National Policy Statement (Waste Water)

Gavin Shuker Excerpts

Monday 19th March 2012 Commons Chamber

[Gavin Shuker (Luton South) (Lab/Co-op)]

I note that debates in the House on waste water are rather like the No. 159 bus that serves the House—you wait for ever for one, then two come along at once. However, I welcome this debate on the national policy statement, as well as the statement itself.

Much of the interest in the debate will be generated by specific nationally significant infrastructure projects, such as Deephams, which is in the constituency of my hon. Friend the Member for Edmonton (Mr Love), and the Thames tunnel. Labour supports the Thames tunnel project. In government, we foresaw the need for the tunnel and established both the commission and the enabling legislation.

London’s sewers carry both raw sewage and rain water and were designed for 4 million inhabitants. There are now 8 million inhabitants, meaning that even small amounts of rain can cause massive amounts of untreated sewage to be discharged into the Thames. That happens once a week on average, and it kills wildlife, damages the health of river users and will in time trigger significant daily fines from the European Commission. We must comply with the urban waste water treatment directive. The project tackles that by collecting the overflow in a giant tunnel bored below London and processing the waste in Beckton sewage works. That should mean that discharges occur only a few times a year, and that they are much less harmful.

Projected costs have risen, however, and time scales have begun to stretch. The Government need to show leadership and make a clear commitment to the project to ensure that the right vehicle for managing and delivering it is put in place. We remain unconvinced by alternative solutions to the problems of London’s sewage discharge, many of which, sadly, are more about local politics than about long-term planning. The consultation process is vital to ensuring that sites are placed correctly and properly integrated into the environment. MPs will rightly want to represent the views of their local communities in that process.

There are several hurdles to clear, not least the Secretary of State for Communities and Local Government, who has an effective veto over the tunnel. The support of the Department for Environment, Food and Rural Affairs alone will be insufficient. Last week in the House, I questioned the Minister on the nature of the decision-making process. I expressed concern that the joint decision-making process was an administrative one and not a legal one, and asked for clarification. He replied:

“The Secretaries of State for Environment, Food and Rural Affairs and for Communities and Local Government will jointly take decisions on water and waste water applications. The Secretary of State for Communities and Local Government will take the lead on considering the Planning Inspectorate’s recommendations. My officials are due to meet his officials shortly to agree the process”.—[Official Report, 12 March 2012; Vol. 542, c. 318.]

Despite the Minister’s assurances, this evening’s debate is the last opportunity for Parliament to express its view of the appropriateness of the Thames tunnel project, so let me put it on the record that I am disappointed that the decision-making process giving the green light to the tunnel is yet to be decided, and that it will not be decided before Parliament has exhausted its scrutiny of whether the Government should be given the green light to go ahead. As we have seen recently in the internal divisions over planning reform and weekly bin collections, every time the Department for Environment, Food and Rural Affairs goes head to head with the Secretary of State for Communities and Local Government, it comes off worse.

In 2001, the independent Thames tideway strategic study was set up to consider the problem of London’s excessive sewage discharge and to come up with a solution. In 2005, the study concluded that improvements to existing treatment works and a tunnel to intercept the combined sewage overflows were the best solution. In 2007, we determined that it was appropriate for Thames Water to make provision for the design, construction and maintenance of such a scheme; and the Flood and Water Management Act 2010 provided for infrastructure regulation to create the framework for the tendering, designation and building of such a project.

In addition to the primary environmental benefits of the Thames tunnel, we saw it as an opportunity to create more than 4,000 direct jobs, expand apprenticeships and regenerate London. Tory-led Hammersmith and Fulham council has co-ordinated much of the opposition to the Thames tunnel plans. Most recently, it established a commission with four other councils to examine the project. Essentially, it proposed a combination of a much shorter tunnel, building more local sewage works, greater separation of foul sewage and rain water, and the installation of sustainable urban drainage.

Some of those would be welcome complementary projects, but we agree with the Government that pursuing the alternative route is a distraction that could cause far greater disruption and costs, and ultimately prove to be ineffectual. Supporters of the alternative approach would have preferred to fight the battle over whether the tunnel should be built at all, and with the commencement of the next-stage consultation, the passing of last week’s Water Industry (Financial Assistance) Bill and tonight’s national policy statement debate, attention should now be focused on getting the specifics right: route and site selection, the delivery vehicle and the finances.

