Water Industry (Financial Assistance) Bill

Alison Seabeck Excerpts

Tuesday 6th March 2012 Commons Chamber

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

rose—

[Dan Rogerson]

I suspect we will hear more about people in Plymouth who are in that situation.

[Alison Seabeck]

Actually, I rose to talk not about people in Plymouth but about the additional costs that the water company has had to bear of placing pumping stations in places that will not spoil tourists’ views of a harbour or a beach. That is certainly the case in some places in Cornwall. People do not see those costs but South West Water bill payers have been burdened with them.

[Dan Rogerson]

The hon. Lady makes an excellent point, and we can set that against the background of what others have said in this debate and in our previous debate on this. People in our part of the world have low incomes and comparatively high housing costs—not as high as those of constituents here in London, but much higher than in the north-west or the north-east. When combined with a low income, those costs are a significant pressure on people’s spending power.

I am delighted that the coalition Government have recognised that this problem needs to be dealt with, but it is not easy. The previous Government looked at the issue for some time and I pay tribute to those who have previously campaigned on this, including many Members who are still in the House. Members from my party and some Conservative Members, as well as Linda Gilroy, who was very useful to have involved, along with the hon. Member for Plymouth, Moor View (Alison Seabeck) and the right hon. Member for Exeter (Mr Bradshaw), all helped to put pressure on the then Labour Government to take action. We got as far as getting the Walker review, so I suppose we should be grateful for that.

[Alison Seabeck]

Before the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile) leaves the Chamber—oh no, he has gone—I wanted to draw attention to something he said earlier about the problem being partly due to the fact that there were only three Labour MPs in the south-west. Clearly, it is about quality, not quantity, but on that premise, given that we have a very large number of MPs from the Government parties in the area now, I assume that everything we want in the south-west will happen. That was a little churlish because the hon. Member for North Cornwall (Dan Rogerson) is right that there was complete cross-party effort on this.

[Dan Rogerson]

I think we can point to the time before the Labour Government, during the early days of the privatised industry, when, although there was a preponderance of MPs in the area from the Government party, we did not get anything. We have to recognise that there has been a problem and that it is being dealt with to some extent.

The company still has work to do, so we are not looking at a static position. We are looking at the fact that, as the hon. Member for Hendon (Mr Offord) said in his excellent contribution in our previous debate on this issue, raw sewage is still being washed out. That happens in London, as the hon. Member for Hammersmith has described, and in coastal locations such as Trevone, which I mentioned in an intervention. Water companies argue that that is a very rare event, happening two or three times a year, but the statistics show that it happens far more than that. Rainfall patterns are changing and development patterns have changed. We have, fortunately, got some affordable housing and market housing built in some of those communities, but that has added to the burden on the sewerage systems, which are just not up to the job. South West Water still has work to do and it also has to take responsibility for taking over the private sewerage systems. I welcome that change, but it will add to the costs going forward. The measures are long overdue and will, I hope, help to offset some of the burden on bill payers.

I have some concerns about the debt model that has been agreed between Ofwat and the water companies. The debt that has been taken on over previous decades to provide infrastructure is not being paid off to any significant degree. Under the debt model, those loans are repackaged periodically.

The water companies and Ofwat argue that that is a great deal because it keeps the cost of borrowing down—if we were to start to pay off these things now, we would put bills up even higher. I see that, but I am concerned that, essentially, we are saying that the Government’s sensible proposal will have to continue for ever, because we will never, ever pay off some of the significant debt that has been arrived at to put in the infrastructure. I hope that Ofwat will continue to look at the issue, because my constituents come to me and say, “At least we must have paid off a lot of this money by now and we must be getting to the point where the bills will start to go down.” No we are not, because the debt is constantly repackaged. That issue perhaps needs to be examined.

Hon. Members have talked about national WaterSure, or social tariffs. I know that the advice from the Treasury is that that effectively amounts to a tax—we need to examine that—but any scheme that seeks to help those who are struggling the most ought to do so regardless of where those people live. Even after the welcome investment in tackling inequality in bills across the country, people in my constituency and in other constituencies across Devon and Cornwall—because of low income, high housing costs, and high water and sewage costs—will still be worse off than people in other parts of the country.

I accept that other hon. Members will say, “Come on, you are getting this and surely you must be satisfied with it,” but I will be satisfied when I think there is a fair deal for people in my constituency and in neighbouring constituencies. As I said in a Westminster Hall debate earlier this year—or perhaps at the end of last year; memory fails me—I hope that we reconsider having some sort of national tariff. If measures are kept within region, the pressure on the other bill payers will be so high that those measures will not be allowed to be significant enough to meet the need.

We also need to keep a close eye on the profits of the water companies. In an excellent contribution to the first part of the Second Reading debate, my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) mentioned the sometimes arcane business models and the layers of companies that manage to pass on significant dividends. Ofwat could do more to look at the profits there. As my hon. Friend the Member for St Ives said, the leadership at South West Water is far better than it was and those people have engaged hugely with the campaign to deliver on this issue. They are being open and realistic about what is achievable, but all water companies need to consider the contribution that they, too, could make to perhaps providing a more generous WaterSure or social tariff scheme. We need to be vigilant about that.

--- Later in debate ---

[Kate Green (Stretford and Urmston) (Lab)]

It is a pleasure to speak in the debate. Many hon. Members have noted that the Bill seeks to deal with two specific local issues, the south-west in respect of the first clause and London in respect of the second, but the Bill is widely and non-specifically drawn.

I take the opportunity to ask about Ministers’ broader strategic intentions. In what the clauses encompass there is some real potential for development of the Government’s broader water strategy, and I am keen to explore two questions in relation to that. The first is affordability. A number of hon. Members, including the hon. Member for North Cornwall (Dan Rogerson), who has just completed his excellent speech, have raised some important issues about that. In common with other non-south-west Members, I want to put it on record that I have no concerns at all about ensuring a fair water deal for customers in the south-west, but customers across the country are struggling with water bills, as a number of hon. Members have pointed out, as the cost of living rises, and the cost of water and other utilities creates additional pressure on household budgets.

The Bill offers Ministers the opportunity to think creatively about how Government can help to relieve those financial pressures, and perhaps to give some indication today of their thinking in that area. Social tariffs have been rightly identified as the route to achieving that, but there is a clear need for the industry and Government supporting the industry to ensure that we raise the game. Water is clearly not a luxury and some families, such as those with young children and families where there is ill-health or a disabled member of the household, are hit particularly hard. WaterSure is helpful in addressing some of the additional need that arises for those families, but it applies only to families with more than three children in the household and the take-up is not particularly good. Only about a third of households that could benefit from WaterSure are taking advantage of the scheme.

