Water Industry (Financial Assistance) Bill

Dan Rogerson Excerpts

Wednesday 29th February 2012 Commons Chamber

[Mary Creagh]

I am happy to say that we will not vote against the Bill. If the hon. Gentleman waits, I will come on to some of the wider affordability issues and will, I hope, answer some of his questions on the wider issues.

The next unanswered question is: why are we debating the Bill now? We know that the Government ran out of meaningful new legislative business about two months ago, and the House has been surviving on thin rations—a meagre diet of one-line-Whip business and Back-Bench business debates, valuable though they are. There was no new Government legislation, but suddenly—boom!—out of the Department for Environment, Food and Rural Affairs, a Department whose Ministers are the embodiment of clout, grip and competence, spurted a sudden, short water Bill, born of the realisation that if the Department has lost its slot in May’s Queen’s Speech, it had better deliver on the Chancellor’s promises to the south-west and his coalition partners. That happened just six short weeks before the end of one of the longest parliamentary Sessions ever held. Clearly, such a masterstroke of parliamentary planning and timing could have been confected only by the Department that brought us the forest sell-off.

Labour in government corrected many of the injustices of water privatisation. As I said, in 2000 we banned water companies from cutting off the water supply of homes, schools and hospitals for non-payment. It is extraordinary to think that legislators would allow provisions that let hospitals—care givers and providers of sanitation—be cut off for non-payment of bills. We allowed for compulsory metering in areas of scarcity, and a more muscular Ofwat, holding the water companies to account, has emerged in recent years.

[Dan Rogerson (North Cornwall) (LD)]

Will the hon. Lady give way?

[Mary Creagh]

I will make some progress, and then I will give way. Where specific issues required careful consideration, we brought in experts to advise us. We commissioned the Pitt report after the 2007 floods, the Cave report to look at competition and innovation, and the Walker report, which analysed water charging and looked explicitly at the problem of high bills in the south-west. My hon. Friend the Member for Ogmore (Huw Irranca-Davies) legislated for water companies to introduce social tariffs in the Flood and Water Management Act 2010. I shall now examine each of those issues in turn.

Some have questioned why the Tory and Lib Dem Government wanted to extend £40 million a year in financial assistance to a region dominated by Tories and Lib Dems. I will leave others to speculate about the politics, but it is clear that customers in the south-west face bills that are, on average, 43% higher than in other areas. That is why we examined the issue in government and did the groundwork on helping those 700,000 households. I pay tribute to colleagues in all parts of the House, and to our former colleague, Linda Gilroy, for their work on the issue.

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[Mary Creagh]

I thank my hon. Friend for that clarification. It is clear that much work was done in the south-west because it has the highest penetration of WaterSure customers and the highest rate of metered households, despite the fact that water is plentiful in the south-west, so it has nothing to do with scarcity. It has to do with people making a rational economic choice and understanding that if they move to metered bills, their costs will go down.

The Government should be using existing data about benefits to ensure that everyone who is eligible is on the WaterSure tariff. I hope we have described the heavy lifting that we did on that tariff. Last year the Government consulted on taking on the costs of WaterSure and absorbing them at a cost to the Exchequer of £10 million a year, as opposed to continuing the cross-subsidy. This idea was dropped from the water White Paper. What has happened to that notional £10 million? Why is it not being used to part-fund company social tariffs or a wider tariff to help the wider population?

Londoners will see their bills rise by £70 to £80 a year when the Thames tunnel is finished in, we hope, 2020. London has some of the poorest people in the country and a significant number living in water poverty. WaterSure will not help most of them. It is imperative that company social tariffs are introduced well before the Thames tunnel is completed to minimise the financial impact on Londoners, yet the Government’s draft guidance on company social tariffs shows that they are adopting a minimalist approach.

The Government have ruled out data sharing, which is key to helping water companies identify customers in water poverty and enabling them automatically to reduce their bill, which is obviously the least painful way, rather than allowing people to get into water debt and then taking action through the courts to pursue the money. They have ruled out an affordability scheme administered nationally, and they have ruled out an extension of WaterSure, which is the only national social tariff. Under DEFRA’s draft guidance, the design of social tariff schemes is left entirely to the water companies. Indeed, it is their choice whether to implement a scheme at all. This is the big society in action: a postcode lottery for millions of customers facing water poverty. We believe that it is untenable for the Government to pass a water financial assistance Bill without providing any assistance to the rest of the country. We will pursue amendments that would oblige water companies to deliver a social tariff scheme that meets clear and uniform criteria.

[Dan Rogerson]

On the question of how WaterSure will be funded and placing obligations on companies, if we have a funded social tariff in the south-west, it will have a disproportionate effect on the other bill payers who are paying into the pot. More work needs to be done before we start pushing regions down the route of having generous social tariffs, because we need to know what costs are being loaded on to other bill payers in the region.

[Mary Creagh]

That is an excellent point. That is why we were interested in the Government’s consultation, which talked about a national affordability scheme and offered the potential to absorb the costs of WaterSure. I hope that the Minister will offer some clarity on that in his closing speech, and I am sure that we can work together on that.

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[Mr Offord]

I thank the hon. Gentleman for his intervention. I am probably aware who he is citing, and, having had conversations with the former leader of Hammersmith and Fulham council, I can assure the hon. Gentleman that we do not agree on this subject, though we may agree on many others.

The super-sewer in London is essential to ensure that the UK complies with European environmental standards and, most particularly, the urban waste water treatment directive. All British taxpayers are at risk of having to fund hefty EU fines if the UK is confirmed to be in breach of that directive.

It is not just London and Thames Water that need to take action, however. All water companies have a contract with their consumers not only to provide them with clean water, but to remove their sewage and to treat it responsibly, but that is not happening. The water quality of Britain’s beaches is being jeopardised by thousands of unregulated overflow pipes that dump raw sewage into coastal waters and rivers. It has been estimated that 3,500 pipes operated by water companies pump unlimited amounts of raw sewage into more than 80 rivers and along sections of our coastline. That comprises more than 60 operated by South West Water, including pipes on the River Torridge, which flows to a popular Devon beach; more than 250 outlets operated by Yorkshire Water, including sewage flowing into the North sea; sewage overflows on the River Don, where thousands of fish were killed by sewage pollution in 2006; and an overflow, operated by United Utilities near Manchester, which was blamed for polluting a fishery in 2005.

[Dan Rogerson]

The hon. Gentleman is making a powerful case for the need to be mindful at all times of how outdated sewerage systems can cause problems. People may be more accepting of occasional discharges during periods of very high rainfall, but he knows north Cornwall well, and if he considers the area of Trevone he may wish to look again at South West Water’s record on delivering its promises, because in that area discharges have been occurring several times a month, and the company has yet to take action. I have raised that issue with South West Water, and we hope to address it soon, but he is absolutely right that there is a problem not just here in London, but throughout the country.

[Mr Speaker]

Order. There is a worrying pattern developing whereby the erudition of interventions is equalled only by their length.