I want to touch briefly on Deephams, in the constituency of my hon. Friend the Member for Edmonton. I have taken a particular interest in this project because treated effluent from Deephams discharges into Salmon’s brook, a tributary of the River Lee, whose source, as we all know, is the picturesque hamlet of Luton. Again, we accept the need for this upgrade work to go ahead. Deephams serves nearly 1 million residents and is already undergoing a £50 million programme of improvement works to deal with excess storm water inflows. Nevertheless, improving water quality and expanding capacity to meet the needs of a growing population will require further work.

The Government should express their view on whether it is better to rebuild the plant in the existing urban area, as congested as it is, than to rebuild on a new site. We know that if relocation is the preferred option, effluent will need to be moved from the existing site footprint for cleaning and then returned for discharge. I therefore welcome what I understand to be the Minister’s intention to designate Deephams as a nationally significant infrastructure project, as the Thames tunnel was late last year. That is what I understood him to say, but I am sure that he will be able to clarify when he sums up.

The process that we initiated in government of introducing national policy statements in draft form, with the intention that they be scrutinised by the relevant Select Committees and the public is, I believe, showing dividends. I pay tribute to the hon. Member for Thirsk and Malton (Miss McIntosh)—I note that we are increasingly in agreement on such matters—for her work chairing the Environment, Food and Rural Affairs Committee and for the recommendations of her Committee. I give the Government credit for incorporating many of those recommendations into the final document.

We completely agree with the Committee’s view that greater attention should be given to—SUDS—sustainable drainage systems as measures complementary to large infrastructure projects. In the case of the Thames tunnel, this can help to ensure that the effectiveness of the tunnel is not reduced with climate change and that we do not end up in 50 to 100 years’ time having to construct a second tunnel.

Measures to reduce the amount of water passing through drains and into the Thames can be implemented at neighbourhood or district level. We encourage councils across London not only to provide information and education on reducing water consumption through rain water harvesting and water recycling, but to lead by example. Education should focus on encouraging people to “wetrofit” their homes, with fittings such as low or dual-flush toilets, water-efficient shower heads and tap flow regulators. Introducing grey water recycling in new-build properties and renovations could allow bath and basin water to be cleaned and reused. External features for rain water harvesting should also play an essential role.

The Government have had much to say about their green deal programme at the Department of Energy and Climate Change, but little assistance is being extended to householders looking to purchase green roofs, water butts or downspouts to collect rain water that otherwise would go into our sewers, even though the advantages are obvious, with residents enjoying a notable reduction in their water bills and the sewerage system having to manage a lower volume of waste water. Over time, local authorities and the Highways Agency should replace hard, non-permeable surfaces with porous materials on pavements and public footpaths; home owners, too, should be encouraged to consider such measures. I do not underestimate the challenge that SUDS present to the status quo. Every year in London alone some 3,000 hectares of private domestic gardens are paved over—the equivalent of 2.5 Hyde parks. Such complementary measures should be part of a rolling programme, and we will return to them in the comprehensive water Bill, a draft of which the Minister promises in the forthcoming Session of Parliament.

On the wider objectives of the national policy statement, we welcome the commitment to sustainable development. Infrastructure should help us to live within strong environmental limits and to have due regard to environmental, social and economic considerations. However, may I press the Minister to clarify which definition of “sustainable development” he intends to use in this version of the national policy statement?

[Mr Slaughter]

I wonder whether I might put to my hon. Friend the question I put to the Minister, but did not get an answer to—although perhaps the Minister, who I think agrees with the position I described, might deal with it when summing up. This is something of a hybrid NPS, because although it deals with the general principles, as my hon. Friend says, it also deals with specific projects. Is it his view—as I think it is the Minister’s—that it is appropriate to have major projects such as the Thames tunnel in addition to general principles in the NPS?

[Gavin Shuker]

I completely agree with my hon. Friend that it is appropriate to recognise major, nationally significant infrastructure proposals in the draft of the document. It is important to note that the document will be revised over a cycle of every five or so years, and rightly so. It is also important to note that the Chair of the Select Committee on Environment, Food and Rural Affairs rightly proposed an additional appendix referring specifically to the two nationally significant infrastructure proposals in the document, for greater clarity and to ensure that that can be addressed appropriately by Ministers. I therefore agree with my hon. Friend’s point, and I am sure that the Minister will clarify the position in due course.

Returning to the broader themes of the policy statement, on public health and environmental improvement, we continue to support efforts to comply with the urban waste water treatment directive, and we appreciate how this is reflected in the policy statement. Improving water quality in the natural environment and meeting our international obligations are, of course, essential. In that vein, I am a little disappointed that there was not more in the water White Paper on the quality of water and waste water. We know that major projects will need to go ahead—not least the two that I have already mentioned—to achieve that objective, and I am assured that the objective in the NPS will be sufficient to ensure that those projects go ahead.

