Water Industry (Financial Assistance) Bill

Andrew Love Excerpts

Tuesday 6th March 2012 Commons Chamber

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Rather unusually, I will start my contribution by seeking to resolve a confusion that has been in my mind over the past couple of weeks. I received a letter from the Minister, as did all London Members, pointing out that discussion of the Thames tunnel would be prioritised in this Second Reading debate. It also mentioned the national policy statement for waste water. Although the letter states clearly that that is before Parliament, I have been unable to gain reassurance that it will be debated on the Floor of the House. I seek the help of the House on that. I will comment on the Thames tunnel, but I will also touch briefly on the national policy statement for waste water, because it affects my constituency.

Like other London Members, I am shocked by the regular reports about the consequences of the discharges into the River Thames, even though my constituency does not lie on the river. I am shocked by the number of discharges—about 50 a year, or one a week. The discharges can have cataclysmic consequences for people who live along the Thames. That is an extremely important issue. There is European legislation under which countries that do not clear up such discharges will be fined. That should weigh on us heavily, not only because of the level of the fines that will be imposed, but because it highlights our responsibility.

I have been impressed by the 10 years of hard labour, if I may call it that, that has gone into the preparation of the Thames tunnel scheme. I have listened closely to the debate, and I have heard many people’s views and received many letters and e-mails about some of the proposed alternatives. Like most Members who have spoken, I remain to be convinced that any of those will address the existing needs. Broadly speaking, I am therefore in favour of the Thames tunnel project. My concern is about its affordability for individual water consumers and its cost and likely value for money.

We have talked a lot about water poverty. I am sure the Minister will say that Thames Water bills are low compared with those in other parts of the country, but we must consider water poverty. If we define water poverty as having to spend 3% of income on water, more than 1.1 million Thames Water customers are affected. If we define it as 4% of income, more than 600,000 are affected. That is twice the level in any other water authority area, which should concern us.

The previous Government introduced the WaterSure scheme to place a cap on water bills for low-income families whose water usage is metered. The problem is its narrowness, and the fact that take-up has not been widespread. Only a third of eligible consumers make use of it. That represents roughly 3,600 families in the Thames Water area, where more than 1.1 million consumers live in water poverty, so it does not really address the problem. I will not go into detail about social tariffs, because other Members have done so, but I am sceptical about the scheme as it is currently constructed, and we need it to be changed enormously to address the problems.

My final point about water poverty is that the Thames tunnel will cost consumers roughly an additional £50 a year, or £1 a week on their bills. The Minister will say that that will take Thames Water bills only up to the national average, but the consequences for the 1.1 million consumers already in water poverty will be extreme, and must be taken into account.

I shall now turn to the value for money, the costs and the delays of the project. It has been going for 10 years now. The study was started up in 2001 and was carried through to the development of the scheme in 2005. As the debate has shown, the scheme is still being consulted on and there is still significant opposition to it. It might not be very well-informed opposition, and it might not address the issues that need to be addressed, but it is there. Perhaps the Minister could say something to reassure us about whether the £4.2 billion cost can be kept to. Will the ambitious time scales upon which that cost is based be realised? Can such a complex and, if I may say so, risky project be delivered at that cost?

To echo what my hon. Friend the Member for Hammersmith (Mr Slaughter) said, the public sector will be supporting some of the riskier aspects of the project. Are the Government getting to the bottom of how to get value for money? We could go into the issues of public-private partnerships and the private finance initiative, but I remain to be convinced that the project will be delivered on time and to cost. I should like some reassurance from the Minister about how we can ensure that Parliament and the Government play a role in protecting the Thames Water customer and the UK taxpayer and ensuring that the project delivers for them.

The national policy statement on waste water is related to my local project at the Deephams sludge works. Like the Thames tunnel, Deephams currently discharges into a river—the River Lea, a tributary of the Thames—which contributes in a smaller way to the discomfort along the Thames. The technology at Deephams dates back to the first half of the last century. To put it crudely, it is exhausted. There was little investment until the last year or two, when significant new investment was made in preparation for the national policy statement.

