Water and Sewerage Charges (South West Water)

Debate between Anne Marie Morris and Andrew George

Wednesday 9th March 2011 Westminster Hall

[Andrew George (St Ives) (LD)]

It is a pleasure to serve under your chairmanship, Mr Amess. I congratulate my hon. Friend the Member for Torbay (Mr Sanders) on securing this important debate and articulating so well the case for taking action, and my hon. Friend the Member for Totnes (Dr Wollaston) on reinforcing his points.

My contribution will be relatively brief. I want to emphasise some of the points made by my hon. Friend the Member for Torbay. The privatisation of the water industry 20 years ago effectively created a risk-free money extortion system, as I said earlier. The company knows full well what the circumstances are in the south-west. It can almost print its dividend the year before, because it knows how the market works: it is not competing with anyone else, and the only variables are uncertainties about its input costs during the year and the risk that it might not be able to recover payments from all its customers, which is increasingly occurring in areas such as mine. Incomes in Cornwall have been at the bottom of the earnings league table since records began, and South West Water’s prices are and have always been significantly higher than in the rest of the country. In those circumstances, people have great difficulty paying the water charges with which they are presented. The legacy of basing water charges on the archaic and unjust rating system, which is not used for any other purpose, re-emphasises that significant reform is needed.

The one beneficial outcome of the circumstances in which the system operates is that it encourages people to recognise the advantages of water metering. South West Water has not engaged in an evangelical campaign to encourage people to install a water meter in their homes or premises; people have simply recognised that they can at least attempt to control their bills by various means, and in many cases the most effective way is to install a water meter. If there is a silver lining in the cloud, it is that people have pursued that. I think that it is accepted across all parties that the increasing move towards universal metering is broadly desirable in public policy terms, and certainly in environmental terms, if we are to address the proper management of natural resources.

In my intervention on my hon. Friend the Member for Torbay, I drew parallels with other, similar national assets. Our beaches are a national asset, which people come to from all over the country all year round. It is not just a summer thing, as it used to be; in my constituency, kite surfers come down from London and from other parts of the country throughout the winter months to enjoy the beaches and the sea around our coast, and they do so with some confidence that they will not go away with a bug, due to the efforts of South West Water to clean up those beaches and ensure a significant reduction in the public health risks associated in the past with bathing in some waters in the south-west.

Those beaches are a national asset, like the British Museum, the National Gallery and the Olympic stadiums, which are being funded by everyone in the country. We do not ask London taxpayers alone to fund them.

[Anne Marie Morris]

I support what the hon. Gentleman is saying, because the heart of his argument is about fairness. Everything that we have heard to date has been about affordability. As crucial as that is, I would be concerned if any future review or consultation did not address fairness. The points that he is making are absolutely right.

[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.