Oral Answers to Questions

Debate between Baroness McIntosh of Pickering and Dan Rogerson

Thursday 30th October 2014 Commons Chamber

[Dan Rogerson]

As I set out to the hon. Lady, there are a number of schemes in place. Some are still paying out and will do so until the end of the financial year. If she has particular concerns about issues in her part of the world, I would be happy to meet her, as ever, to discuss them, but those schemes are available to all those affected by flooding during the period of extreme weather from early December last year through to the end of April.

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

More homes were flooded in 2012-13 across the Yorkshire region, so I hope the Minister might meet a delegation of Yorkshire MPs to consider how our roads and bridges might best be recovered. What progress has been made with the Treasury on having one fund—one budget—between capital expenditure and revenue expenditure for total expenditure on flood spending? That would help communities to recover more quickly and end the senseless rows about the size of the pump and which budget it should come from.

[Dan Rogerson]

I thank the Chair of the Environment, Food and Rural Affairs Select Committee for her question, raising issues to do with transport recovery, which have been well supported by the Department for Transport. I encourage my hon. Friend and other colleagues from Yorkshire to continue to discuss that with Ministers from that Department. On the distribution of the maintenance, revenue and capital money that we have invested in flood defences and coastal risk management—a record amount of money—we continue to discuss with the Treasury whether flexibilities might be helpful in this regard. The Select Committee’s work has been of great help.

Water Bill

Debate between Baroness McIntosh of Pickering and Dan Rogerson

Wednesday 7th May 2014 Commons Chamber

[Dan Rogerson]

First, may I welcome you to the Chair, Ms Primarolo? I thank the hon. Member for Penistone and Stocksbridge (Angela Smith) and my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) for their contributions today, and the latter for the contribution she has made as Chair of the Select Committee, both throughout this process and long before any Bill was formally considered in both Houses.

The hon. Member for Penistone and Stocksbridge raised a number of issues and returned to the issue of affordability. The Government have made it clear that the best thing we can do on affordability is keep bills low for everybody by having a robust regulator and setting out to that regulator the policy framework to which we aspire in order for things to happen. The regulator has taken good action to explore with companies what they can do to keep bills lower; that is the trend we are seeing into the next price review period, with some companies bringing it forward into the current period as well, to the benefit of all consumers. Of course, this Government took action to deal with the acute situation in the south-west, where bills were much higher than everywhere else in the country. The hon. Lady rightly points out the contribution that social tariffs can make and the fact that three companies have introduced them. Other companies are bringing them forward in the next year or so, following consultation with their customer base. It is important that that consultation takes place, because introducing social tariffs involves a funding mechanism.

The Opposition have talked of a national scheme, but they did not introduce one when they were in government. We can continue to debate that, but my concerns with such a scheme, and those of the Government, are that the situation in each water company area is different. Therefore, one scheme mandated across the whole area will have different impacts on different customer groups across those water company areas and may have perverse impacts on the bills of some, given the different demographics and mix of bill payers. We are not convinced of that approach, but I welcome the Opposition’s support for social tariffs where they have been introduced.

The hon. Member for Penistone and Stocksbridge raised the issue of parliamentary scrutiny, as did the Chair of the Select Committee. We have listened to concerns and examined the use of the affirmative procedure where necessary. When we get into the realms of the super-affirmative procedure I bow to those with more experience of the range of options at the House’s disposal and how such a procedure might be used. We feel that the affirmative procedure is the correct one to take things forward, but we very much welcome the work done by the relevant Committee in another place to make suggestions on how to ensure that Members of both Houses, and those observing our deliberations externally, will have confidence that we have got things right.

I spoke earlier about the position on retail exits, but there are a couple of further things to say in response to the two speeches we have just heard. First, the Government’s position has never been that such exits should never happen and that we would never make proposals for them. We said at earlier stages that we had concerns, given the range of opinions held across the industry. Both regulators have supported such provisions throughout, whereas the Consumer Council for Water had a much more nuanced position. Some companies were very concerned about it, as were some investors, particularly with regard to pressure for the forced separation of companies. We know that investors would be concerned about that, and we want to see continuing investment in improving resilience, which is a key feature of where we are going with our programme. We are very concerned about the position of household customers, who will not have the options under this Bill that non-household customers have.