The hon. Member for North Cornwall and others mentioned the need to spread water metering more widely and some of the properties where that is quite challenging. It is also important to recognise that without the benefit of well designed social tariffs, families with higher levels of water usage because families are larger or because of health and other needs may find that water metering worsens their position. It is therefore important that we design very carefully the way in which we apply tariffs to meet the needs of particular families and to support those on lower incomes.

I urge the Minister to recognise the lessons that have been learned in relation to social tariffs from the energy industry, and work that has been done with energy utility companies. The first and extremely important lesson is that a hands-off approach is not sufficient. If it is left to the industry alone to apply the sorts of tariffs that support low-income households, the result is poor protection for the poorest consumers. There would be a lack of information about tariffs and the benefits of more favourable tariffs would more often accrue to better-off customers who can pay by direct debit, for example, which reduces industry costs but passes the benefits to those who can operate their personal finances in that way. Customers often end up on a tariff that might initially have been quite good for them but becomes inappropriate, and there is a lack of proactivity on the part of the supplier to seek to inform individual consumers and improve their position. That is understandable in a market where competition pertains, as is the case for energy utility companies, but it will happen all the more in a market that is effectively a series of regional monopoly markets, as is the case for the water industry.

There have been some interesting experiments on improving the coverage of social tariffs and affordable bills in the energy industry, and I hope that Ministers will take those into account in relation to water supply. There have been some interesting experiments on entitlement to the benefits that support low-income families or those that meet a particular additional need, such as disability benefits. There has almost been a two-way trade in working around that linkage with the receipt of benefits. It is of course possible to think more creatively about how information held by the Department for Work and Pensions and other agencies on who is in receipt of financial benefits could be used more widely to identify households that might also be eligible for social tariffs, a point the Secretary of State alluded to in her opening remarks last week. Although I appreciate the concerns about data sharing, I think that the benefits would surely outweigh the risks and urge Ministers to think imaginatively about how the data could be shared effectively.

[Alison Seabeck]

My hon. Friend talks with a great deal of experience in this field. Could she offer a view on whether the introduction of universal credit will make it more straightforward to operate a social tariff through the benefits system or slightly more complicated because it will be less easy to pull out certain elements and see where people’s needs are?

[Kate Green]

I will not venture to speculate on that—it is disappointing that I, a universal credit junkie, do not have an answer. This is one of the rare moments when I say that it might be useful that universal credit is a household benefit, because water is of course a household bill and so the calculation might be easy. However, a number of the elements of local financial support, such as council tax benefits, will not be within universal credit, so it might not be a straightforward indicator of which households and properties are particularly likely to be linked to high water usage. I hope that the Minister will take the opportunity to discuss the localising of benefits with colleagues in the Departments for Work and Pensions and for Communities and Local Government and to explore what the options might be following the introduction of universal credit. The Secretary of State for Work and Pensions certainly makes great claims about the access to data that universal credit will both rely on and introduce, and I think that it is undoubtedly the mood of the House that we would want to see the data used effectively and constructively, with careful attention to privacy and data sharing concerns, in order to help bring water bills down.

As I have said, the linkage to those in receipt of benefits works two ways. It is not just a case of looking at benefits data and identifying people who might be eligible for a social tariff; it is also about looking at people who are on social tariffs and ensuring that they are in receipt of all the financial support to which they might be entitled through the benefits system.

The Minister may be aware of—and if he is not, I urge him to go and look at—the excellent schemes that have been developed with energy utility companies in order to link benefits checks, proactive benefits advice and entitlements assessments, working closely with a number of charities, to customers on social tariffs. That interesting model has worked well in several parts of the country, with several utility companies and advice agencies working in partnership, so I hope that he will consider whether it might work for the water industry, too.

I endorse strongly what my hon. Friend the Member for Bolton West (Julie Hilling) said about help for people struggling to pay water bills, and I ask the Minister also to comment on consumer education in terms of water usage, because if households can use water more efficiently, they will also help to manage their bills.

My second issue relates to clause 2, and I shall look again at its wider potential beyond the immediate need that it seeks to address—that of resolving the serious problems in London. It relates to the substantial infrastructure investment that the Bill envisages but which I again encourage Ministers to think about using proactively in terms of infrastructure development throughout the country.

At Davyhulme in my constituency, United Utilities operates a large sewage and water treatment plant, which was built in the 19th century but has been at the forefront of technical innovation and development since it was established—and no more so than now. Its groundbreaking sludge treatment project, which when fully up and running will be the largest such programme in the world, takes raw sewage and effectively transforms it into renewable energy sources, with the treatment by-product being used as soil conditioner.

That interesting and remarkable project has already benefited from modest financial support from the Government for its pilot stage, but, if drawing such green energy supplies from sewage and water treatment is to be a real runner, we might want to encourage substantial national investment in it. It is estimated that the Davyhulme plant, when fully operational, could supply green energy to 5,000 homes in the north-west, so there is substantial potential for such energy sources to become a major part of the Government’s renewable energy strategy. I should therefore be interested to hear from the Minister what discussions are taking place with his colleagues in the Department of Energy and Climate Change to link investment in our water treatment sector to the development of new energy supplies.

Under clause 2, I see how Government thinking about their role in supporting the industry’s development through investment or pump-priming might be taken forward. There is a real win-win possibility, which I am sure the Minister will want to explore.

I am grateful to have had the opportunity to raise these wider issues in the context of this Bill. I appreciate that it has not been introduced to deal with the long-term strategic issues of infrastructure and affordability, but in the absence of any other water legislation, or of any sign of new legislation, this may be the only legislation that we have to work with for some time to come, and it would be a great shame if we were not able to maximise its potential.

Oral Answers to Questions

Alison Seabeck Excerpts

Thursday 1st March 2012 Commons Chamber

[Richard Benyon]

I will examine any suggestion that unpicks a system that has failed fishermen and the marine environment. I am putting all my energies into trying to get a meaningful reform that will enable the regional control of fisheries, taking this away from the micro-management by people who often sit about 1,000 miles away from the fishermen who are actually doing the work.

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

It is more than 14 months since the Department sought guidance from the Commission on how to achieve an uplift in area VII—I spell that out for the benefit of Hansard—effort.

[Hon. Members: “Seven”] Well, it is seven, but it has to be written as “VII”. Can the Minister therefore let those with scallop interests know when he expects that guidance to come forth, and what he is doing to speed things up?

[Richard Benyon]

I do understand that this is an important matter for area VII and I will make sure that I write to the hon. Lady with full details about how we are taking this scalloping order forward.

Water Industry (Financial Assistance) Bill

Alison Seabeck Excerpts

Wednesday 29th February 2012 Commons Chamber

[Mrs Spelman]

My hon. Friend is quite right. Indeed, I look across the Chamber to the right hon. Member for Exeter (Mr Bradshaw) as a demonstration of the cross-party consensus that existed, which I have acknowledged. The diligence with which south-west constituency Members raised awareness of this historic unfairness is the reason our Government have sought, finally, to do something about it and stop turning a deaf ear to families struggling with that historic legacy, which is what had happened for too long.

