Water Bill

Charles Walker Excerpts

Monday 25th November 2013 Commons Chamber

[Mr Paterson]

I am fully aware that that is a matter of enormous interest to the right hon. Gentleman and his constituents. To put it bluntly, it is not acceptable that we continue to put 20 million tonnes of untreated sewage in the Thames every year. We have considered a range of alternatives—I know that he has been advising on this—and have concluded, as did the previous Government, that the tunnel is the best solution. We continue to negotiate in detail with Thames Water on the arrangements that will lead to the conclusion of the project.

We now need to build on our success. The Bill will shape the way the industry develops over the next decade and beyond. It will build on the strengths of the regime and use increased competition to drive greater innovation and efficiency, which will benefit customers and make sure that our water supplies and natural environment are resilient.

The Bill shows that we are tackling affordability for the long term.

[Mr Charles Walker (Broxbourne) (Con)]

My right hon. Friend says that we are going to improve the nation’s ability to capture and store water, thereby reducing abstraction. Will he be telling us later in his speech where the new reservoirs are to be built?

[Mr Paterson]

I will be moving on to that. I cannot tell my hon. Friend exactly where the new reservoirs will be because that will be down to the individual companies, according to local circumstances, but I can categorically assure him that I hope that the measures in the Bill will release a floodtide of new investment, potentially in new reservoirs, use of aquifers and transfer of water between water companies, to maximise use of the water that lands on this country. I remind him that 95% of that water ends up in the sea. We need to manage the water better before it gets there.

The Bill shows that we are tackling affordability for the long term. The package of reforms is designed to exert a sustained downward pressure on water bills and ensure affordable flood insurance for households in areas at high risk of flooding. We are well aware of the financial challenges that hard-working households are facing.

Earlier this month I wrote to water companies asking them to consider whether to apply the full price increases next year that were planned for in the 2009 price review. I asked them to share the benefits of historically low financing costs with their customers. Ofwat is with me on this. It estimates that by taking account of lower financing costs, the next price review could reduce pressure on bills by between £120 million and £750 million a year from 2015, while still enabling companies to invest in high-quality services and the environment. This demonstrates once again how critical financing costs are to the bills that customers pay: 1% on finance costs leads to about a £20 increase in bills to customers. We must not undermine in any way the stable regulatory system which gives confidence to investors.

This Bills means that all business, charity and public sector customers in England will be able to choose their water supplier and, for the first time, their sewerage supplier. They will be able to shop around for the best deal and a package that suits them. Large water users could make savings by switching to a water supplier that offers them water efficiency advice and smart metering. We have seen how competition in Scotland is delivering real benefits to customers and to the environment. The public sector in Scotland is forecast to save £36 million over four years, thanks to better water efficiency and discounts. Customers in England deserve the same opportunities. Multi-site customers such as hospitals and supermarkets could save thousands of pounds in administration costs by dealing with only one water company.

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[Mr Paterson]

I thank the hon. Gentleman for that interesting question. We would be happy to meet the Canal & River Trust—it would be appropriate for the Under-Secretary of State, my hon. Friend the Member for North Cornwall (Dan Rogerson), to do so, as he is taking the Bill through the House—but I think that it is being negative. With its wonderful and virtually national network, it has a real opportunity, because if we open up more upstream providers we will need a vehicle for moving water around. I take a very positive view of this for the Canal & River Trust. We are definitely happy to meet it.

We are not at this point offering choice to household customers. We are taking a step-by-step approach, gaining experience from a competitive business retail market first and reducing any risk to investment in the sector. We have seen in Scotland that competition tends to be around value-added services, rather than price, making the case for household competition less attractive. The conditions need to be right. For example, we would need much higher levels of metering before household competition was practical. Although household customers will not be able to choose their supplier, they will benefit from a framework that encourages water companies to put customers at the centre of decision making or risk losing market share. Ofwat will ensure that household customers do not subsidise the costs of increased competition.

I know that some water companies have asked for the option of exiting the retail market. The problem with that approach is that household customers could lose out because they would not have the ability to move to a new supplier, and if the incumbent water company keeps its household customers but disposes of its business customers, the householder is stranded with a company that has little incentive to provide a decent service. We are not prepared to risk that.

