got the capacity to get that water away, it will stay there for a very long time?

[Mr Paterson]

I am grateful to my hon. Friend. He and I worked closely on this matter when he was my colleague in DEFRA. Together, we have come to a number of schemes that are being piloted—seven across the country—allowing local farmers and landlords to clear their own low-risk waterways, under supervision from the Environment Agency; but obviously, if that work is to go ahead and be meaningful, there must be proper dredging of rivers, and we will work on that with the Environment Agency.

[Caroline Lucas (Brighton, Pavilion) (Green)]

How does the Secretary of State expect people to believe his claims that flood management is a priority for the Government when, in addition to the Environment Agency cuts, he has seen the decision to slash DEFRA’s team working on climate change adaptation from 38 officials to six and when the Secretary of State for Communities and Local Government has scrapped the obligation for councils to prepare for the impacts of climate change? Will the Secretary of State not acknowledge that that illustrates an incredibly reckless approach to the risks that extreme weather presents? Will he confirm whether he has found time to hold even one meeting with his Department’s chief scientific adviser on this matter—something that he had failed to do until a few months ago?

[Mr Paterson]

I am grateful to the hon. Lady for her question. I cannot blame her for the economic mess that we inherited, but sadly, when we were borrowing £300,000 a minute—[Interruption.] Opposition Members are still chuntering. They are still in denial, and they are not apologising to the British people. When we were borrowing £300,000 a minute, we had to make difficult decisions. The hon. Lady must acknowledge, because she has been here while I made these decisions in the past 16 months, that we have increased spending in this round up to 2015 and that we have an ambitious programme of £2.3 billion, as I have just said. Hon. Members should therefore look at what we are doing on the ground and look at the benefits, with 1 million properties protected over Christmas.

[Mrs Caroline Spelman (Meriden) (Con)]

I am sure the Secretary of State would like to clarify for the House that the Opposition’s claim that they could identify savings from arm’s length bodies falsifies the fact that when this Government took office, there were 91 arm’s length bodies under DEFRA’s wing, which I reduced to 28, and that those savings were directed precisely to help to improve flood defences.

[Mr Paterson]

I am grateful to my right hon. Friend and predecessor for her comments. She is absolutely spot on. By the very difficult decisions that she took and by reducing the number of bodies that were not absolutely key, she has enabled me to come forward with a programme under which this Government will be spending more in this round than any preceding Government.

[Bill Esterson (Sefton Central) (Lab)]

Significant damage was done in Crosby and Hightown during the December floods. As a result, council officers told me this morning that we were very lucky to avoid further significant flooding this weekend. Cuts to flood defence funding since 2010 mean that many communities have now been left vulnerable to further flooding, so will the Secretary of State ensure that funding is made available for the early repair of the flood defences that have been damaged?

[Mr Paterson]

I am grateful to the hon. Gentleman for his question. Of course, his local council can now work with the Environment Agency on partnership funding. I am not sure of the exact physical circumstances, but if there is a possible scheme, there is now a real chance of getting that scheme over the wire. He makes a good point about the maintenance of schemes, and that has been a daily question in our Cobra meetings and our DEFRA meetings to make absolutely sure that any breaches were mended. I pay tribute to the Environment Agency for the rapid manner in which it worked through the night, certainly in early December, to put right those breaches.

[Anne Marie Morris (Newton Abbot) (Con)]

Prevention is undoubtedly better than cure, and I wonder whether the Secretary of State agrees that, in addition to wonderful flood prevention schemes, education is critical. In my constituency, one of the fatalities involved a misguided rescue attempt. Does my right hon. Friend also agree that we should ensure that councils work with parishes to make sure that plans are in place? No plans were in place in some of my coastal villages, and that was exactly where we needed them.

[Mr Paterson]

My hon. Friend makes an interesting and valid comment, and I hope that she will contribute to our review. She points out that several absolutely tragic deaths in recent weeks were really unnecessary—if only people had paid attention to the warnings. One cannot fault the Environment Agency for putting out a huge number of warnings using every possible medium, and we need to ensure that those warnings are heeded.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

The high tides and strong winds of recent days have caused real problems on Walney island, which is home to about 13,000 of my residents. We have had a long struggle to try to get adequate protection against coastal erosion, which threatens many homes on Earnse bay, so will the Secretary of State put a rocket up the Marine Management Organisation so that it issues a licence without further delay to enable such work to begin? Experts say that if we do not act, Walney could be split into two or three separate islands within 20 or 30 years.

[Mr Paterson]

I am grateful to the hon. Gentleman for his question. He makes a valid point, and it would be appropriate if he put it in writing to the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall (Dan Rogerson), so that we can take it up

[Sir Paul Beresford (Mole Valley) (Con)]

I thank the Secretary of State for his statement. He will be aware that the river that gives my constituency its name flooded and devastated the north of my constituency, as well as the north of the adjacent constituencies to the east and west. The actions of the utility organisations and councils and neighbours in many areas were terrific and offset some of the damage, but the effects will take a long time to overcome. I am delighted that he talks of a review and more money, but I am cautiously aware that we in Surrey usually do not get a decent slice of what is available, so I am putting in a direct bid now. I will be asking the leader of Surrey county council to work with me, the Environment Agency and the utilities to put together ideas for a report. Will the Secretary of State accept that report and agree to meet a small deputation that will push the report?

[Mr Paterson]

My hon. Friend tempts me with his question, but I commend his plan to talk to his local council. The partnership mechanism that we have introduced has enabled several schemes that had previously stalled to get over the bar, so if there is a suitable scheme for his local rivers I strongly recommend that he work with his council to draw up a bid with the Environment Agency. Such a proposal will be assessed alongside all the other schemes.

[Ms Margaret Ritchie (South Down) (SDLP)]

I thank the Secretary of State for his statement. He referred to the fact that certain areas in Northern Ireland were flooded. As the representative of such a constituency, may I ask him to hold immediate discussions with the Secretary of State for Transport to ensure that any cuts to coastguard services will not have an impact on coastal communities in Northern Ireland that were greatly affected by coastal flooding and surges?

[Mr Paterson]

I am grateful to the hon. Lady for raising that important point. The Under-Secretary of State for Transport, my hon. Friend the Member for Wimbledon (Stephen Hammond), is in the Chamber, and as the question is about a transport matter, it is probably more appropriate for the hon. Lady to write directly to him.

[Mark Pritchard (The Wrekin) (Con)]

I commend the Secretary of State for his personal commitment and energy over the Christmas and new year period; while many of us were enjoying our holidays, he was working in his Department. I should also, of course, mention the hard work of the emergency services and the Environment Agency. What discussions has he held with the Association of British Insurers to ensure that those affected by floods will be reimbursed as quickly as possible?

[Mr Paterson]

I am grateful to my hon. Friend for his comments and for reflecting the tremendous work of those in the Environment Agency and the other services. We raised this matter early after the first flood, and ambassadors of the Environment Agency went to check that members of the public were getting satisfactory responses from their insurance companies. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall, spoke to the ABI on several occasions to ensure that that was being followed up, and the matter was raised at Cobra this morning. I am pleased to say that, at the moment, we have not heard of any complaints that insurance companies are being slow in sending out assessors. However, at that very difficult time when someone’s property has flooded, the one thing that they want is to get their insurance sorted out, so we would obviously welcome hearing from hon. Members about any cases where there have been problems.

[Clive Efford (Eltham) (Lab)]

In the early hours of Christmas eve, 35 homes in Westhorne avenue in my constituency suffered an avoidable flood when a grill in the Quaggy river became completely blocked. It was only a few hundred yards away from a multi-million pound flood alleviation scheme, but, sadly, the water did not reach there because the Environment Agency had failed to ensure that the grill was kept clear. This has left my constituents in a difficult situation. What they need now is for the Environment Agency to ’fess up and accept its responsibility for the incident so that they can start to make their claims. Will the Secretary of State contact the Environment Agency on my behalf?

[Mr Paterson]

The hon. Gentleman reports on an unfortunate case. The appropriate measure is for him to send the details to the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall, and we will take the matter up with the Environment Agency.

[Mr John Redwood (Wokingham) (Con)]

Does the Secretary of State agree that a number of small schemes to improve the capacity of ditches, culverts and streams could make a lot of difference? My constituency has had huge development on flood plain, and every time we have these situations we always get too many properties flooded because of defective maintenance or because the ditches and culverts are not big enough.

[Mr Paterson]

My right hon. Friend is absolutely spot on. A big difference can be made by micro-management of micro-problems, such as the one cited in the previous question. Not everything can be done by central Government, national institutions, local councils or even parish councils. In rural areas, we are setting up pilots to allow local landowners the right on the ground to maintain low-risk areas and to clear out small rivers.

[Mrs Madeleine Moon (Bridgend) (Lab)]

At the end of last week, high-sea surges and high winds brought water over the coastal protection in Porthcawl, both at West drive and in Newton. Local council staff were out quickly, clearing up the debris along the roadways. The Environment Agency was excellent. None the less, there are huge financial consequences because we have to repair the sea protection and pay for the staff coverage during the clear-up. What money will be available to the Environment Agency and local councils in devolved Administrations to ensure that repairs can be done and compensation paid so that councils can carry on with the much needed flood protection works?

[Mr Paterson]

I am grateful to the hon. Lady for her question. Nearly all the issues that she raised are devolved responsibilities for Ministers in Cardiff. However, if she wants to write to the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), we will see whether we can help.

[Richard Graham (Gloucester) (Con)]

No one in my constituency of Gloucester or in neighbouring Tewkesbury will ever forget the devastation caused by the floods of 2007 and the remarkable reaction and community spirit from our constituents to deal with it. However, the recommendations of the Pitt report took a long time to implement under the previous Government, and it was not until 2010 that the Environment Agency spent significant sums of money to build up flood prevention measures in the city of Gloucester, notably the Horsbere Brook relief pond, which was opened by my hon. Friend the Member for Newbury (Richard Benyon) in 2011.

Although the floods in 2012 and this year have affected Gloucestershire—anyone who lives by the River Severn should expect some consequences—none of my constituents’ houses have so far been flooded, though I stress the words “so far”. I pay tribute to the work of the Environment Agency, the city and county council, Severn Trent, which spent £15 million on a project to improve drainage and sewers, and many other agencies. Does my right hon. Friend agree that the Environment Agency’s work and advance notice and warnings have been significantly improved by better technology which shows where the flooding is likely to impact much more effectively than it did six years ago?

[Mr Paterson]

I am grateful to my hon. Friend for his generous comments. I can confirm that we have implemented nearly all the recommendations of the Pitt report. One of the most important ones was the establishment of the flood forecasting centre, which brings together the Met Office and the Environment Agency. I pay tribute to the centre, whose work I have seen at very close quarters in recent days, for its great accuracy. I also pay tribute to the Environment Agency for the rapid manner in which it got the message out. My hon. Friend touches on one of the most important recommendations that came out of Pitt.

[Diana Johnson (Kingston upon Hull North) (Lab)]

The Government’s new flood insurance scheme excludes properties built after 2009, properties bought under the Government’s Help to Buy scheme, and small businesses and leaseholders. So can the Secretary of State confirm that the Prime Minister’s review will look at, and publish details of, the number of properties that have been flooded in recent weeks and those that will not be covered by the Government’s new insurance scheme?

[Mr Paterson]

We have already had the Committee stage of the Water Bill, which comes back to the House immediately after this statement and that would be the appropriate moment to raise these issues. We have said that we have to have a cut-off point, and it was 2009, when the last Government firmed up on the whole idea of building on floodplains. There has to be a firm cut-off point, and the longer this goes on, the bigger the burden will be on other hard-working families who are helping to pay the cross-subsidy.

[Sheryll Murray (South East Cornwall) (Con)]

My constituency has suffered from two sorts of flooding over this period, and some residents in Calstock and Lower Kelly are almost cut-off because the road collapsed into the river. The council has been really good in working with the local residents, but Cornwall suffers under the Bellwin scheme because a unitary authority was foisted on it by the Labour party, against the wishes of the people of Cornwall. Will my right hon. Friend speak to his colleagues in the Department for Communities and Local Government to see whether something can be done about the disproportionate way in which the Bellwin scheme works against Cornwall?

[Mr Paterson]

My hon. Friend raises an important point, and I am pleased to say that only this morning the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth met the leader and chief executive of Cornwall council to discuss the impact of the Bellwin scheme on Cornwall.

[Geraint Davies (Swansea West) (Lab/Co-op)]

As the former chair of Flood Risk Management Wales, which is charged with investing in flood defences and flood risk-management systems across Wales on behalf of the Environment Agency and the Welsh Government, I am very aware that although the Welsh coastline is more than a quarter of the size of the English coastline, we get only 5% of the money, because that is allocated on the basis of population. Given the severity of the conditions we face, will the Secretary of State look at the case, with the Treasury, for some contingency funding to deal with the damage caused in Wales and review that balance in the light of the growing risk from climate change?

[Mr Paterson]

The hon. Gentleman raises an interesting point, and probably the appropriate route is for him to write to my right hon. Friend the Secretary of State for Wales, who liaises with the Welsh Government and with the Treasury here in Westminster.

[Jackie Doyle-Price (Thurrock) (Con)]

My right hon. Friend referred to the transport disruption caused by the weather conditions, and I should advise him that high winds have led to the closure of the Dartford-Thurrock bridge on three occasions during this period. Will he ensure that Cobra reviews the resilience of the road network on such occasions, so that that can inform future transport investment decisions?

[Mr Paterson]

Obviously, we had Department for Transport Ministers at every Cobra meeting. It is safe to say that, generally, the strategic road network worked extremely well, but my hon. Friend mentions high-profile routes that are exposed to winds, and my colleagues in the DFT will be examining that as part of the review.

[Alison McGovern (Wirral South) (Lab)]

My sympathies are with all those who have lost loved ones during this period, and I am sure the Secretary of State has said the same. May I tell him that Wirral organisations worked incredibly hard to keep going and to get back to normal during the adverse weather conditions? Unfortunately, their efforts, which should have been supported by the council, have been hampered somewhat by the extremity of the cuts that Wirral council faces at this time. He says that tomorrow the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis) will be chairing a meeting of a ministerial recovery working group. Will that discuss how to assist the councils that have dealt with the biggest cuts this Government have doled out?

[Mr Paterson]

I am grateful to the hon. Lady for her question and thank her for her expression of sympathy for all those who have suffered over the past few weeks. The Bellwin scheme is there to help exactly the sort of council she is talking about. She should work with her local council and encourage it to put in an application to the Department for Communities and Local Government. She can write to the Under-Secretary of State any time she likes, because he will take it up.

[Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)]

The Environment Agency’s flood-alert service is a valuable early-warning system, but unfortunately it is not available to many households in Littlehampton and Bognor Regis. Given the serious flooding in my constituency in June 2012 and the fact that it is on a low-lying coastal plain, will the Secretary of State use his influence with the Environment Agency to ensure that the service is available to all my constituents?

[Mr Paterson]

I am grateful to my hon. Friend for making that useful point. I think that the best thing for him to do would be to write to the Under-Secretary of State, my hon. Friend the Member for North Cornwall, so that we can put that in the mix and work with the Environment Agency on it.

[Ian Paisley (North Antrim) (DUP)]

I welcome the Secretary of State’s statement and add my thanks to the many agencies and staff in Northern Ireland, particularly the Police Service of Northern Ireland, which led the battle against the elements over the past few days and weeks. I congratulate him on ensuring that there was a good state of preparedness on this occasion, as people were warned when floods were imminent, in stark contrast to what had gone before. I hope that that vigilance will be maintained for the future. I ask that he continues to share information with the devolved regions so that that awareness is maintained. Will he condemn those people who took it upon themselves to steal sandbags from parts of the river bank in east Belfast, putting more houses at risk, and then sell them to vulnerable pensioners, which was utterly disgraceful? Will he also keep an especially watchful eye on Rathlin island, which remains cut off from sea transport? If that situation continues over the next few days, will he ensure that my constituents there will continue to receive attention, and hopefully a drop of supplies?

[Mr Paterson]

I am grateful to the hon. Gentleman for his comments. I am as shocked as anyone else in the House by the revelation that people were stealing sandbags at such a difficult time. We all saw on our television screens the extraordinary conditions in Belfast. There is probably no bigger an admirer of the PSNI in this House than me, so I happily endorse his comments. As far as Rathlin island is concerned, I received a communication on new year’s day from the hon. Member for Vauxhall (Kate Hoey), who wished me a happy new year from her cottage there. I am sure that we will hear from her if she gets stuck. Seriously, if people on Rathlin are having problems with transport, Members should take that up with the Secretary of State for Northern Ireland, who can then take it up with colleagues in the Department for Transport.

[Roger Williams (Brecon and Radnorshire) (LD)]

I join the Secretary of State in praising the emergency services that helped and protected communities in the face of flood and storm damage. In Wales those were mostly coastal towns that depend on tourism for their living. He has already said that it is a devolved matter, but will he work with his ministerial counterparts to ensure that there is a Barnett consequential for the Bellwin formula so that local authorities can reinstate the infrastructure and the towns can be ready to welcome tourists later in the year?

[Mr Paterson]

I am grateful to my hon. Friend, who raises an important Welsh point that we heard earlier. Obviously the Welsh Government were represented in the meetings of Cobra, and I talked with my right hon. Friend the Secretary of State for Wales only this morning. I think that the appropriate route would be to write to him, because clearly consequentials have been cited in relation to the large Welsh coastline.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I remind the Secretary of State that when there has been flooding in my constituency it has been an awful experience, but it can also be months, and sometimes years, before homes are habitable again. It is a miserable process. Does he agree that the Environment Agency has come out very well from the recent troubles with flooding and inclement weather. Should he not now do something to restore morale in the Environment Agency, which he is well known to dislike, because its staff are very unhappy about the way they have been treated by his Government over the past three years?

[Mr Paterson]

I am grateful for some of the hon. Gentleman’s comments, but I honestly have to disagree. I have been to see people from the Environment Agency on the ground. Last week I was in Addington, where they were manning the control centre. Only this morning, I was near Maidenhead looking at the Jubilee river, in absolute pouring rain. Those guys have been working all over Christmas and their morale was absolutely tremendous. They are, quite rightly, really proud of what they have done. They have worked their guts out under very difficult conditions, and they have delivered. We estimate that approximately 1 million households are protected through the work of the Environment Agency and all those working in local councils. I am always struck by the real spirit among people in the Environment Agency and their determination to deliver, whatever the conditions. That also goes back to what happened at the beginning of January, when they were working overnight filling breaches on the east coast. I have the deepest respect for the hon. Gentleman, who has been in this House for a long time, and I do not like disagreeing with him, but on this occasion I honestly think he is wrong, and I am pleased to tell him so. I really do think that morale among people in the Environment Agency is tremendous—and of course they are buoyed up by the prospect of our very significant long-term programme for flood defences.

[Richard Benyon (Newbury) (Con)]

Twelve months ago I visited the Environment Agency to thank people for their work over last Christmas, and I visited many of the flooded homes, particularly those of farmers on the Somerset levels, who were mentioned by my hon. Friends the Member for Somerton and Frome (Mr Heath) and for Wells (Tessa Munt). We were able to do much to support them. However, we are left with the importance of remembering that the first two years of this Government were spent dealing with drought and the last two years have been spent dealing with really severe floods. It is right that we are encouraging investment in resilience in the water sector, and it has to be right that we continue to prioritise flood spending. Does my right hon. Friend agree that it is worth reminding the House that the previous Government’s so-called Darling plan would have made 50% cuts in capital spending across the Government, which would of course have had an impact on precisely the things that Opposition Members are complaining about today?

[Mr Paterson]

I am very grateful to my hon. Friend. I would like, on the record, to thank him, and my predecessor, for the tremendous work that they put in during their time working on these long-term programmes. What is fascinating about this statement is that it has flushed out the fact that the Labour party will not match our very ambitious long-term programme for flood defences.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

A constituent of mine has seen his flood risk premiums double to almost £2,500 in 12 months. Does the Secretary of State honestly believe that his Department is doing enough, quickly enough, for people such as Mr Clayton?

[Mr Paterson]

The statement of principles, which was the ad hoc arrangement left by the previous Government, was always going to end on 30 June last year, and I am sorry to say that the hon. Gentleman’s colleagues had done very little to prepare the ground for a replacement. After very detailed negotiation with the ABI, we have come to an agreement on a new programme. The relevant measure is going through the House as we speak, and he will have an opportunity to comment on it in the debate on the Water Bill later this afternoon.

[Peter Aldous (Waveney) (Con)]

Lowestoft in my constituency was badly affected by the North sea storm surge at the beginning of last month. In the past three and a half years the Government have made significant commitments to flood defences in terms of increasing funding and promoting innovative ways of carrying out works. As a result of the recent and ongoing floods, a considerable amount of additional work has been created in relation to preparing damaged defences, working up new schemes that had previously been regarded as long-term projects, and improving risk management procedures. In the light of what has happened in the past four to five weeks, will the Secretary of State be reviewing the funding arrangements for the Environment Agency and local authorities to ensure that they have the necessary resources to carry out this additional work and that local communities can get back on their feet as quickly as possible?

[Mr Paterson]

I am happy to repeat what I said earlier—that this Government will be spending more on flood defences in the course of these four years than any preceding Government, and we have set up a very ambitious £2.3 billion programme going right through to 2021. I very much hope that his constituents, councils and other entities put in bids to participate in these funds.

[Toby Perkins (Chesterfield) (Lab)]

People in Brampton in Chesterfield who were flooded in 2007 will have every sympathy with what people who have been flooded in recent weeks are going through, but they are still waiting for the River Rother flood alleviation scheme that the Government boasted about in 2010. In that context, the spending figures are very important. The Secretary of State made some claims that would give the impression that flood spending was going up. Can he confirm that the funding for flood defences in 2010-11 was £646 million, but in 2015-16, in real terms, it will be £100 million less? That is a very significant cut, not an increase, is it not?

[Mr Paterson]

I am sorry to disappoint the hon. Gentleman, but he is wrong. We are going to spend £2.3 billion over the course of this Parliament. The scheme he mentions may be a good candidate for partnership funding, which has helped get a whole number of schemes that were stuck beforehand over the barrier because they depended entirely on Environment Agency funding.

[Dr Matthew Offord (Hendon) (Con)]

I welcome the Secretary of State’s statement and congratulate him on his energetic performance over the Christmas period, when I saw him here and on our television screens informing the public. Does he agree that he saw a lot of surface water on his travels, and will he assure me and the House that he will have conversations with the Department for Communities and Local Government to ensure that local authorities are playing their part in clearing culverts to ensure that standing water on roads does not contribute to the worsening floods?

[Mr Paterson]

I am grateful to my hon. Friend for his comments. DCLG Ministers obviously played a key part in our Cobra meetings, and liaison with relevant local councils was discussed almost on a daily basis. That is a key local government responsibility that has been pursued with vigour by Ministers at the centre.

[Nia Griffith (Llanelli) (Lab)]

Lack of communication is one of the major complaints made by people whose public transport arrangements have been disrupted by adverse weather. Will the Secretary of State tell us what the Transport Secretary is doing to demand improvements from public sector and public transport providers, particularly those running stations and airports, so that people are not left for hours without any information whatsoever or have to surge from one platform to another because of conflicting messages? It is simply not good enough for people to be left waiting for hours and hours without any understanding of what is happening.

[Mr Paterson]

The hon. Lady is absolutely right and I entirely agree with her. There is nothing more frustrating for all the entities involved if telephone calls are not received and information is not passed on. That applies to transport organisations, airports, power companies and, obviously, local councils. That is definitely one of the things we will be looking at. People were really exasperated. The power system went out at Gatwick: there were no screens and no public address system, and people were, quite rightly, absolutely furious. That is a clear area that we want to look at. We will make absolutely sure that all the organisations delivering to the public on the ground have a means—and a back-up, which is really important—of receiving calls and getting information out. The hon. Lady is absolutely right.

[Sarah Newton (Truro and Falmouth) (Con)]

Will my right hon. Friend join me in thanking the hundreds of people who turned out in my constituency and across Cornwall not only to look out for their neighbours, but to support the whole range of organisations that are doing their level best to prevent damage from flooding? Will he also, as part of his review, listen to today’s advice from Falmouth coastguards for people to better understand the risks involved in water sports such as surfing in the recent weather conditions, not just to themselves, but to the emergency services that have to go out and save them should an accident occur?

[Mr Paterson]

I entirely endorse my hon. Friend’s comments about the amazing community-level activity by members of the public who helped their neighbours, families and friends. I also entirely endorse her comments on the need to somehow get the message across that those who do take part in splendidly energetic sports such as surfing also take account of the real dangers that can occur when the weather goes beyond the point at which it is not a safe activity.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I also extend my sympathies to families and friends who have lost loved ones.

Further to the questions asked by my hon. Friend the Member for Garston and Halewood (Maria Eagle) and others, figures from the 2010 spending review show clearly that central Government spending on flood defences has reduced in real terms—in some cases by up to 20%—compared with, as shown in official documents, the increase of 75% in flood defence spending between 1997 and 2010. The Government have tried to shift the responsibility for investment and financial risk to individuals and communities. In the light of the devastation to individuals, families and communities as a result of the most recent flood, and given that, according to the Prime Minister, politics is about decision making, does the Secretary of State regret any decisions he has made during this time?

[Mr Paterson]

I am grateful to the hon. Lady for expressing her sympathies, quite rightly, about those who have lost their lives, because that has been really shocking. All I can do is repeat what I said earlier—that in the course of this spending round, this Government will spend more than any other Governments have spent on flood defences. We have an ambitious programme to spend £2.3 billion on capital alone up to 2021 meaning that 165,000 properties will be protected up to 2015, which is 20,000 more than we originally planned, and that a further 300,000 properties will be protected up to 2021.

[Jonathan Evans (Cardiff North) (Con)]

Although my right hon. Friend has made it clear that he does not feel it is appropriate to deal with questions about Flood Re until later in the day, his statement made so many references to insurance that it is important for the Secretary of State and the Government to reflect on areas in which Flood Re does not offer insurance protection, such as properties in two council tax bands in Wales and, for instance, the small guest houses on the front of the marina in Aberystwyth that have been affected by appalling waves today.

[Mr Paterson]

I am grateful to my hon. Friend for his question. I am perfectly happy to talk about Flood Re; I just thought that as there will be a debate later, and time is short now, it might be more appropriate to ask questions about it then.

My hon. Friend raises the issue of guest houses. We have made it clear that council tax payment is the criterion on which to decide whether one is in or out of Flood Re. I am not totally up to speed on the exact details of the guest houses he mentioned, but he may find that many of them pay council tax.

[Andy Sawford (Corby) (Lab/Co-op)]

In November last year, October this year and again over the Christmas period—[Interruption.] That is the local radio station, BBC Radio Northampton, asking me about this very issue. For the third time in the past 12 months, Gainsborough road in Corby has been severely flooded, and residents were trapped in their homes for a week over Christmas. I have been passed around between the Environment Agency, Anglian Water and the county council, but nobody seems to want to take responsibility. Will the Secretary of State step in to help me stop this pass the parcel and get somebody to address this problem?

[Mr Paterson]

I am grateful to the hon. Gentleman for his question. I wish him well with his local radio, and I suggest that he writes to the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall (Dan Rogerson) on this particular issue. [Interruption.]

[Mr Speaker]

Order. I think the hon. Member for Corby (Andy Sawford) has elevated “on message” to a new level in that his communication with his local radio station, or a representative thereof, seems effectively to be synchronised.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

May I say to my right hon. Friend that there has been more flood prevention work in the Cotswolds in the past two years than there was in the whole of the 13 years of the previous Government? Nevertheless, some of my constituents in Cirencester and the area have suffered sewage and water flooding for the second Christmas in succession. They really appreciated the work of the emergency services, particularly the Environment Agency. Will he ensure that the front-line services the Environment Agency so generously provided over this period will be maintained and, in particular, that flood maps are rapidly updated, so that they can get up-to-date insurance?

[Mr Paterson]

I am grateful to my hon. Friend for his comments, which reflect the very good work of the Environment Agency. I want to quote its chief executive, Dr Paul Leinster, whom I have been speaking to daily—I hope that this will reassure my hon. Friend—who has said: “The planned reductions in posts will not affect the Environment Agency’s ability to respond to flooding incidents and the Environment Agency will minimise the impact on other frontline services through the changes.”

[Mr Mark Spencer (Sherwood) (Con)]

Will the Secretary of State assure the House that he will do everything he can to make sure that local authorities, highway authorities, the Environment Agency and providers of sewerage and water services co-operate and collaborate, rather than pass the buck from one to the other?

[Mr Paterson]

My hon. Friend makes an important point. We have seen variability with the resilience forums. At the one I went to in Kent, it was quite clear from listening in on conversations that some agencies were really sharp, on the ball and participating, but that others were not quite as reactive. That is one area that we need to look at in the review, first, as I said earlier, to check whether information is getting through to some of these entities and, secondly, whether the entities are actually taking action. That is the area on which we need to concentrate.

[Sir Peter Bottomley (Worthing West) (Con)]

Some 20,000 homes are exposed to flood risk in Worthing and district. I hope that my right hon. Friend will join me in thanking David Robinson, the Environment Agency operations director for South Downs and Solent, and the colleagues of Kieran Stigant, the chief executive of West Sussex county council, for their preparatory work last year, which helped to reduce the risk over the Christmas and new year period. Will he join me in thanking the local media and those who came out with chainsaws to clear the roads, who helped to reduce the impact of the horrendous conditions, which included tides that were up to a metre higher than expected?

[Mr Paterson]

I am very happy to join my hon. Friend in thanking and congratulating the senior members of the Environment Agency and all the staff who have worked so hard in his area. I am also happy to congratulate and thank all those on the ground who came out with chainsaws to work in such a public-spirited manner, as has been touched on by other Members.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

My constituency has also flooded, which has led to one tragedy and widespread disruption and anxiety. I join the Secretary of State in paying tribute to the Environment Agency and the emergency services for their tireless work over the Christmas period. However, despite their ever-increasing water bills, my constituents are again facing foul water flooding from sewers that simply cannot cope with flooding. What is he doing to put pressure on water companies to be more prepared for flood events and to ensure that we prevent these very distressing incidents from recurring?

[Mr Paterson]

My hon. Friend raises a very important point. Very few water shortages have been reported, but we have had incidents of sewage flooding, which she has touched on. Apart from all the other problems of flooding, that is horrendous. We will certainly look at that issue and the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall, will talk to the water companies about it.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

In thanking the Secretary of State for the £67 million that he agreed to in the autumn for the renewal of the flood defences around Fleetwood at Rossall, may I ask him whether there is any chance of his persuading the Treasury to increase the valuation that it places on agricultural land so that we can justify greater investment that goes beyond 30 years in the sea defences around Glasson and Thurnham in my constituency?

[Mr Paterson]

My hon. Friend raises an important point. We have the conundrum that we must protect agricultural land that is of a lower value than land on which property is built and land in the cities. Of course, the risk that lives will be lost is also lower than in cities. The Environment Agency faces that conundrum. There is a matrix to evaluate each project. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall, and I are more than happy to talk to him about the details of the case that he mentions.

[Caroline Nokes (Romsey and Southampton North) (Con)]

Romsey has been very badly affected over the past fortnight by high levels in the River Test, massive surface water run-off and, most particularly, effluent from a Victorian drainage system that simply cannot cope. My huge thanks go to Romsey’s retained firefighters who worked to pump out houses. Will my right hon. Friend assure me that he will work closely with colleagues in the Department for Communities and Local Government to look at areas where housing development is planned on greenfield sites, but where there is already a problem with drainage systems that cannot cope?

[Mr Paterson]

My hon. Friend raises a very important point. It is completely crazy to have new housing projects that do not have adequate drainage for the conditions. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall, is listening carefully. As we go through the review, she might like to write to him with her recommendations.

[Bob Stewart (Beckenham) (Con)]

Apart from in Maidstone in my county of Kent, were military forces deployed in the United Kingdom over Christmas and the new year to deal with flooding?

[Mr Paterson]

To the best of my knowledge, the only case was a couple of days ago, when 90 soldiers helped to fill sandbags at very short notice in Maidstone.

[Henry Smith (Crawley) (Con)]

I, too, welcome the comments that my right hon. Friend has made about better passenger information, following the incident in which people were stranded at Gatwick over Christmas and the new year. Will he join me in thanking West Sussex fire and rescue service for rescuing a number of elderly residents in Ifield Green? Will he also join me in recognising that, were it not for the significant capital investment in the Environment Agency’s scheme at Tilgate lake, which was realised over the past few years, the flooding in my constituency could have been a lot worse?

[Mr Paterson]

I thank my hon. Friend, and I am glad he endorses our views on getting information across to the public in various forums, particularly at his nearby airport. I am delighted to hear that the flood scheme worked effectively, and his constituents will be among those in the 1 million properties that were protected during this difficult period.

