Water Industry (Financial Assistance) Bill

Anne Marie Morris Excerpts

Wednesday 29th February 2012 Commons Chamber

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

Does the right hon. Gentleman agree that despite the fact that the £50 cut will be impacted by high inflationary rises, those rises apply across the country, so one cannot say that we are worse off in the south-west, because we are still better off by that £50?

[Mr Bradshaw]

That is absolutely right. I am afraid that water customers across the country are paying the price for this Government losing control of inflation. The reason we are all facing these massive increases in the current financial year and the next is that inflation is out of control. We in the south-west are suffering like everybody else. However welcome the £50 cut is, it will already have been wiped out by the time we get it. People will not notice it because their bills will be no lower than they were before, as a result of the two years of increases that they will suffer this year and the next.

We must stop the culture of annual increases, and I hope that the Government will do that when they bring forward their full water Bill. The hon. Member for St Ives is absolutely right about this. We always talk about the water industry as though it were the same as the gas industry, the electricity industry and the other privatised utilities, but it is not—it is a monopoly private provider. Customers in the south-west cannot choose where they get their water from. Admittedly there is also a problem in the energy industry, but people do have a limited choice of provider for their gas and electricity.

The other reason it is completely wrong to put water in the same category as the other privatised utilities is that water is plentiful. We live in a wet country; it rains. If it stops raining, we might as well all pack up go home, but that is not going to happen—we hope. Water is not like gas, electricity or oil, where the resources are finite. The Government must challenge the assumption that water prices should always rise. Given the advances in modern technology, there are strong arguments for water bills coming down rather than going up. I ask the Minister to look carefully at the structure of the industry and the strength of the regulator. For the reasons that the hon. Member for St Ives and I have mentioned, there is a very good argument for the water regulator being much stronger than the regulators of the other privatised utilities.

The Prime Minister is fond of making speeches about crony capitalism; well, he can show us his mettle by dealing with an industry that is a private monopoly where customers have no choice. The industry has its hands round their necks, they cannot go anywhere else, they are fed up, and they do not understand the inevitability of year-on-year increases.

Of course we have to improve our outdated infrastructure, and a lot of work has been done on that. However, when I hear industry spokespeople and Ministers saying that we are about to face a terrible drought, worse than that in 1976, I wonder why the industry and the Government have not looked more carefully at the idea of water trading, which I think has been mentioned by a Government Member. Why do we not pipe water from the Severn catchment area, where it is plentiful, to the Thames catchment area? That could be done quite cheaply. It is not hugely expensive or terrible for climate change, as the Secretary of State said in her opening remarks. A similar thing could be done across the country. My right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) mentioned reservoir capacity.

There is no reason why in this country, which has a cool, temperate climate with plenty of rain, we should pay such high prices for our water. We should not accept inexorable rises year on year, particularly when families are feeling the pinch. I share the admiration of the hon. Member for St Ives for the current management of South West Water. However, in the increases that that company and the rest of the industry have asked for in this financial year and the next, they have not shown the sensitivity that they might have shown to the state of household finances.

--- Later in debate ---

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

I congratulate the Government, because they have done an extremely fine job. Frankly, I find the comments about the £50 reduction being cheeseparing a bit sad.

I was interested to hear the comments of the right hon. Member for Exeter (Mr Bradshaw) and I agreed with him on many points. He said that he is concerned that the £50 will be wiped out by price rises. As I said, there will be price rises across the country. Is he saying that the Opposition would have provided more money to give a greater subsidy? If so, how would they have funded that? I will leave him to ponder that.

[Gavin Shuker (Luton South) (Lab/Co-op)]

The hon. Lady asked about Opposition policy. We support the £50 payments in the south-west, but are looking for further action on water affordability across the piece, which this Bill does not provide.

--- Later in debate ---

[Anne Marie Morris]

Like the hon. Gentleman, we are all looking at how we can deal with the affordability issue. However, the Bill is intended purely as an academic piece of legislation to allow the £50 reduction, not to address the whole gamut of water issues, which is substantial. I welcome the £50 reduction and think that the 710,000 householders who will benefit from it will be absolutely delighted.

I will raise some technical points, because this is a technical Bill. I will not talk about the big picture of water issues. I will be grateful if the Minister considers the points that I raise in his winding-up speech, whether that be today or on another occasion. My concern is that the £50 is aimed at the domestic user as opposed to the non-domestic, commercial user. I understand why the Government are trying to be careful with their resources, but I emphasise that including the non-domestic, commercial user would mean an extra £3.5 million, which falls within the £40 million ceiling. I recognise the Government’s concerns, but there is a potential issue with domestic households that pay through commercial intermediaries.

For example, park homes cover a significant number of residents throughout the south-west, and the rates are effectively levied against the park home owner. I am therefore concerned that those living on park home estates will not receive the benefit. There is a similar problem with sheltered housing. I am worried that subsection (7) of proposed new section 154A in clause 1 does not fully address that. I would be grateful if the Minister considered that because I cannot believe that anybody feels that those individuals should be excluded from the benefit.

My second technical concern relates to the debate about WaterSure and support for those who cannot afford to pay their water bills. I will not go into the debate because it is something for the water Bill. My concern is technical because, if the Government decide to support the Consumer Council for Water’s view that WaterSure should be nationally funded, I am not sure whether subsection (2) of proposed new section 154A would enable them to take that position. I would therefore be grateful if that were reviewed.

Otherwise, I think I will make history by making the shortest speech of the afternoon and simply say, “Well done Government—huge benefit! £40 million should not be sniffed at.”