The Bill will also make it much easier for new businesses to enter the water market to provide new sources of water or sewage treatment services, known as upstream services.

[Mr Charles Walker]

On that point, will my right hon. Friend clarify something for me? What is a new source of water?

[Mr Paterson]

A new source of water is one that is not currently being used, so that could mean opening up old boreholes, or farmers building new reservoirs, or water companies building new reservoirs—we have not built a new reservoir in this country for over 30 years. There are all sorts of new sources of water. Around 95% of the water that lands on this country ends up in the sea. We want to manage it better before it gets there.

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[Mr Paterson]

It is known as the market; where there is demand, people will invest. We are hoping to create a new market for this product, and I am absolutely confident, given the freedoms we are releasing in this Bill, that there will be significant investment. We should not forget that £116 billion is an extraordinarily large amount of money that we would never usually have got from the Treasury under any Government of any colour. This is a great success. We want that investment to keep flowing in for exactly the sort of projects that my hon. Friend discusses.

For the first time, we are opening a market for businesses to recycle and reuse waste water as a new water resource. They will also be able to purchase sewage sludge that might otherwise have been sent to landfill—for example, for use in anaerobic digestion plants.

We need to increase the number of options that water companies can use to store and supply water to their customers. The solutions will vary across the country, reflecting different levels of water demand and availability, geography, and geology. For some, storing more water in new reservoirs or in recharged aquifers will help. Others, particularly in water-stressed areas, may need more action to cut demand, including through greater water metering. For others, improving interconnection to move water around between their supply systems will help. Companies such as Severn Trent, Anglian and Yorkshire Water collaborated on practical solutions during last year’s drought. This Bill will make such supply arrangements much easier to put in place. It will enable water resources to be used more flexibly and efficiently, reducing the need for expensive new solutions that customers would have to pay for.

The Bill provides flexibility for the regulator to work with the industry on shaping and introducing these new markets. It also includes checks and balances so that the Government can ensure consistency with our policy framework. We will be issuing guidance to Ofwat on how it must set the rules of the game. We have already published charging principles so that people can see how Government policy will shape the new regime. Since the pre-legislative scrutiny of the draft Bill, we have strengthened the role of Government, with a power to veto Ofwat’s charging rules, and the new market codes. I am extremely grateful to Members of this House, especially those on the Environment, Food and Rural Affairs Committee, who scrutinised the draft Bill. The Bill is stronger as a result of that scrutiny.

Governments do not create successful markets. Well-functioning markets are created by participating businesses and are allowed to evolve over time. That is why the detailed work to develop these new markets is being delivered by the experts. Through the Open Water programme, we are working with the water industry, Ofwat, the Scottish Government, regulators and customers on the detailed work required to prepare for implementation of these new markets. We are committed to reforming the abstraction regime so that it is fit to face the challenges of the future.

[Mr Charles Walker]

Will my right hon. Friend give way on that point, because it is such an interesting topic that I think he will have a lot to offer?

[Mr Paterson]

indicated assent.

[Mr Walker]

Over the past 30 years, these so-called experts, particularly the water companies, have destroyed many of the chalk streams in my part of the country and in Wiltshire, Hampshire and Dorset—the list is almost endless. I therefore do not have a lot of confidence in them. They are very good at looking after their own interests but not the interests of the environment.

[Mr Paterson]

I am grateful to my hon. Friend for his statement. I assure him that I take on board the damage that has been done by over-abstraction. However, this is extremely complicated and it is going to take time; we could make a real mess of things if we blunder into it. I am absolutely confident that through the upstream reforms that I mentioned, by holding more water back in various forms, which might be the reservoirs my hon. Friend wants, putting down aquifers, or SUDS—sustainable drainage systems—schemes, we will have water available for these rivers when they run dry. I totally sympathise with his worries about the chalk streams. It is very much our intention that this Bill will provide more water to keep these rivers flowing.

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[Mr Charles Walker (Broxbourne) (Con)]

What a surprise to be called so early in the debate, Madam Deputy Speaker, but I am delighted to have the chance to speak.