[Mr Marcus Jones (Nuneaton) (Con)]

Many of my constituents in St Nicolas and Weddington wards are concerned about the spectre of new housing development on greenfield land, when there is already a significant flood risk to existing property. Will my right hon. Friend assure me that priority will be given to ensuring that new housing developments do not cause more flood blight?

[Mr Paterson]

My hon. Friend is absolutely right to raise the matter. It is absurd, given the knowledge that we now have, to build houses or anything else on a flood plain. It is good that the Environment Agency objects to planning applications that it thinks are unwise. In the first half of last year there were 26,060 such objections to planning applications, and 99.6% of those objections were endorsed. Our new planning guidance is clear that development should be located away from flood risk whenever possible, and as my hon. Friend suggests, the Environment Agency is active in vetting planning applications.

[Neil Carmichael (Stroud) (Con)]

I certainly congratulate the agencies and the Secretary of State for all that has been done in the past few weeks, but given that a theme today has been that agencies must work together, will he consider asking for a review of how that might be encouraged? I have various examples from my constituency of agencies needing to work together more, such as on drainage in Woodchester, sewerage in Slimbridge and the Severn estuary flood review. That all shows the need to encourage agency co-operation.

[Mr Paterson]

My hon. Friend is absolutely right. We should get this in perspective by saying that there was good co-operation across the country, with enormous work put in by the Environment Agency, councils and those in the fire brigade and transport organisations. However, we can do better. He is right that there were a number of cases on the ground in which a few organisations could have been better informed, reacted quicker and done more. That is what we want to examine. We need to get the system sorted out so that it is much more homogeneous and uniform, but let us get it in perspective—I think there were only a few cases in which things went really badly wrong.

[Mr Philip Hollobone (Kettering) (Con)]

Across the country, water and power engineers, local authority and emergency service workers, volunteers and others have done their level best. They are ordinary men and women doing extraordinary things in exceptionally difficult circumstances.

As the Secretary of State said in his statement, the performance of some utilities and local authorities left room for improvement. Where those few councils and utilities have performed badly, almost by definition it will have been because of bad decisions made, usually, by highly paid chief executives. Will the Secretary of State host a meeting, together with other Government Departments, and invite the 10 worst-performing and the 10 best-performing utilities and local authorities, so that one group might mentor the other?

[Mr Paterson]

I am grateful to my hon. Friend for his question, and that is an interesting idea. We will progress the review by examining the cases in which we think things have gone well, and as I touched on in answer to the previous question, I think that there were only a few cases that showed a need to see how we can co-ordinate better. The co-ordination is the key point.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Over Christmas, it was clear that households and businesses in Snape, Eyke and Southwold were still suffering from the floods earlier in December. Can the Secretary of State assure me that the role of internal drainage boards will continue to be enhanced, and will he consider with the Department of Energy and Climate Change and others a sensitive scheme of felling trees in sensitive areas to prevent trees from bringing down power lines?

[Mr Paterson]

IDBs certainly have a great role to play, and I am a strong supporter of them. It is all part of our long-term proposal to push responsibility for low-risk waterways down to as local a level as possible. That is how we can help to free up a lot of those waterways, which have been blocked because work on them was stopped under the previous Government. I am happy to discuss my hon. Friend’s other question with her directly.

[Martin Vickers (Cleethorpes) (Con)]

May I refer my right hon. Friend back to the floods of 5 and 6 December, and thank him for his visit to my constituency in the immediate aftermath? Subsequent meetings with the Environment Agency have suggested that it will prepare both a short and long-term strategy, and my residents—particularly in Barrow Haven, which has been flooded twice in the past six years—are anxious for those plans to be implemented speedily. Can my right hon. Friend give a categorical assurance that he will do all he can to ensure that the Environment Agency carries out that work?

[Mr Paterson]

I enjoyed my visit to my hon. Friend’s constituency. It was an extraordinary event—I think people told me that it was the worst weather they had had in 500 years, which shows what the Environment Agency has had to cope with recently. I would not want to jump the agency’s list of priorities, so perhaps my hon. Friend would be happy to write to the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall, who will take up the matter, and the particular details of the project he mentions, directly with the Environment Agency.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

It is a pleasure to be the end-stop to this statement. I have been a critic of the Environment Agency in the past, but will my right hon. Friend join me in congratulating it on its staff and on the way it is working in partnership with East Riding of Yorkshire council to deliver a much more joined-up approach, as mentioned by colleagues across the House? Can he assure residents in Kilnsea which was flooded—businesses were also flooded there—that remote, rural spots such as that will see their flood defences prioritised for investment, and that they will see that bank renewed, which desperately needs to be done?

[Mr Paterson]

I am grateful to my hon. Friend and admire his patience in waiting until last. I nearly visited his constituency and saw the advantages of the Hull barrier, which is used as a reservoir at low tide to drain water from his constituency. If he has a particular project in mind, as with the preceding question I think the appropriate route is to write directly to my hon. Friend the Under-Secretary of State for Environment, Food and Rural Affairs, who will take it up with the Environment Agency.

Points of Order

Monday 6th January 2014 Commons Chamber

16:51

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

On a point of order, Mr Speaker. On 19 and 20 December there was a meeting of the European Council, after the House had risen for the Christmas recess. The Council specifically discussed defence as well as sustainable growth and unemployment—all things that are important to the United Kingdom. Have you had any application from the Prime Minister to come to the House and make a statement on the outcome of that European Council meeting?

[Mr Speaker]

No, I have not. It used ordinarily to be the case as a matter of course that there were statements on such matters, and generally speaking—if memory serves me correctly—that has continued to be so, with one or two exceptions. Those exceptions have sometimes been a cause of some concern to right hon. and hon. Members, and we no longer have the debate in advance of the European Council because the Government judge—which they are perfectly entitled to do—that that should come out of the allocation of time for the Backbench Business Committee. It seems a pity if there is no statement after a European Council meeting, but there are various means by which Members can try to pose questions on such matters orally, and get answers, and each case must be considered on its merits. The hon. Lady is an experienced campaigner and she can apply her own resources to the matter.

[Toby Perkins (Chesterfield) (Lab)]

On a point of order, Mr Speaker. We all appreciate that the Secretary of State for Environment, Food and Rural Affairs may be tired after his endeavours in the past few weeks, but I know he would not want that to enable him inadvertently to mislead the House. He said that the figures I quoted in my question to him a few moments ago were wrong, but they were provided by a previous Minister in that Department, the hon. Member for Newbury (Richard Benyon), in answer to a parliamentary question on 9 September 2013. Either the Secretary of State was wrong to say what he said, or the written parliamentary answer given by the hon. Member for Newbury was wrong. I wonder whether you can assist me, Mr Speaker, and my constituents, in getting to the bottom of the matter and finding out whether the written parliamentary answer was wrong, or whether the Secretary of State was wrong earlier today?

[Mr Speaker]

What I say to the hon. Gentleman is that—

[Richard Benyon (Newbury) (Con)]

He’s wrong.

[Mr Speaker]

No, it is not for me to say that the hon. Gentleman is wrong, but I am tempted to say it is a tad tendentious of him to raise that as a point of order. All Members are responsible for the accuracy or otherwise of the statements they make in the Chamber, and it is not for me to seek to assist the hon. Gentleman in his endeavours. I have, however, assisted him to the extent that I have enabled him to raise the point, and he has aired it to Members on the Treasury Bench. If any correction is required, doubtless it will be forthcoming; if not, the eager beaver that is the hon. Gentleman will, I am sure, pursue the matter further.

Water Bill

Monday 6th January 2014 Commons Chamber

Consideration of Bill, as amended in the Public Bill Committee

New Clause 1

Legislative competence for water in Wales

‘The National Assembly for Wales shall have legislative competence for water up to the geographical boundary with England.’.—(Hywel Williams.)

Brought up, and read the First time.

16:54

[Hywel Williams (Arfon) (PC)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 2—Retail exit—

‘(1) The Secretary of State may by regulations make provision about the transfer of an undertaker’s assets and liabilities associated with its non-household retail business into a separate company.

(2) Regulations under this section are to be made by statutory instrument.

(3) Regulations under subsection (1) may, in particular, make provision for any such transfer to be subject to—

(a) approval by the Secretary of State;

(b) any such safeguards as may be specified in the regulations;

(c) the transferee company holding a licence containing a retail authorisation pursuant to section 17A of the Water Industry Act 1991;

(d) the provision of any information or other such assistance from the relevant undertaker as may be required by the Secretary of State for the purposes of approving the transfer.’.

New clause 11—Duties of undertakers to furnish the Secretary of State with information: annual review—

‘(1) Section 202 of the Water Industry Act 1991 (duties to undertakers to furnish the Secretary of State with information) is amended as follows.

(2) After subsection (1A) there is inserted—

“(1B) Any company with a duty under subsections (1) and (1A) must furnish the Secretary of State and the Authority with an annual review which provides information about—

(a) their performance;

(b) the total amount of investment;

(c) their taxation structure;

(d) their corporate structure; and

(e) the total amount of dividends paid to shareholders.

(1C) Information under subsection (1B) must be provided prior to the publication of the annual statement of the Secretary of State under section 2A.”.’.

New clause 12—Oversight of charges—

‘In section 2 of the Water Industry Act 1991 (general duties with respect of the water industry), after subsection (2C) there is inserted—

“(2CA) For the purposes of subsection (2A)(a) above the Secretary of State or, as the case may be, the Authority shall have regard to the rates of charges to—

(a) household premises; and

(b) non-household premises.”.’.

New clause 14—Privatisation of water supply: review—

‘(1) Chapter 1 of this Act shall not come into force until the Secretary of State has laid before Parliament a report on the performance of the water companies since the privatisation of the arrangements for water supply came into force under the Water Act 1989, the Water Industry Act 1991 and the Water Consolidation (Consequential Provisions) Act 1991.

(2) A report under subsection (1) must in particular review—

(a) the cost of water to the consumer,

(b) the number of disconnections of water supply,

(c) the purity of the water supplied and the number and consequences of water pollution incidences attributable to the operation of the water companies,

(d) the incidences of leakages, low pressure and disruptions to water supply,

(e) the levels of investment in the water supply infrastructure by the water companies,

(f) the profits made and dividends paid to shareholders by the water companies,

(g) the levels of management remuneration of the water companies,

(h) the levels of taxation paid by the water companies, and

(i) the adherence of the water companies in their operations in the UK and internationally to the national legislation and international conventions and treaties on the protection of the environment, human rights and wages and employment conditions.’.

Government amendments 13 to 22 and 59.

Amendment 12, page 124, line 1, in clause 80, at end insert ‘(h) section [Retail exit].’.

Government new schedule 1—‘Orders under section 77: further provision.

Government amendments 23 to 28, 60, 29 to 46, 61 to 64, 47 to 50, 52, 53, 65 to 87 and 54.

[Hywel Williams]

As is often remarked, Wales is the land of mountains and valleys, and of lakes and rivers. It is therefore very appropriate that I, as a Welsh Member, speak on the Water Bill.

Water and lakes have had a central part in Welsh culture for many centuries. We witnessed astonishing discoveries some decades ago at Llyn Cerrig Bach, the lake on Ynys Môn, of metal offerings to the gods from 2,000 years ago, including some gruesome slave chains.

There is the story of Llyn y Fan Fach. The poor farm boy wins the love of the maiden of the lake. By intrigue, they marry and prosper. He strikes her inadvertently three times, and on the third blow she returns to the lake with all their worldly wealth. There are many other such stories.

Our lakes have inspired poets—too many to quote. One very short extract, which I will translate, will suffice. Gwilym Cowlyd, in his long poem to the mountains of Wales sings thus:

“Y llynnau gywyrddion llonnydd - a gysgant

Mewn gw as gawd ofynydd

A thynn heulwen ysblennydd

Ar len y dwr lun y dydd”.

That translates as: the still green lakes sleep in a waistcoat of mountain, and splendid sunlight draws on the sheet of the water the picture of the day.

Our lakes and rivers inspired Welsh artists such as Richard Wilson, who is sometimes called the father of “English”—sic—landscape painting. His two substantial paintings of Afon Dyfrdwy, the River Dee, can be seen in the National Gallery. His defining painting of Llyn-y-Cau on Cader Idris can be seen at Tate Britain.

So far, so uncontroversial. That fits into the usual Wales box—it is nothing to disturb Front Benchers on either side of the House—and is the conventional picture of our country as a place of extreme natural beauty, and of a long-lived, varied and inspiring culture, but water has also been an emotive, emblematic and defining political matter in Wales for many decades. Let no one in the Chamber doubt or underestimate the power and significance of the water issue in Wales.

I referred in Committee to the controversy and conflict in the 1950s and 1960s over the drowning of Welsh valleys to supply English conurbations against the will of the people of Wales. That was demonstrated in this very House of Commons, when all but one of Wales’s MPs voted against the removal of the people of the village of Capel Celyn and the drowning of their valley to supply the burgeoning and thirsty industrial development of Merseyside.

At the time, the developers saw that as the entirely reasonable harnessing of readily available natural resources for much needed development. They wondered what all the fuss was about. Many Welsh people saw it as straightforward expropriation, akin to the highland clearances. Chillingly, the drowning of Welsh valleys led to the first sustained campaign of bombing in Wales, which, in a further development, led tragically to the injury of an innocent schoolboy, and to the deaths of two of the bombers and the jailing of some of the key perpetrators. Some hon. Members will be familiar with the pictures taken by Geoff Charles, the photo-journalist, of the 1956 demonstration in Liverpool. The people of Capel Celyn marched through the streets of the city to the council buildings, only to find the doors barred against them. Their banners, carried through a city still bearing the many scars of aerial bombardment, said: “Your homes are safe. Save ours. Do not drown our homes.”

One of the leaders of that march in 1956 was Gwynfor Evans, the president of Plaid Cymru, who in 1966 was elected as the MP for Carmarthen. He was the first Plaid Cymru MP, a political earthquake that still reverberates today. Let no one here today doubt or underestimate the power of the water issue in Wales. To borrow RS Thomas’s line, rather than

“Worrying the carcass of an old song”,

let us look at the situation facing us today.

Dwr Cymru Welsh Water is the provider for most of Wales and for parts of England. Dee Valley Water supplies part of north-east Wales and part of the north-west of England. Severn Trent Water supplies mid-Wales and benefits from its water resources. Indeed, it has a 99-year contract with Welsh Water, dating most recently from 1984, to supply up to 360 megalitres per day of non-potable water. That contract ends in 2073.

This arrangement has its roots in the Birmingham Corporation Water Act 1892. It might appear to some as reasonable and practical at the height of municipal power at the end of the 19th century or when water was in public ownership. Indeed, it was the pattern adopted on privatisation and it continues today. To others, it is nothing less than a clear injustice, with a private sector organisation from another country benefiting from a substantial part of what should be a valuable public resource for Wales.

The water industry in Wales is different from the industry in England and in Scotland. It is run on a non-profit distributing basis. Any profits are channelled into lower prices or investment in the service. This has led to below-inflation price rises for the past three years, with a promise of similar for the future; to a sustained lowering of the gearing of the organisation in an industry where gearing is notoriously high; and to a substantial and sustained investment programme.

To get to the nub of the matter before us in new clause 1, the current arrangements are that the National Assembly for Wales has responsibility for water in Wales, save for that water which flows from mid-Wales to England. New clause 1 provides that the National Assembly for Wales shall have legislative competence for water up to the geographical boundary with England—nothing more and nothing less. It is a reasonable aspiration for any legislature to have legislative competence for important resources within its territory, and it is reasonable that the current arrangements should be changed.

[Mr Philip Hollobone (Kettering) (Con)]

I am listening to the hon. Gentleman’s speech with great interest. When the water industry was established, the boundaries were set on the basis of natural watersheds, which, unfortunately, do not coincide with the boundary between Wales and England. Would the new clause not cause unnecessary and potentially expensive administrative complexity which would benefit neither Dwr Cymru customers nor those in England?

[Hywel Williams]

I thank the hon. Gentleman for his intervention. He anticipates my next points, though he is welcome to intervene again should he still be unsatisfied.

We are not in a static, pre-privatisation and pre-devolution situation. Things have moved on, not least in respect of the current status of the NAW as a legislature following the most recent Act—I note that some hon. Members still call it a Welsh Administration, but that is another matter—and there is the prospect of further change as a result of the Silk commission’s reports. Change is central to the relationship between England and Wales, and has been so at least since the establishment of the Welsh Office in 1964. The pace picked up enormously since 1997 and 1999, with the establishment of the Welsh Assembly. The then Labour Secretary of State for Wales said famously that devolution is a “process, not an event”. That is a truism, whatever the current Labour First Minister in Cardiff might wish for as a constitutional settlement, so that it will “all just go away” and he can continue on his unambitious meander.

Plaid Cymru tabled amendments to Labour’s Government of Wales Bill in 2005-06 that would have had a similar effect to new clause 1, but the then Labour Government rejected them. They retained what, as a shorthand, I call the “London veto on Welsh water”. Their attitude was in contrast to that of the then hon. Member for Suffolk Coastal and former Environment Minister, John Selwyn Gummer, who is now in another place. In response to my right hon. Friend the Member for Dwyfor Meirionnydd (Mr Llwyd), he said:

“Under the clause, a Secretary of State, by diktat, would be able to say that a Measure that has a passing or glancing effect on some matter of importance—sufficiently important for the Assembly to feel that a Measure is needed—should be stopped because he has ‘reasonable grounds to believe’ that it would have an ‘adverse effect’. It is difficult to imagine that a Secretary of State would not be able to stop anything that he did not like. The condition of having ‘reasonable grounds’ does not help, so vague is the wording used in the following paragraphs.”

It was not just the Plaid Cymru MP who was sceptical about the Labour Government’s attitude. John Selwyn Gummer went on to say:

“I agree with the hon. Member for Meirionnydd Nant Conwy.”

That was his constituency at the time.

“Either we trust the Welsh people or we do not. It is extremely difficult for me to accept that the Welsh people have to be singled out and measures taken to ensure that, where water is concerned, they should not in any way or in any circumstances be able to do anything that might upset the plans of English Ministers.”—[Official Report, 24 January 2006; Vol. 441, c. 1359.]

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

I congratulate my hon. Friend on making a powerful case for the full devolution of Welsh water resources. Is it not the case that were his new clause successful, the people of Wales would be in full control over their entire water portfolio and that those who abstain or oppose his new clause when we divide will essentially be saying that large parts of Welsh water resources should be under the control of the British state?

[Hywel Williams]

My hon. Friend makes a telling point that I shall refer to later: there is no centre ground on this matter. Either the Assembly controls Welsh resources or the Government here in London do so. It is a question of whether the Welsh people have self-determination on this matter or whether there is a veto from London. I know which option he favours—it is the same one I favour.

[Jonathan Evans (Cardiff North) (Con)]

The hon. Gentleman rightly referred to the Capel Celyn situation—I remember it from many years ago when I first entered politics—and rightly said that across the political spectrum there was universal opposition in Wales to the drowning of valleys. Today, however, he should help the House. What is the mood in Wales today? He obviously feels that this is yet another step in devolution, but there is no great appetite for it elsewhere in Wales.

[Hywel Williams]

That is an interesting point. At every turn, when further devolution is proposed, right hon. and hon. Members of all parties always say that there is no appetite for it, and they point to polls allegedly showing no appetite for further change, but subsequent polls always show that the Welsh people support further devolution. They support devolution that goes further than the Government’s proposals. They supported further devolution before and after the Government of Wales Act. The hon. Gentleman has his own opinion and I have mine, but I think I have my ear closer to the ground of Welsh people’s opinion.

[Jonathan Edwards]

The hon. Member for Cardiff North (Jonathan Evans) might have noticed over the summer that the Silk commission undertook the most detailed study of devolutionary attitudes in Wales since the Senedd was created in 1999, and it clearly indicated overwhelming support for the people of Wales getting control over their natural resources, be that wind, water, shale gas or whatever. The people of Wales want those resources in the ownership of the Welsh people, and the guardian of the Welsh people is our own sovereign Parliament in Cardiff.

[Hywel Williams]

I am grateful to my hon. Friend for that further point, however disappointed we both might be with the guardianship of the current Government in Cardiff.

Eight years after the Government of Wales Act, circumstances on the ground are much more pressing. For example—a small example, perhaps—the fracking industry, if it proceeds, will be a heavy user of water, and as the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), has confirmed:

“Water sourced from local water companies for projects in England could potentially originate from Wales.”—[Official Report, 18 December 2013; Vol. 572, c. 640W.]

At the very least, there is the threat of history repeating itself—of industrial development and growth in wealth in England being based on resources from Wales, of the benefits to Wales being limited and of the legislative control of the Welsh Government being limited to part of the country only and being subject to a London veto. I believe that that is insupportable. It would be seen by many as Capel Celyn and Tryweryn once again.

[Bob Stewart (Beckenham) (Con)]

Does the hon. Gentleman’s new clause imply that the Welsh Assembly could stop water coming into England if it wished to do so?

[Hywel Williams]

The hon. Gentleman anticipates my next point: it is a matter for the Welsh Government to decide what they would do; they have the right to decide for themselves. What I am against is this place’s veto and this place telling the Welsh Government what they would or should do. I think that in a reasonable world—and I think the Welsh Government are very reasonable people—they would be highly unlikely to turn the off taps, but they might be able to reverse what I described earlier as a patent injustice. What might the Welsh Government do with legislative competence up to the border? That is a matter for them.

This Water Bill introduces competition into water provision. Water companies in Wales are wholly or mainly exempt, but that still leaves open to competition a huge area of Wales owned by Severn Trent, which is expressly against the wishes of the Welsh Government—at least for that part of Wales for which they have the power to decide.

[Mr Hollobone]

I am following the hon. Gentleman’s speech with genuine interest. If water is abstracted from the area within Dwr Cymru’s competence and Dwr Cymru receives proceeds from that abstraction, could that money be used to keep water bills down for the vast majority of Welsh Water customers?

[Hywel Williams]

I thank the hon. Gentleman for his intervention. As I said, the agreement with Severn Trent predates privatisation, and the amount of money that changes hands is, I think, nominal. I have to confess that I do not know precisely how much it is, but my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) has referred in the past to a very small amount of money changing hands, which has only a marginal effect on what Welsh Water is able to achieve. I would also point out that what it achieves by being a not-for-distributive-profits organisation is enormously greater than any money it might get from Severn Trent.

[Mr Hollobone]

The hon. Gentleman mentioned fracking, which could well be a growth business in Wales as in England. From what he says, it seems to me that any water abstracted from Dwr Cymru’s area could mean a negotiation between Dwr Cymru and the users of that water. If it wanted to do so, Dwr Cymru could charge quite a high price for what is a very valuable resource.

[Hywel Williams]

The hon. Gentleman makes a fine point. That would be the case if, say, Northumbrian Water sells to Yorkshire Water: there are different prices in different parts of the country, depending on the economics of the transport of water. The moot point about water is that it is in some ways a transport business rather than a water supply business, because water is extremely heavy and difficult to move about. It would be a matter of negotiation. As I pointed out, however, Welsh Water does not have control of some of the more significant water resources in Wales—the water sources in mid-Wales. Incidentally, I do not want to stray from the water industry, Madam Deputy Speaker, but fracking might take place in south Wales and possibly not in north-west Wales—the part I represent. Someone has to say that, I suppose—start at home.

Ofwat addressed the matter of realigning legislative competence in its evidence to the Silk commission. People who frighten the horses over the costs would do well to listen to what Ofwat had to say about the “potential impacts” of moving away from the “wholly or mainly” boundary—that is, the current situation. It said:

“During our evidence session I was asked about any possible impacts of moving away from the current policy boundary definition. We believe that there are likely to be some administrative costs to companies (and customers) from such a change and that there could be some incidence effects on customer bills (which could be positive or negative for different customers).”

In other words, it will impact differently, but Ofwat says:

“Generally we would expect both of these to be relatively minor.”

I do not think that there is a reason to be particularly frightened of any costs that might be involved.

17:14

More significantly, perhaps, I point out to those on the Opposition Front Bench that the Labour party’s stance on the matter is clear. In their submission to the Commission on Devolution in Wales, the Labour Welsh Government stated that they wanted the National Assembly to have full legislative control over water up to the geographical boundary with England. They also stated that they wanted to remove the London Government’s power to intervene in Welsh affairs in relation to water, which I referred to earlier as the London veto. Interestingly, that is a complete volte-face from the stance taken by the Labour Secretary of State for Wales in 2006, who was insistent on the veto.

In its evidence to the Silk commission, Labour said that

“the Assembly’s legislative competence should henceforth extend up to the geographical boundary with England”

and, on page 9, that competence should be

“extended to the geographical boundary with England in line with the legislative competence for other acts of the Assembly.”

Labour also said:

“We also propose removal of the existing Secretary of State unilateral intervention power in the case of functions relating to water”—

that is, the veto. It went on to say:

“There is an important interdependency between Wales and England in terms of water resource management, water supply and water quality. We consider that any concerns about potential adverse impact in England in relation to these matters would be more appropriately addressed through inter-governmental mechanisms that set out the basis for co-operation and joint working between the respective Governments.”

That is the Labour party’s stance.

[Jonathan Edwards]

Considering the clear position of the Labour Welsh Government, does my hon. Friend share my surprise that there is not a single Labour MP based in Wales in the Chamber today to defend that position?

[Hywel Williams]

Alas, I am not surprised at all by the complete lack of Labour MPs from Wales in the Chamber. They might still be celebrating, who knows?

In conclusion, if the coalition Government are unwise and refuse to accept the new clause and we are forced to press it to a Division, I expect the main Opposition party, which is also the Government party in Wales, to join us in the Lobby. After all, this is not just a Welsh test for the coalition Government. It is also a test for the Opposition in this place and for their friends in Wales of their consistency and commitment to the people of Wales. Are they serious about devolving power to Cardiff, or is this to be a case of echoing St Augustine: “Make me pure, but not yet”?

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

It is a pleasure to follow the hon. Member for Arfon (Hywel Williams), who moved his amendment so eloquently.

I want to speak in support of two little amendments that have been grouped under the heading “Regime of the water industry”. New clause 2 and amendment 12 have been tabled in my name and those of a number of colleagues on the Select Committee on Environment, Food and Rural Affairs. We followed the proceedings in the Public Bill Committee with great interest, but chose to bide our time until the remaining stages before we entered into the legislative process, having done what I thought was a welcome piece of work in the pre-legislative scrutiny of the draft Bill.

New clause 2 specifically considers the possibility of allowing a retail exit. It would empower the Secretary of State to make provision by regulation for the transfer of an undertaker’s assets and liabilities associated with its non-household retail business into a separate company. Regulations would be made in the normal way by statutory instrument and would make provision for any transfer to be subject to the approval of the Secretary of State and such safeguards as may be specified in the regulations. Amendment 12 would amend clause 80 by inserting the relevant section on retail exit.

We considered retail exit during the pre-legislative scrutiny. Inevitably, a number of companies may not necessarily fail but will regrettably have insufficient customers to allow them to stay in the market. New clause 2 and amendment 12 would simply recognise that impact and allow companies to function in what would be considered a normal competitive market. An exit clause such as we propose would facilitate new entrants, particularly larger ones, into the water and sewerage retail markets.

We recommended in our report during the pre-legislative scrutiny that the Bill should include such provisions to enable incumbent companies to exit the retail market voluntarily. It would be helpful to hear from the Minister whether he is minded to accept new clause 2 and amendment 12. During our inquiry, both regulators—Ofwat, which covers England and Wales, and the Water Industry Commission for Scotland—said that incumbent companies and, indeed, new entrants were united in calling for the Bill to include an exit route.

During the Public Bill Committee, Opposition Members proposed a new clause to allow incumbent companies to choose whether to provide to the retail or wholesale market only, subject to approval by the Secretary of State. Regrettably, the Opposition’s new clause was defeated in a vote. New clause 2 would have a different effect from the new clause proposed by the Opposition in Committee, as it would specifically enable companies to exit the retail market by transferring their retail contracts and liabilities—that is, their retail business—to a third party where they chose to do so. That would open up the market to new entrants who hold a retail authorisation, by allowing them to acquire whole retail businesses, rather than acquiring one contract at a time. That would allow economies of scale.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

The hon. Lady is without doubt an expert in these matters, given her role on the Select Committee as well as the all-party group. On the basis of the work done by her Committee, will she give the House a sense of the amount of interest in entering the market and the number of people involved?

[Miss McIntosh]

I am grateful to the hon. Lady for her good services to the all-party group, where we serve as fellow officers. We hear of many entrants, but obviously, until the law is in place, it is difficult to put a number on that. I am sure that my hon. Friend the Minister will have heard and can perhaps comment, as he is closer to the issue.

We suggest that if existing companies are unable to compete with new entrants who want to come in for very good reasons and lose customers as a result, it makes sense to allow an exit strategy. I personally feel that we heard no compelling evidence during the pre-legislative scrutiny of the draft Bill and during our consideration of the water White Paper to suggest that the reform should not include a retail exit strategy. That is why we feel honour bound to come forward for the sake of the Bill’s completeness.

New clause 2 would give all undertakers the power but not the obligation to transfer their non-household retail business to a different company. It would give the Secretary of State the power to make any such transfer subject to approval and any necessary safeguards to ensure an orderly exit from the market. I hope that the House will be able to support the proposals because much of the Bill is silent on these matters and we want to use the new clause and amendment to give it more teeth.

There are several arguments in favour of allowing such a retail exit. For example, an exit clause is needed to allow the market to function normally and competitively. Additionally, a company should be able to organise its business in the way it considers best in the interests of its customers and shareholders. An exit clause would facilitate new entrants, especially larger ones, into the water and sewerage retail market because they would not need to win one contract at a time. Without new clause 2, I understand that economies of scale would work against new entrants and either prevent them from entering the market or, at the very least, reduce the benefits that they could provide to new customers due to higher costs of entry. I hope that my hon. Friend the Minister agrees that the proposal is helpful and that he will be minded to accept it. It would not be in the interest of companies or their customers to force companies to stay in a market in which they have few or no customers.

The general thrust of the new clause goes to the heart of this group of amendments dealing with the regime of the water industry. We should learn from what has happened in Scotland. I understand that DEFRA has stated that it intends to create a market in which access is regulated—in other words, with the rules of entry clearly set out and adhered to by all market participants. The reverse side of the coin is that if the rules of entry are to be set out, the House would, I am sure, want rules of orderly exit to be set out. I am not saying that exit would happen in many cases, but it is important that such rules are on the statute book.

Following our pre-legislative scrutiny, we said that as much detail as possible should be set out in the Bill so that the House could consider it. It is wrong—I part company from my hon. Friend the Minister in this respect —to leave too much to regulations, given that many of us with a great interest in this subject will not be selected to serve on the Delegated Legislation Committees that consider them. As the Bill does not provide for retail exit, the strategy is too open. It could be argued that the Government’s approach is based on the premise that parties in the retail market should be left to negotiate among themselves about matters such as service and price, but that could be set out in the Bill.

Considerations of price, service levels and the ability to respond to difficulties go to the heart of why it is important to have a competitive market in England, as has been achieved in Scotland. There must be a way of policing a situation in which incumbents are simply slow in responding to requests for information or services from new entrants. It is important not only to facilitate the path for new entrants, but to allow for an exit strategy and to bring about a competitive market. The Bill is completing its remaining stages in the House today, but little is known about upstream competition. The Government are asking that we take an awful lot on trust, but it would be better if the Bill provided for a definite exit strategy, which is why I commend new clause 2 and amendment 12 to the House.

[John McDonnell (Hayes and Harlington) (Lab)]

I am pleased to follow the hon. Member for Thirsk and Malton (Miss McIntosh). I see in the national press that she has had a little local difficulty. I hope that she can resolve the matter, because she would be a loss to the House if she were not returned at the next election—unless of course she were replaced by a Labour Member.

I want to speak to new clause 14, which is in my name. It suggests to the House that before we move forward with further legislation, we stand back and look objectively at the performance of the water supply industry since 1989 when it was privatised. I am not part of this common agreement among some parties in the House that privatisation and competition have been a success and are the way forward. In fact, I deeply regret what has happened since privatisation.

17:29

I have set out the suggestion that before we go further, the Government should produce a report that examines some of the key issues affecting the water supply industry and the consumer. I am talking here about the cost of water to the consumer, the number of disconnections that took place during privatisation—although that is no longer allowed under the Ofwat regulations—the purity of water supplies, the leakages, the levels of investment, the profits and the dividends paid to shareholders, management remuneration, the levels of taxation, particularly taxation avoidance, by the water companies and also their adherence to employment, human rights and environmental practices across the world. I say that because the water industry is second only to the energy industry in ripping off the British public. Since privatisation, the water companies have stolen from the average consumer of water in this country. The Government need to expose that in a comprehensive assessment, which this House can debate, before we consider the future structure of the water industry.

Let me go through some statistics showing what has happened since privatisation. Since 1989, real water bills have risen 50%. Since 2005, there has been a 35% nominal increase and a 7% real increase in bills. Since 2010, bills have gone up by more than 12.5%. At the same time, individual family incomes have gone down by 5%. It is interesting to see where the money has gone. Most of it has gone into paying interest charges on water company debts or dividends to their owners and shareholders. Interestingly, most of those owners and shareholders are now overseas.