There are limits to the help that we can give, because of the vast economic deficit that we inherited. However, we believe that the Government should help to correct the historic inequity that has left water bills in the south-west so markedly out of kilter with those elsewhere in the country. We have therefore committed to funding South West Water to enable it to cut bills by £50 a year for all household customers. The payments will start in April next year and will be maintained to the end of the next spending review period. The £50 reduction will be transparent on customers’ bills and, contrary to the impression that might have been gained, will not provide any sort of benefit to South West Water. It will simply be passported straight through to the householder, who will receive that money in full.

We take pride in helping hard-pressed families in the south-west, but we recognise that the challenge of helping vulnerable customers with water affordability problems is a different and more general problem that can be felt in households anywhere in the country, as the hon. Member for Birmingham, Selly Oak (Steve McCabe) suggested. As constituency MPs, we all know the families that we are talking about. That is why our water White Paper has set out definitively the dual approach that we are taking to tackling affordability issues. First, we are taking measures now to enable water companies to introduce social tariffs and to tackle bad debt. Secondly, over the longer term, we are introducing a package of reforms to increase competition and innovation in the industry that will help to keep bills down and improve customer service.

We consulted recently on how water companies could design social tariffs to reduce the bills of those who would otherwise struggle to pay in full. We will publish final guidance in the spring to enable companies to bring forward social tariffs in their charging schemes from 2013. Water companies’ responses to the consultation have shown their commitment to addressing customers’ affordability problems. Many already have schemes in place, such as trust funds, matched payment schemes, referrals to benefits advice and some existing social tariffs, but we have to be realistic in acknowledging that bad debt is also a serious problem in the water industry.

Bad debt adds an average of £15 to all paying customers’ bills, and this Government are taking action to address that. We are consulting on measures to reduce bad debt, and we are considering two options. The first is a regulatory measure that would make landlords liable for the water charges for their tenants’ properties if they failed to supply details of those tenants to the water company. However, we are mindful that the measure has to be proportionate and easily administered, so we are also consulting on whether we should ask landlords to share their tenants’ details with water companies voluntarily.

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

Will the proposals that the Secretary of State has just mentioned be similar to the present regulations involving landlords and energy companies, or might they be somewhat different?

[Mrs Spelman]

Electricity utility bills are the domain of the Department of Energy and Climate Change, rather than the Department for Environment, Food and Rural Affairs. We are seeking to ensure that people who use water pay for it; it is a question of fairness. Water has historically been treated somewhat differently from other utilities such as electricity and gas, so there might be some differences in the details of the proposals. The hon. Lady will have an opportunity to raise that point as part of the consultation.

This Government are going to get a grip of the issue of bad debt, which is forcing up bills for those who do the right thing and settle their bills on time. We are on the side of those who play by the rules and pay their bills in good faith and, unlike the previous Government, we are going to ensure that their interests are properly served by clamping down on those who do not, or will not, pay their bills.

Despite the considerable progress that has been made on cleaning up our water environment, challenges still remain, not least in the river that ebbs and flows outside these very walls. The House has previously debated the fact that London’s sewerage system is operating close to capacity. We are now at a stage at which waste water containing untreated sewage overflows into the Thames between 50 and 60 times a year, involving an average total of 39 million cubic metres a year. The sewage discharges kill fish and leave litter and debris floating in the water. Because of the tidal ebbs and flows, that debris can take up to three months to reach the mouth of the river, and frankly, it stinks—just ask David Walliams. Hon. Members will recall his Sport Relief challenge last spring to swim 140 miles along the length of the Thames here to Westminster. His challenge should have been the distance, the strong currents and the undertows, not the quality of the water he swam in—water that was bad enough following heavy rain to place his entire endeavour in jeopardy.

We might not quite face the “Great Stink” of 1858, when the stench of sewage led to this House’s curtains being soaked in chloride of lime in an attempt to disguise the overpowering smell and, ultimately, to Parliament being suspended, but the sewer outflows will only get worse with population growth, increased urbanisation and more extreme rainfall events caused by climate change. This, as I am sure all Members will agree, is unacceptable.

We are the world’s seventh largest economy; this is our capital city; this city is a shop window for our entire country—and the status quo is simply not good enough. This Government are going to put the “Great” back in “Great Britain”—a Government who are showing that Britain is open for business and competing globally. That is why we need a 21st century solution, not a 19th century one that would still rely on allowing the Thames to function as a sewer.

--- Later in debate ---

[Mary Creagh]

The right hon. Lady might want to answer her own question. We commissioned the Walker report, which said that Ofwat should do a six-monthly league table of water companies showing the best and worst performers. She has had 18 months. Has she implemented the recommendations of the Walker report? She has made her own guidance to water companies on social tariffs voluntary, not mandatory, and I fail to see how allowing them to choose whether to implement them will help customers.

[Alison Seabeck]

Perhaps I can shed some light on what was going on under the previous Government. In the Plymouth south-west area, a detailed pilot was undertaken to identify people for whom water was unaffordable. That was to feed through into forward policy development. Anna Walker used that as part of the basis for some of the work that she did, so it is not true that we were not considering how to reach the people who needed help.

[Mary Creagh]

I thank my hon. Friend for that clarification. It is clear that much work was done in the south-west because it has the highest penetration of WaterSure customers and the highest rate of metered households, despite the fact that water is plentiful in the south-west, so it has nothing to do with scarcity. It has to do with people making a rational economic choice and understanding that if they move to metered bills, their costs will go down.

The Government should be using existing data about benefits to ensure that everyone who is eligible is on the WaterSure tariff. I hope we have described the heavy lifting that we did on that tariff. Last year the Government consulted on taking on the costs of WaterSure and absorbing them at a cost to the Exchequer of £10 million a year, as opposed to continuing the cross-subsidy. This idea was dropped from the water White Paper. What has happened to that notional £10 million? Why is it not being used to part-fund company social tariffs or a wider tariff to help the wider population?

Londoners will see their bills rise by £70 to £80 a year when the Thames tunnel is finished in, we hope, 2020. London has some of the poorest people in the country and a significant number living in water poverty. WaterSure will not help most of them. It is imperative that company social tariffs are introduced well before the Thames tunnel is completed to minimise the financial impact on Londoners, yet the Government’s draft guidance on company social tariffs shows that they are adopting a minimalist approach.