With that in mind, we have introduced amendments that take heed of arguments made by Opposition and Government Members, as well as people outside the House, and which put in place safeguards that make sure that all customers are protected throughout any process of change. There will be further consultation, as my hon. Friend the Member for Thirsk and Malton has said, which is crucial, and the question of forced separation, for example, can be addressed. On that basis, the amendments introduced by the Government allow us to move forward on the potential for retail exit in a measured way. That is the difference between the earlier debates on the Bill and where we are now. I thank the hon. Member for Penistone and Stocksbridge for her contribution, and I thank my hon. Friend the Member for Thirsk and Malton and the Committee for the work that they have done.

[Miss McIntosh]

I am most grateful for what my hon. Friend has said, but would he clarify the enhanced affirmative procedure?

[Dan Rogerson]

When the House considers options on the enhanced affirmative procedure there is a range of processes that can be used, but we believe that the affirmative procedure is the correct one with regard to most of the changes that we have discussed this afternoon. I thank hon. Members for their contributions to the discussion on this group of amendments. I hope that the House approves the amendments and that we can agree the changes made in another place.

Lords amendment 15 agreed to.

Lords amendments 16 to 30, 32, 33, 43 to 64, 101 to 103, 107 to 147 agreed to, with Commons financial privileges waived in respect of Lords amendment 142.

Clause 8

Bulk supply of water by water undertakers

--- Later in debate ---

[Dan Rogerson]

I thank all hon. Members who have contributed to this debate, across a broad range of issues, and welcome their questions.

All three Members who spoke mentioned leaseholders. Let me put on record again the point alluded to by my hon. Friend the Member for Thirsk and Malton (Miss McIntosh). All contents policies would be eligible for Flood Re, whether leasehold, freehold, rented or owner-occupied, provided that the properties were built before 1 January 2009 and are in council tax bands A to G. Leasehold houses will also be within the scope of Flood Re in terms of buildings insurance, provided that the leaseholder lives in the property and purchased the buildings insurance in their own name. Flats will be eligible provided that there are no more than three flats in the building and that the freeholder, or one of those with a share of the freehold, lives in the building and takes out the cover.

[Miss McIntosh]

My hon. Friend says that the scheme applies if there are no more than three flats in the building. Where we lived—the current residents now have the problem—there could be 12, 16 or 20 properties. These are small properties that tend to be more affordable and occupied by those with a mortgage. Residents have put it to me that the increases are unaffordable already. Insurance companies are extracting those increases from them when they renew their insurance policies in an area that they know has already been flooded at ground-floor level because of the properties’ proximity to the river. I urge the Government to revisit this, because it is not acceptable. I do not want to pander to the Opposition’s argument about the standard cost of living, because that would be inappropriate, but I do believe that the Government should make the insurance affordable by reducing the cost. They should take out the below-three number because they have to reflect what working families are living in.

[Dan Rogerson]

We believe that a significant proportion of the leasehold sector will fall within the scope of Flood Re if the properties are at the highest levels of flood risk. I should emphasise, however, that we expect that most properties will not need to be in Flood Re and will find better prices through normal routes. We have been assured that there is no evidence of a systemic problem with freeholders being unable to obtain insurance for their leasehold properties. Specifically, feedback from members of the Association of British Insurers, representing over 60% of the market, including specialist commercial property insurers, showed no expectation of a widespread issue in an open market. As for the small businesses that are outside the scope of Flood Re, we and the ABI will monitor the market over time.

--- Later in debate ---

[Miss McIntosh]

Will my hon. Friend hark back to the evidence the Select Committee heard from the insurance industry during pre-legislative scrutiny? We were told categorically that, if there is a one-in-200-year event, the pot into which the subsidy will be paid, on which we all agree, will not be sufficient to pay out the resources, and it is generally accepted by the insurance industry that the Government will step in. Perhaps that is a different phrase from the one that my hon. Friend might use, but it means that the buck stops with the Government.

[Dan Rogerson]

We have been absolutely clear that, in such an event, the resources from the Flood Re pot would be significant and the Government would be involved in discussions about how that money would be used to help the people affected.

Although we have been focusing on Flood Re, my hon. Friend also asked about de-averaging. I want to use this opportunity to put on the record the fact that the Government’s charging principles on de-averaging are unambiguous. Ofwat must not allow de-averaging that is harmful to customers, particularly rural customers. Our charging guidance will follow soon. I am happy to commit, as I have before, to making it plain in that document that there must be strong, definitive boundaries for the scope of any de-averaging and that households in particular must be protected.

