Water Bills (South West)

Anne Marie Morris Excerpts

Wednesday 30th November 2011 Westminster Hall

[Dan Rogerson]

My hon. Friend is absolutely right. Earlier, I hinted that I would return to that, and of course he understands that further questions remain, which, if settled fairly and equitably, could ensure that the contribution set aside in the Budget has the maximum impact, and that none of its benefits are lost through unintended consequences with regard to tariff schemes.

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

I am grateful to the hon. Gentleman for giving way and would like to add my thanks to the Government for what is undoubtedly a great contribution to our household bills. Is my hon. Friend expressing concern that, while that is a good first step, we want to ensure that the benefit is not eroded by future changes? There is the prospect of further EU directives impacting on the cost of preserving our beaches.

[Dan Rogerson]

We must always have an eye on those sorts of costs and look at any other measures that the Government introduce to deal with the emerging issue of water poverty, which is unfortunately catching up in other parts of England and Wales. Any measures to tackle that should not undermine the good done in the recent announcement.

The time of privatisation in the late 1980s was particularly fraught in my constituency, because it coincided with a water poisoning incident at the Lowermoor treatment works, which is still controversial today. A link was drawn between the fact that there was no inquiry into the incident at the time and the fact that privatisation was under way. I must say that that feeling still exists in the minds of many who feel that they may have been affected by that incident. There is an ongoing inquest in Taunton that is finally getting to the bottom of some of those questions. I pay tribute to Doug Cross for all the work that he and his fellow campaigners have done on that issue over the years.

We then moved into the period when it became apparent that all of this work needed to be done. It was done, and there have been huge improvements in water quality, with benefits to the local community and people from further afield who can come and enjoy our wonderful environment. After the departure of the last Conservative Government, we moved into the period of the Labour Government. I pay tribute to Linda Gilroy, a former Member who campaigned a lot on this issue. It was very helpful to have one Member on the Labour side—they were few and far between, and it is even further between in the south-west now—and she very much engaged with this, and was seeking a response.

Right at the end of the previous Government we had the Walker review. At the last gasp of their term in office, they finally had that review. I must say, however, that we had the feeling at the time that there was not going to be the kind of response that we wanted to hear, in terms of national recognition of this problem. We wanted the recognition that it needed to be handled at that level rather than by the relatively small population in the area. I was frustrated by the attitude of Ofwat in all of this. They could have played a much stronger role in advocating to the Government on the issue of unfairness and the problems it causes for bill payers and the industry in the south-west.

We move on, however, and we now have a coalition Government who put their determination to do something about this in the coalition agreement. I pay tribute to the Chief Secretary to the Treasury on the Liberal Democrat side, and to the right hon. Member for West Dorset (Mr Letwin) on the Conservative side. I know that both of them are determined to work with DEFRA to deliver on this and ensure that that commitment is met. However, with the very welcome £50 contribution towards each household’s domestic bills in the South West Water area, there are further decisions to be taken around WaterSure, which is a scheme that helps people who are in the most need with their bills. It is funded by a form of cross-subsidy from billpayers. The crucial question is whether that subsidy is a within-region subsidy, or whether it is a national one.

I have heard the view that it should just be within the water company’s area. However, that is a dangerous road to go down, for the following reasons. First, I believe that it should be about meeting need, wherever that need may be. Even after this £50 contribution to high water bills per household in the south-west, we will still have the highest water bills in the country, by some way. If we compare the average £517 annual charge in the south-west—and that is the average, of course; those who are unmetered will have a much higher charge—with the Thames Water figure of £319, we see that there is a £219 difference. The £50 will close that gap a bit, but it will still be considerable.

I accept that that is as far as the Government could go with that measure of financial support in the Budget. However, for customers still struggling with those high water charges, WaterSure is a lifeline. For those who are just above that threshold, as always, we have this issue. It would be unjust, having at last secured recognition and support from the Government, to see some of that £50 clawed back in a significant way to fund WaterSure, and also further in regional social tariffs, which is something that water companies are exploring.

South West Water have really engaged in this process. As a private company, it is a tricky thing for it to do; confronting the fact that it has the highest bills is perhaps something it does not want to talk about. However, I pay tribute to Chris Loughlin and the management of the company, who have been absolutely straightforward about the fact that this is the problem they are facing. They want a solution, and they want to play their part in driving forward efficiencies in the business. They were honest about the situation that we face.

South West Water also want to do more with social tariffs. However, the issue for the company is that if we were to have WaterSure funded only within the South West Water area, that would mean that every bill payer who is not on WaterSure would be paying approximately £3.41 towards those who are, whereas across the country the average funding for WaterSure on bills—I am sure the Minister will correct me if I get this wrong—is 30p to 40p. That is a far fairer way of dealing with the issue. Just because someone happens to live in the south-west, they should not be affected by these social tariffs to a greater degree than people elsewhere. The need for people to be on social tariffs in the South West Water area is much higher than in other parts of the country, because the bills are higher, but also because, despite what some might feel about the leafy south-west, it is an area of great poverty. My own region of Cornwall is in receipt of convergence money from the European Union in recognition of the fact that, sadly, our economy still has some way to go to catch up with the wider UK economy.

Another parallel that could be drawn is the issue of additionality. It was always a battle under the previous regional development agency regime to say that, just because we are getting the convergence money, we should not miss out on our fair share of the regional development agency’s money as well. It is supposed to be additional, to help us get to parity with everybody else. This £50, welcome though it is and a tribute to how the coalition Government is tackling these problems, should be in addition to WaterSure and social tariffs that come along. It is not a replacement for them. While the Minister’s Department is looking further at how these social tariffs could play a role in meeting that need, my key point today, in thanking the Minister and the Government for what they have done for our constituents with this £50 assistance, is to ask that when we return to the issue of WaterSure and social tariffs, we should, as far as possible, make them fair and focused on individuals, no matter where they are in the country, rather than being in some kind of fortress south-west, because we would then be taking a step back, having made a step forward. I would hate the Government to be doing that when they are at last making great progress on an issue which has been a huge problem for us over the past two decades.