Water Bills

Baroness Hayman of Ullock Excerpts

Thursday 9th January 2025 Lords Chamber

[Lord Roborough]

To ask His Majesty’s Government what steps they are taking to ensure that water bills are affordable for consumers.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, nobody wants to see bills rise, so the Government are committed to tackling water poverty and holding the water sector accountable for its commitment to end water poverty by 2030. That is why we are pushing companies to have sufficient support available for customers who are struggling to pay their bills while at the same time challenging Ofwat to ensure that all company investments are affordable and that customers do not pay twice for upgrades.

[Lord Roborough (Con)]

My Lords, higher government borrowing costs are being imposed by markets questioning the Government’s Budget assumptions, as I discussed in this Chamber on 19 December. Higher financing costs are likely to be passed on to UK domestic companies, including in the water industry. Does the Minister agree that this makes SAOs more likely? Having rejected our amendments to protect consumers from increased charges in that event in the Water (Special Measures) Bill, is the Minister willing to commit that extra charges will not be levied on consumers in SAOs?

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[Baroness Hayman of Ullock (Lab)]

We are working very closely with water companies in order to ensure that consumers do not have extra charges placed upon them and that anything the water company wants to do through future investment, through the price review that has just come through, does not land in customers’ laps in a way that it should not. It is really important that the water commission, which we discussed recently in the Water (Special Measures) Bill, looks carefully at how water companies operate financially to ensure that consumers do not suffer unnecessarily.

[Baroness Winterton of Doncaster (Lab)]

My Lords, does the Minister agree that water companies should be encouraged to work closely with local organisations, such as citizens advice bureaux, to ensure that debt relief advice is available? If water companies are encouraging people to go on to direct debit, perhaps when they have water meters, they should not make big charges and then when they have taken a lot of money refuse to alter the direct debit to reflect what people are actually using, which can often get people into debt. Will she encourage water companies to look at these measures?

[Baroness Hayman of Ullock (Lab)]

My noble friend makes some extremely important points. Citizens Advice does an important service in supporting vulnerable people. Water companies should work with all charities, such as Citizens Advice, in order to support vulnerable consumers. It is important that we simplify the processes so that customers who need extra assistance can get it. Citizens Advice is an important part of that and helps customers get advice on benefits and managing debt, particularly customers who have not been in financial difficulty before. My noble friend makes some very good points.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, the expected rise in water bills to ensure future investment in infrastructure, so deliberately disregarded in the past by water companies, will fall heavily upon small businesses that use water and farmers, for whom water is essential for rearing livestock and growing crops. Is the Minister talking to her Treasury colleagues about how to help this vital element of our economy with this burden, which will affect small businesses’ and farmers’ profitability?

[Baroness Hayman of Ullock (Lab)]

I assure the noble Baroness that Defra is regularly in contact with the Treasury about all issues such as this, particularly about how to support people going forward. Many of the challenges farmers in particular face—my colleague is at the Oxford Farming Conference today talking to farmers—are to do with long-term security and the ability to bring in long-term investment. Water affordability is an important part of that.

[Baroness McIntosh of Pickering (Con)]

My Lords, does the Minister have the most recent figures for the level of bad debt in the water sector, particularly among vulnerable households? If she does not have the figures, could she release them by letter to the Library? Will she inform the House of how she intends to address the level of bad debt at this time?

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[Baroness Hayman of Ullock (Lab)]

I do not have the figures to hand for the level of bad debt, but I am, of course, very happy to provide them to the noble Baroness and share them in writing.

[Lord Bird (CB)]

My Lords, is it possible to extend the argument around water to the quality of water itself and health? We have people suffering from dehydration. That is one of the major problems doctors face when people in poverty go in. Therefore, we really need to lean on the water companies. Can the Government lean on the water companies to improve the quality of water so that we do not get E. coli, as we did recently? People need water to be healthy.

[Baroness Hayman of Ullock (Lab)]

The noble Lord is right that people need water to be healthy. We have the Drinking Water Inspectorate, which has a very high rating. The issues we had last year around E. coli were very unusual, but it is critical that we do not have situations like that arising again. That is why it is important to work with water companies to make sure that situations like that are going to be planned for, so that if they occur, they can be dealt with swiftly. Ideally, we need to continue to work with the Drinking Water Inspectorate to ensure that such situations do not arise in future.

[Lord Whitty (Lab)]

My Lords, I commend to the Minister the suggestions from the Consumer Council for Water, a commendable organisation that deserves more support. It has made six suggestions on reducing water bills for vulnerable people, including those in single occupancy premises and those with medical conditions, largely using the WaterSure mechanism. Can she pay particular attention to those suggestions and hopefully put them into effect?

[Baroness Hayman of Ullock (Lab)]

Clearly, it is important that we protect the most vulnerable. We expect water companies to put robust support in place to address water poverty. My noble friend mentioned WaterSure, but there are options such as payment breaks, social tariffs and debt management support. It is important that water companies work with vulnerable customers to ensure that they know all the options available to them. The Consumer Council for Water does important work, so I think it is important that the suggestions it made are looked at seriously.

[Baroness Pinnock (LD)]

My Lords, following on from the answers that the Minister has just given—and I have relevant interests to declare in the register—all water companies have a variety of schemes to support customers who are in water poverty. The issue for me is that not all of them are as generous as they ought to be. Is the Minister prepared to speak to water companies to ensure that a greater proportion of their profits is focused on supporting households in water poverty so that, across the country, every customer in water poverty has access to a well-funded scheme?

[Baroness Hayman of Ullock (Lab)]

It is important that every water company does everything it can to support vulnerable customers. Like all businesses, some are better than others. We are working with water companies to try to ensure that they all come up to the same high standards that we expect. We know that some companies have committed to supplement support with contributions from shareholders’ profits between 2025 and 2030. Ideally, it would be good if all companies were prepared to do that.

[Lord Watts (Lab)]

My Lords, given the failure of the regulator to control these water companies, is it not about time that we had a new regulator that would look after the public?

[Baroness Hayman of Ullock (Lab)]

This takes me right back to the Water (Special Measures) Bill, where this was discussed in some depth. The simple answer to my noble friend is that this is something that the water commission, which is making good progress under Sir Jon Cunliffe, will look at and will be central to the outcome for the future of the water industry, because there is great dissatisfaction with the way in which the water regulator has managed things in the past. Certainly, that is something that will be central to the water commission’s investigations.

[Lord Kamall (Con)]

My Lords, one way of possibly reducing water bills is through the installation of domestic water harvesting systems. I know they are not feasible for all consumers, but what is the Government’s view on encouraging and perhaps assisting more people and possibly SMEs to install domestic water harvesting systems in order to reduce their water bills? It is also better for the environment.

[Baroness Hayman of Ullock (Lab)]

I think one thing water companies could be better at is providing advice to consumers about how to cut their water usage. We are not particularly good at that in this country; other countries are much better at it, and I think it is something that we need to encourage water companies to do.