We should not, however, be over-simplistic. There is no doubt that there are areas where better cost reflectivity could have substantial benefits for the environment and the resilience of our water supplies. It must be right that the new upstream markets should reflect the environmental costs of supply and that there are economic incentives for business users that use large volumes of water.

My hon. Friend the Member for Brigg and Goole asked about the operation of current Government grant schemes. It might not be appropriate to go into that in detail now, but I would be happy to respond to correspondence from him on the specifics of how the scheme in his area is working.

I thank hon. Members for their contributions to our debates on the Bill today and at various other stages in this and another place. I hope that the House will agree with their lordships’ amendments.

Lords amendment 67 agreed to.

Lords amendments 68 to 100 and 105 and 106 agreed to.

Immigration Bill (Money) (No. 2)

Queen’s recommendation signified.

Resolved,

That, for the purposes of any Act resulting from the Immigration Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred under or by virtue of the Act by a statutory body or recognised charitable organisation.—(James Brokenshire.)

Immigration Bill (Programme) (No. 2.)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Immigration Bill for the purpose of supplementing the Order of 22 October 2013 (Immigration Bill (Programme)):

Consideration of Lords Amendments

(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion three hours after their commencement at today’s sitting.

(2) The proceedings shall be taken in the order shown in the first column of the following Table.

(3) The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.

Oral Answers to Questions

Debate between Baroness McIntosh of Pickering and Dan Rogerson

Thursday 27th March 2014 Commons Chamber

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

T2. Partnership funding for projects such as the Pickering pilot “Slowing the flow” scheme is being attracted from public sector bodies and, to a lesser extent, internal drainage boards. Will the Minister tell us what private sector partnership funding there has been and why the major review of partnership funding, which was expected to be published in October, has been delayed?

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

The Chairman of the Select Committee on Environment, Food and Rural Affairs is absolutely right to point out the important contribution that partnership funding is making. We anticipate £148 million coming forward across this spending review period, which will enable schemes that otherwise could not have gone forward. The question of private sector funding is important and it has come forward in a number of schemes around the country, but if local authorities or other public sector bodies want to make a contribution too, that is an equally valid way of bringing forward schemes that are important to keeping local people safe. However, I am happy to write to her and discuss how the review of partnership funding is progressing.

Managing Flood Risk

Debate between Baroness McIntosh of Pickering and Dan Rogerson

Monday 3rd March 2014 Commons Chamber

[Dan Rogerson]

I can indeed clarify, as others have at the Dispatch Box, that the business support scheme, which is aimed at small and medium-sized enterprises in areas affected by the floods, will look at businesses that have been affected by the extreme weather, not just those that have been inundated directly. There is a fund for farmers who have suffered waterlogged fields to help restore those fields to farmable land as quickly as possible, along with £30 million for local authorities for road maintenance, which should help affected areas to recover.

We have to remember that, outside current events, flooding is disruptive to people’s lives in the long term, and planning and defending against flooding remain a long-term priority for DEFRA and for the Government as a whole. We are spending £2.4 billion over the four-year period between 2010 and 2014, compared with £2.2 billion in the previous four-year period. That means that we have investment plans to improve protection to at least 465,000 households by the end of the decade. Looking forward, we have made an unprecedented long-term six-year commitment to record levels of capital investment to improve defences: £370 million in 2015-16, and the same in real terms each year, rising to over £400 million in 2020-21.

[Miss McIntosh]

My hon. Friend is addressing the very point that the hon. Member for Brent North (Barry Gardiner) and I made, which goes to the heart of the argument. There have been delays from the Department, particularly in implementing sustainable drainage systems—that is not necessarily its fault—and the review of partnership funding has not yet reported. Will the Department look favourably at allowing more transfer from capital expenditure to revenue and maintenance expenditure, as the hon. Member for Brent North suggested? In the long term, there are opportunities for water companies and others such as insurance companies to contribute to both funding streams.

[Dan Rogerson]

The figures that I am setting out into the future are for capital spending, and we expect revenue amounts to be settled as budgets are introduced for each year. However, the points that the Chair of the Select Committee makes about seeking contributions from all those involved in water management are entirely valid. In her speech she spoke about water company investment in water management that goes beyond the “hardware” side of things and looks more at the softer side of managing water through land management solutions. Ofwat is considering what it does with totex—total expenditure. It is looking at expenditure across the piece, rather than just at capital—the sort of things that appear on balance sheets that, in the past, would have been the focus. I accept that many people want to change that, so the fact that Ofwat has allowed water companies to do more of that will be beneficial.