According to the waste water policy statement, reducing water consumption is another of the Government’s key objectives and a major part of their plan. We know about the benefits of reducing water consumption, and not just for water treatment. Much of England will be subject to water restrictions from 5 April, as drought conditions develop. Although we agree on the importance of the long-term reforms envisaged in the water White Paper—competition for non-household customers to drive water efficiency innovation—we are worried by the lack of deep thought on how to reduce per capita water usage.

In some parts of the advanced world, individual residents get by on just 75 litres per day, but in the UK, household water consumption has grown since the 1950s to around 150 litres per person per day. There is also still significant variation between different water companies. We therefore call for more action, including the publishing of the so-called missing chapter of the water White Paper, to ensure that water efficiency measures are taken seriously and that Government actions and programmes best reflect the guidance, so that not everyone is subject to restrictions on water use when there is enough water to go round in some regions.

On climate change mitigation and adaptation, we know that climate change will require some of our water treatment systems to take far greater volumes of waste and storm water, as well as require our water industry to reduce its emissions. By 2050, the industry—which already accounts for about 2% of our nation’s carbon footprint—will need to have contributed significantly to the 80% reduction in emissions required by the Climate Change Act 2008. At present, there is a tension between higher standards for waste water, often requiring higher levels of energy consumption, and the requirement to reduce the draw on our national grid. There is plenty of space for innovation, and a need for far more research on efficiency and devising new processes for raising standards of waste water. To help with this, we call on the Government to publish a road map, as they have with the motor industry, to sketch out a path to a low-carbon waste water industry.

The principle of the waste hierarchy should of course apply to any project under the national policy statement; the document refers to that directly. In that regard, more could be done to encourage new processes that harness the organic value of effluent. Will the Minister outline what discussions he has had with his counterparts at the Department of Energy and Climate Change and at Ofwat to ensure that the energy recovery process is maximised through the implementation of this document? We welcome this national policy statement, and we will not oppose the motion tonight.

Water Industry (Financial Assistance) Bill

Gavin Shuker Excerpts

Wednesday 14th March 2012 Commons Chamber

[Gavin Shuker (Luton South) (Lab/Co-op)]

I beg to move amendment 1, page 2, line 2, at end insert—

‘(5A)

(a) In exercising the power under subsection (3) the Secretary of State may make an order containing a scheme for the provision of financial assistance to customers whom the Secretary of State considers are disproportionately adversely affected by the water charges with a view to reducing the impact of those water charges.

(b) The scheme shall—

(i) specify the customers whose charges are covered by the scheme,

(ii) set out the basis of the adjustment of the charges, and

(iii) specify the duration of the adjustment.

(c) An order shall not be made under this section unless a draft of the statutory instrument containing it has been laid before, and approved by a resolution of, each House of Parliament.’.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

New clause 1—Water company social tariffs—

‘(1) The Secretary of State shall provide in regulations for the introduction of minimum standards for water company social tariffs, by 1 April 2013.

(2) Regulations made under subsection (1) above shall be made by statutory instrument and may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.

(3) Ofwat shall publish 12 months after the passing of this Act and every year thereafter a league table of water companies reporting the performance of the provision of social tariffs and the number of households spending more than 3 per cent. and more than 5 per cent. of their disposable income on water bills.’.

[Gavin Shuker]

Both the amendment and the new clause deal with the issue of water affordability for customers, but they do so in two different ways. Although I feel certain that a man as reasonable as the Minister will want to accept both improvements to the Bill, I should add that I intend to press them to a vote if necessary.

We made clear on Second Reading that, as a responsible Opposition, we would not seek to frustrate the will of the Government in legislating for a reduction in customer bills throughout the south-west. We accept that Government action should be taken to ensure that water remains affordable for South West Water customers following the botched privatisation of the early 1990s. We all benefit from the “national treasure” status of Cornwall and Devon’s spectacular coastline, just as—this was pointed out by the hon. Member for St Ives (Andrew George) on Second Reading—we benefit from London’s incredible museums, which are also supported by Government action.

I pay tribute to Members in all parts of the House who, over a period of years, have sought to correct this historic injustice. Our work in government in commissioning Anna Walker to look at the problem of water affordability in the south-west has been coupled with action by the present Government in legislating for payments to be made. Let me make it clear to all Members that we support Government action to reduce customer bills in the south-west.