The Government have ruled out data sharing, which is key to helping water companies identify customers in water poverty and enabling them automatically to reduce their bill, which is obviously the least painful way, rather than allowing people to get into water debt and then taking action through the courts to pursue the money. They have ruled out an affordability scheme administered nationally, and they have ruled out an extension of WaterSure, which is the only national social tariff. Under DEFRA’s draft guidance, the design of social tariff schemes is left entirely to the water companies. Indeed, it is their choice whether to implement a scheme at all. This is the big society in action: a postcode lottery for millions of customers facing water poverty. We believe that it is untenable for the Government to pass a water financial assistance Bill without providing any assistance to the rest of the country. We will pursue amendments that would oblige water companies to deliver a social tariff scheme that meets clear and uniform criteria.

--- Later in debate ---

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

It is a great irony for us in the south-west, surrounded by water as we are, that we have the highest water bills in the country. I represent a coastal city that sits on three rivers, and the injustice of the expense of water bills in Plymouth aggravates almost everyone I know in my constituency and the wider region.

Water bills in the south-west are, on average, 43% higher than in the rest of the country and we have 200,000 households under water stress—paying, as we have heard several times, more than 3% of their income towards their bills. A Government Member said that there were more people in his region to which that applies, and that is true, but we have the highest percentage of people in that position. Those people are pensioners and families with high and essential water needs. They are often supported through WaterSure, but only about a third of those eligible get that help.

People have been paying through the nose for a basic commodity. I accept that it needs to be valued because, with climate change and other pressures, it could become more scarce. If we do not prepare well for the decades and century ahead how we manage the future costs of the necessary work and, from my perspective, prevent a repeat of the mistakes that were made when water was privatised and the south-west paid a disproportionately high price, we will all fail water bill payers. The Bill clearly tries to set out some ground rules in that regard.

The high cost of water is not a new problem, but it has dominated concerns in Plymouth throughout my time in Parliament and for many years before that. It has posed problems for Governments of all political persuasions and it will clearly continue to exercise the current Minister in the months and years ahead.

As we have heard, for many years, I and other south-west Members have campaigned to address the higher bills left us by privatisation. The detailed Walker review did, to Anna Walker’s credit, much of the groundwork for the announcements that followed, including the Chancellor’s announcement of the £50 refund for households in the south-west, and ultimately led to the Bill.

Through parliamentary questions, Adjournment debates and the work of the all-party parliamentary water group, which was initially chaired by Linda Gilroy, who has rightly been lauded in the Chamber today, then by the hon. Member for Thirsk and Malton (Miss McIntosh), and then by the hon. Member for St Ives (Andrew George), Members of all parties have sought to keep the issue high on the agenda.

At a time of soaring utility bills, high inflation and stagnant wages, action on water bills is welcome. However, it needs to be meaningful and lasting to make water bills more affordable in the long term. The continuing upward pressure on the south-west, despite the refund, will mean that many families dip below the poverty line. It is not acceptable to increase the number of children and pensioners in poverty. Although I welcome any help that the Government are able to give—it would be churlish not to welcome the £50—it is small relief from ever-rising bills. This is not the end of the debate and the problem extends beyond the south-west.

That said, all of us who live in and represent constituencies in the south-west—I should declare an interest as a South West Water bill payer—have a duty to ask whether the Bill will effect meaningful and lasting changes. Sadly, my conclusion is that it will not. There is a strong view that this gain will be temporary, and that even with the changes, water bills in the south-west will be back at their current levels within two or three years, for the reasons I have set out, with wages stagnant and inflation high.

Will the Minister look at the issue of water companies overcharging for surface water drainage, which affects water bill payers specifically in the south-west, but also more generally? Very many households do not connect their waste water into the sewerage system and water companies do not have complete data on where those properties are—I have been out in my patch trying to identify them. In Plymouth, no council data exist for the 1950s from the plans, and it is believed that later plans are inaccurate in terms of the connection of mains sewers to properties. It is wrong that the default position is to assume that people are connected and charge them. As a result, the onus is on the bill payer or house owner to understand exactly where their water goes and whether they have a direct connection into the mains sewer. That adds further unfairness to the system, and I ask the Minister to address it at some point.

I wholly support the comments of the hon. Member for Newton Abbot (Anne Marie Morris) on park home owners. Many people in Glenholt park in the north of my constituency are anxious about how the proposals will play out for them, and I am afraid that not all park home owners are responsible or willing to be generous with the people on their sites.

A number of related issues, including the adoption of private sewers, will impact on the cost of water nationally, and they need to be understood with regard to the Bill. I note that the explanatory notes state that the Bill gives the Secretary of State

“a power to give financial assistance”

with regard to the

“construction of…sewerage infrastructure”.

I assume that that is partly designed to reassure Thames Water bill payers on the linked new ring main sewer. However, civic schemes are not mentioned in the Bill, so when the Minister winds up, will he tell the House whether assistance could be applied for by a water company that finds it has a much more extensive private sewer commitment than it believed it had inherited? The Minister will know—we have written to each other on the subject—that we are unclear what the burden is likely to be for some water companies in that respect.

The Government need to introduce measures to tackle long-term water affordability, not just in the south-west but nationally, and they should consider the feasibility of a national social tariff. We have heard that from other hon. Members and I hope the Government will consider the proposal.

Anna Walker, who dedicated a whole chapter to the injustice felt and experienced in the south-west, set out a number of main challenges nationally, including the cost that other bill payers incur as a result of bad debt—it is around £15 per person, as we have heard. She looked at the implications of metering and considered how future costs should be met, acknowledging some of the issues that we have debated. She was also clear that it was appropriate for water customers to pay for improvements to the quality of water and the disposal of sewage, because they ultimately benefit from such improvements, but she was also clear that customers should be fully consulted before the Government agree to such changes to avoid the accusation of imposing a stealth tax. I believe that the proposals of my hon. Friend the Member for Wakefield (Mary Creagh), the shadow Secretary of State, on parliamentary oversight of specific schemes, should be debated seriously in Committee on the Floor of the House.

The Bill will be a waste of time if, within a short period, the problem of affordability comes back on to the agenda, not just in the south-west but nationally, and if customers feel that they have not had input into the reasons for the higher bills that they pay. The Government will do them no favours if they simply appease us in the south-west who have kicked off over the years and made a lot of noise about our bills, and they will miss an opportunity not only to consider water affordability in a more strategic and inclusive way but obviously to tackle the historical injustice in our region.

Whatever the new regime, basic standards must apply, but that is not entirely clear from the Bill, and it needs the appropriate regulation, which also is not entirely clear. As has been said, the House must be able to consider every proposal on its merits, but that is not in the Bill either. So more work needs to be done. Given the expertise and experience of Members across the Chamber, I hope for further and more detailed debate in the short Committee stage because it would be of benefit to the Bill.

Water and Sewerage Charges (South West Water)

Alison Seabeck Excerpts

Wednesday 9th March 2011 Westminster Hall

[Mr Sanders]

I only half-share the right hon. Gentleman’s view, because Ofwat is the body that should protect the consumer and it has allowed South West Water to raise charges by the amounts that I described.