The performance of the companies has not really matched the rise in payments. I looked at, for example, the issue of leakages. A great deal has been said about the investment in the infrastructure of the water industry since privatisation. I represent a constituency that is served by Thames Water, which continues to lose up to a third of its water in leakages every year. The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) wrote an article in the Evening Standard, which excoriated Thames Water for its failure to invest in tackling that particular problem. Not only do the companies fail to tackle the leakages, but they are some of the worst polluters of our rivers. I asked the House of Commons Library to provide some recent information on the companies. South West Water was fined £50,000 plus costs for sewage discharge into Salcombe bay in November 2013. It was fined a further £50,000 for sewage discharge into the Tamar estuary. Thames Water lost a final appeal against pollution fines in 2011, and the estimated final cost of those fines was £400,000.

[Richard Benyon (Newbury) (Con)]

The hon. Gentleman has been a consistent if sometimes lonely voice on this issue for a great many years. It is not for me or for anybody to defend individual water companies, but does he not concede that companies such as South West Water have spent an enormous amount of money cleaning up our beaches and rivers? Has he measured the trajectory of investment that was happening before privatisation and compared it with the £100 billion plus that has been spent since privatisation on improving our water sector and making it more environmentally-friendly and on keeping costs down for customers?

[John McDonnell]

I have heard the argument about infrastructure investment doubling since privatisation, but what is significant—

[Alison Seabeck]

Let me pursue the point about South West Water. There is no doubt that it has made dramatic inroads into the problems around the coasts, but there is an issue with the privatisation in the first place. The customer base was far too small to sustain the work that needed to be done around those coasts. As a result, bill payers in the south west—here I disagree with the hon. Member for Newbury (Richard Benyon)—are paying an extraordinarily high amount for their water.

[John McDonnell]

I agree that significant investment has been made in the infrastructure, but the problem is that since the 1990s that has declined as a proportion of the overall turnover of the industry. So the record is not glowing by any means, and the cost of that investment has been paid through significant debt burdens on those companies, which is eventually then paid for by consumers

[Hywel Williams]

I am sure the hon. Gentleman would agree that the level of investment would be even higher if all the profits were devoted to investment in the infrastructure, rather than being siphoned off abroad.

[John McDonnell]

That is one reason why I support the Welsh model of a not-for-profit company, because, as I say, I feel that the general public have been ripped off throughout this period.

Let me just finish off with my last couple of examples, because I would not want to miss them out: United Utilities was fined £75,000 for management failures that contributed to a fire in October 2013; and Severn Trent Water received a £30,000 fine for sewage pollution in September last year. The performance record of these companies is that not only do they not tackle the leakages and the real need for infrastructure investment, but they are polluting the very water they are supposed to be protecting and supplying.

[Joan Walley (Stoke-on-Trent North) (Lab)]

My hon. Friend mentioned Severn Trent Water. Given the pollution incidents involving water companies, does he agree that there is an urgent need to examine the court costs and fines imposed on water companies? Does he also agree that there is a real danger that some companies might prefer to go ahead, pollute and accept a fine because that approach is nowhere near as expensive as making the investment in the first place?

[John McDonnell]

The drive for profits is making these companies ignore their duty towards the wider environment, and the fines and costs are relatively marginal in comparison with the profits they make.

[Richard Benyon]

I promise not to intervene again, but I cannot resist doing so now. Does the hon. Gentleman’s research go back prior to the privatisation of the water sector? In those years, were there any cases of pollution, of leakage or of poor infrastructure? The Minister will know that there were, because there were some appalling cases, one of which was in his constituency, and that the £100 billion we managed to gear into this sector has dramatically improved things. I entirely agree with the hon. Gentleman that there is much more work to be done, and we cannot have a system where the water industry sits outside—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Interventions are supposed to be brief. If the hon. Gentleman wants to make a defence of the water industry, he can stand up to make a speech—he may not do so in an intervention.

[John McDonnell]

Former Ministers need an element of retraining, so may I say to the hon. Gentleman that he can intervene on me as often as wants, but perhaps he could be a bit briefer?

The issue is this: we are not talking about advocating a return to the previous model of nationalisation here; we are talking about the long-term future of the water industry, which is why this debate is important. My view is that privatisation and competition has not worked, but there are other models that we should explore. The Welsh model of a not-for-profit organisation ploughing the money that comes back into the infrastructure and into quality of service is the one we should now be exploring.

[Hywel Williams]

Does the hon. Gentleman agree that this can be clearly seen in Welsh Water’s response to the cryptosporidium outbreak in my constituency some years ago, when it managed to spend £1 million almost immediately on installing new mechanisms to get rid of the cryptosporidium and then spent £7 million on further treatment works? It responded appropriately and quickly to the outbreak.

[John McDonnell]

Competition and privatisation have not worked, which is why I do not think that the Bill, the main thrust of which is to introduce more competition and privatisation, represents the way forward. It provides further opportunities for exploitation. I think that we can all agree to condemn the level of profiteering that has taken pace, particularly in recent years.

I wish to put on the record what has been happening, as independent examinations have shown. Sir Ian Byatt, Britain’s top water regulator throughout the 1990s, wrote in the foreword to a report by the think-tank CentreForum that

“many companies, especially the private equity infrastructure funds, have paid out excessive dividends to their owners.”

He went on to argue for some form of dividend control. That was echoed by Jonson Cox, Ofwat’s chairman, who has called for water companies to share unintended gains with consumers, arguing that the profits and tax- reducing corporate structures were “morally questionable”. I can understand why.

Let me give some examples of the profiteering that has gone on. Northumbrian Water is owned by Cheung Kong Infrastructure Holdings, which is based in Hong Kong. Last year its operating profits were £154 million, but it paid nothing in tax. Its debt was £4 billion. Its chief executive, Heidi Mottram, received a salary, bonus and benefits worth £595,000. Yorkshire Water is owned by Citi, a US company, GIC, which is based in Singapore, Infracapital Partners and HSBC, based in the UK. Last year its operating profit was £335 million, but it paid only £100,000 in tax. Its debt was £4.7 billion. Its chief executive, Richard Flint, received a salary, bonus and benefits worth £800,000.

Anglian Water is owned by Canadian Pension Plan, Colonial First State Global Asset Management and Industry Funds Management, which is based in Australia, and 3i, which is based in the UK. Last year its operating profit was £363 million, but it paid only £1 million in tax. Its debt was £6.9 billion. Its chief executive, Peter Simpson, received a salary, bonus and benefits worth £1,024,000. Thames Water is owned by Macquaire Group, which is based in Australia, China Investment Corporation and Abu Dhabi Investment Authority. Last year its operating profit was £577 million, but it paid minus £70 million in tax, because it is receiving grants from the Government, as the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) pointed out at the time in his article in the Standard on behalf of the Liberal Democrats. Its debt was £9 billion. Its chief executive, Martin Baggs, received a salary, bonus and benefits worth £845,000.

South Staffs Water is owned by Alinda Capital Partners, which is based in the US. Last year its operating profit was £16 million, but it paid only £200,000 in tax. Its debt was £488 million. Its chief executive, Elizabeth Swarbrick, received a salary, bonus and benefits worth £202,000. Sutton and East Surrey Water is owned by Sumitomo Corporation, based in Japan. Last year its operating profit was £17 million, but it paid only £1 million in tax. Its debt was £219 million. Its chief executive, Anthony Ferrar, received a salary, bonus and benefits worth £290,000. Those are obscene levels of profiteering at the expense of the consumer.

Why is the borrowing level so high? It is not because it is all going into infrastructure. It has now been exposed that some of the borrowing is being used to pay dividends to shareholders and high salaries to chief executives and board directors. That was not the intention of the Thatcher Government’s original privatisation—well, it was not the stated intention. Privatisation was meant to reduce prices, increase investment and make the industry more accountable to the wider public through shareholding. That has not been the case. It is not more accountable through shareholding, because most of the companies that now own British water are owned by overseas shareholders. It does not make it any more efficient for the consumer, because prices have gone through the roof in recent years, which people are angry about. It does not make it more accountable to the taxpayer. In fact, the taxpayer is being bled dry as a result of tax avoidance and the various scams that have been going on, which have been explored by Richard Murphy, the tax justice expert.

Corporate Watch has produced an excellent report on some of those issues. It reports that six UK water companies took high-interest loans from their owners through the Channel Islands and then converted them into euro bonds. They then lent them back to the companies and paid virtually no tax on them whatsoever. This is a tax scam for which these water companies are used as a vehicle. Corporate Watch found that the six companies it looked at—Northumbrian, Yorkshire, Anglian, Thames, South Staffs, and Sutton and East Surrey—had borrowed £3.4 billion using this method. It highlights Northumbrian Water as “the most brazen case” as it paid 11% on just over £1 billion of loans it had taken from its owner, the Cheung Kong group, a Hong Kong-based conglomerate run by the world’s ninth-richest person. No wonder he is the world’s ninth-richest person—we are making him so. This is a scandal. The Bill does not go any way near addressing this rip-off of the British consumer or tackling some of the tax evasion and tax avoidance by these companies that has gone on. People are angry about this. In recent reports in the media there has been exposure after exposure, and people expect this House to act on these matters.

17:45

Before we go any further with this Bill, we should consider in detail the record since privatisation on all these matters—cost, performance, and implications for our taxation system—and then come to a considered view about whether privatisation has worked and whether there are alternatives. Minor reforms will not satisfy people when their next water bills come through the door; they will be extremely angry. I urge that we look sensibly at the not-for-profit model that is operating in Wales, because on that basis people can at least be confident about what they pay in and that what is given to these companies through tax subsidies as a result of their long-term investment plans is poured back into the supply of decent and pure water at a reasonable cost. That is why I tabled my new clause.

It may well be that, as the hon. Member for Newbury (Richard Benyon) said, I am a lone voice in this House—with a number of others; my hon. Friend the Member for Luton North (Kelvin Hopkins) is here and has shared similar concerns—but I do not believe that I am a lone voice in the wider community. People are fed up with being ripped off by energy companies, water companies and others, and fed up with being exploited as a result of privatisation.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

May I take this opportunity, Madam Deputy Speaker, to wish you and all hon. Members a happy new year? I hope that all hon. Members have had a peaceful and enjoyable break and have returned refreshed and looking forward to this busy year.

Unfortunately, the festive period was not a happy experience for many households up and down the country. Many hon. Members spent a great deal of their recess dealing with the impacts of the recent weather events on their constituents. It is therefore appropriate that later we will discuss a series of amendments on the clauses that will help to provide support to many of those affected households. I look forward to having that debate in more detail, but for the moment I want to focus on the new clauses in the first group of amendments.

Last year, in his now infamous letter to water companies, the Secretary of State trumpeted water privatisation as

“one of the greatest success stories of privatisation.”

If one measures success by the payouts made to investors, it is without doubt a great success story. Let me echo the thoughtful remarks by my hon. Friend the Member for Hayes and Harlington (John McDonnell) and pick out a few examples of the dividends paid out since 1989. Severn Trent Water has paid out £6.2 billion in dividends, Thames Water has paid out £6.3 billion, the north-west’s United Utilities has paid out £7.3 billion, and Anglian Water investors have recouped some £6 billion. Overall, a staggering £40 billion has flowed into the pockets of investors. It is fair to say that many customers would not share the Secretary of State’s appreciation for his wonderful friends the chaps running the water companies.

Indeed, their view is shared by many of the coalition’s own MPs. I am disappointed that the hon. Member for Skipton and Ripon (Julian Smith) is not present. In last year’s excellent debate on the water industry he said that

“Yorkshire Water…is exploiting my constituents and people across Yorkshire.”—[Official Report, 5 November 2013; Vol. 570, c. 213.]

I do not know whether the Chair of the Environment, Food and Rural Affairs Committee shares that view of Yorkshire Water.

[Miss McIntosh]

Any company that is prepared to invest £1 million in improving the provision of water to Filey has to be congratulated, so I congratulate Yorkshire Water on that. Does the hon. Gentleman agree that this Government’s arrangements leave Yorkshire Water and other companies free to raise money on the markets in a way that otherwise would not be possible?

[Thomas Docherty]

I do not want to get sidetracked by a debate about the merits of privatisation—I think you would pull me back in line if I did so, Madam Deputy Speaker—but I will just point out to the hon. Lady that Scottish Water, which is owned by the state, has invested more per connected property, I think, than any of the English water companies, with the exception of South West Water, so I am not entirely convinced by her argument.

To go back to the comments made by the hon. Member for Skipton and Ripon, despite paying out hundreds of millions of pounds to investors, Yorkshire Water has paid next to nothing in corporation tax over the past few years. I am not singling out Yorkshire Water in particular—it is clear that its behaviour is no better or worse than that of any of its competitors. The problem lies with the culture of water companies themselves. They have behaved in an unacceptable manner towards their customers for too many years. It is clear that they have come to regard customers as nothing more than cash cows, and many have paid little or no attention to customer complaints. That is why we believe it is in the interests of hard-pressed customers that the industry be subjected to greater scrutiny.

New clause 11 in particular shines a light on the opaque world of the companies’ financial and business practices. This is not an unreasonable or overly bureaucratic requirement. For many years, water companies voluntarily produced reports such as those that the new clause would require of them; yet, strangely, in recent years they seem to have got out of the habit of providing that information to customers, the regulator and the Department.

It is also worth noting, before the Minister replies, that Ofwat’s Scottish counterpart, the Water Industry Commission for Scotland, requires Scottish Water to produce the relevant information on an annual basis. Therefore, we believe that this is not an onerous or bureaucratic requirement.

New clause 12 would require Ofwat to pay far more attention to the problem of affordability of bills. I am conscious that we will have a wider debate about affordability when we discuss the second group of amendments, but Ofwat’s current interpretation of its role as an economic regulator is far too narrow. Both household and business customers feel that they are an afterthought, and the new clause makes it clear that Ofwat must have due regard to the cost of bills when setting the prices in future review periods. Labour believes that during a time of unprecedented squeezes on household budgets, much more must be done to help hard-pressed customers. Our two new clauses are important measures that would ensure that water companies served their customers’ interests, not the other way around.

We will, unsurprisingly, support the Select Committee’s new clause 2 on retail exit if it is pressed to a vote. We welcome the fact that the hon. Member for Brecon and Radnorshire (Roger Williams) appears to have had a change of heart over the festive break. During the Bill’s Committee stage he did not vote in favour of Labour’s proposal, but we very much welcome his change of heart. If we do not get an opportunity to discuss the proposal today, we hope that the other place will note that even members of the Bill Committee have signalled that they believe, on reflection, that it is a sensible and worthwhile measure. I will not repeat the discussion we had in Committee, but I think it is fair to say that, based on the signatories to the new clause, the proposal has cross-party support, which we welcome.

We will also support the Government’s amendments. I am slightly surprised that they felt the need to table a series of amendments, but not as surprised, I suspect, as the Minister when he was informed by his civil servants. The Minister has told us many times that he is lucky enough to be half Welsh, so one would have thought that he would have noticed the impact on Wales of the new clauses tabled by the Government in Committee. I hope he will explain how that slightly embarrassing oversight occurred.

We hope we will have an opportunity later this evening to press our new clauses to a Division. We welcome the spirit in which this first part of the debate has been conducted and I do not wish to detain the House any further at this point.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)]

I start by echoing the remarks of the Opposition spokesman, the hon. Member for Dunfermline and West Fife (Thomas Docherty), with regard to the earlier statement made by my right hon. Friend the Secretary of State. Our thoughts are with those who have been affected by the storms and flooding over the Christmas and new year period, and I pay tribute to all those who have worked incredibly hard, including the Environment Agency, local authorities, the emergency services and, of course, those volunteers and community representatives who have supported their neighbourhoods and neighbours.

This discussion has covered a number of new clauses and amendments in relation to the regulation of water and sewerage undertakers and licensees, particularly those provisions designed to extend competition in the sector. The new clause tabled by the hon. Member for Arfon (Hywel Williams) would alter the devolution settlement by devolving further powers to the National Assembly, and he has set out his appetite for doing so. Generally, the Government of Wales Act 2006 devolves its issues down the national border, but the situation is not so straightforward for water supply. Water catchment areas and water supply management infrastructure cross the national boundary. The appointment and regulation of any incumbent water company whose area is not wholly or mainly in Wales is not devolved. That means that the legislative competence of the Assembly does not cover the parts of Severn Trent Water’s area in Wales.

[Jonathan Edwards]

Would the Minister be so kind as to inform the House of the situation in terms of the geographical boundaries of the water system in Northern Ireland? Is it based on the water table, as is the case in Wales, or on the actual state border with the Republic?

[Dan Rogerson]

The hon. Gentleman sets out his aspirations quite clearly by viewing the boundary between Wales and England in the same way as the sovereign state boundary between the Republic of Ireland and Northern Ireland, but I am addressing my remarks to the devolution settlement within the United Kingdom.

[Roger Williams (Brecon and Radnorshire) (LD)]

The Minister is well aware of the new clause’s implications for devolution. Does he agree that such a fundamental change would be better considered as part of devolution legislation, not as a new clause in a Bill on another matter?

[Dan Rogerson]

I thank my hon. Friend for his helpful intervention. He has somewhat pre-empted the remarks I was about to make, but I am happy that we speak as one on this issue.

Licensing of water suppliers is also not devolved. I recognise the deep, historical reverberations in Wales—we heard about them in the heartfelt speech by the hon. Member for Arfon—about the management of water, which is an essential natural resource. Much of the responsibility for water is, I am pleased to say, now devolved. However, further changes to the current devolution arrangements would have implications for customers and household bills on both sides of the border. They would also affect the companies, their assets and their operating rules, and possibly the people who work for them. Therefore, changes should not be undertaken without very serious consideration of all the implications.

The UK Government position is that we will not make changes to the devolution settlement in advance of the review and report by the Commission on Devolution in Wales—the Silk commission—which, as hon. Members will know, is led by Mr Paul Silk. The commission is currently working on part II of its remit and is expected to report in the spring. It is reviewing the powers of the National Assembly for Wales in the light of experience. The commission’s terms of reference make it clear that any changes it proposes must enable the UK Parliament and the National Assembly better to serve the people of Wales.

17:59

New clause 2 would provide the Secretary of State with the power to make regulations allowing incumbent water companies to transfer their non-household customers to a water supply licensee with a retail authorisation, subject to the approval of the Secretary of State. That would allow such companies partially to exit the water supply retail market or, alternatively, it might enable the introduction of regulations to mandate the separation of retail and wholesale functions into two legally separate companies, both of which would be within the incumbent’s control. Amendment 12 would commence the provision on Royal Assent, which means that it might be possible to transfer customers before the retail market opens in April 2017, if the Secretary of State produced the regulations before that date.

We heard a range of arguments for retail exit during the debate in Committee. Although some of them undoubtedly have merit—I again emphasise that we do not rule out coming back to the issue in future—other arguments are less convincing. The intention of new clause 2 is to allow retail exit only from the non-household market, leaving household customers with incumbent companies. That does not address our concern that enabling water companies to walk away from the non-household retail market risks being a bad outcome for household customers.

[Thomas Docherty]

I wish you a happy new year, Mr Deputy Speaker. Given that new clause 2 specifies that the process can take place only with the Secretary of State’s consent, will the Minister tell the House how such an unintended consequence might happen?

[Dan Rogerson]

We are very clear that we look at such issues strategically across the whole market, rather than picking them case by case. The issue is that we want to make reforms based on the principles that we set out during discussions in Committee and elsewhere.

Were a company to exit and to leave household customers on their own—without the non-household element—customers would not only be left with a company that had limited incentives to focus on improving customer service, but would be at risk of having higher bills, because providing, as new clause 2 does, for forced legal separation of the companies’ retail businesses would reduce regulatory stability and risk increasing the cost of capital.

Let me be clear: we want to see a successful retail market. The Bill sets a framework for new entrant retailers to enter the market on an equal footing with the retailers of the incumbent water companies. Our opposition to a provision about retail exit has nothing to do with supporting the position of incumbent water companies; we expect Ofwat to use its regulatory powers to make sure that new entrants can be confident that they are competing on a level playing field.

However, retail exit is not about delivering a level playing field. For example, in written evidence to the Public Bill Committee, the Water Industry Commission for Scotland argued that a provision about retail exit was needed so that new entrants had other options for increasing their market share than

“to acquire customers by winning them one contract at a time.”

However, that is exactly how entrants to the market in Scotland have had to win business unless an existing licensee surrenders its licence or has it withdrawn. In that case, the customers of the exiting licensee are shared out among other licensees, but otherwise all business customers stay with the incumbent retailer, Business Stream, until they actively decide to switch.

Some commentators have painted a picture of an incumbent water company being left without any customers, because all of them are lost to their customers once our retail reforms are in place. We feel that that is a very unlikely scenario, given that non-household customers represent only some 10% of the total retail market, and that 90% of customers—in other words, households—will not be able to switch suppliers.

It is quite an assertion to say that 100% of an incumbent’s non-household customers will switch suppliers. Some 60% of non-household customers in Scotland have put their water services out to tender, but most customers have elected to stay with Business Stream. We understand that only about 5% to 10% of customers have switched since 2008. The customers who stayed with Business Stream have benefited from improved services, without having to switch, by renegotiating their terms. We might expect a more active market in England from 2017.

[Thomas Docherty]

I fear that the Minister is confusing two different issues. Undoubtedly, competition in itself has brought huge savings and has made Business Stream—or Scottish Water—change its whole ethos, but like does not follow like: simply because customers have stayed with Business Stream does not mean that the market is not working. Given that only 10% of customers have switched, as he says, does he not accept it is quite likely that some smaller water companies will not be able to compete with big retail providers?

[Dan Rogerson]

I certainly was not seeking to suggest that the market is not working in Scotland. My point was that some people have chosen to stay with their incumbent, and they may wish to do so rather than to have an incumbent abandon them and walk away.

An Oxera report commissioned by WICS and published in November 2012 predicted that incumbents would lose some 40% of their non-household customers in the first year of the opening of the retail market, with a 5% loss of profit. However, arguments that make an economic case for exits seem to be based on incumbents losing all their public sector and multi-site customers in the first year of market opening. The Oxera view is bolder than that of the rating agency Moody’s which, in February 2012, said that a worst-case scenario would be incumbents losing 25% of their non-household customers in the short to medium term, with a much smaller loss of 0.69% of profit. Although no doubt all incumbents will lose some customers, we can suppose incumbents will take steps, such as those that Business Stream has taken, to retain customers.

Anecdotal evidence from business customers suggests that incumbents are already upping their game, even though retail competition reform is some years away. Large business customers have suddenly discovered that they have a named customer service contact, and some have been offered improved metering services. The idea of incumbents sitting around while customers disappear is therefore, in our view, an unlikely scenario. In addition, water-only companies will be able to apply to Ofwat for a sewerage licence, which will allow them to compete with licensees and other incumbent sewerage companies by offering both water and sewerage services to their customers.

My point is that this is evolution, not revolution. Many non-household customers may choose to stick with the incumbent supplier because the incumbent supplier will improve its services to them as a result of the reforms. The benefits of that may in turn be passed on to household customers. Forcing or even allowing retail exit ignores such points. Where customers choose to switch, we anticipate a growth market in which innovation and competition lead to benefits, both environmentally and in customers’ bills. Allowing partial retail exit would open the door to forced separation if individual cases of discrimination were discovered, and we have made clear our position on that.

As I have said, any decision on separation should be made by Ministers and Parliament. We are not prepared to take the risk of forced restructuring, or even the potential for it as provided for in new clause 2, destabilising investment or increasing costs to customers. The new clause envisages the Secretary of State permitting exits, but that may not reduce the risk of a competition authority forcing an incumbent water company to make an application to exit. I therefore urge hon. Members who tabled new clause 2 and amendment 12—led by the Chair of the Select Committee, the hon. Member for Thirsk and Malton (Miss McIntosh)—not to press them to a Division.

The hon. Lady raised other issues about the industry in general, particularly in relation to upstream reform. We know from experience that setting out how markets should work in primary legislation is very inflexible and can stifle innovation. I know that she is keen for us to do more in that regard, but our view is that that was one clear lesson from the last attempt to extend competition through legislation in 2003. That is why the framework in the Bill sets the scope and direction of reform, without being overly prescriptive. We are working closely with Ofwat, customers and the industry—through the high-level group and the Open Water programme—to ensure that new markets work effectively, and we know that the industry does not want to constrain the market unnecessarily with too much detail in primary legislation, any more than the Government want to do that.

On new clauses 11 and 14, the hon. Members for Dunfermline and West Fife and for Hayes and Harlington (John McDonnell) have raised important issues about how the sector is run. As the hon. Member for Dunfermline and West Fife pointed out, we had a previous debate on this set of issues in which hon. Members from all parties were keen to put on the record their concerns about the past operation of the industry. I fear, however, that we have been talking about things as they were, not as they are and will be. Ofwat is already taking action to improve standards of corporate governance across the sector. It recently consulted on principles relating to board leadership, transparency and corporate governance, and it is putting pressure on water companies to strengthen audit arrangements, board member appointments and governance. The response from water companies has been positive and I welcome that. I do not want to belittle the issues that the hon. Member for Hayes and Harlington set out, but Ofwat has listened and is providing leadership to deal with them.

[John McDonnell]

Is the Minister satisfied that United Utilities, which supplies water to the north-west, is forecast to have made £627 million in the year up to March last year, which is up from £594 million; that Pennon, the owner of South West Water, which must supply his constituency, is due to unveil profits of £273 million, which is up from £268 million; and that earnings at Severn Trent Water, which supplies the midlands, are expected to hit £525 million, which is up from £504 million? The profiteering is continuing as normal.

[Dan Rogerson]

The hon. Gentleman is referring to the current price review period, but we are about to enter a new one. The measures that I am setting out have been prepared by Ofwat to change the industry and to meet its aspiration of better performance by the industry. They also recognise the low cost of borrowing from which companies have benefited in the latter years of the current price review period.

[John McDonnell]

Would the Minister put his mortgage on United Utilities, Pennon and Severn Trent not increasing their profits next year?

[Dan Rogerson]

I suspect that they would not welcome my mortgage, given the debts that they are already dealing with because of the investment that they have put into the sector. The Secretary of State made it very clear in the letter that he sent to the industry and the framework that he set out for Ofwat that we want to see a settlement that reflects the market conditions that companies have benefited from in recent years. Ofwat, in turn, has been very clear that it expects companies to take account of that in the coming price review period. Companies are responding to that and we have seen some good signs.

[Mr Charles Walker (Broxbourne) (Con)]

I do not often applaud water companies, but Affinity Water, which serves large parts of my part of the world, hopes to achieve an average bill reduction of 0.7% before inflation in each of the five years up to 2020. That is worth welcoming.

[Dan Rogerson]

I thank my hon. Friend for that intervention. As he is not always an enthusiast for what water companies do, it means all the more that he is prepared to offer those words of congratulation. It is fair for hon. Members across the House to express clearly their view that water companies should offer a fairer deal to consumers. That is what the Government want to see as well. That is why I am pleased that water companies are responding positively to the process.

[Hywel Williams]

The Minister talks about fair deals between water companies. Is he satisfied with the terms for the supply of water from Wales to Severn Trent, especially given that Severn Trent is apparently selling on 30 million litres of water a day to Anglian Water at commercial rates? Of course, that is happening on the back of Welsh resources.

[Dan Rogerson]

The hon. Gentleman is tempting me to get into the specifics of individual companies. The framework that the Government have set out and our policy statements are very clear, and Ofwat is responding to that. The companies will have to take account of that and satisfy the regulator that they are acting fairly and effectively.

[Richard Benyon]

Given that one of the key objectives of the Bill is to increase the resilience of the water sector across the country—or perhaps I should say countries—should we not welcome the fact that Severn Trent is trading bulk quantities of water with Anglian Water and say that we hope to see more water flowing from areas where it rains a lot to areas where it does not?

[Dan Rogerson]

My hon. Friend and predecessor is a great advocate of ensuring that we have a far more resilient water sector on environmental and sustainability grounds, as well as on economic and social grounds. It is important that we get that message across and I welcome his intervention.

New clauses 11 and 14 would place a duty on water companies to report information that is already freely available in the public domain. Both new clauses require reporting about company performance, investment, tax, corporate structure and dividends. Indeed, the hon. Member for Hayes and Harlington cited those figures in his speech, which shows that they are readily available.

New clause 14 would also require the Secretary of State to report on the cost of water, disconnections, water quality, leakage and the legal compliance of water companies. The cost of water to consumers is published every year in each company’s charges scheme. The Water Industry Act 1999 removed the power of any water company to disconnect homes because of the non-payment of bills. That prohibits the disconnection of the water supply to homes, schools and hospitals. The drinking water inspectorate is responsible for providing independent reassurance that water supplies are safe and that drinking water quality is acceptable to consumers. In England and Wales, 99.96% of drinking water supplies meet national and European standards. The tiny proportion that are failing to meet that standard—0.04%—are predominantly private supplies, rather than supplies from incumbent water companies. Since the mid-1990s under the current framework, there has been a 30% reduction in leakage, which is more than 2 billion litres per day. Companies are now operating at their sustainable economic level of leakage.

18:15

The information on tax and corporate governance that is required by both new clauses is already available. They would therefore not increase transparency. I direct hon. Members towards each company’s business plan and annual reports and accounts.

[Mr Charles Walker]

To refer once again to Affinity Water, its business plan for the five-year period from 2015-16 to 2019-20 states that it intends to reduce abstraction by 42 million litres a day over that period. That is very welcome, particularly in my part of the world. How will I be able to check up on Affinity’s progress towards that objective?

[Dan Rogerson]

My hon. Friend is an astute and fearless challenger of all authorities, whether they be in the private or public sector. I am sure that he is well aware of the routes that he can take to challenge the company on that matter publicly and privately. The new clauses that we are debating would not assist him in that aspiration.

[Thomas Docherty]

The Minister probably has first-day-back blues. I refer him to Opposition new clause 11, which would allow the hon. Member for Broxbourne (Mr Walker) to check the performance of his water company.

[Dan Rogerson]

The hon. Gentleman hopes that his new clause would require further reports to be made to the Secretary of State. However, that information is already in the public domain. That is why supporting new clause 11 would not be helpful. I understand and respect his desire to ensure that the industry is as transparent as possible. I understand the ambition behind the new clause, but I do not share his enthusiasm for the wording that he has chosen.

The privatisation of the water industry has been a success story in terms of investment. Helpfully, the hon. Member for Hayes and Harlington pointed out that I represent a constituency in the South West Water area. The coalition Government have recognised that there were a few flaws in the privatisation process, so there is now extra money to support bill payers in the south-west, who paid for the clean-up of the beaches around the south-west peninsula.

As was pointed out by my predecessor, my hon. Friend the Member for Newbury (Richard Benyon), there has been huge investment in infrastructure since privatisation. That is one of the key successes that we want to build on and not jeopardise. The stable regulatory framework for the water sector has enabled companies to attract more than £111 billion of low-cost investment to upgrade water and sewerage infrastructure and to improve customer service and environmental standards.

I agree that we should be putting pressure on the water sector to act as transparently and responsibly as possible. Ofwat is already doing excellent work on the issues that have been raised by hon. Members. I do not believe that duplicating the reporting requirements would help. For that reason, I believe that new clauses 11 and 14 should be resisted.

New clause 12, for which the hon. Member for Dunfermline and West Fife argued, would place a duty on Ofwat to have regard to the charges to household and non-household customers. That would simply duplicate Ofwat’s existing duty.

I turn to a number of technical amendments, which the hon. Member for Dunfermline and West Fife charitably referred to. I will move amendments 13 to 50, 52 to 54 and 60 to 87 formally at the appropriate time. They will mainly make changes to schedules 5 and 7. Schedule 7 makes consequential changes to the Water Industry Act 1991 and other primary legislation as a result of our reforms, and schedule 5 makes further changes should the Welsh Ministers decide to adopt the reforms being introduced in England. Amendment 59 and new schedule 1 will provide the Secretary of State with the power to produce transitional orders that allow us to deliver retail and upstream reform separately.

Taken together, our amendments will provide Ministers with the maximum flexibility to commence the different market reform provisions transparently and in stages, as per our commitment to stagger the implementation of our retail and upstream reforms. They will enable the current arrangements to continue without diverting attention from the immediate priority of preparing for the opening of the reformed retail market in April 2017.

[Hywel Williams]

We have had an interesting debate, and I was glad to hear the contributions of the Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), and the hon. Member for Hayes and Harlington (John McDonnell), with whom I yet again agreed entirely. I was also glad to see the hon. Member for Newbury (Richard Benyon) taking an interest in his former beat, and to see the hon. Member for Brecon and Radnorshire (Roger Williams) in his place, although essentially in a non-speaking role.

I was disappointed by the lack of contributions from Welsh Members, and disappointed that the hon. Member for Dunfermline and West Fife (Thomas Docherty) did not make any reference to my new clause 1. Pretending it is not there does not mean it will go away.