The right hon. Member for Exeter (Mr Bradshaw), who is not in the Chamber today, but who took part in the Westminster Hall debate, pointed out the involvement of South West Water, along with my Department, landowners and managers, in an initiative looking at how water can be retained on Exmoor, which has made a difference to the moor’s catchments. That is a good example of the sort of work that can take place. The Chair of the Select Committee often speaks about what is happening in her constituency with the “Slowing the Flow” project, which is working on land management solutions. She is absolutely right that we need to emphasise the economic importance of investment in flood defences and, indeed, in water management. If we can prevent flooding and take that blight away from land that could be developed successfully, that would make a big contribution. If we can avoid the impacts that hon. Members have discussed, we can make a huge difference to local economies.

Oral Answers to Questions

Debate between Baroness McIntosh of Pickering and Dan Rogerson

Thursday 13th February 2014 Commons Chamber

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

Whatever the cause, we are seeing extreme weather events and we need to do more between floods. Will the Department consider restoring the balance between building new flood defences, repairing and making good the existing ones and maintaining watercourses? May I ask, in the presence of the Leader of the House of Commons, whether it would be a good idea to have a national statement on adaptation and on climate change generally for this purpose?

[Dan Rogerson]

I pay tribute to my hon. Friend and her Committee for all the work they have done on flood defences—

--- Later in debate ---

[Dan Rogerson]

The clear commitment that the Prime Minister has made is on ensuring that we have the facilities ready to respond to the incidents we are covering at the moment, no matter where they are in the country.

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

T4. Our thoughts have to be with the flood victims at this time. Will the Minister update the House on the audit of existing sustainable drainage systems with a view to establishing what role they play in flood alleviation; and what help is being given to fishermen who are unable to fish at sea during the time of this flood event?

[Dan Rogerson]

My hon. Friend puts together two questions that cover areas for which both my hon. Friend the Under-Secretary and I are responsible. As she knows, I will table the regulations on introducing sustainable urban drainage later this year. I am happy to write to her about auditing existing provisions. My hon. Friend the Under-Secretary is visiting Newlyn soon to discuss with fishermen the problems they are facing.

Water Bill

Debate between Baroness McIntosh of Pickering and Dan Rogerson

Monday 6th January 2014 Commons Chamber

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

Water Bill

Debate between Baroness McIntosh of Pickering and Dan Rogerson

Monday 25th November 2013 Commons Chamber

[Dan Rogerson]

I agree that, as my right hon. Friend the Secretary of State said, we need to capture more of this water and make it work for us in such a way that we can improve environmental outcomes as well as resilience. That is very much what we want to happen.

[Miss McIntosh]

In terms of capturing water, is my hon. Friend going to deal with SUDS and surface water, because I know that he will care as passionately about this in his new position as he did when he was a member of the Select Committee?

[Dan Rogerson]

I had a premonition that I might get such an intervention from my hon. Friend, the Chair of the Select Committee. I know she is pleased that we are, as a Government, making progress towards implementing this process in April 2014. She would like it to be sooner, but we have to make sure that we get it right. The views of the Select Committee have been very useful in making sure that we get it brought in adequately.

We heard a couple of very specific questions on market reforms. My hon. Friend the Member for St Austell and Newquay asked about small charities that operate from residential properties. The reform would affect non-domestic properties, so if a charity is operating from a property that is primarily residential, it will not have access to it, but it will be open to it if it is operating from other premises.

On abstraction reform, I entirely agree with Members’ comments about the need to tackle abstraction, which is damaging our rivers. We are tackling this in two ways. First, we are taking action using the tools already available to address over-abstraction. The Environment Agency has reviewed thousands of abstraction licences and has changed about 80 of them, returning 75 billion litres of water per year to the environment in England. That is equivalent to the annual average water use of a city larger than Birmingham. There is clearly a lot more to do in the individual catchments that have been mentioned, and we have to take account of the stress that is put on them.

The Bill will also help by removing water companies’ right to compensation to ensure that the funding of these schemes moves into Ofwat’s price review process, which is a far better way of tackling over-abstraction. In the longer term, we need a reformed regime fit to face the future challenges, and we will publish a consultation on possible options in December. [Interruption.] These reforms will affect a range of businesses, so we need to get them right.