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

I agree with the hon. Gentleman’s assessment that Ofwat’s role in this regard is key, although I also accept the points made by my right hon. Friend the Member for Exeter (Mr Bradshaw). I have just received an e-mail from one of my constituents that makes exactly the same point as the hon. Gentleman. My constituent says that he lives in a three-bedroom house; there are two residents, and he has received a bill for more than £1,000 for the coming year. Ofwat has agreed these prices. My constituent’s question is, “Do they realise just how much individual customers are having to pay and the impact on those households?” I urge the Minister to look again—please—at the role of Ofwat in all this.

--- Later in debate ---

[Mr Sanders]

My hon. Friend is absolutely right. In my constituency of Torbay, the unitary authority area now has a gross value added level lower than Cornwall’s was when it qualified for objective 1 assistance, and there are other such pockets in the south-west.

[Alison Seabeck]

I would like to reinforce the hon. Gentleman’s point. Does he not agree that, with the current increase in water rates, we will see more pensioners, particularly in the area around Torbay and in my constituency of Plymouth Moor View, falling back down below the poverty line? The Government would not want to see that happen, but undoubtedly they will.

[Mr Sanders]

The hon. Lady is absolutely right on that point.

If Ofwat is not supportive, we at least have political unity around the idea that something more than a social tariff and something specific to the south-west needs to be done, and I need only consult the Hansard report from a previous debate on this very issue, in January 2010, to see that. In that debate, we had the support of the then Labour Members for Plymouth and some warm words from the then Minister with responsibility for water, the hon. Member for Ogmore. The right hon. Member for West Dorset (Mr Letwin), who is now one of the Prime Minister’s chief aides, stated that

“there seems to be a strong case for some kind of spreading of cost”—[Official Report, 27 January 2010; Vol. 504, c. 323WH.]

The Liberal Democrats have, of course, championed the cause for many years. I see that I am joined today by Members from all parties, who are united in wanting to get something done for their long-suffering constituents, and I hope that many of them will be able to contribute later in the debate.

The overarching problem, which Walker ably demonstrates, stems from privatisation. On privatisation, South West Water had the smallest asset base—what was called the regulatory capital value—per customer, and it now has the highest, at 210%. South West Water customers will therefore pay far more for longer. If that situation were to occur in any other utility it would be outrageous, but for some reason successive Governments have tolerated it in the water industry. The previous Government sadly never understood the damage caused by the failed privatisation. I describe it as failed not because the water companies have not provided a good service—on the whole they have—but because it has simply not delivered a market, not even a heavily regulated one. No domestic consumer can choose between water companies, and instead of being reinvested fully in the service, the surplus created is converted into profit for shareholders. The water customers in the south-west do not like that, and I suspect that if it happened to other regions they would not like it either.

That brings me to some potential hope in this doom and gloom. We have a new Government. We are in the era of new politics, and appear to have a listening Government, and so I invite the Minister to join in this spirit of new politics and listen to the people of the south-west. If he spoke to them, they would tell him that they do not want just a social tariff or some adjustments around the edges, but a fair and transparent system, whereby they pay the same as everyone else in the UK for the water and sewerage services they use.

The Minister’s party was in power at the time, so he might not join me in wishing that privatisation had never happened in this industry, but I hope that he will acknowledge that it was carried out in a wrong-headed way. The company in the south-west needed a much bigger customer base, and needed to be compensated for the poor state of its infrastructure. If the Minister does join me in this, I hope that he can take the next logical step and support something that addresses these historical problems and lifts the unfairness. I particularly mention unfairness because it is important not to conflate it with affordability, and it would be very foolish if the Government pretended that addressing the problem of water poverty also solved that of unfairness. I shall give an example to illustrate the problem. A family earning £35,000 would never come under the scope of WaterSure or any improved social tariff. They would, however, feel incredibly aggrieved if they had to pay anything up to £400 more for exactly the same service and product than if they lived anywhere else in the country, and that insult is made worse by the fact that the service is a basic necessity.

I understand, however, the Minister’s difficulty in being able to give concrete answers to many of the questions that will be raised today. There will necessarily be input from the Treasury as well as from No. 10, and in a way it is a shame that we cannot have Ministers from both Departments—the Treasury and DEFRA—here today, as some might argue that the solution is to be found at the Treasury. The Treasury can make or break another Department’s plans, but I hope that the Minister is pushing the case both for a social tariff and, more importantly, a solution to the south-west injustice.

Overall, we know the problem. Water bills for all customers in the south-west are far too high, as a result of the way in which the industry was privatised. We need a structural solution, through Government intervention, to remedy that unfairness. I am not sure how much detail the Minister can give in response, but I want him to recognise the difference between addressing water poverty and addressing unfairness. I hope that he can restore, or shall we say maintain, my faith, and that of others, in this Government, by promising to address both those issues.

[Alison Seabeck]

On a point of order, Mr Amess. To avoid any possible misunderstanding, I should draw Members’ attention to an entry in the Register of Members’ Financial Interests by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), in whom I have an indirect interest: he is my partner.

--- Later in debate ---

[Andrew George]

I know that Ministers are wrestling to produce a fair and equitable solution, and I know that this Minister has been engaging constructively and is well seized of the problem and the challenges that we in the south-west face—I have no doubt that he understands the issue fully. Discussions with other Departments, especially the Treasury, will inevitably be involved. I hope that the issues can be resolved to the satisfaction of the long-suffering water rate payers of the south-west. My hon. Friend is absolutely right that any solution must emphasise fairness.

It is worth while, when considering the issue, to compare water with electricity, telecoms and other utilities. In any other part of the country, it is at least possible to opt for another supplier of services. Therefore, whichever part of the country someone happens to live in, they will know that a regulator is regulating the market to ensure that there is fair competition and an even playing field, so that anyone in the country has the opportunity to at least obtain services—in this case, we are talking about water and sewerage services—that are no worse and no better than anywhere else in the country. We pay a significant amount more.

[Alison Seabeck]

On the glamorous subject of sewage, does the hon. Gentleman share my concern that, apart from the current pressure on bill payers in the south-west, we will have additional pressure from the transfer across of the private sewer network? It seems to be a completely unknown quantity—South West Water does not really know what it is taking on and what the impact will be. Will the hon. Gentleman join me in urging the Minister to offer reassurance on that?

[Andrew George]

The hon. Lady is absolutely right. I do not know whether this is area in which she is declaring her interest.

[Alison Seabeck]

Not in sewage.

[Andrew George]

I am sure that her interest is in something far more glamorous than the adoption of private sewers. I have raised the matter with the Minister and there has been consultation on it. Water companies are aware of the issue and some have undertaken their own calculations of the impact that it might have. I am confused and uncertain about how far down the water companies will have to go—it is possible to get stuck on these issues due to the number of metaphors that could be adopted in relation to them, but I shall not dwell on that for too long—before they take on those obligations. Other issues include the state in which those sewers would have to be in order for them to be fit to be adopted and, indeed, whether the companies will have the opportunity to assess the condition of those drains and sewers in the first place.