As I was preparing in the Tea Room, my hon. Friend the Member for Meon Valley (George Hollingbery) said, “I suspect you’ll go into the debate and just shout a lot.” He was very accurate in his analysis: I am going to shout a lot. There is nothing like a good shout to get things off your chest. I will try not to shout too loudly, but I want to shout about water because it is very important to me.

I congratulate the new Minister on his elevation to the Front Bench. I also lament the passing of my hon. Friend the Member for Newbury (Richard Benyon). He was a wonderful Minister, and it is a great shame that he is not still one, because he will be much missed and knew a great deal about water.

I want to pay one final tribute during my 10 minutes. It is to the former Member of Parliament for Reading West, Mr Martin Salter, who has been a great champion of fishing and of the conservation of rivers for many years. I am sure that wherever he is today, he is watching this debate fondly.

I listened to the Secretary of State, and I am afraid that my heart did not leap with joy. I fear that, in reality, we will not build the reservoirs that we need. In 10 or 15 years, we will be in this place once again talking about the continued decimation of our waterways and, in particular, but not exclusively, of our chalk streams. A few years ago, Thames Water had the great idea of building a reservoir in Oxfordshire near Abingdon. It was a spade-ready project in 2010, with everything ready to go, but it has not yet taken off because of planning issues and people who are not too keen on its construction.

I must be a really rubbish politician because when it comes to water, I have only one speech, which most hon. Members will have heard at least three times in this place.

Since 1973-74, we have not built a reservoir of any note in east and south-east England. We have added to the population by quite a few millions and we have built many hundreds of thousands if not millions of new homes, but we have somehow decided that we do not need reservoirs. I have looked at the Bill, and I do not see any concrete plans for new reservoirs. I have talked to many water companies and, apart from Thames Water, they seem to have a marked reluctance to build new reservoirs, but without them, we are going to continue to abstract.

I am afraid that the trading of abstraction licences leaves me cold. Initially, licences were not awarded on any scientific basis; water companies were told: “Here are a few thousand. Now go off and enjoy yourselves.” The truth is that if all the abstraction licences on the River Lea were used, it would not exist. That is not a far-fetched scenario because there are quite a few rivers in my constituency and elsewhere in Hertfordshire and Buckinghamshire that do not exist any more. They have been sucked dry and are now empty river beds. When it rains in the winter, clean water might flow through them, but it does not flow for long.

The Environment Agency has a new trick. That is to reclassify a river that dries up for the first time in 30 or 40 years as a winterbourne. I understand that one of those winterbournes might be the Upper Kennet around Manton and Marlborough. I know that the Upper Kennet is not a winterbourne because over my lifetime, I have caught well over 400 trout and 400 grayling in that stream. I understand that there is a move in the EA to reclassify it as a winterbourne. That is total and utter nonsense.

Let me return to abstraction licences. I fear that if there is unrestricted trading in abstraction licences, we will see more and more water sucked out of already stressed environments. That thought gives me sleepless nights because, as I have said, one could walk across many streams in Hertfordshire and Buckinghamshire in one’s bedroom slippers and not get wet. I think of rivers such as the Mimram, the Chess, the Beane and many others that are too numerous to name in this debate. Some of those rivers flow some of the time, some of them flow none of the time and some of them flow all of the time, but the one thing that they have in common is that they are under great stress.

It would be easy to lash the water companies, as I am sort of lashing those on the Government Front Bench. It is a very gentle lashing—indeed, it is almost a licking. I have taken the trouble to meet my water company. I met the chief executive of Affinity Water, who seems to be a switched-on individual. I have invited him to go fishing on the River Chess, so that we are on someone else’s water. He has accepted that invitation and we hope to go in May. Hopefully we will have a wet winter, so that beautiful river will have something near a proper flow, and he will walk down the river and see what a wonderful environment it is. However, such environments are becoming all too rare.

As I say, Mr Deputy Speaker—what a magical change in the Chair—there are parts of the Bill that I am sure I will welcome when I have found them. I have yet to find them, but I will welcome them when I do. What has distressed me most about aspects of this debate is that there has been a lack of willingness to focus on the fact that water, because of the way in which we manage it, is a rare resource in this country. Quite a lot of it falls out of the sky but, as the Secretary of State said, we wave 95% of it goodbye in the winter months, as it rushes down into the North sea and the English channel. As my hon. Friend the Member for Newbury said, we have to get much better at capturing and storing that water.