Food Contamination

Debate between Baroness McIntosh of Pickering and Dan Rogerson

Thursday 17th October 2013 Westminster Hall

[Miss McIntosh]

I congratulate my hon. Friend on his first outing as Minister. There is some common ground between us, but there are still areas of disagreement. Nevertheless, we have had a very good debate and exchange this afternoon.

It was remiss of me not to thank all those who participated in our inquiry, including the witnesses, who gave both oral and written evidence. I will momentarily point out to my hon. Friend the Minister that his name is recorded in the formal minutes of both reports and we were delighted to have his support.

[Dan Rogerson]

The hon. Lady is absolutely correct. When I was responding to the hon. Member for Ogmore earlier, I thought that he was referring to the NAO report when he talked about “two reports”, rather than the two phases of the work that the Committee did.

[Dan Rogerson]

No—absolutely not.

[Miss McIntosh]

Anyway, a week is a long time in politics.

I will just go through some of the points that have been made. Regarding traceability and the supply chain, I think that the Minister has taken the point, and we need to process that.

On insufficient testing, we concluded—although none of us spelled it out, and it was remiss of me not to do so—that the FSA at the moment does not force the industry retailers to carry out testing. It would be good if we could agree that the Department should look into that and consider giving the FSA a steer on it. Perhaps the Elliott review will do that, and say that large retailers must carry out regular DNA testing of meat ingredients for frozen and processed meat products, with the cost being borne by themselves—the industry—and not by the consumers. That point has been echoed by hon. Members throughout the debate and I think that consumers will respond to it. We insisted, in our conclusions, that the results of the tests ordered by the FSA should be submitted to it and that a summary should be published on the retailer’s website.

There must be change in respect of issuing horse passports. There is a worrying increase in numbers of horses in my county, let alone between Northern Ireland and southern Ireland.

We need to deal with insufficient testing by retailers, including supermarkets, especially those who do not do it at all. I will be pleased if the Elliott review addresses the issue of analysts. I welcome what the Minister said about strengthening intelligence sharing.

[Dan Rogerson]

I should like to mention a couple of points that I did not talk about directly in my remarks. The issue of horse passports will be settled at European level, but the Government are keen to engage in that process and see what can be done, as long as it is proportionate, to ensure that we get it right.

The NAO considered capacity in terms of analysts, although it did not say that there was a lack of capacity. The FSA holds that under review, so we will keep a close eye on that.

[Miss McIntosh]

I am most grateful to the Minister. Although it would be hugely expensive to deal with, there is concern about abattoirs slaughtering both cattle and horses. We need to be aware of that.

There is a real issue about the governance and structural problems. I poked fun at the shadow Minister, the hon. Member for Ogmore, about how his Government set the structure up. However, it is possible that we have been seen to compound that situation. We will be able to draw a line under this matter only when we can say, hand on heart, where contamination, adulteration and lack of authenticity entered into the food chain. The sooner we can see prosecutions of the perpetrators from the big retailers, the more it will boost consumer confidence.

I endorse comments made about the processed foods that have been a cause of concern. At the heart of our report was concern about processed foods and frozen foods.

I am delighted that the Minister, and the shadow Minister, gave us a hearing today.

Question put and agreed to.

Oral Answers to Questions

Debate between Baroness McIntosh of Pickering and Dan Rogerson

Thursday 10th October 2013 Commons Chamber

[Dan Rogerson]

I entirely understand what the hon. Lady has said about the cost of living. We are all aware of the problem. I represent an area in which incomes are very low, and in which water bills are a significant issue. It is clear from our discussions with Ofwat—my right hon. Friend the Secretary of State has engaged in some recently—that it understands the importance of the issue, and believes that the benefits to water companies of, for example, low borrowing rates should be passed on to customers. I am pleased that companies are considering the introduction of social tariffs, and I shall continue to keep the matter under review.

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

I congratulate all who have been elevated to both Front Benches. We look forward to the return, in the very near future, of those of them who have served on the Select Committee—[Laughter]—in their ministerial capacity.

Will my hon. Friend use his good offices to press Ofwat to ensure that the 2014 price review enables the necessary investment to be made in the infrastructure and in innovation? May I also tease out of him the date on which the Water Bill will be given its Second Reading, and can be scrutinised by Parliament?

[Dan Rogerson]

I thought for a moment that my hon. Friend, who chairs the Select Committee, was petitioning the Prime Minister to summon us back to it, and that our tenure on the Front Benches might be very brief.