The information that appears to be coming from the marketplace and from those who are engaged in the industry is that both the previous and present Governments have not properly assessed the true impact that the proposal is likely to have. The knock-on effect will be on all customers—not only in the south-west, but countrywide—although it will be disproportionately worse for those in the south-west, because any increase in their bills will be on top of something that is already extortionately high. I know that the Minister is looking into the issue. The matter clearly needs to be resolved before we go down the track of finally forcing water companies to adopt private sewers and drains. I hope that the Minister will address the issue in his comments.

The hon. Member for Newton Abbot (Anne Marie Morris) has left the Chamber, but she raised the issue of fairness. When we have debated how we can address the legacy of unfairness that has been left to South West Water customers, we have talked about the potential adoption of a national levy, which is one of the options proposed by the Anna Walker review. A national levy would be a very small, gnat bite of a charge, which few people would notice and which would address some of the inherited legacy of additional unfairness in the south-west and other parts of the country. However, if we adopted such a levy, and if it were simply a flat rate charge for all water rate payers, poor water rate payers in one part of the country—the north-east, for example—might end up subsidising wealthy second home owners, who already pay, if they have water meters, significantly less than most people in their locality. Clearly, to address the issue of fairness, if we were to adopt a national solution, it would have to be significantly more sophisticated than a simple, flat-rate solution. I know that the Minister is well aware of the issues.

Water Bills (South-West)

Alison Seabeck Excerpts

Monday 14th June 2010 Commons Chamber

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

I am grateful for the opportunity to be the first to raise this issue in the new Parliament on behalf of water bill payers in Plymouth and the wider south-west. The problem we face is simple: water rates in the south-west are 25% higher than the UK average, placing an unfair burden on the budgets of my constituents and all residents across the south-west of England. This is an issue that dates back to the botched privatisation of water utility companies in the late 1980s, and it is to the shame of all parties that the problem remains unresolved after so many years, despite the constant efforts of right hon. and hon. Members from the south-west to keep the matter high on the agenda of the Minister’s Department.

I am pleased to welcome the new Minister, and I am pleased to see so many Members from other parties in their places tonight, including the hon. Member for St Ives (Andrew George), who is the new joint chair of the all-party water group, and the hon. Member for Newton Abbot (Anne Marie Morris), who is carrying on the active interest in water pricing shown by her predecessor. I hope that by the end of this debate we will have been able to put on record some of the options for consideration, including a levy proposal.

It would be remiss of me not to place on record the thanks due for the unstinting efforts and enthusiasm of my former colleague, Linda Gilroy, who not only chaired a very active all-party water group, but individually campaigned for many years on behalf of water bill payers.

[Mr Adrian Sanders (Torbay) (LD)]

I congratulate the hon. Lady on securing the debate. She is right to pay tribute to Linda Gilroy, but other former colleagues from Devon and Cornwall played their part, including the former Members for Truro, for Falmouth and Camborne and for Teignbridge. I may have forgotten others, but they all stood up for the south-west on this issue.

[Alison Seabeck]

The hon. Gentleman is right and the valuable contributions of those former Members will be missed.

Linda Gilroy was instrumental in organising the many meetings and briefings that we had with Ministers and others, and with the all-party group she produced a very thorough paper on the pressures felt by customers and water companies—and not just South West Water—which in turn fed into Anna Walker’s considerations in her review. In 1989, the privatised utilities were given responsibility not only for the provision of water and the disposal of waste but also for the maintenance of the coastline. The Minister will be well aware that in the south-west we are blessed with some of the most beautiful coastline in the country. Our beaches, bays and coves are famed, and rightly so, but they are an expensive luxury and one that is enjoyed not only by the people of the south-west, but by people from across the country and around the world. They are a common good and to the benefit of the whole public.

South West Water deserves credit for the work it has done to clean up the beaches. It has invested more than £1.5 billion through its clean sweep programme, which has modernised sewage treatment all around the peninsula, removing almost 250 crude outfalls and transforming the bathing waters of the region.

Those improvements are not paid for by the whole public. When the water utilities were privatised, the public in each area became responsible for paying for the maintenance of the coastline in their region. For the people of the west midlands, that was not a problem because they do not have a coastline, but in the south-west we have 30% of England’s coast, and the burden of cost is placed on just 3% of the population. The Prime Minister himself acknowledged the problem when he said, while holidaying in the region:

“I understand the unfairness that people feel in the South West that they are paying a lot of money so that there are clean beaches for people like me from Oxfordshire to come and play on.”

Indeed, the number of tourists to the region continues to grow, with the latest figures showing 21 million visits, the vast majority of which are by people coming from outside the south-west.

The water industry faces many challenges in the years ahead, and none of the solutions comes without a cost. It will have to deal with pollution concerns; better manage surface water and flooding; continue to try to provide an affordable supply of water; reduce greenhouse gas emissions; and adapt the service to make it more resilient to climate change.

[Andrew George (St Ives) (LD)]

I pay tribute to the hon. Lady for what she is saying, all of which I endorse. When she refers to cleaning up the coastline, she is talking about a national asset being paid for by local water rate payers—a point that the Anna Walker review made clear. That is clearly not the case with national galleries or national museums, which are paid for by all taxpayers. We should all reflect on that.

[Alison Seabeck]

Yes, indeed, and I shall return to that point.

It is welcome that all water companies are now expected to produce water resources plans for the Environment Agency and strategic direction statements for Ofwat, both of which are useful indicators to assist in the long-term planning for the sector, but also help in assessing the likely impact of such works on bill payers.

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

I very much support this debate. I would like to reinforce the point that although many people feel that we in the south-west live in a land of plenty—a land of flowing milk and honey—there are areas of great deprivation. For many people in our constituencies, the cost of living is high compared with the national income, and they are therefore hit particularly hard.

[Alison Seabeck]

The hon. Lady is absolutely right, and I concur with that view. Again, however, I will deal with that issue in more depth a little later.

Bills in the south-west are 25% higher than the national average, which over the course of a year equates to £100 more, while for unmetered customers the figure is considerably higher, at almost £300. For people on low or fixed incomes, that can mean a substantial amount of their income. Indeed, for those on the lowest incomes, water bills can take 10% of their incomes. For elderly individuals living alone on a basic pension—we in the south-west have a larger-than-average older demographic— or for lone parents with young children or single people in rented accommodation, water bills present a struggle.