Although I am hugely attracted to the idea of farmers building small reservoirs, it simply is not the answer. The idea that a farmer will build a reservoir of sufficient capacity to sell water to major water companies is, I am afraid, as near to nonsense as one can get without it becoming nonsense. What we need to do—again, it is the broken record—is to build some reservoirs. There needs to be a consensus about building reservoirs.

Of course, there are parts of the country where water is abundant. People say airily, “Let’s transport it from the north of England to the south of England or from Wales to other parts of the country.” I am sure that the Welsh do not like the idea of having their water pinched any more than the people of Northumberland do.

[Jonathan Evans]

They could sell it.

[Mr Walker]

They could sell the water, but the truth is that it is extremely expensive to cart water around the country. I do not know whether anybody has noticed, but water tends to weigh quite a lot. Yes, gravity can be used, but there needs to be gravity for that to work. We could ship water around the United Kingdom, but that is not the answer. It is talked about by people who want to deflect attention from the real issue, which—again, I am afraid—is building reservoirs.

Before I get too boring, I would like to say that I look forward to hearing from the hon. Member for Dunfermline and West Fife (Thomas Docherty). That is a big mouthful, but I got my mouth around it—sorry, Mr Deputy Speaker, but there are a lot of mouth analogies. I would like to hear the view of the Opposition on conservation. Of course it is important that we try to keep people’s water bills as low as is possible. However, the Walker household, which is metered, gets a fairly good deal. We can have loads of baths, use the facilities and have showers every day and it costs us about £2 to have pharmaceutical-grade water pumped into our house. Of course price is important, but so is conservation because we live in a lovely country and we need to keep it beautiful.

I am about to overrun my allotted time, so I will conclude by saying one more thing. My hon. Friend the Member for Newbury said that he led a delegation of water companies to Brazil. Having drained my rivers, they are going to drain the Amazon. I hope that they are not as successful with the Amazon. However, the point that was made by my hon. Friend and that will be made again by my hon. Friend the Member for Meon Valley, who is a courageous campaigner on all matters water, is that this country has 85% of the world’s chalk streams. Funnily enough, they are not making them any more. If there is another ice age, we might get a few more, but they are not making any more right now.

We have been disastrous at protecting our natural environment. Indeed, a press release from the Salmon and Trout Association just flashed before my eyes, saying that we are not even going to reach the target of getting 32% of our rivers up to an acceptable level and that it is going to be pushed further into the future. That is ridiculous nonsense. As my hon. Friend the Member for Newbury said, we should want to reach that target ourselves as a sovereign nation and should not need the European Union to require it of us. This country is so good at lecturing parts of the developing world about their environmental responsibilities—particularly Brazil and Indonesia about the rain forests. They should take no lessons from us. Until we manage our own environment more effectively, there is very little that we can teach Brazil.

With that final flourish, Mr Deputy Speaker, I shall sit down. I have been very naughty and taken 12 minutes. I see the Whip looking at me aggressively, so I am sitting down.

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[George Hollingbery (Meon Valley) (Con)]

I declare an interest as the riparian owner of a small stretch of the headwaters of the River Itchen in Hampshire and as a small part-owner of similar rights on the River Spey in Scotland. I am also chairman of the all-party angling group.

In an ideal water world, we would have cheap bills for all, plentiful and clean drinking water and sparklingly clean rivers and watercourses, stuffed with myriad fish, leaping with baby otters and surrounded by clouds of fly-life with beds of iris and crow’s foot—okay, this is the bit where we hear the needle being ripped off the Enigma Variations, because unfortunately, that dreamy picture does not match reality.

To be clear, things are not all bad. The industry has invested some £110 billion in the 25 years since privatisation, and much has been achieved in restoring antiquated infrastructure. Let us not forget the scale of the task: the industry looks after 414,000 km of water pipes; 1,380 treatment works; 6,000 reservoirs; 392,000 km of sewers and so forth. In 2012-13 alone, £4.5 billion of investment has been made. A great deal of good work is being done; things are improving in tackling water quality in the environment; and the health of rivers has improved. Point sources of pollution have been tackled, and whole catchment management plans promise improvements in diffuse pollution. However, as the water White Paper so tellingly pointed out, only 27% of our rivers and lakes are fully functioning ecosystems. We surely have a great deal more to do.