Deephams was not a problem some years ago. It was in the Lea valley, quite a long way from my constituents, many of whom did not know it existed and were not concerned about it. That is not the case now, which is a primary reason why I am raising the matter. During the past 10 years housing has come to the edge of Deephams, and there are consequences, including the statutory nuisances from sludge works, such as the pungent smells. Thames Water will say that it does not get many complaints about the smells, but there are sound reasons why the number of complaints is not as great as it should be—not least the confusion caused by the fact that a number of different facilities in the Lea valley can contribute to those problems. Constituents living close to Deephams regularly take up the consequences of the lack of investment with me.

I should say something positive about the national policy statement, because much in it is to be welcomed. There is no longer a preferred option for the redevelopment of the Deephams site, which shows flexibility, leaving open a wide range of options. I strongly welcome the increased priority given to design. The policy statement talks of sustainability, durability and adaptability, which are important considerations for the redevelopment of the Deephams site.

The national policy statement recognises the need for flexibility and talks of the likely population increase for which Deephams must provide a facility: the population will go up from 850,000 to nearly 1 million over the lifetime of the project, so recognition of that is welcome. Finally, the national policy statement recognises that most of the infrastructure is woefully out of date and must be replaced.

I want to build on those welcome changes to the national policy statement, and I ask the Minister, if he has time, to comment on some of my suggestions, the first of which relates to the central role of Ofwat, which will be responsible for funding capital infrastructure. I understand that Ofwat has responsibility for ensuring that capital infrastructure comes in on cost and on time, but based on previous experience, I make a plea not to limit the preferred options to be considered for Deephams, and not to restrict what can be done to existing legislative requirements.

The national policy statement recognises the critical need for flexibility, and to find innovative and sustainable solutions. We should not base proposals on existing need—as I have said, the national policy statement recognises that the population will increase and that there should be flexibility—but there should also be flexibility in welcoming higher standards, which will undoubtedly be introduced. There will also be legislative change during Deephams’ period of operation.

Climate change will come to the fore—we are now in the midst of a discussion of drought, but there will be other climate change issues in future. Everyone keeps talking about the green agenda, but we need to introduce the new technologies into our water system. I shall come back to that in a few moments. Thames Water will claim that the recently improved project in Reading is state of the art, but the problem for Deephams is that development will come 10 to 15 years down the road. So we need to consider not what is state of the art now, but what will be state of the art in 15 years. I hope that the Minister can reassure the House that the Government recognise the need for these flexibilities, because there is a danger that Deephams will be out of date by the time it comes on stream. It is incumbent on Thames Water and the local community to consider what alternatives there are, and what other technologies could be used.

I want to mention two such technologies that are being piloted in this country but have not been fully rolled out, although they are being used in the United States and China. My knowledge here is suspect, so I hope that nobody will press me too closely, but there are things called integrated fixed-film activated sludge—I can give Members a definition if they want—and moving bed biofilm reactors. Council officers at the London borough of Enfield speak about little else at the moment; they can wax very lyrical about it.

Council officers sympathise with the idea of introducing a combination of the two technologies to future-proof Deephams in respect of the factors that I have mentioned, including climate change, improved water quality and population increases. Is the Minister aware of, and sympathetic to, those technologies? They are not mentioned in the national policy statement, but it would be welcome if he could say something helpful about them. We recognise that the introduction of new technologies has a cost implication, but there is growing evidence not only that they can respond more flexibly to future pressure, but that over time they work out much cheaper.

To sum up, it would be helpful if the Minister commented on some of these issues. I strongly welcome much of what is in the national policy statement, but if Deephams is to address the issues of concern to people in my constituency and round about, we need to build in the flexibility to allow them to develop the technologies that will address the issues of the future.