Amendment 1 is not in any way a wrecking amendment. It seeks to improve the legislation by providing for proper parliamentary oversight of the wide-ranging powers in clause 1, which—let me be honest—I suspect are intended not to involve the Secretary of State in some kind of land grab, but to avoid the Bill being classified as something other than a money Bill. I can reassure south-west Members that if the amendment were adopted, we would not use the additional scrutiny for which it provides to frustrate the will of the House. Its inclusion would, however, serve as an entirely proper safeguard to prevent the Secretary of State, or her successors, from abusing the powers given to her and extending financial inducements in any way for any reason.

Amendment 1 would ensure that the Secretary of State makes an order when she wishes to exercise the power in clause 1 to give financial assistance to a water and sewerage company in order to secure a reduction in household bills. The amendment requires the scheme contained in her order to

“specify the customers whose charges are covered by the scheme”,

so that there is clarity about the households who will benefit from a reduction. It requires the scheme to set out the basis for the reduction in charges, so that everyone understands why the reduction is being made in the first place and to ensure that the Government’s logic is tested and sound. Crucially, it requires the scheme to

“specify the duration of the adjustment”,

so that this Parliament does not write blank cheques, and so that the most cost-effective option can be considered over an appropriate length of time.

In short, the Government will be required to answer the questions that need to be answered if effective parliamentary oversight is to be exercised. We feel that that is especially important given that the Secretary of State can give the assistance in any form whatsoever, including grants, loans and guarantees, and given that, because this is a money Bill, it will receive just one day of scrutiny in the other place.

We believe that when the Secretary of State wishes to use the powers granted by the Bill in the future, the least she can do is lay out her argument before a representative Committee of the House. I say that for one simple reason. As new clause 1 makes clear, there are numerous, increasing and varied threats to affordable water, and as the Government’s own water White Paper makes clear, our climate is changing, which has profound implications for the scarcity of water. New infrastructure may be required to supply fresh water, while—as the Government have also made clear—complying with higher standards for waste water will require expensive construction projects such as the Thames tunnel. More regions will seek to make a similar case to that of the south-west, and now that the principle has been established by the Government’s actions, we require a mechanism to test the logic of successor Secretaries of State.

Let me give an example. According to yesterday’s Evening Standard,

“The boss of Thames Water today warned that bills will have to rise to pay for new pipes and reservoirs if customers are to avoid more hosepipe bans in future.

Chief executive Martin Baggs, who announced yesterday that the first hosepipe ban in six years will come into force on April 5, said Thames was ‘living on the past’ and needed to step up levels of investment.

He told the Standard: ‘The last two years have been exceptionally dry and there needs to be flexibility in the system to deal with that.

The flexibility needs to come from one of two directions: it means people must use less water during those extreme conditions or we have got to have extra resources so people don’t have to have those restrictions.’

Mr Baggs wants clearance from the regulator Ofwat to step up investment when the company negotiates its next five-year funding plan from 2015.

London water bills are already set to go up by an inflation-busting 6.7 per cent next month to an average of £339 per household.”

--- Later in debate ---

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

The amendment is defective in that there would be regulatory implications in respect of Ofwat, but they have not been considered. Indeed, I am struggling to understand why we need this amendment at all, given the current text of clause 1.

[Gavin Shuker]

The purpose of the amendment is to ensure that when the power under clause 1 is triggered, there is proper parliamentary accountability and oversight at the time of making any reductions. The hon. Lady mentions the regulatory regime. It would not be particularly affected under clause 1 as it currently stands. Ofwat’s role will be to see the money coming in and the money going out. This amendment would not change that situation at all, except that we in this House would have the opportunity to examine any scheme that is to be established and to have answers to any questions we might have: namely, how long, for which customers and for what duration.

As I have said, we agree with the proposals to give financial relief to the south-west from April 2013. Indeed, we examined this issue when in government and laid the groundwork for helping 700,000 households in the region. We therefore accept the argument that the south-west requires additional help to keep water affordable, but stopping there misses the point.

The south-west has the highest bills in the country and about 200,000 people are under water stress. In the Thames region, that number is 1.1 million, however. Our new clause 1 therefore starts with the simple proposition that by April 2013—the month when financial assistance will start flowing to Devon and Cornwall—the Secretary of State should bring forward minimum standards for a company social tariff. We think that is not too much to ask.