What does the Bill contribute? Hon. Members know that we face difficult financial times and that consumers must be protected in a monopolistic market. The Bill will help. The opening of certain retail markets to competition, with the prospect of that widening to all consumers of water, must surely be a crucial step in keeping downward pressure on end-user pricing. That and many other measures in the Bill, such as the change in the byzantine regime that compensated companies for the removal or change in abstraction licences, will help to solve a number of problems that the industry faces and that directly impact on pricing.

We face a problem, however. We must not throw the proverbial baby out with the tap water and get into the position in which the energy sector finds itself. A lack of long-term investment has left us all vulnerable to power outages, as old capacity is closed down and new capacity has yet to come on stream. The few hon. Members who are in the Chamber might think that the two sectors are wholly different. They might think, “Surely, the raw materials of water fall freely out of the sky regularly, sometimes on a prodigious scale.” That is true in part, but it is the how much, how often and where that matters.

As was pointed out to me in an excellent briefing from the Angling Trust, the UK has less rainfall per person than our northern European neighbours. London is drier than Istanbul. In the UK, every person uses approximately 150 litres of water a day, which is one of the highest usages in Europe. The UK—believe it or not—has less available water per person than most other European countries.

Last summer demonstrated how precarious our position has become. My hon. Friend the Member for Newbury (Richard Benyon), who is in his place, has painted a compelling picture of the crisis that we faced. It is not an exaggeration to say that many parts of the country would have faced severe shortages. Many people in the south and east of the country would have relied on standpipes, and there might have been an absolute disaster for our natural environment. Rivers had begun to run dry, as their natural sources dried up and as water companies abstracted yet more to meet demand.

We need to understand that the three-year scenario will happen—it is not a matter of if, but truly a matter of when. We should remember that it does not matter how cheap water is if there is none. I therefore want to make a few comments on resilience. More can and is being done on leakage. There is some success on consumption through metering, through the advent of modern technologies that use less water for the same tasks and through education, but we face a potential structural problem in the regulatory environment.

Resilience necessarily means building infrastructure. Ofwat rightly has a primary duty to protect customers, but it therefore has a perverse incentive not to sanction investment in what is, by definition, redundant capacity. That is why I am particularly pleased by clause 22, which promotes resilience to being a primary duty for Ofwat. The measure is very much helped by the explicit guidance published in May by my hon. Friend the Member for Newbury and the Department, “Strategic policy statement to Ofwat: incorporating social and environmental guidance”. Paragraphs 3.6 to 3.9 explicitly set out the Government’s expectation that Ofwat should ensure long-term resilience and, crucially, sustainability in the system.

It is important to recognise that resilience is not the same as sustainability. None of us wants a system that creates resiliency in the water supply that relies on sources that are environmentally damaging. In the round, however, I am glad that we now seem to have a regulatory environment that recognises that protecting customers also means protecting a sustainable supply of water. However, I wonder whether we might go a step further. Hon. Members know that one of the biggest problems faced by large-scale infrastructure projects, such as those likely to be needed by the water industry, is delays in the planning system. To that end, I wonder whether the Minister has considered a national policy statement for water. After all, we have one for waste water, so why not have one for water? Such a statement would go a further step towards allowing Ofwat’s two conflicting duties to be resolved in a timely and structured manner. It should ensure that the necessary infrastructure is introduced in a way that is controlled by the Government, at a reasonable pace, and as the economy and consumers’ wallets allow.

As we have heard, one of the most urgent but complex areas of change that is needed is in abstraction. Hon. Members know that over-abstraction is damaging our environment and that the governing regime is antiquated and not fit for purpose. Licences granted in an entirely different social and historical context are still in force and in urgent need of change. I accept that that is a complex matter, but I remain somewhat disappointed that the necessary reform is not tackled in the Bill. I am reassured by the Secretary of State’s remarks this evening on our intentions in that regard, and I hope we hear similar commitments from the Opposition.

