Water Industry (Financial Assistance) Bill

Debate between Dan Rogerson and Mary Creagh

Wednesday 14th March 2012 Commons Chamber

[Dan Rogerson]

My hon. Friend makes an excellent point. The water Bill will be a further opportunity for us to revisit these issues and I welcome the fact that hon. Members across the House are still considering this matter as one that needs further exploration.

[Mary Creagh (Wakefield) (Lab)]

I want to reply to the hon. Gentleman’s point about league tables. The idea came from Ofwat and is meant to ensure that there is transparent information for customers, shareholders and the Government so that they understand who is levelling the tariffs, where they are going and where the money is going. That was Ofwat’s idea and I cannot claim any credit for it, much as I would like to.

[Dan Rogerson]

The hon. Lady is very generous in ascribing the idea to Ofwat. I suspect that Ofwat could probably do that anyway and would not need legislation; if it wanted to publish a league table, it could get the information. Ofwat would have information from companies about where the money was coming from and where it was going and could publish it without that needing to be on the face of the Bill.

Water Industry (Financial Assistance) Bill

Debate between Dan Rogerson and Mary Creagh

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.

--- Later in debate ---

[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.