The Minister will know that the area covered by South West Water is large and diverse, ranging from Cornwall in the far west through to Devon, and taking in parts of Dorset and Somerset. We also have some of the poorest areas of the country. Cornwall is the only area of the country to be in receipt of EU convergence funding—previously known as objective 1 funding—and poverty remains an issue, despite big moves in the right direction over the past 13 years. The Consumer Council for Water has actively campaigned to try to influence price levels in the south-west, and has carried out further, detailed research to try to discover what the bill payers themselves feel should be done to remedy the problem.

The bill payers whom I have spoken to—I am sure that other hon. Members have had similar conversations—feel that it is unfair and indefensible to expect some of the nation’s least well-off families to shoulder the burden of the cost of a system that requires them to pay for the upkeep of beaches that are largely used by wealthier holidaymakers from outside the region who do not pay for the coastline in the south-west. A solution to that long-standing injustice must be found. Many of my constituents have already lost patience with the process. A recent letter from one elderly constituent from St Budeaux expressed utter exasperation at the lack of transparency in how the costs are apportioned.

In acknowledgement of the problem, the previous Government set up the Walker review to examine the case surrounding water charges. Anna Walker was asked, among other things, to examine the current system of charging households for water and sewerage, and to assess both the effectiveness and fairness of the current and alternative methods of charging, and the link to affordability. Anna Walker delivered her extremely thorough report last year, having toured the country and visited the south-west and Plymouth on more than one occasion. The report acknowledged for the first time what most of us knew: that the long-standing high charges in the south-west were a direct result of the privatisation in 1989.

Anna Walker also suggested that the options for tackling the root causes should include a specific one-off adjustment, estimated at around £650 million, to pay off South West Water’s debt, or annual transfers either from the Government—I suspect that this is unlikely in the current economic climate—or from other water customers around England and Wales. That would not be popular either, because Thames Water customers are financing the Thames tideway project around the city, and water shortage issues have a significant future cost in a number of other areas.

A further alternative would be to rely on a package of proposals targeting specific groups of South West Water customers, perhaps through a series of measures such as the use of a seasonal tariff charged for additional summer use. That would pick up second-home users, but also businesses. It could help some residents to achieve a saving of between £40 and £50, but it is not a popular option. It is seen as a tourist tax, and would require compulsory metering, which would also have a cost. I know that the hon. Member for St Ives (Andrew George) is concerned about second-home owners and their potential for benefiting significantly from having meters. He sees that as unfair. Indeed, in a debate on 2 June 2008, he said that metering was

“a way of rewarding people who should be paying more”.—[Official Report, 2 June 2008; Vol. 476, c. 619.]

Another option would be the wider use of affordability measures, and South West Water has been quite proactive in trying to identify and assist vulnerable customers in that regard. Such measures could be more widely applied and could deliver around £80 per annum for low-income households. That would have to be linked to water efficiency, however. It is essential to encourage that, not only for economic reasons but because water is becoming an increasingly scarce resource at certain times and in certain areas.

As a result of this debate, I have received some useful briefings from people on related matters, especially on the re-use of rain water and on building regulations. I suspect that there is a whole new debate to be had on those matters, but I want to put on record my gratitude to the businesses and organisations that have e-mailed me. This flags up just how useful these debates in an often rather empty Chamber can be—it is actually quite full tonight, so thank you to everyone who has stayed.

Low-income customers with medical conditions could benefit significantly if changes to the current WaterSure scheme, as recommended in the review, were adopted. That would result in it being capped, either at a national average or on a regional basis, whichever is the lower, and would have a redistributive effect within the region, but that in turn would mean that other South West Water customers would pay more, which would probably not have broad support. This is not a straightforward issue, which is partly why I am back here tonight, five years after I secured my first debate on the subject.

A national levy is another idea that has been put forward. That would have the effect of supporting South West Water bill payers now, but they could well find themselves having to pay for similar schemes in the future, such as additional reservoirs in the Thames Water area or elsewhere in the south of England, for example. The Consumer Council for Water’s research suggests that water bill payers would consider that option, and we local MPs certainly need to explore it with our constituents. I appreciate that many of the options would have consequences for bill payers elsewhere, but we must resolve to produce a fairer system that does not penalise low-income families merely for living on a peninsula surrounded by the sea.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I congratulate the hon. Lady on securing a debate on this topic so early in this Parliament. Does she share my concern that the modelling work to support the policy implementation of any of the options in the Walker review is not happening fast enough, and that we need to go further and faster towards reaching a solution to a problem that has bedevilled my constituency and many others for many years?

[Alison Seabeck]

I agree, and I hope that the Minister listened to the hon. Gentleman’s genuine concern. His comment is well timed, as I was about to say that the current Government have, in the work carried out by Anna Walker and by their own officials, a basis for going forward without further delay. The previous Government had already asked Ofwat to consider the Walker report, but no Government can compel the regulator to act. Before the election, MPs asked Ofwat to consider how the Walker review could be implemented. Ofwat was clearly willing to do that work, and its position has not changed. Serendipitously, Ofwat asked for a meeting with south-west MPs today. That has usefully coincided with this debate, and, I am sure, helped to inform those hon. Members present of Ofwat’s position and of its thoughts on the subject of affordability.

Action on water charges, particularly on behalf of vulnerable customers, is long overdue. The public have seen improvements to the quality of the water around our coasts, and this has without doubt benefited other businesses, including those linked to the tourism industry, but it has come at a huge cost and left many people struggling to pay their bills. In this difficult economic climate, people are worried about such pressure on their income. Will the Minister therefore confirm that he will meet Ofwat urgently, to ask it to continue with its assessment of Walker and to give it a timetable for bringing forward its advice to the Government? South West Water bill payers will not be pleased to hear tonight that that has been pushed further back into the long grass. I hope that the Minister can be positive, especially as we were tantalisingly close to getting an announcement prior to the last election.

Does the Minister intend to publish a water White Paper and take forward both the Cave and Walker proposals? If so, when will that be and is it likely to look at the future of Ofwat and its role? Will the Minister also confirm that work is continuing to ensure the widest possible data sharing, so that people receive the help and entitlements they are due? That work was in train between a range of Departments and other organisations prior to the general election.

Will the Minister also acknowledge that there is an ongoing need for all the bodies involved in environmental improvements in water supply and removal both to inform customers on work planned and to ask their views? On affordability, may I make the following plea, which came out of today’s meeting with Ofwat? The Minister must not rely solely on the Government office for the south-west figures, which include Wessex Water and skew the figures slightly. If we drill down and look at Devon and Cornwall separately, we will see that the situation there is much more serious. I hope that the Minister will press his officials to look at the minutiae.

Finally, will the Minister confirm whether he accepts the Walker review principle that it was right for environmental improvements to be funded regionally except where there is an exceptional expenditure, as was the case in the south-west? If he does, does he not feel duty bound to right the historic wrong that the south-west has suffered?