[Mr Charles Walker]

I agree with my hon. Friend that water abstraction is complex and that it does obvious damage—that obvious damage is dried up river beds.

[George Hollingbery]

Who could possibly disagree? That is clearly one consequence that we need to reform shortly. I will come to that in a moment.

Those of us who hold our natural environment dear, particularly those rivers and streams across the country that are fed by chalk aquifers, cannot wait for ever for change. Too many of our chalk streams, such as the Chess, the Beane, the Kennet and many others, have been irreparably damaged by over-abstraction. That simply cannot be allowed to continue, as my hon. Friend says. How can we possibly continue to lecture countries such as Brazil and Indonesia on environmental damage when we, the custodians of 85% of chalk streams—unique ecosystems—are complacent and allow them to be degraded over time, doing nothing about it? That simply will not do. We must change the system, and do so soon.

I understand why the Government have delayed reform, but the fact that the Bill does not change abstraction licensing at the same time as allowing new upstream supplies may well present a problem. One of the proposed resilience reforms is that those with unused abstraction licences for purposes other than general water supply and those with water surplus to their needs can sell water on. I welcome that in principle, but one concern is that, if proposals to reactivate old licences or sell bulk water across borders are not very carefully assessed in respect of their impact in source areas—in terms both of the environment and of local pricing incentives and competition—unanticipated damage could easily be done. I am glad to note that the Government have partially recognised that and committed to introducing changes to the Bill in Committee to ensure that permission must be obtained from the Environment Agency before any changes of use of water abstraction rights are made. May I suggest that a similar assessment of the impact on local pricing and competition in source areas also be made?

The same rules must surely apply to the bulk transfers proposed by the Bill. The Government have said that they are considering that, and I hope that similar changes will be introduced. It is worth noting we will need to consider how permitting would apply across the border into Scotland and Wales. No doubt, the ministerial team have that under review. Furthermore, it would be reassuring if the Government considered allowing such arrangements to be terminated on advice from the relevant assessor if it is clear that they are contributing to over-abstraction, causing environmental damage or skewing the competitive environment.

Finally, on water metering, as undertakers have made more progress on leak reduction, measures to reduce demand will become more important. Measures in building regulations and the advent of new technologies that reduce the amount of water needed to perform certain tasks have a part to play, but so does water metering. That is another complex matter. Hon. Members know that water metering increases costs for some people and reduces them for others. We should never allow companies to cut off supply to those who cannot pay their bills. However, water metering reduces consumption and allows householders and undertakers more accurately to identify local leakage, which can then be dealt with.

The Water Industry (Prescribed Conditions) Regulations 1999 allow universal water metering to be introduced in areas of water stress. I wonder whether it is time to take that a step further. We should consider not standing in the way of rolling out water metering schemes throughout all areas, water stressed or not, if an undertaker can demonstrate that they have a clear, deliverable plan to help customers to deal with the change; that they have similar, robust plans to deal with the difficulties faced by those who are least likely to be able to deal with increased bills; that their request for the roll-out forms part of a long-term strategy to reduce demand; and that the Secretary of State retains the power to remove the scheme if those things are not delivered. All I ask is that the Minister and his team consider such a change.

In conclusion, the Bill is a step in the right direction towards reform of the water industry. Its measures will help to increase competition and so keep down prices. It clearly recognises the need to guarantee long-term supply, but does so in the context of other measures and proposed changes that acknowledge that sustainability of the source of supply is as important as resilience. It would have been hugely preferable if abstraction reform were followed by changes to upstream competition in that order, but, when taken with the licensing requirements that Government are contemplating, the dangers posed can be mitigated. I look forward to joining colleagues in the Aye Lobby should a Division be called.

[Sheryll Murray (South East Cornwall) (Con)]

I welcome the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall (Dan Rogerson) to the Front Bench, and I pay tribute to my hon. Friend the Member for Newbury (Richard Benyon), who led on the Bill from the beginning.

We often take water for granted. Not everyone in the world is so lucky. Indeed, I have walked, with some of my staff, along the beautiful coastal path between Looe and Polperro to raise money for WaterAid.