[Thomas Docherty]

The hon. Gentleman should have intervened on me if he was concerned that I had not covered his new clause. I echo the point that the Minister made—the Silk commission is examining the issue and will report in the spring. [Interruption.] We think that will be the right time to consider the matter properly.

[Hywel Williams]

My hon. Friend the Member for Perth and North Perthshire (Pete Wishart) asks from a sedentary position, “What do you think?” The Minister might choose to enlighten us, but possibly not—he would prefer to listen to the Silk commission.

My hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) made a point about legislative competences and borders. In Northern Ireland the matter is not considered problematic, because the national or state boundaries are followed; nor is it considered problematic for legislative competences to cross the border in the case of Wales. Legislative competence seems to become a problem only when proposed by Plaid Cymru. Of course, it is also proposed by the Labour Welsh Government, but they are not here to make that point. That does not seem particularly fair dealing.

The Minister said that the status quo is the status quo, and that the matter is not devolved because it is not devolved, and presumably it will not be. He gave us no indication of what the Government would eventually propose following Silk. We look forward to that with interest.

On a personal note, I missed many of the sittings of the Public Bill Committee—

[Thomas Docherty]

And we missed you.

[Hywel Williams]

The shadow Minister is very kind. I was disappointed to have missed those sittings, and I apologise to Members of the Committee. Unfortunately, it was unavoidable.

It is my pleasure to press new clause 1 to a Division.

Question put, That the clause be read a Second time.

18:23

Division 165

Ayes: 6

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Labour: 3
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Green Party: 1

Noes: 282

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Conservative: 236
Liberal Democrat: 45
Democratic Unionist Party: 1

New Clause 3

Provision of benefits information

‘(1) The Secretary of State may by regulations make provision about the disclosure of benefits information about occupiers to water undertakers and sewerage undertakers in connection with section 144C of the Water Industry Act 1991 (non-owner occupiers).

(2) In this section “benefits information” means information which is held for benefit entitlement purposes by the Department for Work and Pensions.’.—(Miss McIntosh.)

Brought up, and read the First time.

[Miss Anne McIntosh]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

New clause 7—National affordability scheme—

‘(1) The Secretary of State must, by order, introduce a National Affordability Scheme for water.

(2) The National Affordability Scheme must include an eligibility criteria, determined by the Secretary of State, in consultation with—

(a) the Water Services Regulation Authority; and

(b) the Consumer Council for Water.

(3) An order under this section—

(a) shall be made by statutory instrument; and

(b) may not be made unless a draft of the order has been laid before and approved by resolution of each House of Parliament.’.

New clause 8—Billing information: affordability—

‘Any company providing water services to a residential household must include on its bills—

(a) details of any tariffs provided by that company;

(b) a recommendation of the lowest possible tariff for each residential household; and

(c) information regarding eligibility criteria and how to make an application for assistance under Water Sure.’.

New clause 9—Provision of information to water companies: landlords—

‘(1) The Water Industry Act 1991 is amended as follows.

(2) After section 207 (Provision of false information) there is inserted—

“Provision of information to water companies: landlords

Where a water company does not have information about a resident in a property that is using water, if the occupants of that property are tenants, the landlord must, on request, provide to the water company contact details for the tenants.”.’.

New clause 10—Water companies: recovery of losses—

‘(1) The Secretary of State, or the Authority, may prohibit losses to a water company due to non-payment of bills from being recovered through charges on customers.

(2) This section comes into force on the day after the Secretary of State has laid before Parliament a report setting out how water companies have failed to take action on these matters,’,

Amendment 9, in clause 80, page 124, line 1, at end insert—

‘(e) section [Provision of benefits information].’.

[Miss McIntosh]

I wish to consider new clause 3 and amendment 9, which seek to address legislation already on the statute books in the Flood and Water Management Act 2010. I remind the House that the cost of bad debt to each household in England is approximately £15 per annum, and in times of great hardship and a period of austerity, which the Government are dealing with through the actions we continue to take, it is incumbent on the Government to consider every opportunity to defray the costs to each household in that regard.

New clause 3 seeks to provide benefits information by allowing the Secretary of State to regulate to

“make provision about the disclosure of benefits information about occupiers”

to water and sewerage companies in connection with the revised part of the Water Industry Act 1991. It goes on to state that

“‘benefits information’ means information which is held for benefit entitlement purposes by the Department for Work and Pensions.”

Amendment 9 would make the consequential change to the current clause 80, to allow the provision of benefits information. I sat where the hon. Member for Dunfermline and West Fife (Thomas Docherty) is currently sitting and followed the passage of the Flood and Water Management Bill as closely as he is following the passage of this Bill. I have been very taken with the idea of trying to reduce bad debt in this way. Recently, I was most fortunate to receive a written answer from the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Hemel Hempstead (Mike Penning), who helpfully told me that at present the legislation does not permit the transfer and provision of benefits information by the Department for Work and Pensions in the way I wish. He did not say it could not be done; he said only that the current law does not permit it. We are where we are.

[Mr John Redwood (Wokingham) (Con)]

To help the House, will my hon. Friend explain what kind of information she would like to see transferred and how it would help?

[Miss McIntosh]

I hope that my right hon. Friend will bear with me as I take the House through it.

In the Environment, Food and Rural Affairs Committee report on the draft Bill, we reiterated our previous recommendations that the Department should implement without delay the existing provisions of the Flood and Water Management Act 2010 on bad debt, to which I have referred. In our view, it is unacceptable for honest customers to be forced to subsidise those who can pay but refuse to pay their water bills. To answer my right hon. Friend’s question, the specific provision is section 45 of the 2010 Act, which introduces new section 144C to the Water Industry Act 1991. That is what we propose in new clause 3, which would require landlords to arrange for information on their tenants to be provided to water companies.

Instead of implementing the existing bad debt provisions, the Government currently rely on a voluntary approach, whereby landlords share information on tenants on an online database set up by the water companies. Before I go further on the voluntary approach, it might be helpful to ask my hon. Friend the Minister this question: what is to prevent a customer who happens to be a tenant from marking on their electricity bill the fact that they have no problem with it being made known to the electricity company and the Department for Work and Pensions, whichever works best, that they are in receipt of benefits? The Environment, Food and Rural Affairs Committee was fortunate to enjoy the company of the hon. Member for Dunfermline and West Fife for a time. I am sure he remembers our exchange, but the Committee has great difficulty in understanding what the problem is for the Government—either the Department for Work and Pensions or the Department for Environment, Food and Rural Affairs—in permitting that flow of information.

The House will recall the tragic case of an elderly couple who sadly passed away because they could not afford to pay their utility bills for heating. No one had informed the electricity company of that fact. I believe that what is good for electricity companies—in law, such information can be provided to those utility companies —should be equally good for the water companies, which are also utility companies. They should have access to the same information.

A close reading of proceedings in Committee shows that Water UK acknowledged the new database for landlords and tenants, but claimed that

“experience has shown that a voluntary approach simply does not work.”––[Official Report, Water Public Bill Committee, 3 December 2013; c. 15, Q19.]

It gave the example of Northumbrian Water. It has had an easy-to-use website for landlords to provide information for two and a half years, yet only 7% of all rented properties have been registered. That is a problem and this is a matter of some urgency. The Government need to press ahead—the House would support that.

In Committee, the Opposition tabled a new clause that would have meant landlords providing contact details of their tenants to the water companies, but it was voted down. The Environment, Food and Rural Affairs Committee produced a report on the water White Paper—we have worked hard on the issue and I hope we have made a positive contribution. My hon. Friend the Minister nods because he, too, was a member of the Committee when we adopted the report. I find myself in good company this evening. The report recommended that DEFRA work with the Department for Work and Pensions to ensure that all means-tested benefits claimants are given the option to consent to the sharing of their data with their water company for the purposes of help with affordability issues.

I and hon. Members who have put their names to new clause 3—a number are members of the Environment, Food and Rural Affairs Committee—believe that there is a difference between electricity and gas bills and water bills. If people do not pay their heating bill, their supply can be cut off, whereas if people do not pay their water bill, the water company is simply not permitted to turn off the supply of clean water going in or prevent waste water—sewage—going out, for reasons of hygiene and good health.

18:45

My hon. Friend the Minister must recognise the urgency. This year, it will be four years since the Flood and Water Management Act 2010. The legal basis exists. New clause 3 and amendment 9 would give the Secretary of State the power to make the regulations on the disclosure of benefits information relating to tenants to water and sewerage companies in connection with the bad debt provisions in the Act. The benefits information should include all information held by the Department for Work and Pensions on benefit entitlements.

All the Secretary of State needs to do is introduce appropriate safeguards in regulations to protect data. As I have indicated to the Minister, there could be a box on the bill for the customer to tick to indicate that they are willing to have information shared with the water or sewerage company. The Committee has previously recommended a simple tick-box on a customer’s bill consenting to such information disclosure. I urge him to tell the House what has changed since he endorsed such a provision in the previous Parliament—he was a member of the Environment, Food and Rural Affairs Committee in the last Parliament, and was so until recently in this Parliament.

The Committee believes that the proposal is a helpful suggestion to the Government in closing a loophole and preventing an omission from the Bill. The legislation is in place. The new clause would enable companies to determine which customers cannot pay and those who will not do so. There is a clear distinction between the two. Those who can pay but will not pay are costing £15 per household. The provision would allow water companies to target information about the charitable funds and social tariffs they operate on the most vulnerable customers—those who simply cannot afford to pay, perhaps even for a temporary period—and allow them to make arrangements for which they are eligible.

There is a precedent for the disclosure of information. I understand that the Secretary of State for Environment, Food and Rural Affairs implements the warm home discount scheme, which has been regulated pursuant to powers granted to the Secretary of State in the Energy Act 2010.

The information provided by Ofwat following recent submissions of water companies’ business plans in December, which was part of the current price review round, shows that three companies have social tariffs, that 12 companies will have a social tariff by 1 April 2015, and that five companies have proposed not to introduce a social tariff.

In conclusion, I urge my hon. Friend the Minister to follow through on what he so eloquently supported when he was a member of the Select Committee and allow consumers to benefit by making benefits information available at the earliest possible opportunity. That will enable those who cannot pay to be on the radar screens not just of landlords but of the Department for Work and Pensions and their own water utility company.

[Thomas Docherty]

I wish you a merry Christmas and a happy new year, Mr Deputy Speaker.

I welcome the thoughtful remarks by the hon. Member for Thirsk and Malton (Miss McIntosh). As she rightly said, the Minister and I had the pleasure of serving on the Select Committee under her chairmanship. She was an excellent tutor to both of us, although I suggest, looking at the debates today and in the Bill Committee, that I remember more of what the Select Committee agreed than the Minister. I am sure he will eloquently explain his position.

[Dan Rogerson]

The hon. Gentleman is always kind enough to remind me repeatedly, so I fear I can never forget any of our deliberations.

[Thomas Docherty]

It is always a good thing to be a charitable and giving soul, so I do my best to try to accommodate the Minister.

I would like to speak to the new clauses that stand in my name. As I said earlier, much attention has been paid to households that faced a difficult Christmas and new year because of the climatic conditions that battered the United Kingdom. Much less, however, has been written on households that faced a stressful period because of the economic conditions that have battered the United Kingdom, not just in the past three weeks but in the past three years. Hundreds of thousands of households did not enjoy the Christmas that all of us here in the House of Commons did, in warm and secure homes with plenty to eat and with presents given and received. Too many families were left unable to enjoy the Christmas joys that we take for granted.

The cost of living crisis cannot be dismissed as a soundbite, as many Government Members try to do. The cases of hardship regularly brought to the attention of Members of Parliament cannot simply be batted away. At a time when household incomes are continuously being squeezed, it is not acceptable to Opposition Members for most water companies to continue to do so little to help their struggling customers.

The size of water bills may not have reached the obscene level of their gas and electricity counterparts, but there is no disputing their cumulative impact. Citizens Advice reported to MPs in November that it had received almost as many inquiries from people worried about their water bills as they had about the other two utilities. DEFRA’s own statistics state that some 2.5 million households now find themselves in what the Department itself defines as water poverty, while in the past year water companies reported pre-tax profits of £1.9 billion and paid out, in dividends, a staggering £1.8 billion to their shareholders.

You might have expected the water companies to rush forward with schemes to assist their hardest-pressed customers, Mr Deputy Speaker. After all, the previous Labour Government put in place legislation to allow each company to introduce a tailor-made scheme for its own region. The water companies told the then Government and Parliament that that was all that was needed: a voluntary system of social tariffs that each and every water company would then set and implement quickly. Four years later, what progress has been made? So far, only three water companies have got around to implementing social tariffs, helping a grand total of 25,000 households across the country. Even by the end of the price review period, more than a third of water companies will still have not bothered to lift a finger and introduce such a scheme. When the water companies gave evidence to the Bill Committee, did they acknowledge that they had let down their customers and Parliament? Did they acknowledge that the rate of progress was not good enough? Did they say sorry, even once? Of course not. They blamed everyone but themselves: they blamed the regulator, they blamed the Government and they blamed the customers.

What has been the response of the Secretary of State, and his Minister with responsibility for water, to the crisis facing households? The Secretary of State sent a letter to the companies in October begging them not to raise prices further. It was not, we note, an instruction or a warning that if they did not take heed, the Government would step in. It was not even a rebuke; it was just a weak letter. That is why the Opposition have tabled four new clauses that will each help hard-pressed households. Taken together, they would make a tangible difference to those struggling with the cost of living crisis. With your permission, Mr Deputy Speaker, I will briefly take each new clause in turn, explaining the existing problems and how our proposals would address them.

First, on bad debt, I will build on the excellent remarks by the Chair of the Select Committee. Ofwat estimates that on average bad debt adds £15 to every customer’s annual bill. Note, of course, that that is just the average amount; in some cases, it is significantly more than that. As the hon. Lady said, water companies are, rightly, not allowed to cut off those who cannot afford to pay their bills, but they are allowed to pass the cost of non-payment on to their other customers. In effect, the sector already has cross-subsidisation.

[Richard Benyon]

Average figures are exactly that—average. There are, of course, water companies that underperform and their debt is much higher than average, but the corollary is that other water companies perform considerably better. Does the hon. Gentleman not think that there is much work to be done to learn best practice from water companies such as Yorkshire Water, which serves the constituency of the Chair of the Select Committee, my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) and is outperforming the others extremely well? We should learn from such companies about bad debt.

[Thomas Docherty]

I know that you are a fan of all things Yorkshire, Mr Deputy Speaker, and I will come on to Yorkshire Water in a moment, if the former Minister will bear with me.

As the hon. Lady said, among those who do not pay there are those who can pay. That is unfair on decent customers who meet their obligations and we believe the time has come for more robust action to be taken. Some 80% of those who do not pay are in rented accommodation. One of the challenges facing water companies is tracking down those who refuse to pay because they move homes far more often than the average person. The only way to track them down effectively is to require landlords to provide water companies with a list of tenants. Individuals moving property would not then disappear from the system and evade paying their debts.

The measure would be a simple step and it would not require a disproportionate amount of new bureaucracy to implement. It is estimated that approximately half of total bad debt falls into the category of “can pay, won’t pay”. The Select Committee, of which the Minister was previously a member, has unanimously backed the measure throughout this Parliament, so why the opposition from the Government?

[Mr Mark Spencer (Sherwood) (Con)]

I understand, and sympathise with, the point the hon. Gentleman is making, but there is no legal way to force a tenant to inform their former landlord of a forwarding address. How can a landlord know what information to supply to the water companies, so they are able to track former tenants?

[Thomas Docherty]

I am grateful to the hon. Gentleman, who I think is a recent addition to the Select Committee. I do not think he was a member of the Committee when we had this discussion, so for his benefit I will say that it is quite simple. As the water companies have said, they would be supplied with names and addresses. The onus would then be on them to carry out the necessary activity to match up the appropriate individual, and there would be no significant burden on the landlord, the local authority or social housing provider. The burden for that work would fall on the water company. He will recall from our time in Committee that I was not always the water industry’s biggest fan, but on this the Select Committee, the water industry and the Opposition are united, so again I come back to this question of why the Government are so opposed to the proposal.

19:00

[Mr Redwood]

I fully agree with what the hon. Gentleman is trying to do, but I share the concern of my hon. Friend the Member for Sherwood (Mr Spencer). How would it help to know the name of the tenant who has done a bunk, moved somewhere else and not given a forwarding address and who has no intention of paying the bill? Would the water companies not need investigatory powers to track down the tenant?

[Thomas Docherty]

I have huge respect for the right hon. Gentleman and his knowledge, but we are clear that, as they themselves accept, it is the water companies who would have to do the legwork; no additional burden would be placed on the landlord, as it would be for the water companies to contact householders, and obviously they would have a list of new tenants. I will use the example of the electoral roll: candidates, parliamentarians and political parties receive a list of those who are new on the register, and we then contact them to welcome them to the area. When the name of somebody who disappears from one property appears at a different property, it would not be beyond the wit of a water company to work out who they were. In Committee, the Government’s key objection seemed to be that it would place an unfair burden on landlords, so we are keen to stress that, as the Minister will recall from his time on the Select Committee, it would place an additional burden not on the landlord, but on the water companies. The companies themselves want this power. To reiterate, we are absolutely clear that those who can pay should pay, so why the opposition from the Government?

[Dan Rogerson]

The hon. Gentleman has set out how the burden of pursuit would fall on the water companies, but of course the burden of providing that information to them would fall on the landlords, so there would be a burden.

[Thomas Docherty]

I congratulate the Minister on stating the blindingly obvious. Of course, the landlord would have to provide that information, but it is not the longest list in the world, and it is information that landlords have anyway, so the Opposition, like the Select Committee, find it difficult to comprehend why it would be so onerous for landlords to provide a list of their tenants by property. If he has specific examples of hard-pressed landlords who have made representations to him, I am sure he will refer to them when he responds.

For the fourth time, I ask myself the question: why the opposition from the Government? The Secretary of State has had his usual Pavlovian reaction to a suggestion that the Government should take action. It appears once again that when Parliament, the Select Committee and the water industry ask DEFRA to do something, its knee-jerk response is to think of spurious reasons why it should not or cannot do it. Our new clause would be a pragmatic and efficient measure that would help to drive down costs on all decent households, help water companies to do their job and ensure that all customers meet their responsibilities.

Our second new clause—new clause 10—recognises that not all water companies have done all they can to tackle the problem of bad debt. As I mentioned earlier, although the average bad debt figure is about £15, there are wide variations across the country. As the hon. Member for Newbury (Richard Benyon) pointed out, that is because some, such as Yorkshire Water, have worked with customers and debt advice groups, such as Citizens Advice, to put in place measures to help customers genuinely struggling to access payment packages and programmes, but unfortunately that is not the case across the country. Too many water companies have come to the unsurprising conclusion that, because they can pass the cost of bad debt on to their other customers, they need not bother to do anything about it themselves.

That is why we have tabled new clause 10. We want to give Ofwat and water companies a clear and unambiguous signal that hard-pressed customers should no longer be treated as a cash cow by companies that cannot be bothered to meet their own responsibilities. Where the regulator and the Department are satisfied that water companies are not doing enough to pursue bad debtors, the cost should no longer be passed on to other customers. Taken together, not only would our two new clauses be practical measures, but they would send a clear signal that while we will do more to help those who are struggling, we expect all customers and water companies to do their fair share.

Our third new clause—new clause 8—would help to ensure that customers know about the help for which they are eligible. In 1999, the last Labour Government introduced WaterSure to help low-income metered households with high essential water use. WaterSure caps the bills of metered households in receipt of a qualifying benefit or tax credit at the average bill for that water company’s operating area. It applies to households with three or more children under the age of 19 living at home or where someone in the household has a medical condition that necessitates high water use. It is an important measure that at the time received cross-party support and which, according to the latest figures that the Minister gave us in Committee, has helped 70,500 households in England—I think a similar scheme has helped approximately 20,000 households in Wales. Although that is welcome, we believe that that level is unacceptable. Given that, as the Consumer Council for Water has said, only one third of eligible households are in receipt of the benefit to which they are entitled, the Government have been guilty of complacency.

The Minister previously claimed there was no need for the new clause because all the water companies already provided this information. For the benefit of Members who have not had a chance to look at the amendment paper, we are proposing that information about the eligibility criteria and how to apply should be included in all water bills. He believes that all water companies already provide this information, but unfortunately for him the reality does not match his statement. Not only do his own figures show that the current approach is not working, but our own anecdotal research shows that customers are not even aware that WaterSure exists. We want to make it clear to water companies that they must do much more to promote the scheme, and we want Ofwat and the Government to hold them to account if they do not. I hope he has reflected not only on the evidence we presented in Committee, but on his own figures and the evidence from the CCW, and will listen to common sense.

Finally, our fourth new clause—new clause 7—deals with the central problem of the failure of the voluntary approach to social tariffs. As we have set out, too few water companies are helping too few customers through social tariffs, and it is clear that left to their own devices many water companies, by their own admission, will never introduce such schemes. That is why we are proposing a national affordability scheme to end the postcode lottery and ensure national standards for eligibility. We would expect schemes to be funded by the excess profits of the water companies, not by other water bill payers. As I have said, last year these companies made an eye-watering £1.9 billion in pre-tax profits and paid out £1.8 billion to investors. The idea, for example, that Yorkshire Water, which paid out £240 million, cannot afford to provide support through social tariffs is clearly nonsense.

Enough is enough. Hard-pressed households need real help now, and these new clauses are four practical and simple measures that would ensure they get it. It is time for the coalition to match our commitments.

[Mr Spencer]

I want to make some brief comments that were too long for an intervention, particularly about new clause 3, tabled by my hon. Friend the Member for Thirsk and Malton (Miss McIntosh). I sincerely hope that, in summing up, the Minister will reflect on today’s debate, which has shown recognition across the House that consumers and our constituents are finding it very difficult to pay their household bills because of pressure on the household budget. It is worth saying that the Government recognise that challenge and are doing their best to assist, not least by turning around the failing economy that they inherited. Needless to say, a section of society will find it very challenging to pay their utility bills, and the Government have an obligation to try to assist and support them.

There is another group of people who are unwilling to pay, as a result of a frankly malicious intent to avoid paying the bill that is due to be paid. It is vital that the water companies have the power to decide which cases fit into which categories. Those who are clearly unable to pay should be able to receive assistance, support and sympathy from the water companies. New clause 3 goes some way towards assisting the water companies to identify people within the benefit and welfare support system, who may be in need of extra assistance.

I am somewhat sympathetic to new clause 8, too, which was tabled by the hon. Member for Dunfermline and West Fife (Thomas Docherty) and is designed to ensure that water companies put the neediest customers on “the lowest possible tariff”. Those who find themselves under pressure in the most challenging of circumstances are often those least able to identify from their bills which is the correct tariff for them to be on and least able to challenge the water companies to put them on a better tariff, allowing them to afford to pay their household bills. I hope that the Minister will give further consideration to that, if he is minded to do so.

Finally, I support those who have said it is difficult to understand why the Department for Work and Pensions or the Department for Environment, Food and Rural Affairs are unable or unwilling to supply the necessary data to the water companies. I hope that when the Minister sums up, he will be able to shed some light on those thoughts.

[Mr Redwood]

I hope that the Government will look at the issue of unpaid bills. Colleagues of all parties are right to draw attention to the problem—one of the many sources of excess cost in the water industry, which it would be good to reduce or eliminate. It is undoubtedly the case that we pay dearly for our main utility provision in this country, and I fear that the main reason why water bills are high and will stay high is that there is no competition. It is a great pity that this Bill will not introduce proper competition into water as into other areas, as it would make a lot of difference. The amendments are designed to deal with the situation of having regional monopolies that are in many cases unresponsive and have high cost structures. Then there is the particular problem of customers deciding—quite wilfully, when some of them are perfectly capable of paying—not to pay their bills. Clearly, more needs to be done on that.

There is some good in all the amendments before us this evening, but I am not persuaded that they take the trick. It might be helpful to know who the tenant was, but if the tenant cannot be traced to where they have gone, it will be impossible to get them to pay. It might be useful to know something more about the benefits and financial circumstances of individuals, although there are issues of privacy and the handling of data that could cause difficulties, but that then fails to enable us to come down hard enough on the people who can afford to pay, which is the real issue.

[Thomas Docherty]

Given that it is the water industry itself that is pressing for this power relating to landlord information and given that it is prepared to bear the burden of tracking people down, does the right hon. Gentleman not accept that such a scheme is clearly workable?

[Mr Redwood]

It may or may not be. I do not have a very high opinion of the success of the water industry in these areas, and it may not be the best judge, but I accept that this is one of the best points in the hon. Gentleman’s case, and I look forward to hearing the Minister’s reply to it.

As I say, the amendments and new clauses are all well intentioned and, if passed, they might not make the situation worse and in some cases might even make it a little better. I hope, however, that the Minister, working with the water industry, can come up with something better because there is a serious issue here. A lot of money is owed to the water industry that people could afford to pay, but the matter is not being pressed.

19:15

For very good reasons, nobody here wants to change the rule about cutting people off because water is so essential. That weakens the industry’s position, which then requires other work. If the Minister is going to advise us to reject the amendments, I hope he will provide a scheme of his own because of the serious money at risk here and because it is not fair on all the other people who pay their water bills, many of them without a lot of resources themselves but who feel that they should pay. There is a cross-subsidisation going on to the benefit of people who often have more money but simply will not pay.

[Dan Rogerson]

The hon. Member for Dunfermline and West Fife (Thomas Docherty) has proposed a number of new clauses, which I shall address before dealing with the lead new clause 3, tabled by the Select Committee Chairman.

New clause 7 would place a requirement on the Government to introduce through secondary legislation what is described as “a National Affordability Scheme”. The details of the scheme are not entirely clear. We debated in Committee an identical clause tabled by the hon. Gentleman, but at that point, the funding was not made clear. He said today that it would be funded specifically from the profits of the water companies rather than from other bill payers in a cross-subsidy approach.

[Thomas Docherty]

I refer the Minister to the evidence session during the eighth sitting of the Public Bill Committee, where I specifically said that the scheme would be funded from excess profits. Perhaps the civil servants should pay more attention in future.

[Dan Rogerson]

The hon. Gentleman is, as always, keen to assist. What I said comes entirely from my recollection of his introduction of the measure in Committee and if it is faulty, it is certainly not on account of any information briefed to me by others. I am grateful to the hon. Gentleman for highlighting the issue of excess profits. However, this does not address the point that we have a regulated system under which the profits are allowed for under the price review process. I appreciate that he was not a Member when his party was most recently in government, but it was quite happy to move forward with the pricing process. What he is saying now is that he has no confidence in the regulator—in other words, that the regulator would set a level of profit that it thinks reasonable for the price review period, but that this would now somehow be unpicked as being in excess in some cases in order to fund the scheme. I am happy to give way again, in case he wants to correct this.

[Thomas Docherty]

I am grateful, but on this occasion it is perhaps the Minister who should have paid more attention to my remarks a few moments ago. I clearly said that the last Government gave the water companies time to introduce the voluntary schemes, but that they have now failed to honour their commitment, so the Government should step in and do what the companies failed to do themselves.

[Dan Rogerson]

I understand the hon. Gentleman’s views on social tariffs, which he feels have not been introduced in a speedy enough fashion. My point was rather about the issue of excess profits. I said that the hon. Gentleman was seeking to introduce a concept that is perhaps a subjective rather than an objective assessment of the profits made by water companies. The whole point of the price review process and price review period, however, is that a regulated process takes account of the need to attract investment and thus the need to make a reasonable return in profit.

[Roger Williams]

My understanding is that the water companies made larger profits because the period of very low interest rates benefited them to a great extent. However, basing an entire policy on windfall profits that might not occur in the future would certainly not be a very good idea.

[Dan Rogerson]

I thank my hon. Friend for his intervention. He is absolutely right to point out that what is proposed is a new bold national scheme built on profits that might or might not go up or down in accordance with the markets and through the price review process. Although I accept that the intention of the hon. Member for Dunfermline and West Fife is, as always, to be helpful, I feel that his scheme could use a little work and I therefore urge my hon. Friends to resist it should he seek to press it to a vote.

Let me move next to new clause 8, also tabled by the hon. Gentleman. It would place a legal requirement on water companies to include information in their bills about the WaterSure scheme, but, as I have said—I provided information to this effect to the Committee—all water companies already do so voluntarily. He made a point based on anecdotal evidence. I would be happy to see that evidence and I am sure that he will want to share it with us, but I think we should base our policy making on the evidence provided to us, and the Consumer Council for Water has been quite clear that companies provide such information to customers.

In addition, new clause 8 would place requirements on water companies to provide information about tariff structures and the lowest available tariff, a point picked up on by my hon. Friend the Member for Sherwood (Mr Spencer). The proposals simply fail to reflect the realities of the water sector as opposed, for example, to the energy sector. Water companies do not have complex tariff structures. The sole choice for the majority of household customers is whether to pay according to the amount of water they use through a metered tariff, which is particularly prevalent in areas such as my own, or according to the rateable value of their home through an unmetered tariff. The cheapest option for each household will therefore depend on the location of the property and the amount of water used by the household.

Many smaller households with low water use can benefit from a meter. Water companies are required to fit a water meter free of charge on request and they also advise customers on whether they might benefit financially from the installation of a water meter. A further point to bear in mind about the operation of WaterSure is that it caps the bills of eligible customers at the average of the metered and unmetered bill for the area. That could, in effect, put the bills of some eligible customers up and it is therefore not surprising that they have chosen not to apply for WaterSure.

There is no evidence, in my view, that further regulation is required in this area. As I have noted, all companies already include details of WaterSure in their household bills and they also all provide details of the support available to any customer struggling to pay their bill. Legislation to require the companies to do something that they are already doing voluntarily would be redundant.

The Consumer Council for Water works closely with the companies on the format of their bills. Its expert advice, as we discussed in Committee, is that one of the biggest risks in using water bills as a means of communication with customers is information overload. I do not, therefore, consider the new clause to be necessary.

Let me turn next to new clause 9, also tabled by the hon. Gentleman. We discussed an identical clause that he tabled in Committee. Section 45 of the Flood and Water Management Act 2010 already enables Ministers to introduce secondary legislation that would require landlords to provide water companies with personal details about their tenants or become liable for paying the bill. That was a point that the Chairman of the Environment, Food and Rural Affairs Committee was keen to emphasise, given her involvement with the passage of that Act.

Following extensive consultation with the industry and with landlords’ organisations the Government took the decision that a voluntary approach would be more suitable. During consultation, landlords argued that the additional regulatory burden would be disproportionate as they are not the source of the problem we are trying to tackle. At the same time, the evidence provided by the water sector to support the case for additional regulation was not sufficient to make the case for additional regulation of millions of small and micro-businesses.

The Government simply do not believe that more regulation is always the answer. As we discussed in Committee, good practice in tackling bad debt is not applied consistently across the water sector. The hon. Gentleman quite rightly took great pains to point that out. The significant variation in performance between companies tells us that the focus should be on driving better standards across the sector rather than regulating landlords.

One reason we do not propose to bring forward the bad debt regulations on landlords is that we do not wish to endorse the argument that performance on bad debt is not within the control of water companies. We think there is more that the companies can do to collect their debts and we want them to focus on that rather than look to the Government to solve the problem for them.

Of course, the real drivers of company performance are the incentives and penalties set by the regulator so I am pleased to be able to report that Ofwat has changed its approach to bad debt in the methodology it is using for the 2014 price review. The new approach will enable it more effectively to bear down on the costs of bad debt. It is doing so by insisting that the companies demonstrate that any increase in bad debt is genuinely beyond their control and that they have taken all available steps to control it. Unless they can prove that that is the case they will not be allowed to include it in customer charges. We are already seeing our focus on the industry’s taking responsibility for tackling bad debt bear fruit. As I mentioned in Committee, the industry is working with landlords’ organisations to establish a new voluntary scheme that will enable landlords to provide information about their tenants direct to water companies swiftly and easily.

[Miss McIntosh]

I am most grateful to my hon. Friend for giving way, but before he concludes his remarks he must say what the Government object to as regards the 2010 Act. I do not personally subscribe to the data protection argument if someone is genuinely in need.

[Dan Rogerson]

The Chair of the Select Committee is quite right that I have yet to respond to that aspect of her argument and I will seek to do so, I hope to her satisfaction, once I have made my closing remarks on new clause 9.

The industry is working with landlords’ organisations to establish the new voluntary scheme that will enable landlords to provide information about their tenants direct to water companies swiftly and easily and that approach has the support of Water UK and the main landlords’ organisations. The new database will launch in March next year and I believe that it should be given time to work. For those reasons, I believe that new clause 9 is not necessary.

[Thomas Docherty]

I am grateful to the Minister and am listening carefully to what he says. He will, I am sure, come on to his justifications as regards new clause 10 in a second. Before he finishes dealing with new clause 9, however, can he say what he defines as “time to work”?