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

I congratulate the hon. Member for Plymouth, Moor View (Alison Seabeck) on securing this debate on an issue about which she has shown a clear commitment during her time in the House. The hon. Member for Torbay (Mr Sanders) made the point that it has also been a very important issue for a great many former and current Members on both sides of the House. I know that the all-party group on water is well attended and is very passionate on this issue, and I certainly intend to address as many of the points the hon. Lady raised as possible in the few minutes available for my response.

The hon. Lady asked about White Papers. The new Government are very eager to introduce a White Paper on water, but we are determined to get it right. Our priority is to introduce a White Paper on the natural environment, which will involve a lot of issues that affect water—water will be fundamental to that White Paper—and then to introduce a White Paper on water, which will address many of the issues raised in the Cave and Walker reports. I can therefore assure the hon. Lady that this issue is a priority for the Government.

As I have said, I am aware that the hon. Lady and several other Members on both sides of the House have campaigned tirelessly on this issue for many years. I also understand that it is an issue that arises frequently in Adjournment debates, so I suppose I should not be too surprised that my first Adjournment debate as a new Department for Environment, Food and Rural Affairs Minister is on this topic.

I would like to say at the outset that the Government recognise that water affordability is a problem for some households, particularly in the south-west. We recognised that in our coalition statement, which pledged:

“We will examine the conclusions of the Cave and Walker Reviews and reform the water industry to ensure more efficient use of water and”—

crucially—

“the protection of poorer households.”

I also want to acknowledge that there is an important distinction between water affordability for low-income households and the more general sense of unfairness felt by households in the south-west at having to pay the highest bills in the country.

[Alison Seabeck]

I wish to reinforce the point that we have both unaffordability for households and a huge sense of a lack of fairness; both apply to the south-west.

[Richard Benyon]

I absolutely accept what the hon. Lady says. This year, the average bill for households in the region is almost £490, which is about £150 higher than the national average bill and—to refer to a particular point that she made—about £80 higher than Wessex Water bills, which is the next highest bill area. Affordability is very important. Although we often examine the average water prices across the country, we must also recognise that certain areas contain pockets of poverty where people may pay less in water bills, but utility bills may have a marked effect on their quality of life because they account for a high percentage of people’s net income.

Clearly, bills vary between water companies. That reflects the cost of providing water and sewerage services in an environmentally sustainable way. Ofwat, as the independent economic regulator of the water industry, ensures that bills are no higher than they need to be. The reasons for the relatively high bills—my use of “relative” is, of course, a relative use of the word—in the south-west were looked at by Anna Walker in her independent review of charging for household water and sewerage services. As has been said, she published her final report and recommendations last December, and I should like to take this opportunity to put on the record this Government’s recognition of the thorough and collaborative way in which she undertook her review.

As the hon. Lady said, the Walker report found that at the time of water privatisation, in 1989, South West Water had the lowest regulated asset base per property of any water and sewerage company. Since then, the company has invested about £2 billion, much of which has been spent on sewerage infrastructure and on improving sewerage services. That has brought sewerage standards in the area up to the same level as those elsewhere in England and Wales, and the cost has been met by local customers.

The cost per household has also been compounded by the relatively low number of households in the south-west, together with the relatively high proportion who live in rural areas. Those factors make it comparatively expensive to provide these households with water and sewerage services. Anna Walker recommended that Ofwat should advise the Government on options that could tackle the issue of high water bills in the south-west. The hon. Lady and those who attended a meeting with Ofwat representatives today will know that Ofwat is already working on that.

Some of the options suggested by Anna Walker could benefit all households in the region. In particular, a one-off or other financial adjustment funded by the Government, or an annual adjustment of bills financed by the Government or water customers nationally, could bring average household bills down by about £50 a year. Another option suggested by Anna Walker that would benefit all households in the south-west is a seasonal tariff, which would have the advantage of pricing water in a way that reflects the additional costs that tourists place on the water and sewerage system when they visit the region.

--- Later in debate ---

[Richard Benyon]

Certainly; the hon. Gentleman raised this earlier, and I am loth to give him a specific date, but I assure him and all Members of the House that I do not intend to be standing at the Dispatch Box in Adjournment debates in the dim and distant future because I have been unable to give a resolution, as best I can, to this matter. It is clear that I will not be able to satisfy every Member of the House or every one of the hon. Gentleman’s constituents, but I will do my best and the Government will do their best to get a speedy resolution to this.

I see the issue very much in two parts. First—this is the point I was making to my hon. Friend the Member for Newton Abbot (Anne Marie Morris)—there is an urgency. People are coming to hon. Members’ surgeries in real difficulties and there is work to be done to address their concerns. As we take Walker through the legislative process, following those options, I hope that we will be able to find other solutions on a more medium-term basis. I can only assure hon. Members on both sides of the House that I will meet them to try to resolve these matters and that I will keep them informed as best I can.

I understand that hon. Members who received the briefing from Ofwat earlier today will have heard about the merits and otherwise of the options that have been put forward. There is a fundamental question about who should pay for any new affordability measures. The options are the Government, which means the taxpayer, as the hon. Member for Plymouth, Moor View has said, and which brings difficulties at this time, or water customers, either at company-specific level or nationally. The hon. Lady will appreciate the need to reduce Government spending to tackle the budget deficit, and she will also be aware of the very strong resistance identified in the Walker review to any suggestion that water customers nationally should subsidise special measures for those in the south-west. The Government will need to take those factors into account when deciding which of the Walker recommendations to take forward.

[Alison Seabeck]

Could not the concern that customers nationally might not want to subsidise the south-west be offset by the fairness argument, in that south-west customers might well find themselves subsidising other areas of the country in future?

[Richard Benyon]

The hon. Lady points to a difficulty. She has mentioned the Thames tideway. What we decide to do now to help the south-west might legitimately be raised by customers in other areas in relation to concerns about a multi-billion pound project to improve the national asset that is the capital city. That is a difficult conundrum that I have to face, but I see her point.

Let me take this opportunity to remind the House of the support that is available for low-income households both in the south-west and elsewhere in England and Wales. Under the national WaterSure tariff, the bills of qualifying households are capped at the average bill for their company’s operating area. To qualify for WaterSure, households must be metered, in receipt of means-tested benefits and either have three or more dependent children aged under 19 and living at home—I have five children, so it is possible—or have someone in the household with a medical condition that necessitates a high, essential use of water.

WaterSure ensures that vulnerable and low-income households do not have to cut back on essential use of water because of worries about the potential size of their bills. Anna Walker made several recommendations about changing WaterSure and providing greater support for low-income households, which we will consider as part of our wider examination of the Walker review. In conclusion, I assure the hon. Lady and all hon. Members from the south-west that I will carefully examine the Walker recommendations, including those on water affordability, and Ofwat’s advice on the options for addressing high water bills in the south-west.

Question put and agreed to.