The timing of the Bill is, of course, a matter for those who manage our business. I look forward to debating the issues with colleagues in the House and, subsequently, in Committee.

What my hon. Friend has said about investment in the sector is crucial. We have already managed, through our regime, to deliver huge investment in water infrastructure. We now want to establish a regime which, while being fair to customers, also attracts further investment, so that we can have an industry that is fit for the future.

Water Industry (Financial Assistance) Bill

Debate between Baroness McIntosh of Pickering and Dan Rogerson

Wednesday 14th March 2012 Commons Chamber

[Miss McIntosh]

I am most grateful for that clarification. It would be interesting to know the background to the amendment and, in particular, to new clause 1. It would be helpful to know what discussions took place and what level of support the hon. Gentleman has from water companies and from Ofwat.

I did not have the opportunity to discuss this matter on Second Reading. It is appropriate to examine new clause 1 and amendment 1, as I have a concern and I am trying to help the Minister. A helpful Library note spells out clearly:

“The Government intends that bills be reduced from April 2013. The funding will come from the HM Treasury Reserve until the end of the spending review period in 2014-15. After that time funding will come from the Department for Environment, Food and Rural Affairs…budget.”

I understand that that was confirmed in a House of Commons debate in January.

“The payment will continue until ‘at least the end of the next spending review period’.”

So my question is: from which part of the Department’s budget is this funding going to come from 2014-15 until, presumably, 2019-20?

I must make a general remark about departmental budgets, and I do not think that the Department for Environment, Food and Rural Affairs is any different in this regard. We had the opportunity to question the Secretary of State on the annual report, in its new revised format, and the annual accounts. I think that there is a lack of transparency and clarity in all the departmental accounts—I do not single DEFRA out. I am deeply concerned about the position for those in the south-west whose water bills will or could benefit from this Bill, and for those in other areas who could benefit subsequently, as highlighted in amendment 1 and new clause 1. My real concern relates to how this will be funded in the next spending review period, given that we have not yet worked through all the savings in the budgets of the Department and other agencies, such as the Environment Agency. I am prepared to give any assistance I can in arguing with the Treasury that this money should be ring-fenced. Obviously, there is real concern that if it is not ring-fenced or if additional money cannot be found, other parts of the budget currently being spent on farming or flood defence will simply be hijacked for this purpose.

With those remarks, I welcome the opportunity to have this debate and to understand a little more about the thinking behind these proposals. However, I shall have to disappoint the hon. Member for Luton South by telling him that I will not be following him into the Lobby.

[Dan Rogerson]

It is a pleasure to serve under your chairmanship, Mr Hoyle. I follow the hon. Member for Thirsk and Malton (Miss McIntosh), whom I customarily refer to as “Madam Chairman” in the Select Committee. Obviously, it is a delight still to be considering this Bill. We are doing so rapidly, in order to make progress and get it on the statute book, so that it can start delivering fairness for my constituents and those of other Members across Devon and Cornwall, and so that we can start putting in place the framework for the necessary works here in our capital.

Although the amendment and the new clause proposed by the hon. Member for Luton South (Gavin Shuker) present a number of opportunities for discussion, they will not necessarily take us that much further forward. The amendment makes a reasonable point: if in future the Secretary of State or any other Secretary of State wishes to use the enabling powers of the Bill to make a difference to another part of the country that seems to have been disadvantaged, that should be explained to the House. I would have thought that it would be extraordinary, however, for such a thing to happen without a great deal of public debate or decades of campaigning, such as that which we have experienced in Devon and Cornwall. Perhaps other parts of the country might have such a keen hold on the Secretary of State or any future Secretary of State that they could get it all pushed through within a matter of weeks, but I suspect that that would not be the case. The Treasury would want to know very plainly and in great detail why the money was required and why it was felt to be a priority.

--- Later in debate ---

[Dan Rogerson]

The hon. Lady is very generous in ascribing the idea to Ofwat. I suspect that Ofwat could probably do that anyway and would not need legislation; if it wanted to publish a league table, it could get the information. Ofwat would have information from companies about where the money was coming from and where it was going and could publish it without that needing to be on the face of the Bill.

[Miss McIntosh]

I remind my hon. Friend that, as those on the Opposition Front Bench might not be aware, the Select Committee had some very compelling evidence from the water companies about social tariffs paid for by charitable trusts from each water company.