[Dan Rogerson]

We should at least allow the database to be set up and give it a chance to operate. That would seem to be a fair approach and it is certainly the one I seek to take. I understand the hon. Gentleman’s keenness to see progress but I believe that the voluntary approach will have some effect and we should give it time to do so.

Let me turn now, as the hon. Gentleman uncannily predicts, to new clause 10, which he has tabled in his efforts to make some changes to the Bill, and in Committee we discussed a similar clause that he tabled. The new clause will provide a new power for Ministers and Ofwat to disallow companies from recovering the cost of unpaid bills from their paying customers. The hon. Gentleman has argued that there is no incentive for companies to collect bad debt. During our previous discussions, I made it clear that Ofwat has the power to decide which costs may be recovered through the price review. Ofwat is already using the price review process to bear down on the costs of bad debt and requiring companies to demonstrate high performance in debt collection and to show that any increase in bad debt is beyond their control before they are allowed to include it in customer charges. The price review will challenge poor performers to raise their game.

The new clause proposes a power for a future Secretary of State to intervene in the setting and recovery of charges. That is exactly the kind of political interference that concerns the investors who are critical to the water industry. I have stated before that the stability of the regulatory regime is vital to keeping the cost of borrowing low. An increase in that cost will have the direct result of putting up customers’ bills and I am firmly of the view that it is for the regulator and not the Government to make detailed decisions about charges. New clauses 9 and 10 intend to incentivise companies to improve their debt collection performance and I absolutely support that objective. I cannot, however, support the approach that has been proposed and I am sorry to disappoint the hon. Gentleman—and, I am sure, to surprise him.

Let me turn finally to new clause 3, tabled by my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), the hon. Members for Poplar and Limehouse (Jim Fitzpatrick) and for North Tyneside (Mrs Glindon) and my hon. Friend the Member for Brecon and Radnorshire (Roger Williams). The proposed clause targets a number of points that we have already discussed in some detail, including bad debt and social tariffs.

The practical effect of the new clause would be to require the Department for Work and Pensions to supply water companies with personal information about their customers. The clause focuses solely on the subset of customers that are both in receipt of benefits and living in rented accommodation. Amendment 9 would simply include the proposed new clause in the list of measures to be commenced two months following Royal Assent.

I am grateful to my hon. Friend the Member for Thirsk and Malton for her clarification that the clause is intended both to help water companies to collect their debts and to target social tariffs at customers in rented accommodation who are also in receipt of benefits. However, I am afraid that I do not believe that the clause is likely to achieve either objective effectively.

As I have already set out, the Government’s position on bad debt among water customers is that there is a great deal more that the industry can do for itself. We think, therefore, that there is more companies can do to collect their debts and we want them to focus on that rather than to look to the Government to solve the problem for them.

I am pleased, as I have said, that the industry is already taking more responsibility, by working on a voluntary approach to sharing information on customers in rented accommodation, using the landlord database, as we have discussed in response to new clause 9, tabled by the hon. Member for Dunfermline and West Fife.

19:30

Benefits data, like all personal data, are highly sensitive. We must therefore take their security extremely seriously. The circumstances in which any personal data can be shared are tightly controlled by law. No legislative gateway permits data sharing for the purposes of collecting debt. Therefore, simply passing on the details of all those who are on benefits to water companies without the appropriate consents would be illegal.

Moving on to the objective of targeting social tariffs, new clause 3 would focus support on a very specific subsection of water customers: those who both receive benefits and live in rented accommodation. The problem with that approach is that it would target help at many people who do not need it and exclude many who do need it. It is important that we do not over-simplify. Benefit recipients are a very diverse group of people, including, for example, pensioners and those in receipt of child benefit, disability benefits and a range of both in and out-of-work benefits.

Evidence from Ofwat shows that the majority—60%—of households at risk of water affordability problems do not receive means-tested benefits. Additionally, when universal credit is fully rolled out, it will replace all the existing wide range of income-related social security benefits and tax credits. Many of its recipients will be in work and have reasonable earnings. So receipt of universal credit alone is not a suitable indicator of possible eligibility for access to a social tariff. Similarly, no evidence suggests that living in rented accommodation is a reliable indicator of affordability problems.

Furthermore, many customers, whether or not in receipt of benefits, own their own property but nevertheless suffer real affordability problems. Precisely because water affordability problems are not simple, we have resisted a simplistic, top-down approach to social tariffs.

My hon. Friend the Member for Thirsk and Malton asked why water companies could not simply use a tick-box to ascertain whether people were happy to share their data. Anyone can agree to have their personal information shared, but that is quite different from the effect of new clause 3, which would require the Government to share personal information. That is perhaps the problem that we would have with new clause 3.

We must not forget that all social tariffs are cross-subsidised by increasing the bills of ineligible customers.

[Thomas Docherty]

I remind the Minister that our scheme would not involve cross-subsidisation. I am surprised that he is so against the use of benefit systems for social tariffs, because the Liberal Democrats in Scotland actively supported the introduction of social tariffs based on council tax benefit. What is the difference?

[Dan Rogerson]

I am seeking to point out that there are a range of benefits and a range of circumstances for people. The hon. Gentleman highlights one benefit. Of course council tax benefit no longer exists in this country in the format that it does in Scotland, as we have now moved over to local council tax forms of support, so there is a different system, which would not necessarily translate across. The hon. Gentleman is keen always to learn the lessons of Scotland, but some of these things do not apply simply, given the different frameworks following the devolution settlement.

We place emphasis on locally designed social tariffs developed in close consultation with the customers who will ultimately foot the bill, as opposed to crude, centrally imposed eligibility criteria. Although I very much thank hon. Members for their new clauses and understand their aspirations in tabling them, I would urge my hon. Friends to resist them.

[Miss McIntosh]

We have had a fruitful debate, but I express my disappointment that my hon. Friend the Minister has not seen fit to take a simple measure that already exists on the statute book and is not intended to be regulatory. He will, of course, have opportunities in the future to appear before the Select Committee that I chair and that will give him plenty of opportunity to explain at greater length why he is unable to support these new clauses. It is my fervent wish that such new clauses might perhaps find their way on to the notice paper in another place. However, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 4

Sustainable drainage and automatic right to connect

‘The Secretary of State shall by order made by statutory instrument implement the provisions of section 32 and Schedule 3 of the Flood and Water Management Act 2010, and any other provisions as the Secretary of State considers appropriate in connection with the coming into force of those provisions, no later than the end of the period of one month beginning with the date on which this Act is passed.’.—(Miss McIntosh.)

Brought up, and read the First time.

[Miss McIntosh]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following: new clause 5 —Abstraction reform—

‘(1) The Secretary of State shall by regulations make provision to introduce a reformed abstraction regime.

(2) An abstraction regime under subsection (1) must—

(a) be resilient to the challenges of climate change;

(b) be resilient to the challenges of population growth; and

(c) better protect the environment.

(3) An abstraction regime must be introduced no later than the end of the period of seven years beginning with the date on which this Act is passed.

(4) Regulations under this section—

(a) shall be made by statutory instrument; and

(b) may not be made unless a draft of the instrument has been laid before and approved by a resolution of both Houses of Parliament.’.

New clause 6—Onshore oil or gas activities—effect on water environment—

‘In Part 1 of Schedule 5 of the Environmental Permitting (England and Wales) Regulations 2010 there shall be inserted after paragraph 13 the following—

“Onshore oil or gas activities—effect on water environment

13A (1) Without prejudice to the operation of Regulation 35(2) and paragraph 5(1)(d) of Schedule 10 and of Regulation 35(2) and paragraph 7(j) of Schedule 20, the regulator shall refuse an application for the grant or variation of an environmental permit or for the transfer in whole or in part of an environmental permit if—

(a) the regulated facility to which the application for or transfer of the environmental permit relates is to be carried on as part of an onshore oil or gas activity; and

(b) the regulator is not satisfied that the applicant or the proposed transferee has made or will make adequate financial provision for preventing or mitigating pollution of the water environment, by ensuring all of the following—

(i) operation of the regulated facility in accordance with the environmental permit;

(ii) compliance with any enforcement notice or suspension notice or prohibition notice or mining waste facility closure notice or landfill closure notice which may be served on the applicant or transferee by the regulator under these Regulations;

(iii) compliance with any order of the High Court which may be obtained against the applicant or transferee under Regulation 42 for the purpose of securing compliance with any of the notices listed in sub-paragraph (ii).

(iv) compliance with any order of any court issued under Regulation 44 against the applicant or transferee; and

(v) recovery by the regulator of its costs upon any exercise of its power against the applicant or transferee under Regulation 57;

(c) for the purpose of this paragraph ‘onshore oil or gas activity’ means any activity for the purpose of exploration for or extraction of onshore oil and gas;

(d) for the purpose of this paragraph ‘adequate provision by way of financial security’ means financial provision which is sufficient in value, secure and available when required.”.’.

New clause 13—Unlawful communications—

‘(1) Section 109 of the Water Industry Act 1991 (sewerage: unlawful communication with public sewer) is amended as follows.

(2) Omit subsection (1)(b).

(3) In subsection (2)(a) after “close”, insert “or redirect”.

(4) In subsection (2)(b) omit “from the offender”.

(5) At the end add—

“(4) The expenses are recoverable from—

(a) the offender; or

(b) the owner of the drain or sewer.

(5) A person who obstructs a sewerage undertaker in exercising a power under subsection (2)(a)—

(a) commits an offence; and

(b) is liable on summary conviction to a fine not exceeding level 5 on the standard scale.”.’.

Amendment 2, in clause 21, page 62, line 19, after ‘undertakers’, insert ‘and highway authorities’.

Amendment 3, page 62, line 22, after ‘undertaker’, insert ‘or a highway authority’.

Amendment 1, page 62, line 23, at end insert—

‘(2A) Highways authorities must include in schemes for the construction of new roads, drainage systems with a specification designed to decrease the risk of flooding of public sewerage systems.’.

Government amendments 55 to 57.

Amendment 5, clause 51, page 107, line 5, after ‘premises’, insert ‘and small businesses’.

Amendment 6, page 107, line 7, after ‘premises’, insert ‘and small businesses’.

Amendment 8, clause 53, page 107, line 37, after ‘made’, insert

‘which shall include the occurrence of a 1 in 200 year loss scenario’.

Government amendment 58.

Amendment 7, clause 69, page 119, line 37, at end insert ‘“small businesses”.’.

Amendment 10, clause 80, page 124, line 1, at end insert—

‘(f) section [Sustainable drainage and automatic right to connect].’.

Amendment 11, page 124, line 1, at end insert—

‘(g) section [Abstraction reform].’.

[Miss McIntosh]

I shall try to keep my remarks brief, but this is the first occasion that I can remember when there has not been a parliamentary week between the completion of the business of the Public Bill Committee and consideration on Report and Third Reading. I should therefore like to pass on my thanks not only to the Committee staff who have accommodated our being able to table amendments in a timely fashion, but to all those involved in the House service who have enabled us to have amendments before us to debate this evening.

I shall go through the new clauses and amendments first and then give the reasons for them. I, along with a number of members of the EFRA Committee, have thought it fit to assist the Government yet again, and I hope that we have more success with this round. Anyone who knows me even remotely will know that I am becoming a compulsive obsessive on sustainable draining systems and that I will never pass over an opportunity to discuss SUDS. So, under new clause 4, we seek to introduce the sustainable draining system, which is woefully late. It was already given statutory powers under the Flood and Water Management Act 2010, and in new clause 4 I link that to the end of the automatic right to connect.

I should like to pay tribute to a great Yorkshireman, Sir Michael Pitt, who after the surface water flooding of 2007 attempted to get on to the statute book under the 2010 Act—the then Government’s legislation—the end of the automatic right to connect. I would go further with substantial developments than I have had the opportunity to do here. I should personally like Yorkshire Water and other water companies, as well as drainage boards, to be given the right to be statutory consultees on major new developments on the same basis as that enjoyed by the Environment Agency following the 2010 Act.

[Thomas Docherty]

It is worth pointing out that local authorities in Scotland place great emphasis on the opinion of Scottish Water, which is, indeed, treated as a major statutory consultee when local authorities are making decisions about developments.

[Miss McIntosh]

As a non-practising Scottish advocate, I would always say that the Scottish legal system has a great deal to commend it, but Scotland needs to remain part of the United Kingdom to allow us to benefit from that.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

That is for another day.

[Miss McIntosh]

Indeed, that is a different argument.

I shall give our reasons for new clause 4 in a moment. Abstraction reform forms the basis of new clause 5, in which we would return to what was in the White Paper, where the Government waxed lyrical on abstraction regimes. We particularly call for the abstraction regime to be introduced no later than the end of the period of seven years beginning on the date on which the Bill is passed and comes into legal effect.

Amendments 2 and 3 would insert into clause 21 the relevant language of “undertakers” and “highways authorities”. I am attracted to amendment 1, tabled by my hon. Friend the Member for Sherwood (Mr Spencer), and look forward to his speaking to it in due course. Amendments 5, 6, 7 and 8 would include small businesses in the flood reinsurance scheme, for reasons that I shall give in a moment.

[Sheryll Murray (South East Cornwall) (Con)]

Does my hon. Friend agree that the Flood Re clauses will help the people whom the Minister and I met in Looe last Saturday who were unable to get insurance because of repeated flooding? Flood Re will give them the opportunity to obtain realistically priced insurance.

[Miss McIntosh]

Our thoughts are obviously with my hon. Friend’s constituents who were sadly inundated during the recent flooding. I look forward to hearing further from her during the debate, as well as the Minister’s response.

Amendments 10 and 11 are consequential amendments to clause 80 arising from new clauses 4 and 5.

Before I explain why the amendments and new clauses are important, I should point out that we have seen three types of flooding in the past three or four months. The most recent examples have been of coastal flooding, but the Yorkshire and East Anglia coasts suffered tidal surges before Christmas to devastating effect; more than 80 houses were evacuated at Filey in my constituency and a number more in Whitby. However, we have become more accustomed to surface water and river flooding, and surface water flooding has been on the increase, and has become more of a problem, since 2007.

I want to hear from the Minister why SUDS have been delayed. The latest we heard was that there was an implementation date of April 2014. People have been trying to convince me that Brawby in my constituency suffered in 2013 not from flooding but due to surface water running off from fields and roads into the combined sewerage pipe, which then spilled water from the sewerage system back on to the road. In that case, the water did not go into anyone’s house, but at Castlegate in Malton when exactly the same thing happened—water ran off the road into the combined sewers—water then entered a house.

The missing link is an audit of existing SUDS and an examination of future SUDS when major developments and roads are built. However, from my experience, and given what we heard during the statement on the floods, there is a further problem to deal with. If water runs off a highway, it is the responsibility of the county council, the unitary council or the Highways Agency itself. However, if that water then runs into the combined pipes, it suddenly becomes the water company’s problem, although what has happened is not its fault. I hope that that unacceptable situation can be addressed through the measures that I and other members of the EFRA Committee have tabled, or through amendment 1, which was tabled by my hon. Friend the Member for Sherwood. If fields are saturated, as is the case at present—it was the situation in my constituency between September 2012 and March 2013—highways authorities must take responsibility and create a SUD to take the excess water. I accept that such a process would involve cost, but I applaud the Government’s approach on partnership funding, so we could look to public sector partners, or be more imaginative by looking for private sector partners, such as local businesses that might be interested in investing. However, we cannot allow a situation to continue in which surface water running off a road becomes the responsibility of a water company and thus forces it to take preventive measures, given that the highways authority—whichever one it might be—should accept responsibility for it.

The EFRA Committee’s report following our pre-legislative scrutiny of the draft Bill highlighted concern about the delayed implementation of the provisions on sustainable drainage systems in the Flood and Water Management Act 2010—it is now four years since that Act was passed. The Committee also criticised a lack of urgency on improving the management of surface water in its report on the water White Paper, so I hope that my hon. Friend the Minister will be able to clarify what has been happening and why the process seems to be so complicated. As the Committee has not been convinced that the Department’s work to improve the management of surface water has involved the urgency that constituents throughout the country would expect, new clause 4 would require the Government to implement the relevant provisions of the 2010 Act within a month of the Bill being passed.

19:45

The key provisions to be implemented relate to ending the automatic right to connect to public sewers in England and Wales. In addition, developers of substantial property developments should be required to construct sustainable drainage systems before carrying out any new construction work. When houses are built on a field in Filey that takes surface water, that water will be displaced to existing developments, or more likely to the school, which required a multi-million pound refit following the 2007 floods. Water will find its way.

We also want the Environment Agency, highways authorities, British Waterways, internal drainage boards and water and sewerage companies to be statutory consultees when the new SUDS authority makes a determination on an application for connection. The reason for that is simple: why should a water company be asked to connect what are often outdated Victorian pipes to a major development of 300 houses, for example, when that is simply not possible? It is necessary that action is taken prior to planning permission being granted so that developers can make the necessary arrangements and save a great deal of grief down the line.

Surface water flooding is a major contributory factor to the damage caused to homes and businesses. It is a relatively new threat, especially when surface water runs off fields and roads and then floods public sewers. Extreme weather involving sporadic and intense rainfall—whether that is due to climate change or because of another reason—has caused surface water flooding, and it is difficult accurately to predict where such flooding will occur. In 2009, the Environment Agency estimated that of the 2.4 million properties then at risk of flooding from rivers or the sea, some 1 million were also at risk of surface water flooding. In addition, 2.8 million properties are at risk of surface water flooding alone. If a house is built on land that is prone to flooding, it is highly unlikely to be eligible for insurance. However, in the case of Filey, an existing bungalow or the school can suffer due to displaced water—secondary flooding, almost—and then find that its insurance premium and excess increase. Does the Minister think that that is fair? I do not think that it is, so we need to bring forward SUDS as a matter of urgency and end the automatic right to connect.

Amendments 2 and 3, which would amend clause 21, are important so that highways authorities have the power to construct, maintain and operate sustainable drainage systems to reduce the volume of surface water entering public sewers. If sewage water backs up into people’s homes, we know that they will be displaced for much longer than if only clean water had entered the house, given the public health requirements that must be met before they are allowed to re-enter. Clause 21 already gives the power to sewerage undertakers. Our amendments would extend the power to highways authorities, and clarify the fact that highways authorities are able to construct SUDS to prevent surface water flowing into sewers. It is the link that is missing at the moment.

The Committee’s report on managing flood risk, which was published last July, recommended that DEFRA should liaise with the Department for Transport and the Department for Communities and Local Government on measures to encourage highways authorities to install SUDS, which will improve the management of water run-off from roads. This is intended to be a precursor to creating a statutory duty for highways authorities to take responsibility for surface water on new and existing roads, and to build SUDS to address the problem of surface water flooding. We cannot ignore the incidents and frequency of surface water flooding in addition to river and coastal flooding incidents. The amendments are intended to be helpful to the Minister and the Government in that regard.

Let me turn now to abstraction reform and new clause 5. The Committee has repeatedly called for the implementation of abstraction reform by 2022. I cannot see how we can consider introducing upstream competition without having the necessary reforms to abstraction in place.

[Thomas Docherty]

Hear, hear!

[Miss McIntosh]

It is always a delight to be supported by the hon. Gentleman.

The current system for managing abstraction of water from rivers and aquifers was introduced in the 1960s, and does not effectively address the severity of pressures on water resources caused by increasing demand from a growing population and an increasingly varied climate. The current system does not help abstractors to trade water effectively or provide an incentive for them to manage water efficiently. The current weaknesses in the system mean that it could start to constrain economic growth, reduce the resilience of the water supply and lead to environmental damage.

I note that the reasons and need for abstraction reform are acknowledged and discussed in the Government consultation “Making the most of every drop”, which was published last December. When my hon. Friend the Minister replies, will he address the issue of why there was so much emphasis on abstraction and resilience in the water White Paper, and why we lost that emphasis in the draft Water Bill and, to a certain extent, in the Bill before us this evening?

The detail of a new abstraction regime will need to be developed following the end of the Government consultation, which was launched on 17 December. Following the conclusion of that consultation, which will not be until March, DEFRA will have to produce legislative proposals and secure space in the highly charged legislative programme before a new regime can be introduced. Once again, these amendments are intended to be entirely helpful and constructive.

During the Committee stage, the Opposition tabled a new clause to provide that upstream reform may not be implemented until new primary legislation on the licensing of abstraction has been passed, and five years has expired to allow for its implementation. Sadly, that proposal was voted down.

New clause 5 would require the Secretary of State to introduce a reformed abstraction regime within seven years of the Act being passed—by 2021. That was on the basis of the evidence that we received, and we believe that that is the most accurate and cost-effective timetable for all the parties involved.

The abstraction reform must be resilient to the challenges of climate change, or extreme weather conditions, and population growth and better protect the environment. Those high-level requirements are entirely in line with the key commitments regarding abstraction reform in the water White Paper.

Let me turn now to upstream and abstraction reform. In our pre-legislative scrutiny report on the draft Water Bill, the Select Committee called on the Government to make clear in the Bill the key principles that underpin the introduction of upstream reforms. Further work needs to be undertaken to establish how upstream reforms can be introduced in a way that will preserve investor confidence, ensure that customers do not face increased bills and maintain resilience in the sector. I was extremely pleased to see the emphasis on resilience in the water White Paper.

Upstream reform aims to encourage upstream competition. I am talking about the input of raw or treated water into a water company’s network or the removal of waste water or sewage for treatment. Clause 1 unbundles all the existing licensing structures so that new entrants can sell raw or treated water into an incumbent’s network. It also looks at the wholesale authorisation to input water into a part of the system. The Environment Agency’s statistics show that on average, between 2002 and 2011, only 45% of the annual total of water licensed for abstraction in England and Wales was actually abstracted. Therefore, if all of this unused but already licensed water was abstracted, there could be a significant deterioration of the environment. We hope that when the Government look at abstraction and upstream reform, they will bear these thoughts in mind.

One other aspect of upstream reform and abstraction that the Government should consider is, very topically, the role of water companies and other private sector companies in flood prevention and in protecting homes and businesses from floods. The Minister will be familiar with the work of his Department in the Natural Environment White Paper, which looked at a project known as ScaMP—Sustainable Catchment Management Programme—involving United Utilities in Cumbria. Surely there must be much more scope for the type of partnership approaches we have seen in Pickering where the first soil of the reservoir will be dug tomorrow.

I will conclude my remarks by looking at flood insurance. Amendments 5, 6, 7 and 8 seek to amend clauses 51 and 53. The Select Committee took a lot of evidence in relation to Flood Re and the potential for reinsurance companies. Given how deeply wedded the Government are to Flood Re, I hope that they have not closed the door completely on reinsurance. In summing up this debate, perhaps the Minister will inform us how the state aid application to the EU Commission in Brussels is going to enable Flood Re to come into effect according to the Government’s timetable.

Clause 51 and the amendments we propose to it would have the effect of bringing small businesses within the ambit of Flood Re. There is considerable doubt and anxiety that small businesses will not be covered under the new Flood Re proposals. The impact that flooding can have on small businesses is clear. In 2001 and 2005, a dental practice in my constituency was flooded twice and the dental chair and all the computer equipment had to be replaced each time.

[Roger Williams]

I am sure that many Members will have a deal of sympathy for my hon. Friend and her concern for small businesses. I guess that the difficulty in getting this into legislation will be how to define a small business. Perhaps she has some ideas on that.

[Miss McIntosh]

Like my hon. Friend, I merely shadow DEFRA so I do not have the definition to hand, but I am sure that the Federation of Small Businesses will have a definition. I think it is generally deemed to be a business that has fewer than 50 employees, though many small businesses employ five or fewer or are often a single employee. The example I cited was that of a small dental practice with two or three dentists. The knock-on effect on an independently run, stand-alone dental practice of fitting, for the second time, a new dental chair and computer equipment goes beyond what would normally be expected. The knock-on effect on the insurance premium and excess for that dental practice was considerable and, possibly, unaffordable.

19:59

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Is it the hon. Lady’s understanding that not only would small businesses and micro-businesses in commercial premises not be covered by Flood Re, but people who run businesses from their own homes would find it almost impossible to get insurance under the arrangements as they stand?

[Miss McIntosh]

I welcome the hon. Gentleman’s intervention, but I believe that homes generally are covered. Our Government have persisted with his Government’s arbitrary choice of 2009 as the relevant year, although this is a new Bill and we have a still relatively new coalition Government. I was very taken by what the hon. Member for Stoke-on-Trent North (Joan Walley) said in a previous debate about 2009 having been plucked from the air as an arbitrary date, and many people will not realise that homes built after 2009 on a floodplain are simply not covered by insurance. One of the purposes of tonight’s debate is to entice the Government to seek a different year—it could be 2013 or 2015, but let us be imaginative.

[Sheryll Murray]

Will my hon. Friend clarify the difference between an insurance policy that covers a business premises and one that covers a private home? Insurers, and the Association of British Insurers, would probably find it difficult to distinguish if we were to include small businesses, but because her amendment is well intentioned, I am sure that she will be able to clarify her differentiation.

[Miss McIntosh]

I am sure that the Minister will be well aware of the point that my hon. Friend is trying to make. There is great concern among the farming community that farms may be excluded whereas the farm house may be included. I commend my hon. Friend’s knowledge, because she worked in the insurance industry for a time. We need to know whether farms and people working from their own homes are going to be included, and what the position will be for small businesses, because this could put them out of business in some of the areas that we have seen flooded over the past two years in repeat flooding incidents. It has also been brought to my attention, although, unfortunately, too late to have tabled an amendment, that there is concern that blocks of flats—leasehold flats—may be excluded from this arrangement. That may be news to the Minister as well, but before Third Reading he might like to ponder whether such blocks will be excluded.

Our amendments to clause 51 address concerns relating to the exclusion of small companies such as charities and, as I have mentioned, farms under the new Flood Re proposals in the Bill. Any business based in a property that is primarily a residential one, and on which the occupier therefore pays council tax, would fall within the Flood Re scheme. Any business based in premises used primarily for business will not be covered. It is extremely important that we understand these issues. For the first time that I can remember, under the Flood Re scheme, once it is up and running, the Government will be added as an insurer of last resort if in the three years before the fund has built up we suffer an exceptional one-in-a-thousand-year incident.

In the Public Bill Committee, the ABI stated that Flood Re is not the solution for small businesses and that there is not a sufficient evidence basis for providing insurance cover for small businesses. The Federation of Small Businesses is concerned that small businesses that have affordability problems will not be covered, other than in respect of the insurance premiums or excess that they might seek to defray. Although they do not pay council tax, they do pay business rates and therefore could be rated in a similar way to household customers under Flood Re. There remain a lot of known unknowns with Flood Re as to why a council band rate has been chosen and which particular band rate has been opted for, but that is a separate debate. If there is a lack of evidence, further investigations and monitoring should be conducted with regard to small businesses and how they might cope with sourcing flood insurance in the free market.

Our amendments to clause 53 would have the effect of ensuring that insurance companies cover for any liability in excess of a one-in-200-year loss. Our amendments seek greater clarification of the Government’s role in this scenario of a one-in-200-year loss, and, in particular, how the taxpayer would be protected. As I have mentioned, the Government will, for the first time, be the insurer of last resort. In later years, after the fund has built up, I do not believe that that will be a problem, but we are seeking the Minister’s reassurance about what the implications will be in respect of the first three years. In Committee, the Minister confirmed that there is no Government liability for Flood Re and that the Government have made it clear that Flood Re is not guaranteed above the one-in-200-year level, so he might just like to revisit that and clarify the point.

Our amendment 8 would put the Government’s commitment in the Bill and create certainty for all concerned as to who will assume the additional liability. A one-in-200-year loss scenario would be the total value of claims from households reinsured through Flood Re that, during the course of a year, actuaries would not expect to be exceeded in 99.5% of years. Expressed in a different way, that would mean that the actuaries would be 99.5% confident that the limit would not be exceeded in any one year. It is important to note that that is not the same as a one-in-200-year flood event; the ABI has estimated that this would mean flooding six times worse than that experienced in 2007. Obviously, neither the Minister nor the insurance industry will yet be able to say what the cost of the recent floods has been, but I hope that he will see fit to lend his support to our amendments, and I commend them to the House.

[Joan Walley]

I am fortunate to follow the hon. Member for Thirsk and Malton (Miss McIntosh), who speaks with the greatest authority on these subjects, as I am sure everyone in the Chamber would agree. I particularly share her concern about drainage and surface water, and I agree with the points she made earlier about the need to ensure that highways authorities also have statutory duties, so that we can deal with this issue in a joined-up way. The debate on this group of provisions is important because we have had pre-legislative scrutiny by the Environment, Food and Rural Affairs Committee of the draft Water Bill and subsequent debate in that Committee. When the Minister addresses the various comments that have been made, we will see the extent to which the Government are listening to what Parliament is saying about the amendments. There may not necessarily be agreement on all of them; I am talking about the amendments that seek genuinely to try to improve matters on the whole issue of water. We have an opportunity to put in place legislation that is fit for purpose, so I hope that improvements will be made.

[Thomas Docherty]

It will probably not cheer my hon. Friend to hear that every single amendment tabled in Committee by Opposition Members, and indeed by coalition Members, was rejected, even though the Minister had previously agreed with them in the Select Committee.

[Joan Walley]

I am grateful to my hon. Friend for pointing that out. As I have said, the proof of the pudding will be in the eating, so we will wait to hear what the Minister says in response. Given that the Bill has further stages to go through before Royal Assent—I am glad to see the hon. Member for Brecon and Radnorshire (Roger Williams) nodding—I think that it is the Opposition’s duty to press the Government as much as possible, because it is important that Parliament does the right thing. Even if the Government do not make concessions at this stage, there will be an opportunity in the other place to put more flesh on the Bill and to make it much more fit for purpose. We will wait to see what further progress we can make.

I will speak briefly to new clause 6, which stands in my name, because I realise that many Members wish to speak. I want to introduce my comments by considering the issue of contaminated land. It is clear to me from the work I have done recently that there is a problem with how we deal with contaminated land. The current regime and the funding for it, particularly that which involves local authorities, is not fit for purpose, and it needs to be. We are dealing with a huge amount of legacy problems. I do not want the Government to set up a whole new regime without giving due consideration to the preventive measures that would need to be put in place in relation to fracking and shale gas extraction.

Madam Deputy Speaker, I am sure you would rule me out of order if I were to speak this evening on whether we should have fracking or shale gas extraction. The point I want to make is that if it is to go ahead, with the enormous tax concessions it currently has, there needs to be a proper regime in place that relates to water, water quality and concerns about contamination. It is for that reason that I have tabled new clause 6. I acknowledge that, were the Government to act on the concerns I am raising, there would need to be consequential amendments to paragraph 9 of schedule 20 to the Environmental Permitting (England and Wales) Regulations 2010, so I do not want the Minister simply to claim on a technical point that the new clause is unworkable because it is not thorough in that regard.

My understanding is that the principles that the polluter should pay and that prevention is much better than an end-of-pipe solution mean that we should be dealing at this stage with the procedures that need to be put in place to prevent contamination of water as a result of fracking. I point out that the new clause is supported by many non-governmental organisations working on the front line to deal with that, including the Royal Society for the Protection of Birds, the Angling Trust, the World Wide Fund for Nature and the Salmon & Trout Association.

New clause 6 would amend the Environmental Permitting (England and Wales) Regulations 2010 to introduce a liability guarantee to ensure that fracking companies have the funds available to pay the clean-up costs should an accident occur during the fracking process. I think that is eminently sensible. A similar amendment was tabled in Committee and briefly debated, as my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) just pointed out, but it got nowhere. I believe that it was important to table it again for further consideration, mainly because the Minister’s response in Committee did not offer adequate assurances that the public purse would not be hit should an accident occur.

As I understand it, the Minister’s main argument was that the existing regulations on the statute book already ensure that operators are technically and financially competent to carry out fracking activities. However, a financial competence check is carried out only in specific circumstances, and competence is not the same as securing a form of financial provision or guarantee for long-term environmental liabilities. In other words, it does not guarantee that a company has put in place funding or insurance for dealing with an accident; it only provides a snapshot in time of its financial situation. I am reminded of the complex discussions there have been about the ownership of football clubs and where due diligence should lie.

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It is vital that anyone looking to carry out fracking should have the finances in place to pay for any remedial work that is needed. Tests for technical competence, which the Minister also mentioned in Committee to reassure Members, are also limited. Even the most technically competent operator might not be able to avoid an environmental impact as a result of its operation.

I understand that the hon. Member for Brecon and Radnorshire made the point in Committee—I was not party to those discussions but read the reports assiduously—that the amendment was intended simply to ensure that there is a plan in place for the low-probability but high-risk scenario of a pollution incident occurring. Although a stringent and well-enforced regulatory regime will mitigate risk, it cannot eliminate it altogether. It is for that reason that we need to look seriously at making that amendment before the Bill receives Royal Assent.