I have done in-depth research into the job that South West Water does in my constituency. I thank Chris Loughlin and his staff for taking the time to show me around Restormel treatment works, which is the biggest treatment works in Cornwall—it does not supply my constituency, but it is based there—and the Torpoint waste water treatment works. I now understand more about what happens to the water that falls out of the sky. During these visits, at either end of my constituency, I was fascinated by the work undertaken and have a much better understanding of the level of investment being carried out to ensure that our water is clean and our waste water properly treated. That investment does not come cheap, of course. While water bills in South East Cornwall and the far south-west reflect that investment, they have been unusually high for a number of years. I again thank my hon. Friend the Member for Newbury for showing a clear understanding of the matter, and the Chancellor for the contribution of £50 to each household towards that higher than average cost in Cornwall.

I want to highlight two concerns. First, we should not put in place legislation that will further increase the cost of our water. It is imperative that we monitor water quality without putting an expensive burden of regulation on our water companies. I am thinking in particular about our beaches and coastal water. We must remember that the south-west is a tourist area, and it is vital that local hard-working families do not have to pick up the cost burden of further European legislation. We must not become the Government of red tape. The Department for Environment, Food and Rural Affairs and other Departments have done much to reduce the burden on industry following the mess left by the previous Labour Administration.

Secondly, any legislation must allow water companies to be able to react quickly to circumstance. We do not need legislation that says that everyone must be consulted in triplicate. There is no point in putting sandbags out once a town has been flooded. When the need arises, water companies must be able to do what is necessary to save lives, homes and businesses. Tragically, my constituency has been hit more than most by the weather and by flooding—it is a key problem. I thank the former Secretary of State, my right hon. Friend the Member for Meriden (Mrs Spelman), and my hon. Friend the Member for Newbury for visiting it on a number of occasions to see the situation on the ground for themselves.

[Mr Charles Walker]

My hon. Friend is making a powerful speech. Is it not the case that if homeowners cannot get insurance their homes become, in essence, worthless, because nobody will give them a mortgage on them?

[Sheryll Murray]

Many of my constituents who live in the areas affected by flooding have a particular problem getting insurance. I speak as someone who, many years ago, worked in the insurance industry and dealt with domestic insurance. One constituent was told that she could get insurance after 10 flood-free years, and was flooded after nine-and-a-half years. My constituents cannot afford to pay repair costs every time it floods. Will the Minister consider ways to mitigate the causes of flooding and to help people to get the insurance they desperately need? Some of my constituents have been caught in a flooding trap: they cannot get insurance to be able to recover from floods and, as my hon. Friend the Member for Broxbourne (Mr Walker) said, they cannot sell their home at a reasonable rate because the flooding has caused a type of blight.

South East Cornwall is not rich. Wages are frequently below average, with many people relying on seasonal tourist work. The Bill must not place an extra burden on them. It is not just the Opposition’s constituents who are hard pressed. The Opposition must accept that they need to look at solutions, rather than sitting and sniping from the sidelines about increasing bills, and making cheap political points.

[Mr Walker]

I thank my hon. Friend for her tireless campaigning on this subject. She has worked with Members across the House to bring this important matter to the attention of the Government and she deserves to be thanked for it.

[Sheryll Murray]

I welcome my hon. Friend’s comments.

I ask the Minister to look at South East Cornwall as an example. As my neighbour, he knows my constituency well. I am happy to meet him to discuss the many individual stories I have heard about flood insurance, if that would be helpful.

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[Dan Rogerson]

Companies in water-stressed areas will be able to push people towards meters. Of course, new properties are customarily metered now, as a result of existing legislation. As we have heard today, there is a range of views on whether metering is desirable. Certainly, with regard to managing a scarce resource, it is desirable, but we must carefully examine the implications, such as the cost of the investment needed to install meters and the impact on bills, because there are always winners and losers. We need to look at that closely, as we move forward.

[Mr Charles Walker]

The population of this country is forecast to grow by 8 million or 9 million, and most of that growth will be in the east and the south-east. The problem is that the Bill simply does not address what we are going to do with these people and how we are going to provide them with water. We need more reservoirs.

[Dan Rogerson]

I agree that, as my right hon. Friend the Secretary of State said, we need to capture more of this water and make it work for us in such a way that we can improve environmental outcomes as well as resilience. That is very much what we want to happen.