The importance of protecting ground and surface water must not be underemphasised. In the midlands—I represent a midlands constituency—40% of public water comes from ground water. The figure is even greater—more than 70%—in the southern regions of England. Not only do we depend on that resource for drinking water, but farmers and industries across the country depend on healthy aquifers, which are estimated to be worth £8 billion to the economy. We must look at this in the round, because we are talking about the food industry and food security. Are we really going to risk contaminating all that simply by failing to put proper safeguards in place when introducing legislation?

The Government must therefore put in place adequate provisions to ensure that companies are able to pay for the clean-up of a contamination incident. There is much peer-reviewed evidence to suggest that that is something we should be prepared for. For example, a study in the USA last year examined stray gas concentrations in 141 drinking water wells near Marcellus shale gas extraction sites in Pennsylvania. It detected methane in 82% of drinking water samples. Average concentrations were found to be six times higher for homes within 1 km of natural gas wells.

Some would argue that our regulatory regime is much more stringent than that in the US and that we can therefore prevent such accidents from occurring. Although it is true that the existing regulatory regime, if properly implemented and enforced, should mitigate most risk, that does not detract from the need for the new clause. Even if liability can be proven, there remains the risk that companies could go bankrupt, leaving taxpayers and water companies with the clean-up costs.

The precedent for that has already been set. I note that several Members present this evening represent former coal mining constituencies. Those of us who have dealt with the legacy of mining pollution will know that the cost of clean-up often falls on the taxpayer. In 1994 it was estimated that abandoned coal mines had polluted more than 400 km of rivers. Treatment schemes and remedial works undertaken by the Coal Authority have helped to protect the environment and people, but at a cost of tens of millions of pounds a year to the taxpayer, not the polluter. It is vital that we follow the principle that the polluter pays.

There is also concerning evidence that regulation is not being adequately enforced. I understand that at Preese Hall, the only site in the UK to be hydraulically fractured to date, the Environment Agency did not issue the environmental permits that were required. At the same time, the agency has committed to a dramatic reduction in the time it takes to issue permits. Streamlining regulation and issuing permits in this way is all well and good in some circumstances, but as we are dealing with a new technology in the UK with unknown risks, we should not be looking to streamline regulation until we can be certain that proper procedures are being followed.

The new clause would ensure that the fracking companies that will benefit from the most generous tax regime in the world for this industry have the funds available to pay for the cost of clean-up should an accident occur. Since we are repeatedly reassured that the risk of an accident occurring is minimal, why should we be concerned that the new clause would impose unreasonable costs on the industry? If there is a minimal risk, there is not a huge likelihood that it will be needed, but it would ensure that in the event of an accident the industry did not impose unreasonable financial and environmental costs on the public.

I wish briefly to refer to aspects of the Flood Re scheme and the amendments that relate to it. The adaptation sub-committee, which advises the Committee on Climate Change, has, through its chairman, Lord Krebs, made various points about the importance of getting the scheme absolutely right at this stage rather than later on. In a letter that he wrote to the Secretary of State for the Environment, Food and Rural Affairs about the awareness of flood risk and the importance of taking account of rising flood risk levels, he said that there are at least five issues that the Government need to address but have not yet done so. Given that, as we heard earlier in the Secretary of State’s statement on flooding, we know that we are now going to get events of this kind far more regularly, it is incumbent on Parliament to make sure that the insurance scheme that is being introduced is absolutely fit for purpose.

[Mr Spencer]

I rise to speak to amendments 1, 2, 3 and 10, particularly amendment 1, which stands in my name.

There is enormous frustration in Nottinghamshire about the fact that when a new development takes place there is an obligation to connect and that often means that the public sewer, which is already under pressure, becomes flooded. Many Members will recognise that villages in our constituencies have grown over a number of decades. Often in Nottinghamshire, those villages have a working sewerage system but no one has developed a surface water system. That means that when somebody builds a new conservatory at the back of their house the local authority allows them to put the downpipe into the public sewer, and that puts pressure on an already pressurised sewerage system.

The problem is exacerbated when a new road is built. There is a good example of that in Nottinghamshire, where the Hucknall inner relief road, which has been permitted by Nottinghamshire county council, is about to go right through the town of Hucknall, and the plan includes dumping the surface water from that new road into an already flooding public sewerage system. That is unacceptable. To put it into Sherwood language, while we have got diggers on the ground digging up the whole town to put a new road in, it is not beyond the wit of man to put an enormous pipe underneath the road to take the surface water and not put it into the public sewer and flood the homes of people who are already suffering from sewage flowing through them.

[Neil Carmichael (Stroud) (Con)]

We have exactly the same problem in my constituency of Stroud in connection with Slimbridge and a relatively old sewerage system. The real question is how we manage to calibrate the capacity and quality of the systems, certainly some of the older ones, within the context of this Bill.

[Mr Spencer]

It is very difficult, but we can make sure that anything new that is built does not make the problem worse. We have an obligation to try to improve things as developments take place. What causes enormous frustration is that the bodies responsible, whether it is the sewerage company or the highway authority, pass the buck so that, in effect, the person who causes the problem does not take responsibility for solving it but it falls on someone else.

Another example is a small village in Sherwood called Farnsfield, where there is already flooding. A developer is applying to put a large number of houses and new roads at the edge of the village, and there is no surface water system. The poor people in the old village who are suffering with sewage flooding their homes are going to have that problem made much worse if the new development takes place and the surface water is put into an already overflowing sewerage system. I appeal to the Minister to see whether he can find a way to encourage, if not force, local authorities to take responsibility when they allow planning permission for a new highway or road and make sure that the highway authority that is developing the road, or the developer that is developing a new estate, picks up the cost of solving the problem that they are creating and disposes of the surface water responsibly rather than putting pressure on an existing, overflowing sewerage system.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

I want to speak to new clause 13, which I have tabled. It is headed, “Unlawful communications”. Several hon. Members have asked me about that, and I apologise because it is a little confusing. It does not deal with unlawful communications but unlawful connections, or, more colloquially, misconnections. The new clause would amend section 109 of the Water Industry Act 1991, and that is why it uses the word “communications”, which is used in that Act. It is exactly the same as an amendment that was included in the draft Flood and Water Management Bill of 2009 but sadly had to be dropped from the final Bill because of a lack of legislative time as we approached the 2010 general election. The reason for tabling the new clause is to find out why the provision has not been included in this Bill.

Misconnections occur when separate surface water and foul water sewers are wrongly connected by households or businesses. The reasons for this range from the over-enthusiasm of household DIYers to cowboy builders and plumbers connecting to the first and most convenient sewer, which is often the wrong one. The consequence is pollution of groundwater, watercourses, streams, rivers, and, in my case, a local lake. The problem comes to light only as a result of the visible pollution that we can see, which is sometimes accompanied by some rather unpleasant smells, as has affected local communities in my constituency.

The cost of tracking this down once it has been discovered is very difficult to quantify, because it is extremely difficult to find out where the misconnections have taken place. It is also very time-consuming. As a result, it is a significant problem, particularly in more densely populated areas. A large number of misconnections are occurring in parts of my constituency.

Thames Water estimates that one in 10 homes in its area are misconnected. The Department for Environment, Food and Rural Affairs estimates that 300,000 homes in England and Wales were misconnected in 2009 and, ominously, that the number will increase to 500,000 by 2015.

Part of the solution, of course, is better information about and greater awareness of the problem of misconnection. Some steps have been taken to try to address that. Thames Water has set up an industry strategy group, as have other water companies. My local authority has sent leaflets to areas particularly badly affected. Of course, we can do better, but the reality in my constituency and up and down the country—this is verified by DEFRA figures—is that, as current misconnections are dealt with, others are adding to the problem and it is getting worse, not better. I could cite instances in my constituency and I am sure that other Members have similar examples.

Part of the reason for the problem is that, although water companies can disconnect from the connected drains, they cannot redirect them into correct sewers; only local authorities have the power to do that. If, for any reason, the householder or business does not carry out the works, the local authority has powers to do so and to bill that individual or organisation for the costs. New clause 13 seeks to grant water companies the same enforcement powers as those available to local authorities. They could then deal directly—they already deal with other aspects of the problem—with misconnections.

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This is not intended as a strike against the work of local authorities. Indeed, in the Greater London area—I suspect the situation is similar in other parts of the country—many local authorities are doing tremendous work. One London local authority—the borough of Ealing—has a 90% record on sorting out these problems and the majority of local authorities achieve greater than 50% of corrections within a reasonable time frame. My own local authority achieved 64%. I am not, therefore, having a go at local government, but one London borough—I will not name it—has achieved only 12% of corrections. Indeed, it has misconnections going back to 2005.

Local authorities are not incentivised or always resourced to give the priority necessary to misconnections. The situation is getting worse: local authorities are finding it difficult, adjustments have to be made due to the austerity programme and this is one of the areas likely to be under considerable pressure.

There would be benefits from allowing water companies to carry out this sort of work. It should be more efficient if the same organisation did all the preparatory work and then carried it through. That should also mean that the work would be completed quicker and that it would cost less, which might incentivise some households and businesses to correct the problems they have created.

I commend new clause 13 on the simple basis that two bodies—the local authorities and the water companies—should have the opportunity to carry out the work. It may make a significant inroad into the problem. If there is confusion, the Department should play a co-ordinating role and bring local authorities and water companies together. There are real benefits to be achieved, including a significant environmental benefit. The lake that has been polluted in my constituency is a running sore. The same is happening to water courses and rivers up and down the country. We could really make a difference through this very simple procedural measure.

I ask the Minister in a positive spirit whether he has thought seriously about accepting the new clause. If there are good reasons for refusing to do so, I would accept them, but it seems to me to be a relatively simple measure that could make a significant difference.

[Richard Benyon]

I rise to speak briefly to new clause 5, but I also want to touch on the comments made by my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) about Flood Re. I was intrinsically involved in the tortuous and detailed negotiations with the industry to try to come up with something from zero when the coalition Government came into office. We had urgent and overdue discussions about what would replace the statement of principles. All hon. Members would agree that it is absolutely right that this needs to be scrutinised by the House, with ongoing scrutiny of how it works. I hope that the Minister will agree that flexibility should be built into it to enable it to be changed as circumstances change in years ahead.

However, on behalf of my constituents, who suffered some of the worst flooding in the south of England in 2007 and have continued to face flooding in certain areas since, I beg the House not to unpick the detailed negotiations that have resulted in the Flood Re proposal before the House. For example, if we started to introduce a wide range of businesses into the scheme, that would completely change the complex mathematical—probably algorithmic—calculations that will make it viable. I want as many properties to be included as possible, but if we start to say that we want it to include band H houses, different types of businesses, and houses built after a certain date, hon. Members have to understand that that would come at a cost. The cost might be that the industry walks away and that we have nothing, with constituents who live in areas at risk of flooding facing the really terrifying prospect, when we have the kind of weather we are currently experiencing, of not being able to get insurance. The affordability factor that we have managed to build in would be gone, so I just urge the House to have a little caution when—rightly—scrutinising this Bill, which I really believe is right and should become law as quickly as possible.

I want to speak about new clause 5, but I should have started by reminding hon. Members about my entry in the Register of Members’ Financial Interests. I have been accused of obsessing about over-abstraction, and I have been obsessed about it since long before I entered the House. More than 20 years ago, I set up an environmental body relating to a small river in my constituency, the River Pang, which is a chalk stream. It was one of the National River Authority’s ALF—alleviation of low flow—schemes. We managed to stop over-abstraction by a water company at the top of the aquifer and to restore the river. It is currently in desperate need of further restoration, as are others in my area, particularly the River Kennet. It seems strange to talk about over-abstraction when many of our rivers are overflowing at this time, but it is nevertheless a very serious issue. The River Kennet is a site of special scientific interest, and has overlaying European and national designations. It is an example of a river for which we have to find a better solution.

When I was in the Minister’s role, I would dearly have loved to bring meaningful abstraction reform before Parliament, but it would have been wrong to do so. As has already been said, we have been dealing with a regulatory system that dates back to the 1960s, when people did not mention the words “climate change” and we did not have the levels of population and demand that we now face, particularly in the south and east of England. When the consultation and all the work being done by the Department and the Environment Agency is over, I know that we will have about 30,000 abstractions that affect the livelihoods of our constituents and the ability of their businesses to perform and that have a huge impact on our environment. I hope that the House agrees that we must get the system right, and that we legislate in haste and repent—in opposition—at leisure. I hope that we get this right, and that the reassurance the Minister will be able to give us will set my mind, and those of other hon. Members, at rest.

I have said that the problem is complex. Organisations such as the WWF have been a fantastic help to the Government and hon. Members in our thinking about how we should deal with over-abstraction. I regret that the abstraction incentive mechanism originally hinted at in the water White Paper has been diminished in relation to its ability to address abstraction where it will cause real problems to the environment. I hope that it comes forward in the future as a very useful tool that values water differently where it is scarce and where it is plentiful.

There are technical measures in the Bill that will not be talked about in the Dog and Duck, but that are groundbreaking—perhaps game changing would be a better description. The change from using the environmental improvement unit charge method of assessing over-abstraction to putting it in the five yearly price review is a major one that will make a big difference to how we deal with the environmental damage that is caused by over-abstraction.

I looked closely at new clause 5, which was tabled by my hon. Friend the Member for Thirsk and Malton and other Members. I wondered whether it might be an elegant way forward. However, I think that it would face problems. There would be problems in getting the legislation through Parliament. It undoubtedly uses Henry VIII clauses and would give a dramatic power to the Committee Corridor, as opposed to the whole House. That would concern many Members of this House and would certainly concern Members in another place, where they do not like Henry VIII clauses. I hope that the Minister will address that in his remarks.

I then looked at how such secondary legislation would implement the abstraction reforms that we want to see and that will result from the current consultation and the implementation of a new scheme. If that could all be dealt with in the obscurity of the Committee Corridor to a level that satisfied my concerns and the concerns of the many organisations that are worried about over-abstraction now and in the future, that would be fine. However, the use of secondary legislation is a limiting factor. I regret that in my time as a Minister, I did not get my head around what an abstraction Bill in the next Parliament would look like. I suspect that it will be a relatively complicated document. That legislation would be diminished if it was dealt with as secondary legislation, as under new clause 5.

I hope that the Minister will give two assurances. First, I hope that he will address the concerns that were put eloquently by the Chair of the Select Committee, my hon. Friend the Member for Thirsk and Malton, and my concerns about whether such legislation would deliver what we want it to deliver. The second assurance is perhaps an impossible one for him to give, but I will ask him to give it anyway. I hope that he will give an assurance that the Government are as determined as they were when they put together the water White Paper—a document that was roundly welcomed by Members in all parts of the House, the industry, NGOs and every stakeholder I can think of—that abstraction reform will be followed up by his party and mine, and hopefully by other parties, and that it will race through the House in the early years of the next Parliament so that we can see meaningful abstraction reform that addresses the problems that blight so many rivers. This is not just an environmental problem; more fundamentally to many of our constituents, it is an economic one. Not only do we rely on rivers and aquifers for aesthetic reasons and leisure activities; they are fundamental to our economy. That is why it is so important that we get abstraction reform right. I hope that the Minister will give us those assurances this evening.

[Steve McCabe]

I will be extremely brief and confine my remarks to Flood Re. With all due respect to the hon. Member for Newbury (Richard Benyon), if this is the best that three and a half years of intense negotiations can produce, I am not sure that congratulations are in order. As I understand it, the scheme will cover only a fraction of the 6 million homes that are deemed to be at flood risk.

I want to ask the Minister three questions. First, if it is true that there is a 60% chance that the scheme will fall into deficit, and if, as Professor Diacon, who was asked to review it, said, it relies on luck in the first place, what are the contingency plans if the scheme falls apart? Secondly, what will be the trigger for the Government to intervene on the insurance companies if insurance premiums for everyone else, who will not be covered by the scheme, continue to rise to such a point that they cannot afford them?

20:45

There is not a lot of mass flooding in my constituency, but in one particular area, on the River Rea near Dogpool lane in Selly Park, homes have been flooded. It was the same problem that everyone will be familiar with—people were washed out and their belongings destroyed. In my question following today’s statement, I mentioned a constituent whose insurance premium has gone up by 50% in 12 months. If insurance premiums continue to rise, what will be the trigger for doing something about it? If there is no trigger, this will all have been a waste of time.

Finally, if Flood Re is not going to cover small and micro-businesses, what is the Government’s plan for them? Are we simply going to stand aside and see them washed away?

[Thomas Docherty]

May I wish you a warm and happy new year, Madam Deputy Speaker?

We have had a thoughtful and knowledgeable debate over the past hour and a half or so. I commend two Select Committee Chairmen and a former Minister for their remarks, even if we did not agree with every part of the former Minister’s interpretation of the past three and a half years.

Time is limited, so I hope the House will understand if I restrict my remarks to some of the new clauses. Unsurprisingly, the Opposition agree with the Environment, Food and Rural Affairs Committee about SUDS. I am sure that, as a former member of that Committee, the Minister will agree with himself on the issue. The hon. Member for Thirsk and Malton (Miss McIntosh), who chairs the Committee, was right to highlight the increasing burden being placed on a network that, in many cases, is struggling to cope. We have heard that the ability to cope with additional development is not always given the consideration that it needs. I hope that the Minister will reflect on the cross-party support on that point that the hon. Lady demonstrated.

There is a broad coalition of opinion on abstraction reform, to which the hon. Member for Newbury (Richard Benyon) alluded, but it is not just made up of what he might describe as the usual suspects—the non-governmental organisations involved. That well known environmental organisation the Food and Drink Federation made a submission to the Public Bill Committee. We welcomed the Minister’s announcement in the Committee. It was disappointing that his colleagues chose to make it to the media before it was made to Parliament, but of course I assign no responsibility for that to him. We welcome the consultation, but we agree with the Environment, Food and Rural Affairs Committee that it is long overdue.

I say to the hon. Member for Newbury that the Government certainly could not be accused of legislating in haste, because after almost four years we simply have not seen sufficient progress on abstraction reform. My hon. Friend the Member for Garston and Halewood (Maria Eagle) and I look forward as Ministers in the next Parliament to taking such legislation through with due speed, and we look forward to the support of Conservative Members.

My hon. Friend the Member for Stoke-on-Trent North (Joan Walley), the Chair of the Environmental Audit Committee, made an incredibly thoughtful and logical speech, and we support her new clause 6. We are clear that, as she said, this is not a debate about the merits and demerits of fracking technology. It is about trying to ensure that there are safeguards in place. Her constituency is still suffering the fallout from open-cast mining not having had sufficient guarantees in place, so I understand exactly where she is coming from.

Given that time is incredibly short I will bring my remarks to a conclusion, but it is clear that the other place will have an important job to do in the weeks ahead. A number of issues in this group of amendments—and indeed elsewhere—have not been addressed, and my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) is right to say that we must consider Flood Re in some detail. With the greatest respect, the Opposition will not simply go along with the Government because they have come to a deal and say that that is good enough; we need more detail from Ministers. We look forward to the Bill making progress but we will, as I have suggested, press some amendments to a vote.

[Dan Rogerson]

In the time available I shall seek to respond to as many points as I can. The Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), has been a strong advocate of and campaigner for sustainable drainage over many years, and the Government are pressing ahead and implementing the requirement to secure approval for sustainable drainage systems for new developments under schedule 3 to the Flood and Water Management Act 2010. Regrettably, it is looking increasingly unlikely that we will be in a position to ensure that the scheme comes into force this April, which was our preferred date for implementation as stated previously. I accept that that will be a great disappointment for the hon. Lady and other hon. Members, but I remain committed to introducing the legislation at the earliest opportunity. I plan to lay the relevant affirmative regulations by April, to underline the Government’s commitment to addressing flood risk.

I share the hon. Lady’s frustration that the process has been so protracted, but we are working with developers and local government to develop the processes, standards and guidance that are an integral part of a new SUDS approvals and adoption regime, rather than just imposing them. That takes time, but it is time well spent if the end result is an approach that is fair to all parties and successful from the outset because local government and developers are fully prepared to take on their respective new responsibilities.

Amendments 1, 2 and 3 address flooding on highways or that caused by the run-off from highways. The causes of flooding can be complex and it is difficult to make a general statement about them. There are already legislative powers to ensure that highway surface water drainage does not pollute or flood, and section 100 of the Highways Act 1980 enables the local highway authority to take action related to the drainage of highways—for example, it can construct drains or erect barriers on the highway or adjoining land to divert surface water into an existing drain.

The majority of new road drainage systems are not connected to the public sewerage system. Typically, they discharge under designated conditions, either to a watercourse or a storage pond with controlled exits to a watercourse, or alternatively soak into the ground in a designed manner. A decision to connect new highway surface water to a combined or foul public sewer can be made only subject to an agreement with the receiving water authority. There is no automatic right to connect new highway drainage to the public sewerage system. We recognise, however, that in some cases local flooding may be exacerbated by drainage from existing highways, and as I have said, the 2010 Act places a duty on lead local flood authorities to develop a local flood risk management strategy for their area. I hope hon. Members will be reassured by that.

Let me seek to address the points raised by the Chair of the Environment, Food and Rural Affairs Committee about flood insurance, and amendments 5, 6 and 7, which relate to small businesses. Flood Re has been specifically designed to recreate the current cross-subsidy in the domestic home insurance market. There is little evidence that the same type of cross-subsidy applies in the commercial insurance market, and the majority of business insurance policies are already priced to risk. A recent English business survey of more than 9,000 businesses in England found that fewer than 1% of businesses had experienced difficulty getting property insurance in the last year due to the risk of flooding, and that no businesses had been refused insurance cover due to such a risk.

As outlined by the Association of British Insurers in its evidence session, businesses tend not to face the systematic issues that householders experience. We must also remember that Flood Re is funded through a levy on all household insurance policies. We have deliberately set that at £10.50, which the ABI estimates is the same as the current cross-subsidy. Widening Flood Re to include small businesses would significantly increase costs. We do not want someone living in a council tax band A property, for example, to subsidise the cost of insuring a private company that potentially earns up to £1 million a year. I am also mindful of the need to comply with state aid rules. Government intervention to support business would be carefully scrutinised and at greater risk of rejection—I know the hon. Lady is familiar with that issue.

On flood insurance and amendment 8, which was tabled by the same group of hon. Members, we are clear that we are talking about a one-in-200-year annual loss, not a one-in-200-year flood event. If Flood Re is legally responsible for claims above a one-in-200-year level, the cost of the liability could be prohibitive. Likewise, if the Government took on a liability beyond a one-in-200-year level, we could expose the taxpayer to extremely large and unpredictable costs. In such a catastrophic situation, many more homes than would be insured by Flood Re are likely to be affected. That is why the memorandum of understanding says that the Government of the day would work with Flood Re and representatives of the insurance industry to decide how any available resources should be distributed to Flood Re customers if flooding exceeds such a level.

Government amendment 58 is a technical one. On the issues raised by the hon. Member for Stoke-on-Trent North (Joan Walley), the Chair of the Environmental Audit Committee—we discussed them in Committee—the Government remain convinced that the existing provisions would be helpful enough in terms of the checks on companies’ financial probity and their technical ability. However, she rightly raised issues that could be addressed following Lord Krebs’s intervention in his letter. I am pleased to hear her calling for things such as betterment, meaning better quality reinstatement, and more information to customers, for which Lord Krebs has also called. Many hon. Members would like to include that in discussions with the ABI.

On misconnections, the hon. Member for Edmonton (Mr Love) is aware that local authorities currently have the power. We are not convinced that giving the power to companies would be helpful. His points are on the record and it is right that the Government take account of what he has said. I am happy to talk to him in future to see that we get the right response.

There is only a very little time for me to respond to all the points hon. Members have made on abstraction. My predecessor as Minister, my hon. Friend the Member for Newbury (Richard Benyon), has rightly said that there is agreement in the House that we want progress. Action is taking place under the existing regime—the Environment Agency has changed 77 licences since 2008, returning around 75 billion litres of water per year—but we need to go much further. That is why we are consulting. The process is under way and will lead to legislation, hopefully with the support of all parties, to reform that complicated system. However, we need to do that properly. I do not believe it is appropriate to do it in the way suggested in the new clause.

Finally, Government amendments 55 to 57, which I have tabled, seek to clarify the resilience duty. We want to make it absolutely clear to hon. Members that we are covering environmental sustainability. I hope the changes we are making to the resilience duty will reassure hon. Members who believe that we need to elevate the sustainable development duty that we are looking at environmental resilience as well as social and economic resilience.

[Miss McIntosh]

We have had a good debate on Flood Re. The Environment, Food and Rural Affairs Committee wanted to flag up the point that the proposals do not reflect the value for money of other aspects of Government policy.

We have also had a good debate on abstraction, but the jury is out. The Bill would be a retrograde step if there is a severe drought between now and whenever the Government introduce provisions.

Obviously, both personally and on behalf of the Committee, I am disappointed that the SUDS provisions will not be in place. The House would wish to record its disappointment and the fact that, if the regulations will be introduced only in April, there is time before those who must apply them are in a position to do so.

However, mindful of the opportunities that hon. Members have had to debate the matter, and that the Bill must continue its passage, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.



New Clause 7

National affordability scheme

‘(1) The Secretary of State must, by order, introduce a National Affordability Scheme for water.

(2) The National Affordability Scheme must include an eligibility criteria, determined by the Secretary of State, in consultation with—

(a) the Water Services Regulation Authority; and

(b) the Consumer Council for Water.

(3) An order under this section—

(a) shall be made by statutory instrument; and

(b) may not be made unless a draft of the order has been laid before and approved by resolution of each House of Parliament.’.—(Thomas Docherty.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

20:59

Division 166

Ayes: 216

---

Labour: 210
Plaid Cymru: 3
Green Party: 1
Democratic Unionist Party: 1

Noes: 291

---

Conservative: 244
Liberal Democrat: 45
Independent: 1

21:12

Proceedings interrupted (Programme Order, 25 November 2013).

The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

New Clause 11

Duties of undertakers to furnish the Secretary of State with information: annual review

‘(1) Section 202 of the Water Industry Act 1991 (duties to undertakers to furnish the Secretary of State with information) is amended as follows.

(2) After subsection (1A) there is inserted—

“(1B) Any company with a duty under subsections (1) and (1A) must furnish the Secretary of State and the Authority with an annual review which provides information about—

(a) their performance;

(b) the total amount of investment;

(c) their taxation structure;

(d) their corporate structure; and

(e) the total amount of dividends paid to shareholders.

(1C) Information under subsection (1B) must be provided prior to the publication of the annual statement of the Secretary of State under section 2A.”.’.—(Thomas Docherty.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

21:13

Division 167

Ayes: 218

---

Labour: 211
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Green Party: 1
Conservative: 1
Democratic Unionist Party: 1

Noes: 289

---

Conservative: 243
Liberal Democrat: 44
Independent: 1

Clause 12

Arrangements for water undertakers to take water from other persons

Amendment made: 13, page 48, line 8, after ‘213’, insert ‘(2) to (2B)’.—(Dan Rogerson.)

Clause 22

Amendments made: 55, page 63, line 25, leave out ‘against’ and insert ‘regards’.

Amendment 56, page 63, line 32, after ‘resources’ insert ‘in sustainable ways’.

Amendment 57, page 63, line 32, after ‘demand’ insert

‘for water so as to reduce pressure on water resources’.—(Dan Rogerson.)

Clause 29

Standards of performance: water supply

Amendments made: 14, page 69, line 42, after ‘retail authorisations’, insert ‘or restricted retail authorisations’.

Amendment 15, page 69, line 42, leave out ‘Secretary of State’ and insert ‘Minister’.

Amendment 16, page 70, line 3, leave out ‘Secretary of State’ and insert ‘Minister’.

Amendment 17, page 70, line 6, leave out ‘Secretary of State’ and insert ‘Minister’.

Amendment 18, page 70, line 8, leave out ‘Secretary of State’s’ and insert ‘Minister’s’.

Amendment 19, page 70, line 31, at end insert—

‘(6) In this section—

“the Minister” means——

(a) the Secretary of State, in relation to supplies of water made in accordance with a retail authorisation;

(b) the Welsh Ministers, in relation to supplies of water made in accordance with a restricted retail authorisation;

“prescribed” means prescribed by regulations made by the Minister.”.’.

Amendment 20, page 70, line 47, leave out ‘prescribed’ and insert ‘specified in the direction’.

Amendment 21, page 71, leave out lines 16 to 18 and insert—

‘(2) In the application of section 39 by virtue of subsection (1)—

(a) a reference to a water undertaker is to be treated as a reference to a water supply licensee, and

(b) a reference to the Secretary of State is to be treated as a reference to the Minister (as defined in section 38ZA(6)).

(3) Regulations under section 38ZA are to be made by statutory instrument.

(4) A statutory instrument containing regulations under section 38ZA is subject to annulment in pursuance of a resolution of—

(a) either House of Parliament, in the case of regulations made by the Secretary of State;

(b) the National Assembly for Wales, in the case of regulations made by the Welsh Ministers.

(5) Section 213(2) to (2B) applies to regulations made by the Welsh Ministers under section 38ZA as it applies to regulations made by the Secretary of State.”’.—(Dan Rogerson.)

Clause 30

Standards of performance: sewerage

Amendment made: 22, page 72, line 31, leave out ‘prescribed’ and insert ‘specified in the direction’.—(Dan Rogerson.)

Clause 64

Expenses of relevant bodies

Amendment made: 58, page 115, line 34, leave out ‘relevant insurers’ and insert

‘insurers of a description specified in the regulations’.—(Dan Rogerson.)

Clause 77

Transitional, transitory or saving provision

Amendment made: 59, page 123, line 20, at end insert—

‘( ) Schedule (Orders under section77: further provision) (further provision about orders under this section) has effect.’.—(Dan Rogerson.)

New Schedule 1

Orders under section 77: further provision

Introductory

1 (1) The provision that may be made by an order under section 77 (“a section 77 order”) includes such provision as is mentioned in this Schedule.

(2) Nothing in this Schedule affects the generality of section 77.

New retail authorisations and the threshold requirement

2 (1) A section 77 order may make provision for the threshold requirement (see section 17D of the Water Industry Act 1991) to have effect for a relevant period in relation to the supply of water to any premises, where the supply to those premises is made in connection with the introduction of water into the supply system of a water undertaker under a new wholesale authorisation.

(2) Provision under sub-paragraph (1) may in particular include such modifications of Schedule 2A to the Water Industry Act 1991 (forms of authorisations given by water supply licences) as appear to the Secretary of State to be appropriate.

Modifications relating to new wholesale authorisations

3 (1) Where a section 77 order makes provision as regards new wholesale authorisations, that provision may include provision for provisions of the Water Industry Act 1991 to have effect for a relevant period with such modifications as appear to the Secretary of State to be appropriate.

(2) Provision under sub-paragraph (1) may include provision for applying old provisions of the Water Industry Act 1991 with such modifications as appear to the Secretary of State to be appropriate.

(3) Provision under sub-paragraph (2) may in particular provide for the application of provision in old section 66D(2) to (8) for the purpose of determining—

(a) the period for which, and

(b) the terms and conditions on which,

a water undertaker’s duties under new section 66B or 66C are to be performed.

(4) Provision under sub-paragraph (2) may in particular provide for the application of provision in old section 66E for the purpose of determining charges payable in respect of the performance of a water undertaker’s duties under new section 66B or 66C.

(5) Provision under sub-paragraph (1) may in particular make provision about the interpretation of references to a water undertaker’s supply system, including in particular provision for such references to be treated as references to the supply system of a water undertaker as it is described in old section 17B.

(6) Provision under sub-paragraph (1) may provide for modifications to have effect for different relevant periods.

(7) Provision under sub-paragraph (1) may make provision—

(a) in relation to new wholesale authorisations that authorise the introduction of water into the supply system of a water undertaker whose area is wholly or mainly in England,

(b) in relation to new wholesale authorisations that authorise the introduction of water into the supply system of a water undertaker whose area is wholly or mainly in Wales, or

(c) in relation to new wholesale authorisations that authorise the introduction of water into the supply system of any water undertaker.

(8) Before making provision falling within sub-paragraph (7)(b) or (c), the Secretary of State must consult the Welsh Ministers.

Modifications relating to new supplementary authorisations

4 (1) Where a section 77 order makes provision as regards new supplementary authorisations, that provision may include provision for provisions of the Water Industry Act 1991 to have effect for a relevant period with such modifications as appear to the Secretary of State to be appropriate.

(2) Provision under sub-paragraph (1) may include provision for applying old provisions of the Water Industry Act 1991 with such modifications as appear to the Secretary of State to be appropriate.

(3) Provision under sub-paragraph (2) may in particular provide for the application of provision in old section 66D(2) to (8) for the purpose of determining—

(a) the period for which, and

(b) the terms and conditions on which,

a water undertaker’s duties under new section 66B or 66C are to be performed.

(4) Provision under sub-paragraph (2) may in particular provide for the application of provision in old section 66E for the purpose of determining charges payable in respect of the performance of a water undertaker’s duties under new section 66B or 66C.

(5) Provision under sub-paragraph (1) may provide for modifications to have effect for different relevant periods.

(6) Before making provision under this paragraph, the Secretary of State must consult the Welsh Ministers.

Old section 66D agreements and new water supply licences

5 (1) A section 77 order may include provision for securing that an old section 66D agreement continues to have effect in a case where the person who entered into the agreement as the holder of an old water supply licence is granted a new water supply licence.

(2) Provision under sub-paragraph (1) may provide for the modification of the agreement and may in particular include—

(a) provision for treating a reference in the agreement to the old water supply licence as reference to the new water supply licence;

(b) provision for treating a reference in the agreement to an authorisation given under the old licence as a reference to an authorisation or authorisations given under the new licence;

(c) provision for the Water Services Regulation Authority to vary the agreement by order, on application by a party to the agreement.

(3) Before making provision under this paragraph in relation to old section 66D agreements to which a water undertaker whose area is wholly or mainly in Wales is party, the Secretary of State must consult the Welsh Ministers.

New section 66E and old section 66D agreements

6 (1) A section 77 order may provide for new section 66E (rules about charges that may be imposed under a section 66D agreement) to have effect for a relevant period as regards—

(a) charges payable under old section 66D agreements, or

(b) specified descriptions of charges payable under old section 66D agreements.

(2) Provision under sub-paragraph (1) may include provision for making such modifications of—

(a) new sections 66E to 66ED, and

(b) old sections 66A to 66D and 66F,

as appear to the Secretary of State to be appropriate.

(3) Provision under sub-paragraph (1) may provide for the modification of old section 66D agreements and may in particular include provision for the Water Services Regulation Authority to vary the agreement by order, on application by a party to the agreement.

(4) Before making provision under this paragraph in relation to the supply of water using the supply system of a water undertaker whose area is wholly or mainly in Wales, the Secretary of State must consult the Welsh Ministers.

Interpretation

7 (1) In this Schedule—

“new restricted retail authorisation” means a restricted retail authorisation given by a new water supply licence;

“new retail authorisation” means a retail authorisation given by a new water supply licence;

“new supplementary authorisation” means a supplementary authorisation given by a new water supply licence;

“new water supply licence” means a water supply licence granted under new section 17A;

“new wholesale authorisation” means a wholesale authorisation given by a new water supply licence;

“old section 66D agreement” means such agreement or determination as is mentioned in old section 66D(3);

“old water supply licence” means a water supply licence granted under old section 17A.

(2) In this Schedule “relevant period” means—

(a) a period specified in or determined in accordance with a section 77 order, or

(b) a period that—

(i) begins at a time specified in or determined in accordance with a section77 order, and

(ii) ends at such time as the Secretary of State may specify by order.

(3) Before making provision under sub-paragraph (2)(a) or (b)(i) or making an order under sub-paragraph (2)(b)(ii) that affects provision to which paragraph 3(8), 4(6) or 6(4) applies, the Secretary of State must consult the Welsh Ministers.

(4) In this Schedule a reference to an old provision is a reference to a provision of the Water Industry Act 1991 as it has effect before the coming into force of an amendment or repeal of that provision made by this Act.

(5) In this Schedule a reference to a new provision is a reference to—

(a) a provision of the Water Industry Act 1991 after an amendment of that provision made by this Act has come into force, or

(b) a provision of the Water Industry Act 1991 inserted by this Act.’.—(Dan Rogerson.)

Brought up, and added to the Bill.

Schedule 4

Sewerage undertakers’ duties as regards sewerage licensees

Amendment made: 23, page 158, line 13, leave out

‘taking away matter discharged from the’

and insert ‘providing sewerage services to’.—(Dan Rogerson.)

Schedule 5

Extension of licensing provisions in relation to Wales

Amendments made: 24, page 164, line 44, at end insert—

24A (1) Section 38ZA (standards of performance in connection with the supply of water: water supply licensees) (inserted by section 29) is amended as follows.

(2) In subsection (1), the words “or restricted retail authorisations” are repealed.

(3) In subsection (6), for the definition of “the Minister” there is substituted—

“the Minister” means—

(a) the Secretary of State, in respect of the supply of water by a water supply licensee in accordance with the licensee’s retail authorisation using the supply system of a water undertaker whose area is wholly or mainly in England;

(b) the Welsh Ministers, in respect of the supply of water by a water supply licensee in accordance with the licensee’s retail authorisation using the supply system of a water undertaker whose area is wholly or mainly in Wales;”.’.

Amendment 25, page 165, line 4, at end insert—

26A In section 63AC(4) (as substituted by section31), the words “or a restricted retail authorisation” are repealed.’.

Amendment 26, page 166, line 27, at end insert—

35A (1) Section 95ZA (standards of performance in connection with provision of sewerage services: sewerage licensees) (inserted by section 30) is amended as follows.

(2) In the following places—

(a) the opening words of subsection (1),

(b) subsection (1)(b)(i), and

(c) subsection (2),

for “the Secretary of State” there is substituted “the Minister”.

(3) In subsection (2), for “Secretary of State’s” there is substituted “Minister’s”.

(4) After subsection (5) there is inserted—

(6) In this section—

“the Minister” means—

(a) the Secretary of State, in respect of the provision of services by a sewerage licensee in accordance with the licensee’s retail authorisation using the sewerage system of a sewerage undertaker whose area is wholly or mainly in England;

(b) the Welsh Ministers, in respect of the provision of services by a sewerage licensee in accordance with the licensee’s retail authorisation using the sewerage system of a sewerage undertaker whose area is wholly or mainly in Wales;

“prescribed” means prescribed by regulations made by the Minister.”’.

Amendment 27, page 166, line 27, at end insert—

35B In section 96ZA (procedure for regulations under section 95ZA) (inserted by section30), for subsection (2) there is substituted—

(2) In the application of section 96 by virtue of subsection (1)—

(a) a reference to a sewerage undertaker is to be treated as a reference to a sewerage licensee, and

(b) a reference to the Secretary of State is to be treated as a reference to the Minister (as defined in section 95ZA(6)).

(3) Regulations under section 95ZA are to be made by statutory instrument.

(4) A statutory instrument containing regulations under section 95ZA is subject to annulment in pursuance of a resolution of—

(a) either House of Parliament, in the case of regulations made by the Secretary of State;

(b) the National Assembly for Wales, in the case of regulations made by the Welsh Ministers.

(5) Section 213(2) to (2B) applies to regulations made by the Welsh Ministers under section 95ZA as it applies to regulations made by the Secretary of State.”’.

Amendment 28, page 169, line 13, at end insert—

44A In section 195(3AA), after “water supply licensee” there is inserted “or a sewerage licensee”.’.—(Dan Rogerson.)

Schedule 7

Further amendments

Amendments made: 60, page 172, line 14, at end insert—

‘Water Act 1989 (c. 15)

(1) Section 174 of the Water Act 1989 (general restrictions on disclosure of information) is amended as follows.

(2) In subsection (2)(b)—

(a) for “company” there is substituted “person”;

(b) for “on it” there is substituted “on the undertaker or, as the case may be, the person”.

(3) In subsection (6)(a)—

(a) for “company” there is substituted “person”;

(b) for “its licence” there is substituted “the person’s licence”.’.

Amendment 29, page 173, line 14, after ‘40F,’, insert ‘63AC to 63AF,’.

Amendment 30, page 173, line 16, after ‘110G,’, insert ‘110L to 110O,’.

Amendment 31, page 189, line 16, after ‘manner’, insert ‘and with such frequency’.

Amendment 32, page 189, line 22, at end insert—

‘(1B) The Authority may direct that the requirement in subsection (1A) is not to apply to such water supply licensees as may be specified in the direction.”’.

Amendment 33, page 189, line 23, leave out from ‘subsection (2),’ to end of line 24 and insert

‘for “any such direction” there is substituted “a direction under subsection (1) or (1A)”.’.

Amendment 34, page 189, line 24, at end insert—

‘(4A) In subsection (2B), for “section 17B(5)” there is substituted “section 17B”.’.

Amendment 35, page 192, line 12, at end insert—

‘(2A) In subsection (1), in the opening words, after “above” there is inserted “or section 63AC(2)”.’.

Amendment 36, page 195, line 18, at end insert—

‘80A In section 95B (publication of statistical information about complaints)—

(a) in subsection (1), after “undertakers” there is inserted “or sewerage licensees”;

(b) in subsection (2), after “undertakers” there is inserted “or sewerage licensees”.’.

Amendment 37, page 195, line 18, at end insert—

80B (1) Section 96A (information to be given to customers about overall performance) is amended as follows.

(2) In subsection (1), after “customers” there is inserted “, and, if the direction so specifies, sewerage licensees using the undertaker’s sewerage system for the purpose of providing sewerage services to the premises of customers,”.

(3) After subsection (1) there is inserted—

(1A) Each sewerage licensee must, in such form and manner and with such frequency as the Authority may direct, take steps to inform the licensee’s customers of—

(a) the standards of overall performance established under section 95ZA(1) which are applicable to that licensee;

(b) that licensee’s level of performance as regards those standards.

(1B) The Authority may direct that the requirement in subsection (1A) is not to apply to such sewerage licensees as may be specified in the direction.”

(4) In subsection (2), for “any such direction” there is substituted “a direction under subsection (1) or (1A)”.

(5) After subsection (2) there is inserted—

(2A) The sewerage licensees referred to in subsection (1) shall, if the Authority so directs, pass on the information about the matters mentioned in that subsection to their customers.

(2B) In subsection (1), the reference to the sewerage undertaker’s sewerage system is to be construed in accordance with section 17BA(7).”

(6) In subsection (3), after “undertaker” there is inserted “or sewerage licensee”.’.

Amendment 38, page 195, line 26, at end insert—

‘83A In section 102 (adoption of sewers and disposal works), in subsection (4) (sewerage undertaker to give notice of proposal), after “under this section” there is inserted—

“(za) shall give notice of its proposal to any sewerage licensee which uses, or removes matter from, the undertaker’s sewerage system in accordance with a retail, wholesale or disposal authorisation;”.’.

Amendment 39, page 195, line 34, at end insert—

‘85A In section 105C (adoption schemes: supplementary), in subsection (2), after paragraph (a) insert—

“(aa) any sewerage licensee which uses, or removes matter from, the sewerage system of any such sewerage undertaker in accordance with a retail, wholesale or disposal authorisation;”.’.

Amendment 40, page 196, line 8, at end insert—

‘87A In section 113 (power to alter drainage system of premises in an area), in subsection (3), for the words from “notice of its proposals to” to the end of the subsection substitute “—

(a) the owner of the premises in question, and

(b) any sewerage licensee providing sewerage services to those premises.”’.

Amendment 41, page 196, line 8, at end insert—

‘87B In section 117 (interpretation of Chapter 2), in subsection (5)(a), after “the Water Resources Act 1991” there is inserted “or the Environmental Permitting (England and Wales) Regulations 2010 (S.I. 2010/675)”.’.

Amendment 42, page 196, leave out lines 9 and 10 and insert—

88 (1) Section 146 (connection charges etc) is amended as follows.

(2) After subsection (3) there is inserted—’.

Amendment 43, page 196, line 16, at end insert—

‘(3) In subsection (4)—

(a) after “sewerage undertaker” there is inserted “or a sewerage licensee”;

(b) after “to the undertaker” there is inserted “or the licensee (as the case may be)”.

(4) In subsection (5), after “certain charges” there is inserted “by relevant undertakers”.’.

Amendment 44, page 196, line 16, at end insert—

‘88A In section 147 (charging for use of emergency water), in subsection (1), after “undertaker” there is inserted “or water supply licensee”.’.

Amendment 45, page 196, line 16, at end insert—

‘88B In section 150 (fixing maximum charges for services provided with the help of undertakers’ services), for subsection (1A) there is substituted—

(1A) This section does not apply to—

(a) water supplies provided by a water supply licensee, or

(b) sewerage services provided by a sewerage licensee,

to premises of customers in accordance with Chapter 1A of Part 2.”’.

Amendment 46, page 196, line 16, at end insert—

‘88C In section 152 (grants for national security purposes), in subsection (1), for “and licensed water suppliers” there is substituted “, water supply licensees and sewerage licensees”.’.

Amendment 61, page 196, line 16, at end insert—

‘In section 148 (restriction on charging for metering works), in subsection (2)(cc), after “section 66D” there is inserted “or 117E”.’.

Amendment 62, page 197, line 7, at end insert—

1 (1) Section 16 2 (works in connection with metering) is amended as follows.

(2) In subsection (1A)—

(a) in paragraph (d), for “licensed water supplier” there is substituted “water supply licensee”;

(b) after paragraph (d) there is inserted “, or

(e) a sewerage licensee provides sewerage services in respect of those premises using the undertaker’s sewerage system.”

(3) In subsection (1B), for “section 17B(5)” there is substituted “section 17B”.

(4) After subsection (1B) there is inserted—

(1C) In subsection (1A)(e) above, the reference to the sewerage system of a sewerage undertaker shall be construed in accordance with section 17BA.”’.

Amendment 63, page 197, line 7, at end insert—

‘In section 163 (power to fit stopcocks), in subsection (1), for “a licensed water supplier” there is substituted “a water supply licensee”.’.

Amendment 64, page 197, line 16, at end insert—

1 (1) Section 174 (offences of interferences with works etc) is amended as follows.

(2) In subsection (1A)(a)—

(a) in sub-paragraph (i)—

(i) for “any licensed water supplier” there is substituted “any water supply licensee”;

(ii) for “any such supplier” there is substituted “any such licensee”;

(b) in sub-paragraph (ii)—

(i) for “the supplier” there is substituted “the licensee”;

(ii) for “its licence” there is substituted “the licensee’s licence”.

(3) In subsection (2)(b), for “licensed water supplier” there is substituted “water supply licensee”.

(4) In subsection (2A)—

(a) in paragraph (b), in the opening words, for “a licensed water supplier” there is substituted “a water supply licensee”;

(b) in paragraph (b)(i), for “the supplier” there is substituted “the licensee”;

(c) in paragraph (b)(ii), for “the supplier”, in both places, there is substituted “the licensee”;

(d) in the words following paragraph (b), for “section 17B(5)” there is substituted “section 17B”.

(5) In subsection (3A)—

(a) in the opening words, for “the licensed water supplier” there is substituted “the water supply licensee”;

(b) in paragraph (a)(i), for “a licensed water supplier” there is substituted “a water supply licensee”;

(c) in paragraph (a)(ii)—

(i) for “the supplier” there is substituted “the licensee”;

(ii) for “its licence” there is substituted “the licensee’s licence”;

(d) in paragraph (b), for “a supplier”, in both places, there is substituted “licensee”.

(6) In subsection (5A)—

(a) in paragraph (a), for “a licensed water supplier” there is substituted “a water supply licensee”;

(b) in paragraph (b)—

(i) for “the supplier” there is substituted “the licensee”;

(ii) for “its licence” there is substituted “the licensee’s licence”;

(7) In subsection (8A)(b)—

(a) for “a licensed water supplier” there is substituted “a water supply licensee”;

(b) for “the supplier” there is substituted “the licensee”.’.

Amendment 47, page 197, line 31, at end insert—

92A (1) Section 195 (the Authority’s register) is amended as follows.

(2) In subsection (2)—

(a) in paragraph (bc), for “66D(1)” there is substituted “66CA(1)”;

(b) in paragraph (g), for “or 66H above” there is substituted “, 66H, 117N or 117O”.

(3) In subsection (3AA), for “licensed water supplier” there is substituted “water supply licensee”.

(4) Subsection (3A) is repealed.’.

Amendment 48, page 197, line 31, at end insert—

92B (1) Section 195A (reasons for decisions) is amended as follows.

(2) In subsection (1)(f), for “66D(1)” there is substituted “66CA(1)”.

(3) In subsection (3), after “appointment or” there is inserted “the person holding the”.’.

Amendment 49, page 197, line 31, at end insert—

92C (1) Section 201 (publication of certain information and advice) is amended as follows.

(2) In subsection (1)(b), for “company” there is substituted “person”.

(3) In subsection (2), after “Part II of this Act or” there is inserted “a person holding”.’.

Amendment 50, page 197, line 31, at end insert—

92D (1) Section 202 (duties of undertakers to furnish the Secretary of State with information) is amended as follows.

(2) In subsection (1A), for “company”, in both places, there is substituted “person”.

(3) In subsection (3), for “company”, in each place, there is substituted “person”.

(4) In subsection (4)(c)—

(a) after “particular company” there is inserted “or person”;

(b) after “to companies” there is inserted “or persons”;

(c) for “description or” there is substituted “description,”;

(d) after “Part II of this Act or” there is inserted “to all the persons holding”.

(5) In subsection (5), for “or licensed water supplier” there is substituted “, water supply licensee or sewerage licensee”.’.

Amendment 52, page 197, line 31, at end insert—

92F (1) In section 205 (exchange of metering information between undertakers), in subsection (4)—

(a) the “and” at the end of paragraph (a) is repealed;

(b) in paragraph (b), for “licensed water supplier” there is substituted “water supply licensee”;

(c) after paragraph (b), there is inserted—

“(c) any sewerage licensee.”’.

Amendment 53, page 197, line 31, at end insert—

92G (1) Section 206 (restriction on disclosure of information) is amended as follows.

(1) In subsection (3)(b), for “a licensed water supplier of any of the duties imposed on it” there is substituted “a water supply licensee or sewerage licensee of any of the duties imposed on the licensee”.

(2) In subsection (5)(a), for “a licensed water supplier of activities under its licence” there is substituted “a water supply licensee or sewerage licensee of activities under the licence held by the licensee”.’.

Amendment 65, page 197, line 31, at end insert—

1 (1) Section 203 (power to acquire information for enforcement purposes) is amended as follows.

(2) In subsection (1)—

(a) in paragraph (a)(ii), for “company” there is substituted “person”;

(b) in paragraph (b), in the opening words—

(i) for “company which” there is substituted “person who”;

(ii) for “the company” there is substituted “the person”.

(3) In subsection (7), after “such an appointment or” there is inserted “a person holding such a”.’.

Amendment 66, page 197, line 31, at end insert—

1 (1) Section 208 (directions in the interests of national security) is amended as follows.

(2) In subsection (1)—

(a) for “or licensed water supplier” there is substituted “, water supply licensee or sewerage licensee”;

(b) for “or supplier” there is substituted “or licensee”.

(3) In subsection (2)—

(a) for “or licensed water supplier” there is substituted “, water supply licensee or sewerage licensee”;

(b) for “or supplier” there is substituted “or licensee”;

(c) for “requiring it” there is substituted “requiring that undertaker or licensee”.

(4) In subsection (3)—

(a) for “or licensed water supplier”, in both places, there is substituted “, water supply licensee or sewerage licensee”;

(b) for “on it” there is substituted “on that undertaker or licensee”;

(c) for “to it” there is substituted “to that undertaker or licensee”.’.

Amendment 67, page 197, line 31, at end insert—

‘In section 211 (limitation on right to prosecute in respect of sewerage offences), in paragraph (b), after “undertaker;” there is inserted—

“(ba) a sewerage licensee;”.’.

Amendment 68, page 197, leave out lines 32 and 33 and insert—

1 (1) Section 213 (powers to make regulations) is amended as follows.

(2) In subsection (1)—

(a) the words “17D(8),” are repealed;

(b) after “36A” there is inserted “, 66M”.

(3) In subsection (2)(a), for “or sewerage undertaker or licensed water supplier” there is substituted “, sewerage undertaker, water supply licensee or sewerage licensee”.’.

Amendment 69, page 197, line 35, at end insert—

( ) in the definition of “customer or potential customer”, in paragraph (a), for “licensed water supplier” there is substituted “water supply licensee or sewerage licensee”;’.

Amendment 70, page 197, line 37, at end insert—

( ) in the definition of “sewerage services”, for “includes” there is substituted “—

(a) in the case of a sewerage undertaker, includes”;

( ) in that definition, after the paragraph (a) so formed there is inserted “or

(b) in the case of a sewerage licensee, means the services provided by that person in that person’s capacity as a sewerage licensee;”;’.

Amendment 71, page 198, line 3, at end insert—

‘( ) After subsection (10) there is inserted—

(11) Subsection (10) does not apply to references to the Chief Inspector of Drinking Water in sections 8, 17AA, 51CA, 51CB, 66DB, 66P and 86ZA.”’.

Amendment 72, page 198, line 3, at end insert—

‘In Schedule 1A (the Water Services Regulation Authority), in paragraph 9(3), for paragraph (f) (and the “and” following it) there is substituted—

(f) water supply licensees;

(fa) sewerage licensees; and”.’.

Amendment 73, page 198, line 3, at end insert—

‘1 (1) Schedule 2 (transitional provision on termination of appointments) is amended as follows.

(2) In paragraph 1—

(a) in sub-paragraph (3A)(a), for “a qualifying licensed water supplier” there is substituted “a qualifying water supply licensee or a qualifying sewerage licensee”;

(b) in sub-paragraph (3A)(b), for “carry on activities” there is substituted “carry on—

(i) activities”;

(c) in sub-paragraph (3A)(b), after the sub-paragraph (i) so formed there is inserted “; or

(i) activities relating to the removal or removals of matter mentioned in section 23(9) of this Act which were carried on by the transferor until that date (as the case may be).”;

(d) in sub-paragraph (4), in the definition of “other relevant companies”, for “to be holding” there is substituted “to be—

(a) holding”;

(e) in sub-paragraph (4), in that definition, after the paragraph (a) so formed there is inserted “or

(b) holding appointments as sewerage undertakers for any area in which, or in part of which, the activities relating to the removal or removals of matter mentioned in section 23(9) of this Act will be carried on by the transferee (as the case may be);”.

(3) In paragraph 2(7A)(b), for “licensed water supplier” there is substituted “water supply licensee or sewerage licensee”.’.

Amendment 74, page 198, line 3, at end insert—

‘In Schedule 8 (pre-1989 Act transitional authority for trade effluent discharges etc), after paragraph 2(3) there is inserted—

(3A) If a sewerage undertaker serves a notice under sub-paragraph (2) in relation to premises in respect of which a sewerage licensee provides sewerage services, the sewerage undertaker must send a copy of the notice to the sewerage licensee.”’.

Amendment 75, page 198, line 3, at end insert—

‘Water Resources Act 1991 (c. 57)

The Water Resources Act 1991 is amended as follows.

(1) Section 203 (exchange of information with respect to pollution incidents etc) is amended as follows.

(2) In subsection (1A)—

(a) for “licensed water supplier” there is substituted “water supply licensee”;

(b) for “supplier” there is substituted “licensee”;

(c) for “its licence” there is substituted “the licensee’s licence”.

(3) In subsection (2A)—

(a) for “licensed water supplier” there is substituted “water supply licensee”;

(b) for “supplier” there is substituted “licensee”.

(4) In subsection (3)—

(a) for “licensed water supplier” there is substituted “water supply licensee”;

(b) for “supplier” there is substituted “licensee”.

(5) In subsection (4), for “licensed water supplier” there is substituted “water supply licensee”.

(6) In subsection (5)(b), for “licensed water supplier” there is substituted “water supply licensee”.

(7) In subsection (8)—

(a) for “licensed water supplier” there is substituted “water supply licensee”;

(b) for “a company” there is substituted “a person”.’.

Amendment 76, page 198, line 3, at end insert—

1 (1) Section 204 (restriction on disclosure of information) is amended as follows.

(2) In subsection (2)(b)—

(a) for “company” there is substituted “person”;

(b) for “on it” there is substituted “on the undertaker or, as the case may be, the person”.

(3) In subsection (4)(a)—

(a) for “a company” there is substituted “a person”;

(b) for “its licence” there is substituted “the person’s licence”.’.

Amendment 77, page 198, line 10, at end insert—

‘Enterprise Act 2002 (c. 40)

The Enterprise Act 2002 is amended as follows.

(1) Section 168 (regulated markets) is amended as follows.

(2) In subsection (3)(ff), after “section 66D” there is inserted “or 117E”.

(3) In subsection (4)(ff), after “section 66D”, in both places, there is inserted “or 117E”.’.

Amendment 78, page 198, line 10, at end insert—

‘In section 249 (special administration regime), in subsection (1)(aa)—

(a) for “licensed water supplier” there is substituted “water supply licensee”;

(b) after “administration order)” there is inserted “or a qualifying sewerage licensee within the meaning of subsection (8) of that section”.’.

Amendment 79, page 198, line 14, at end insert—

1 (1) Section 52 (co-operation between water regulators) is amended as follows.

(2) In subsection (3)—

(a) in paragraph (a), for “and licensed water suppliers” there is substituted “, water supply licensees and sewerage licensees”;

(b) in paragraph (b), for “licensed water suppliers” there is substituted “water supply licensees”;

(c) in paragraph (c), for “and licensed water suppliers” there is substituted “, water supply licensees and sewerage licensees”.

(3) After subsection (8) there is inserted—

“(9) In this section—

“sewerage licensee” means a person holding a sewerage licence under Chapter 1A of Part 2 of the Water Industry Act 1991;

“water supply licensee” means a person holding a water supply licence under Chapter 1A of Part 2 of the Water Industry Act 1991.”’.

Amendment 80, page 198, line 31, at end insert—

‘Government of Wales Act 2006 (c. 32)

In Schedule 7 to the Government of Wales Act 2006 (Acts of the Assembly), in paragraph 19 (water and flood defence), in the second exception, for “licensed water supplier” there is substituted “water supply licensee”.’.

Amendment 81, page 198, line 31, at end insert—

‘Consumers, Estate Agents and Redress Act 2007 (c. 17)

The Consumers, Estate Agents and Redress Act 2007 is amended as follows.

In section 4 (meaning of “designated consumers”), in subsection (3)—

(a) for “or a licensed water supplier” there is substituted “, a water supply licensee or a sewerage licensee”;

(b) for “its capacity” there is substituted “the undertaker’s or licensee’s capacity”.’.

Amendment 82, page 198, line 31, at end insert—

‘(1) Section 25 (enforcement by regulator of section 24 notice) is amended as follows.

(2) In subsection (2), for “its capacity” there is substituted “the person’s capacity”.

(3) In subsection (3), in the table, for “or licensed water supplier” there is substituted “, water supply licensee or sewerage licensee”.

(4) In subsection (7), for “or licensed water supplier” there is substituted “, water supply licensee or sewerage licensee”.’.

Amendment 83, page 198, line 31, at end insert—

In section 33 (supplementary provision about transfer and abolition orders), in subsection (10)—

(a) for “or a licensed water supplier” there is substituted “, a water supply licensee or a sewerage licensee”;

(b) for “its capacity” there is substituted “the undertaker’s or licensee’s capacity”.’.

Amendment 84, page 198, line 31, at end insert—

‘In section 41 (interpretation of Part 1), in subsection (1)—

(a) the definition of “licensed water supplier” is repealed;

(b) at the appropriate place there is inserted—

““sewerage licensee” means a person holding a sewerage licence under Chapter 1A of Part 2 of the Water Industry Act 1991;”;

““water supply licensee” means a person holding a water supply licence under Chapter 1A of Part 2 of the Water Industry Act 1991.”’.

Amendment 85, page 198, line 31, at end insert—

‘(1) Section 42 (interpretation of Part 2) is amended as follows.

(2) In subsection (1), in the table—

(a) in the first column, for “or licensed water supplier” there is substituted “, water supply licensee or sewerage licensee”;

(b) in the second column, for “or licensed water supplier in its capacity” there is substituted “, water supply licensee or sewerage licensee in the undertaker’s or licensee’s capacity”.

(3) In subsection (2)—

(a) the definition of “licensed water supplier” is repealed;

(b) at the appropriate place there is inserted—

““sewerage licensee” has the same meaning as in Part 1;”;

““water supply licensee” has the same meaning as in Part 1.”’.

Amendment 86, page 198, line 31, at end insert—

‘In section 52 (enforcement of requirements imposed under Part 2), in subsection (3), for “or licensed water supplier” there is substituted “, water supply licensee or sewerage licensee”.’.

Amendment 87, page 198, line 33, at end insert—

In section 6 (other Part 1 definitions), in subsection (11) (“water company”)—

(a) in the opening words, the words “a company which holds” are repealed;

(b) in paragraph (a), at the beginning insert “a company which holds”;

(c) in paragraph (b), at the beginning insert “a person who holds”.’.—(Dan Rogerson.)

Schedule 11

Commencement orders: appropriate authority

Amendment made: 54, page 214, line 21, at end insert—

‘Section29	The Secretary of State, in relation to supplies of water made in accordance with a retail authorisation.
	The Welsh Ministers, in relation to supplies of water made in accordance with a restricted retail authorisation.’. —(Dan Rogerson.)

Third Reading

Queen’s consent signified.

21:26

[Dan Rogerson]

I beg to move, That the Bill be now read the Third time.

I begin by thanking those who have been involved in the Bill. Members of the Public Bill Committee, under the excellent co-chairmanship of the hon. Members for Halifax (Mrs Riordan) and for North Wiltshire (Mr Gray), did an outstanding job of ensuring that critical issues were debated in depth, and the considered amendments that were tabled allowed us to explore several issues in detail. I thank hon. Members on both sides of the House for their contributions over the past weeks and months—and, indeed, today. Members of the EFRA Committee scrutinised the draft Bill, and I was grateful for the continued engagement of current and former members of that Committee during our debates on the Bill, including on Report. The Bill leaves the House stronger as a result of the changes made to the draft Bill before the introduction of this legislation, and the amendments made in Committee and on Report.

The Bill addresses difficult challenges that we all accept that we are facing. Climate change and population growth will place our water resources under more pressure than ever before. At the same time, unfortunately, it is widely recognised that the future holds more frequent and severe weather events. We need to keep bills affordable while addressing those challenges, which means finding new approaches to encourage innovation and greater efficiency in the water industry. We also need an affordable solution to the problem of flood insurance for those at high risk of flooding.

The Bill is just one part of the action that the Government are taking to secure our vision of a sustainable and resilient water sector. It provides a framework for greater competition with the aim of driving more efficiency and innovation. Its measures will ensure a resilient future in which water is available to all at an affordable price, but not at the expense of the environment. It will ensure that there is choice and flexibility for customers and that bills are kept affordable, that there is more innovation in the water industry, and that there are opportunities for new businesses so that the industry continues to attract crucial investment. The Bill will not only protect and improve the environment, but contribute to the growth of our economy.

The Bill will deal with the availability and affordability of flood insurance for households at high risk of flooding, and in the longer term it will ensure a smooth transition to a free market. The most significant change made to the Bill during its passage through the House was the addition of its flood insurance clauses in Committee. I am greatly encouraged by the support for our proposed approach of ensuring that households at high risk of flooding may access affordable flood insurance.

I visited the south-west flooding incident room last week, and I would like to thank all those who are still working hard on the ground to support people following such distressing events. Hon. Members know that our preferred approach on flood insurance is to create an industry-led flood reinsurance scheme. Flood Re will carefully target benefits towards low-income households, who are the people most in need of support during the managed transition to risk-reflective prices. In developing the scheme, we have been mindful of the costs of the levy, which will be spread across all those holding household policies. We believe that our proposals get the balance right, and it also right that we should take powers on a fall-back obligation to ensure that there is certainty for householders.

Just as we want to ensure affordable flood insurance, we also want to make sure that water bills continue to be affordable for everyone, and that has been a recurring theme of the debate on this Bill. We want those who are struggling to pay to get help. All water and sewerage companies have developed packages to help customers with affordability problems, and they include customer assistance funds, support tariffs, debt advice and water efficiency measures. Most water companies are taking action to put social tariffs in place in 2015. The most important thing we can do is make sure that everyone’s bills are kept affordable. Let us not forget that this is a sector subject to price-cap regulation, which means that Ofwat scrutinises and challenges the business plan of all water companies to secure a fair deal for customers. By taking account of lower financing costs, Ofwat estimates that the next price review could significantly reduce pressure on bills from 2015 by between £120 million to £750 million a year. This Bill will contribute to the affordability of bills for all. Measures will exert a downward pressure on bills by encouraging greater competition to keep bills as low as possible.

Greater competition will drive more efficiency and innovation in the water sector. All customers and the environment will benefit from an industry that is incentivised to find the most efficient ways to meet future demand. We are preparing to open the expanded retail market in 2017. Upstream reform will take place at a slower pace because of its increased complexity, which also means that we expect it to be introduced in parallel with longer-term abstraction reform.

In Committee and today, Members raised concerns about making legislation on upstream reform before the abstraction regime has been reformed. Let me assure Members again that we are confident that there are sufficient existing safeguards to prevent an unsustainable increase in abstraction in response to the implementation of upstream reform. We are tackling unsustainable abstraction now by varying and removing abstraction licences, but over the longer term we are committed to making the abstraction regime more flexible and resilient. A consultation on abstraction reform was launched on 17 December and we expect to legislate in the next Parliament.

Improving our approach to abstraction is critical, but it is only one part of our approach to ensuring the long-term resilience of our water resources. Today we amended the Bill to make it absolutely explicit that the new resilience duty is about ensuring the long-term resilience of both our water supply and sewerage services and the environment on which those services depend. I want to make it very clear that this is not about resilience of supply at the expense of our precious water resources. It is about ensuring that we all have enough water for the long term and that our environment does not suffer as a result.

I have no doubt that this Bill will continue to receive thorough scrutiny in another place. I look forward to following those discussions with interest. After that, I am looking forward to the implementation of the Bill. Experts are already working hard on the detailed work to develop new markets in water. The open water programme, which includes Government, regulators north and south of the border, water companies and customers, is developing the practical details of market implementation. It launched its market blueprint consultation last week.

We are also continuing to work with the Association of British Insurers, and I am grateful to it and the rest of the industry for their co-operation and hard work. I reiterate my thanks to all Members and all officials and staff who have aided in the preparation and passage of the Bill, and I commend it to the House.

21:32

[Maria Eagle (Garston and Halewood) (Lab)]

This Bill includes important reforms that build on three important reviews taken forward by the previous Government: the Pitt review on flooding, the Walker review on affordability and the Cave review on competition. It also follows on from the Flood and Water Management Act 2010 that we took through Parliament before the last election. That is why the Opposition supported the Bill on Second Reading and will do so again on Third Reading this evening.

We have backed measures to increase competition, extending to non-domestic customers the opportunity to switch supplier. Such an opportunity is already enjoyed in Scotland where it has been shown to be successful in reducing costs to business. We support the reforms intended to encourage new entrants into the market, and we back regulatory reforms aimed at ensuring long-term resilience of our water supplies. We also support the measures, at long last, to provide a statutory basis for agreement on flood reinsurance, providing relief to those who live in hard-to-insure households.

However, there remains a major hole at the heart of the Bill, and at the heart of the Government’s water policy. That is the absence of any serious attempt to tackle the impact that rising water bills are having on household budgets, which is adding to the cost of living crisis. There is a real gulf between the rhetoric of the Government and the reality on this. Again, this evening, we have seen Government Members troop through the Lobby to stand up for the monopoly water companies, and against the interests of households. In his Second Reading speech, the Secretary of State assured the House:

“The package of reforms is designed to exert a sustained downward pressure on water bills”.—[Official Report, 25 November 2013; Vol. 571, c. 49-50.]

Yet, time after time the Government have opposed sensible amendments that would have ensured that that was a reality in this Bill. For all the briefing to newspapers back in October, the Prime Minister and the Secretary of State are simply unwilling to do anything that might be perceived as interfering in a market that they believe is working well. I do not believe that consumers agree that a monopoly industry that enabled companies last year to make pre-tax profits of £1.9 billion and pay out dividends totalling £1.8 billion to shareholders is a market that is working and adequately regulated.

Our reforms would have introduced a new national affordability scheme, requiring all water companies to help those struggling with their bills. That would have ended the current postcode lottery whereby companies choose whether to offer a social tariff and set the criteria for eligibility. Just three companies have introduced such a scheme, helping just 25,000 households. In their submissions to Ofwat for the next price review period from 2015, we see that there are still companies that do not intend to set a social tariff and that those that do are proposing to assist a relatively small number of customers.

Given that Ofwat estimates that 2.6 million households—11%—currently spend more than 5% of their income on water, it is clear that only a tiny fraction of those struggling are being helped. It is also clear that many customers do not know about even the help that is available. Only a third of eligible households access WaterSure, which was introduced by Labour to help households that have a high level of water use due to a medical condition or because they have three or more children. Yet the Government have opposed our proposal to require water companies to include information with bills about the help available to customers, just as they have consistently opposed forcing water companies to publish annual information, including on their corporate structure, and on their levels of investment, taxation and dividends paid to shareholders, and then enabling Ofwat to take full account of that information when determining whether to re-open price settlements and cut bills.

Finally, our proposed reforms would have tackled bad debt, which adds £15 to the average bill, by requiring landlords to provide water companies with details of their tenants on request. We sought to give Ofwat powers to ban water companies that fail to act on bad debt from transferring the cost of lost revenue from non-paying customers to other bill payers. By rejecting all of these sensible measures, Ministers have wasted the perfect opportunity that this Bill offered to tackle the impact that rising water bills are having on stretched household budgets. Instead, the Government’s preferred approach has been to send just one weakly worded letter to water bosses, begging them not to hike bills next year, without even a threat of action if they do not comply. So while the water companies are doing very well from their monopoly position, customers in this country will continue to pay among the highest bills in Europe.

Disappointingly, Ministers have also not been more willing to listen to concerns raised on other aspects of the Bill during its passage through this House. The Government’s only concession has been a grudging acceptance that it is right to make it clearer to Ofwat that it must have a higher regard to the environment in the way that it regulates the industry. The Government’s compromise is to stick to their decision to elevate “resilience” rather than “sustainability” but to require Ofwat to

“secure resilience in sustainable ways”.

We will have to consider carefully whether that sends a clear enough signal or not.

Disappointingly, Ministers have not heeded the concerns about the total amount of water taken from the environment if upstream competition happens ahead of abstraction reform. I welcome the fact that the consultation on abstraction licence system reform was finally launched just before recess, but, on the Government’s own timetable, reforms will not be implemented until the early 2020s, and upstream competition is due to begin in 2019.

Finally, it is disappointing that Ministers have rejected each of the sensible and modest proposals to improve the Flood Re scheme. The Secretary of State will have today heard the clear warnings from Sir David King, the Government’s special envoy on climate change, that changes to the climate will lead to

“quite a radical change in weather conditions”

and more frequent severe flooding. Requiring the Committee on Climate Change regularly to advise on the increase in the number of properties likely to be at risk of flooding as a result and the consequence for the Flood Re scheme was surely a sensible move, yet it has been rejected by the Government.

Similarly, it is difficult to see how the Government could have had any serious objections to strengthening incentives for the uptake of household flood protection measures—providing a right of appeal for those who find that their property has been removed from the scheme, allowing a right of public access to any Flood Re insurance database and publishing figures for the number of properties in the categories to be excluded from the scheme.

This Bill contains important reforms, but it remains seriously flawed as it leaves this House; flawed because it does not sufficiently protect the environment; flawed because the Flood Re insurance scheme will not be in place until 2015 but also remains disconnected from future increases in at-risk properties as a result of our changing climate; flawed because it has failed to toughen the powers of the regulator to cut bills; flawed because it leaves it to the water companies to decide whether to establish a social tariff and preserves the postcode lottery on eligibility; and flawed because it does nothing to protect customers who pay their bills from seeing higher charges as a result of those who can pay but will not. This Bill could have delivered a framework for that new deal with the water companies. Instead, a huge opportunity to tackle water’s contribution to the cost of living crisis has been missed.

21:40

[Miss McIntosh]

We have had a good debate today. I welcome the Bill and thank all those involved in preparing it, including my right hon. and hon. Friends. Obviously, a lot of work remains to be done to it in the other place, and we will watch those developments with interest.

I welcome the introduction of retail competition. The Select Committee would like to have seen the primary duty of sustainability in preference to resilience. I believe that too much detail has been left to be fixed at a later stage. I enjoyed the comment from my hon. Friend the Minister on not wanting to rely too much on regulation, because just about every clause calls for implementing regulation to be drafted. We will leave that conundrum with him.

Competition is to be welcomed. It should lead to greater efficiency. In particular, I hope that both the current 2014 price review and the competition provisions permitted following the Bill will lead to more innovation, not least following these weeks of sustained and considerable flooding across the country. I applaud the Government’s search for a partnership approach and for more private enterprise funding for flood prevention measures. I hope that the water companies will step up to the plate in that regard and that other private sector companies might help to fund schemes from which they might benefit.

I believe that there are still opportunities to write other provisions into the Bill before it receives Royal Assent, not least with regard to the partnership approach to flood prevention measures, which has been mentioned this evening, but also for increasing the amount of maintenance that can be done by internal drainage boards. We await the results of the pilot schemes, whereby DEFRA is allowing landowners to permit their own maintenance to be done on the watercourses locally, to see whether that scheme can be rolled out.

It is a joy to me that tomorrow we will see the Pickering pilot project in my constituency reach its final phase with the cutting of the first sod of earth, which will enable the reservoir to be built. It is a great disappointment for me personally, as I am sure it is for many in the country, that the sustainable drainage systems, which are left over from the Flood and Water Management Act 2010, will still not be on the statute book by April this year. SUDS, on their own, will do a huge amount to prevent surface water flooding from entering sewerage systems through the combined sewage pipes that we have heard so much about today and that can cause sewage spills on to roads and, regrettably, into homes and other properties.

Perhaps the most innovative aspects of the Bill that are to be welcomed are those relating to flood insurance. I commend Flood Re, but I hope that the Minister will have listened carefully to the concerns that have been raised today, not least from the Select Committee. We expect to see the same respect and acknowledgment of value for money in that as in other schemes. We will be looking to see that that is confirmed as we go forward.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

My hon. Friend praises the SUDS system, but will she take into account, and ask our hon. Friends on the Front Bench to take into account, the fact that we may be building up considerable liabilities for ourselves in future if SUDS systems are inadequately designed by developers who have clever consultants and local authorities do not have the expertise to vet whether those systems are adequate in the type of floods that we are seeing at the moment?

[Miss McIntosh]

My hon. Friend will have an opportunity to read our proceedings tomorrow and see the debate that we have had on SUDS. For reasons that the Minister has not rehearsed in full, the SUDS regulations will not be on the statute book by April. I am sure that there are very good reasons for that, including those that my hon. Friend raised, but I do believe that SUDS will have a substantial role to play.

If the flood insurance system leaves out leasehold flats, that will be a matter of concern.

[Dan Rogerson]

I am grateful to my hon. Friend for giving way on this point, as I did not have the opportunity to deal with it on Report. I assure her that householders living in those sorts of properties would have access to the contents aspects of flood insurance if they were council tax payers.

[Miss McIntosh]

That will be very welcome news. As I said, I was alerted to this problem after the time for tabling amendments had expired.

What we have seen this week and saw in the weeks running up to Christmas shows the scale of the challenge that we face. I welcome the all-party approach that we have seen across the House today and in Committee, which I was not at liberty to participate in. That is a very good basis on which the Bill can go forward from this House, and I commend it to its future stages.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Business without Debate

Monday 6th January 2014 Commons Chamber

Scottish Affairs

Ordered,

That Mrs Eleanor Laing be discharged from the Scottish Affairs Committee.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

Welsh Affairs

Ordered,

That Jonathan Edwards be discharged from the Welsh Affairs Committee and Hywel Williams be added. .—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

Access to Justice (British Citizens Abroad)

Monday 6th January 2014 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Gyimah.)

21:47

[Stella Creasy (Walthamstow) (Lab/Co-op)]

My remarks will be in three sections, and then I have two questions and three requests to put to the Minister. First, I want to talk about the young man for whom I speak this evening—Tyrell Matthews-Burton, sadly no longer with us. Secondly, I want to talk about the inconsistent nature of the assistance that has been provided to his family since his tragic murder. Thirdly, I want to talk about the existing protocol for supporting families who have lost loved ones abroad in such instances as this case. My hon. Friend the Member for Lewisham East (Heidi Alexander) also wishes to speak, and I want to ensure that the Minister has ample time to respond to the concerns that we are raising.

On 23 July last year, Tyrell’s 19th birthday and the last night of his first holiday abroad without his mum, while out with his friends celebrating not just his birthday but their chance to go to university, he was brutally killed while trying to stop a fight in a bar in Malia. I do not know who killed Tyrell, and I am not here to prosecute the case against those who stand accused; I am here to ask how we ensure that every British family who has a loved one killed or go missing abroad knows that their country will stand by them. This is every parent’s nightmare.

Tyrell was a young man in his prime, with a passion for fashion, which he hoped to make a career of, and popular with friends and family and, indeed, young ladies. He was cut down before he had the chance to show the world what he was capable of. Then he was disgracefully slandered in the press by Greek officials as a member of a gang. I have written to Greek officials asking for an apology for this, but I am sad to say that, six months on, it is yet to appear. Since Tyrell’s death, the distress caused to his family by the Greek authorities has been continuous, from the dismissive actions of the Greek coroner to the casual return of the clothes that Tyrell was wearing the night he was killed in the post and the continued total lack of communication with and respect shown to a grieving family. But I am not here tonight to call to account the Greek authorities as to why they seem to care so little for this young man’s life. I am here to ask: what is the appropriate role of the British authorities in such matters?

I am sure the Minister has been briefed on the family’s concerns—from being told consistently by the consulate that it could not find out anything about the investigation and simply to find a lawyer, to then being given the details of lawyers who represented the person accused of Tyrell’s killing and being subjected to a tirade as to their innocence. The consulate staff knew themselves that the clothes, with possible DNA evidence, were being returned to the family, but they did not question this and simply telephoned ahead to ensure that the family would be in when the courier arrived. Tyrell’s mother was told that if she wanted someone to explain the difference between a UK and a Greek pathologist report, she should go to her own GP for help.

But I have not asked for this debate to talk about lessons learned in sensitivity; I have done so primarily because I believe that without intervention there is a risk that the human rights of the victim’s family are being infringed. The Minister will know that we have been repeatedly told that formal requests for information have been rebuffed by the Greek authorities. Our consulate tells me that it cannot even find out matters such as a possible date for the trial or the charges laid, even though it claims to have registered an interest in the case.

The Minister will also know that, for Tyrell’s hard-working, single mother, the cost of legal advice is prohibitively expensive. Therefore, the only information the family have had about the case has been through press reports of the claims of the family of the accused.

I draw the Minister’s attention to the obligations under European Union law that all member states must ensure protection for the rights of crime victims, which international law defines as including the families of murder victims. The EU framework has been fully in force since 2006. It requires that victims and their families are kept involved and informed throughout criminal investigations and criminal trials, including the provision of detailed information in a form and language that they can understand, and for free when they cannot afford to pay. There are also requirements of co-operation between member states, so the UK must ensure that the family’s rights are upheld by Greece. My first question, therefore, is: does the Minister believe that the conduct of the UK Government on this matter to date is in accordance with those legal requirements?

The Prime Minister kindly agreed to meet Tyrell’s mother in September to try to help matters, but I am afraid to say that it was not the breakthrough for which we had all hoped. I know that the Foreign Office itself is disappointed with the advice it has given. It admits that the former team at the Ministry of Justice that managed such matters has been disbanded, so there is no institutional memory as to how we should address such cases. Regretfully, we are now told—contrary to the Prime Minister’s own personal suggestion—that Tyrell’s mother is not eligible for legal aid as a family member of a victim of crime. Nor would she be eligible under the Greek system; even if she was, there would be no guarantee that the person would speak English.

The family were then told that there is no public funding for representation, and so the official advice from Foreign Office officials was that the family should approach Tyrell’s former employer—he had a Saturday job at Next—or the mother’s current employer, a housing association, to ask them to fund legal advice. When I queried this, the officials simply told me this was standard practice, so my second question to the Minister is: will he confirm whether that standard practice is in accordance with the EU framework that the UK has ratified?

Thankfully, in the past few weeks some progress has started to be made. Money has now been made forthcoming from Victim Support. This limited funding, granted in December, will cover an initial instruction for a Greek lawyer, yet this £1,800 is the sum total of support we have given as a nation to this grieving mother in a case where the costs could reach €20,000.

I am also still waiting for a response from the Foreign Office following its commitment to ask the ambassador to raise this matter with the Greek authorities; to secure a meeting for the family and myself with the Greek authority representatives here; to ask the police lead for an update; and to speak to the judge in Greece about meeting the family. Those promises were made at the start of December.

Sadly, this is not an unusual case. My final points refer to the protocol that is supposed to define the treatment of families in such matters. There is a memorandum of understanding on what should happen in dreadful cases of a British national being murdered abroad. It was formalised between the Foreign Office, the Association of Chief Police Officers and the coroners of England and Wales in 2011. It specifically decrees that where a matter involves both a British national as a victim and a British national as a suspect, the UK police can appoint a senior investigating officer. Indeed, under section 9 of the Offences Against the Person Act 1861, the suspect can be prosecuted in England and Wales.

Despite the fact that this case meets that test, there has been no involvement in the investigation of this matter or movement on it by the police in relation to bringing the case to the UK for trial, even though the Prime Minister agreed to raise it with the Met. An SIO was finally appointed when the Prime Minister intervened, but nothing more has happened. The police have said that, as the Greek police have refused their help, there is nothing they can do. That stands in contrast to other well-known cases, such as that of Madeleine McCann, where the Prime Minister’s intervention has rightly been crucial to making progress.

Of concern to me is the failure of the police to act when the defendant conducted a public interview with the British press that was broadcast in the UK. I alerted the Met before the broadcast of the film and asked them to ensure that it would not affect the possibility of a trial here. I am afraid that that did not happen. The Foreign Office has told me, with circular logic, that

“because we don’t know the quality of the Greek investigation they have decided they cannot tell whether it would be appropriate to ask the MET to get involved”.

We therefore cannot know whether the investigation is proceeding appropriately. Our authorities are not following their own protocol. What confidence can we have that justice will be done?

In addition to my requests about clarification of the EU legal framework, I have three requests for the Minister. First, I ask him to request the Greek authorities to meet me and Tyrell’s family directly to update them on the status of the investigation and the time scale for the trial. That this has not happened yet—and, indeed, that no offer to arrange it has been made, except because of my request—is I am sure something on which the Minister will wish to reflect: it should not take a cross MP for our representatives to want such authorities to speak to a victim’s family.

Secondly, will the Minister confirm that the Foreign Office will ensure that Victim Support has the funds to be able to provide full financial assistance to ensure Ms Matthews has legal representation in the trial, or will he and the British Government request, as per the memorandum of understanding, that the matter is now brought back to UK authorities for trial and investigation by the UK police?

Finally, I urge the Government to review their protocol for the management of such cases. We cannot have a fair and just system if only those families who can secure a media presence receive the intervention they need when something terrible happens to a family member overseas. Baroness Browning confirmed that the Home Secretary and Prime Minister intervened in the case of Madeleine McCann because they believed her to be alive, and their intervention included a commitment to ensure that the police had what she termed the “necessary funding”.

Tyrell may no longer be with us, but his right to justice lives on, as do the rights of his family and those of other murdered British citizens. It cannot be beyond the realm of possibility for our Government to have a clearer and fairer protocol for the provision of appropriate support and intervention, subject to differences in countries’ legal systems, to ensure that families have the representation and assistance that they need. If this involved any of our families, we would wish for such certainty of assistance, as does Ms Matthews, who faced her first Christmas without her son this year and who continues to grieve, still not knowing whether she will be able to see justice done for Tyrell or even hear when it will occur.

21:58

[Heidi Alexander (Lewisham East) (Lab)]

I am grateful for the opportunity to speak in this debate. I congratulate my hon. Friend the Member for Walthamstow (Stella Creasy) on securing it and on presenting her arguments so powerfully and in such detail.

My interest in speaking in this debate relates to the fact that the individual currently detained in Greece on suspicion of murdering Tyrell Matthews-Burton is a young man called Myles Litchmore-Dunbar. Myles is my constituent, and in the past six months I have been in contact with his parents Chris and Carole, and his aunt Denise. The whole family have serious concerns about the way in which the Greek authorities have handled the murder investigation. They believe the support that has been provided to them by the British Government to be wholly inadequate. They believe passionately that the British police should be involved in investigating Tyrell’s murder.

I am not here tonight to assert any individual’s guilt or innocence. This was an horrific crime and I want whoever committed it to be brought to justice.

22:00

Motion lapsed (Standing Order No. 9(3)).

Motion made, and Question proposed, That this House do now adjourn.—(Mr Gyimah.)

[Heidi Alexander]

Although I do not come to the Chamber to assert any individual’s guilt or innocence, I would like to say for the record that Myles Litchmore-Dunbar maintains his innocence and argues that on the night of 23 July last year in Malia, he too was attempting to break up the brawl that led to the stabbing of Tyrell.

When crimes are committed in the UK, many of us take it for granted that the British police will investigate fully and fairly, and that our legal system will give both sides a fair hearing in the pursuit of justice. Although I recognise that I do not know the full facts of the case, I believe on the basis of what I have been told that there is reason for the British Government to be worried that the process that is under way in Greece will not result in the sort of justice that we would expect to be delivered in our country. I want justice to be done, I want the right person to be convicted of the murder of Tyrell Matthews-Burton and I want the British Government to help make that happen.

My hon. Friend has referred to the fact that the clothing that Tyrell was wearing on the night of his death has been posted back to his family in the UK. I am at a loss to understand why that clothing was not retained in Greece as evidence. I am concerned that that suggests that the Greek authorities are failing to deal with the matter appropriately. I could give other examples that lead me to say that, but I am not entirely sure that this is the appropriate forum to do so. I have communicated my concerns to the Prime Minister in writing.

I am here tonight because I want to be assured that the British Government are doing everything they can to press the Greek authorities to investigate this crime in a rigorous, professional and timely manner. I ask the Government to think again about British police involvement in the investigation. A British man was killed in a brawl that involved another 18 or so British citizens, and a British family are grieving for their son. Is there really no way in which the case could be investigated by the British police or heard in a British court?

My constituents feel badly let down by our Government. The victim’s family feel badly let down too. For everyone’s sake, I ask the Minister to take heed of the deep and serious concerns that have been expressed by those involved, and to do whatever he can to ensure that justice is done.

22:03

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

Let me say at the outset that both the hon. Ladies who have spoken have taken exactly the right approach in representing their constituents. If I were in their position, I would do the same. That is what MPs are there for. The two hon. Ladies may be representing different sides of the argument—one represents the accused and one represents the person against whom the crime was perpetrated—but they are both absolutely within their rights to come to the House to raise these issues on behalf of their constituents.

We must manage expectations. I do not agree with the view that the Foreign and Commonwealth Office is not doing enough. I will expand on that in the following minutes. I am grateful to the hon. Member for Walthamstow (Stella Creasy) for securing a debate on this important issue.

I will deal straight away with the points that were made by the hon. Member for Lewisham East (Heidi Alexander). It is worth saying at the outset that the case is now at the judicial investigation stage, which means that the police have handed it to the courts, which will now decide whether further investigation is required or whether they have enough evidence to proceed. In Greece, that can be a very long process, and we are doing all we can to ensure that Ms Matthews and others have as much information as possible. It is also worth pointing out that all the men involved in the incident and their families are receiving consular assistance. We repeatedly advise them, however, to speak to their lawyers about anything of a legal nature. We met three of the families in particular at their request, and we offered to meet Ms Matthews at any time.

Providing assistance to British nationals who are the victims of serious crimes overseas and their next of kin is a core priority for the Foreign and Commonwealth Office. To put the matter into context, in 2012 alone, FCO staff dealt with more than 1 million consular inquiries and 100,000 consular cases and provided consular assistance to more than 20,000 people as they endured the trauma of being a victim of crime with the additional challenge of being in an unfamiliar country whose language, culture and judicial systems can be very different from ours.

We can and do provide support, experience and assistance and put those in need in contact with charities and other organisations, several of which we help to fund. We can and do also use our diplomatic network to put pressure on foreign Governments to make changes or improvements to their processes. We are committed to delivering support of the highest standards and, as our consular strategy makes plain, to improving continually our service and offering the most vulnerable the greatest level of support.

However, in such circumstances there are also clear limitations to what we can do—this is where we come back to the management of expectation. For instance, we cannot become involved in the competent judicial process of another country or ask the taxpayer to fund legal cases in foreign courts. I know that the hon. Member for Walthamstow has been deeply concerned about the case of Tyrell Matthews-Burton, who was tragically killed in Crete last year. I, too, would like to take this opportunity to extend my deepest sympathies to Tyrell’s mother, Ms Matthews.

From the moment we were informed of Tyrell’s death, officials have provided extensive support to Ms Matthews. In the immediate aftermath, consular staff in Crete spent time at the police station, hospital and court to offer support. The hon. Lady shakes her head in disagreement, but I am stating the chronology of what happened. It might not have been enough, but it is what actually happened in the aftermath.

In London, teams were in daily contact with the families of those involved to provide assistance and referrals to organisations such as Victim Support. Ms Matthews was assigned a caseworker and quickly issued with a passport, and with the support of one of the charities that the FCO helps to fund, Missing Abroad, flights to Crete and accommodation were arranged at no cost to the family. We have continued to provide full support to Ms Matthews, from repatriating Tyrell’s body to liaising with Her Majesty’s coroner following Ms Matthews’s request to see the post mortem report.

One of the greatest challenges for victims of crime at home and abroad is gaining access to information. Of course, in the case of crimes committed overseas, geographic distance, language and procedure are all added barriers. I know that a lack of information can lead to extreme frustration, compound anxiety and result in a loss of confidence in the judicial process of the country involved. That is entirely understandable. We therefore do what we can to get updates as soon as possible as well as providing guidance on local systems and procedures. In Tyrell’s case, consular staff were on hand from the outset to help liaise with the authorities and provide a range of important information explaining the local police and legal systems and giving details of local lawyers and interpreters. Consular officials at the British embassy in Athens have also lobbied for information the Greek Ministries of Foreign Affairs and of Justice, as well as the Greek police and judiciary, and have attended some initial meetings. We stand ready to continue to do that as the family navigates the local system, and to attend the first day and verdict of any future trial.

Systems overseas are often different from our own, and unlike in the UK, it may not be possible for individuals to obtain information directly. Investigating authorities and courts may refuse to answer inquiries from third parties, including foreign Governments or consular officials. For those reasons, we always advise victims of crime overseas to instruct a local lawyer who can access detailed information on their client’s behalf, and judge whether an investigation is conducted in line with local laws. From the outset, we and the Greek authorities have recommended that Ms Matthews obtain legal representation.

I understand, of course, that appointing a lawyer can put a huge financial burden on a family—something to which the hon. Member for Walthamstow alluded. However, the Foreign and Commonwealth Office cannot fund legal representation. We are simply not resourced to offer such funding, and in the case of Ms Matthews we have done all we can to explore alternative legal aid options in the United Kingdom and Greece, including offering advice on the EU compensation scheme. Following the meeting between the hon. Lady, Ms Matthews, and my right hon. Friend the Prime Minister, I am pleased that work to identify a lawyer and funding from Victim Support has enabled Ms Matthews to appoint a Greek lawyer.

I also wish to address the concerns raised by the hon. Lady that the UK police could do more, and that a senior investigating officer and family liaison officer were not appointed at the outset. In 2012 the British Government agreed a memorandum of understanding with the Association of Chief Police Officers and the Coroners’ Society of England and Wales regarding support in murder/manslaughter cases. It sets out Government support to the next of kin, including what we can do to ensure a proper and thorough investigation. The MOU is clear that the UK police cannot investigate a crime overseas unless invited by a foreign Government to do so. Even in cases where a suspect is British, the jurisdiction of the country where the crime took place takes precedence.

The UK police get involved only exceptionally where there is a genuine operational need, such as securing forensic samples or conducting formal inquiries on behalf of foreign police in the UK, and that was not the case following Tyrell’s death. It is an operational decision for the police whether to appoint a senior investigating officer or family liaison officer. In this case, the police initially decided to identify an officer as the single point of contact. Following the intervention of the Foreign and Commonwealth Office, the Greek police assigned an individual to liaise with the Met police and, as a result, a senior investigating officer and family liaison officer were duly appointed. However, as the investigation in Greece has been completed and the file now lies with the judicial authorities, as I said at the outset of my remarks, there is little information to be shared through that channel.

The British Government cannot interfere in trials or legal processes in other countries. We would not accept other countries doing that in the UK, and we therefore need to respect their systems. In some circumstances, however, we will continue to make representations to local authorities where appropriate. That includes cases where there are concerns that the investigation is not being carried out in line with local procedures. We stand ready to do that in this case should the need arise. Meanwhile, we will continue to raise the case more generally through normal diplomatic channels.

The British ambassador to Greece first raised Tyrell’s death with the mayor of Malia and the chief of police last summer, and as the hon. Member for Walthamstow knows, we are facilitating a meeting between her and the Greek ambassador to London in the near future, to discuss the case and the issues it raises.

We have a consular service that many countries envy and of which we are rightly proud. However, we cannot always meet every need and expectation. Of course we want to improve; we seek to learn from every case, and continually review our consular policy, guidance to staff and training.

[Stella Creasy]

I thank the Minister for intervening and I am pleased that the Foreign Office will be assisting my office in arranging a meeting with the Greek authorities. The Foreign and Commonwealth Office had specifically told my office that that was for me to organise, so I am pleased that there has been a change of mind. May I press him on the point about the EU framework on the decision on the rights of victims of crime, which has been fully in force since 2006? I appreciate that the way in which it applies in the UK with regard to the Greek authorities’ behaviour towards the Matthews family is a technical point of EU law. However, can he and his officials give me an assurance on that specific point? Will he clarify that the conduct of the Foreign Office in the matter—it failed to ensure that Ms Matthews had legal representation in that trial—is in accordance with that legislation, which our nation has ratified?

[Mr Swire]

Let me say two things to the hon. Lady. First, we have done everything we can, and continue to do everything we can, in compliance with every international obligation. I have tried to articulate that in what I have said in the past 10 or 15 minutes. Secondly, to answer her other question, it is my understanding that the Foreign Office has arranged access to the Greek ambassador in London. Indeed, the consular department of the Foreign Office intends to accompany her to the meeting. I hope she is reassured on that point.

As I have said, we do not imagine that we get it right the whole time. I have tried to contextualise the matter and to explain to the House not only the complexity but the size of the issue. We are always asked to fund things that we simply are not funded for. No party in government or opposition plans to change the policy—if any party did, it would be a significant change and one we should be aware of. We do everything we can within the existing guidelines, but, as I have said, we do not always get things right. We want to improve and learn from experience; we are human. In this case, we are doing everything we can.

As I have said, we continually review our consular policy, our guidance to staff and our training. As part of that, in 2014 we will evaluate the impact of the memorandum of understanding on murder/manslaughter and our internal guidance to consular staff on helping next of kin. We are making changes to our services so that they focus more effectively on the needs of British nationals. That will include better and clearer information —information is key—on local services such as lawyers and legal aid.

We are currently exploring what more we can do to build on the legal guides that Fair Trials International has developed—it has done so with Foreign and Commonwealth Office funding. For instance, we are working with Justice Across Borders and identifying pro bono legal advice providers for victims of crime overseas. That is part of a strategy to establish more partnerships with specialist organisations, which goes alongside increasing funding for those with which we already work. Finally, we have introduced flexibility in our policy on our staff translating and interpreting when British nationals need to talk to local authorities.

Therefore, after three and a half years, the Government are seizing the issue and dealing with it in a more realistic way than has perhaps been the case in the past. If the hon. Lady has any concerns, I would be more than happy for her to come to me or for her to see the Under-Secretary of State. I have come to the case fresh—I read the reports at the time, but it has not been on my desk for a long time—and have gone through it with officials in some detail today. I have a fresh set of eyes. Of course, I do not share the hon. Lady’s views—I do not represent her constituent, and I would probably have a different view if I did so—but I am convinced that we are doing everything we can. In fact, I believe we have done more than can be expected in offering to fix up a meeting between her and the Greek ambassador.

We face many challenges as we try to help victims to get justice overseas. Cases can be complex and move slowly through foreign legal systems that British nationals find hard to understand. British MPs can find them hard to understand or will not understand them. Our remit does not extend to foreign countries. Things often do not work abroad in the way we would expect them to work here. Translating what happens here to systems abroad serves no purpose because we cannot change those systems. We must operate within them.

[Stella Creasy]

I thank the Minister for letting me intervene. I will try one more time. I would be ever so grateful if he could clarify, in writing, that he believes that in this matter the current Government have met their obligations under EU law on victims of crime and their treatment. I appreciate that he believes what he has been told by officials. I invite him to meet the families to understand the other side of the story about what has happened. On the particular point about access to justice and the requirements under that legislation, will he give a commitment to the House to investigate the legal ramifications of the failure of this Government to ensure legal representation for the Matthews family in the trial?

[Mr Swire]

There has been no failure by this Government on any point. I entirely refute that and it is not helpful for the hon. Lady to suggest that when we are doing everything we can for the hon. Lady’s constituent. However, I will certainly ensure in writing, if I have not made myself clear verbally, that our position remains clear: we are absolutely certain that we have followed the existing guidelines in every single way—in fact, more so.

I concede that the Foreign and Commonwealth Office may not always meet the full expectations of victims and their families. Indeed, it would be impossible for us to do so, because expectations exceed capability and that would be the same however much resource we threw at this problem. That makes it even more important to have under constant consideration what we can offer, and to find new ways to provide it.

I respect the hon. Lady’s position in bringing this matter to the House, but she is a Member of Parliament and she has to respect what all parties are signed up to. If she feels in any way that the Government have been derelict in their duties towards her constituent she is right to raise that, but I have heard nothing tonight to suggest that that is the case. On whether the Government have been compliant with existing laws, I will ensure that she is written to, to explain that to her. In the meantime, we must all await what happens in Greece. She will be in a good position when, with the assistance of the Foreign and Commonwealth Office, she meets the Greek ambassador shortly.

Question put and agreed to.

22:22

House adjourned.