The numbers speak for themselves. As I established on Second Reading, 400,000 households in Wales, 460,000 households in Yorkshire, 780,000 households in the Severn Trent region and 1.1 million households in the Thames region pay more than 3% of their disposable income on water. The squeeze on living standards is real. This Government’s actions are contributing to high inflation and pressure on family budgets. The rise in VAT has pushed up the price of petrol, and the cost of child care is going up at twice the rate of wages, just as the Government cut that element of the working tax credit. Families with children who cannot raise their working hours from 16 to 24 could find themselves almost £3,000 worse off from next month. Energy prices have risen, while for many people pay has been frozen.

The crunch will be felt first and worst by low and middle-income families, particularly those with children. A single-earner couple household with kids that is earning £44,000 might sound well-off—and, indeed, in comparison to many, it is—but it will be hit hard by the £1,750 a year that it will lose overnight when child benefit is scrapped.

[Dan Rogerson (North Cornwall) (LD)]

I am intrigued that the hon. Gentleman wants to have a debate about tax credits, as we recently had a vote on such issues. Is he going to mention the fact that this Government are delivering free nursery places for the most disadvantaged two-year-olds, and that increasing numbers of children will be covered by that in the course of this Parliament?

[Gavin Shuker]

I will not test your patience, Mr Hoyle, by continuing that debate. The hon. Gentleman puts his case on the record, but one of the key arguments in respect of new clause 1 is the squeeze on family living standards. We believe it would be wrong to park that argument in a different silo from the rising costs of water bills.

People are facing falling living standards, frozen wages and rising water bills. Our amendment would ensure that the power to introduce a company social tariff—a power that we legislated for when in government—is followed by Government action to ensure that these schemes are effective at making water affordable for those who are struggling to pay. Under the current Government’s plans, the design of any social tariff is entirely in the hands of each of our 20 or so water companies. Apart from WaterSure, there will be no national tariff, and there will be no national branding of water affordability schemes. Outside the south-west, there will be no new Government money to help those who cannot pay.

Under this Government’s plans, it is even down to the individual companies to decide whether to introduce a social tariff scheme at all. Although we believe the industry and Government should be working towards a national affordability solution, the first part of new clause 1 would require the Secretary of State to bring forward plans for minimum standards for water company social tariffs.

The second part is just as important. We know that if we cannot measure it, we cannot manage it. Therefore, water companies should be held to account by ensuring a league table is published each and every year reporting on the performance of company social tariffs. In the energy sector, Ofgem sets parameters for what can be included by suppliers as part of their spend on social initiatives, and it annually monitors suppliers’ progress against the voluntary commitment. A handful of water companies already have good social tariff schemes, but we want to raise the bar for all companies to the standards of the rest of the industry, both by requiring the Secretary of State to have minimum standards approved by Parliament, and by the monitoring and reporting of all companies, shaming those poor performers into action. By also requiring the number of households spending more than 3% and 5% of their disposable income on water to be published, we can monitor the scale of the affordability problem and make meaningful comparisons between companies.

Our amendment 1 and new clause 1 are attempts to improve the Bill. We welcome the money for the south-west, but stopping there misses the point. People’s ability to pay for something as basic as water should not be subject to a postcode lottery. This issue is at the heart of shaping a socially responsible water industry in the years to come. I hope the Minister will accept the amendments.

[Miss McIntosh]

I followed the arguments of the hon. Member for Luton South (Gavin Shuker) very closely, and I went along with a great deal of what he had to say, particularly his congratulations to the Minister and the Government on introducing what is a very timely Bill. I think I understand the spirit in which the Opposition amendments have been tabled. The Front-Bench colleague of the hon. Member for Luton South, the hon. Member for Ogmore (Huw Irranca-Davies), is present, and he will recall that we spent many—happy—hours scrutinising the provisions that were to become the Flood and Water Management Act 2010. That Bill was fairly good, but it was improved as we went along—although we did not have sufficient time to address many of its measures, of course.

That Act gives enormous order-making powers to the Secretary of State, and I would be interested to learn from the Minister why the Government have chosen not to draft a parliamentary order in respect of interested parties on this occasion. For the record, a number of hon. Friends—I hope I may call them that—on both sides of the House would normally be discussing the business of the Select Committee on Environment, Food and Rural Affairs, but we deem this debate so important that we thought it was our priority to be here to discuss the Bill and these amendments. Obviously, I am entirely at one with the Government, given that we have worked so hard under successive Governments to come up with a novel means of helping people with water bills in the south-west, but it would be helpful to know why clause 1 made no provision for parliamentary scrutiny. I, therefore, have some sympathy with what the hon. Member for Luton South and his colleagues have proposed.

Amendment 1 and, even more so, new clause 1, on social tariffs, raise the question of why the hon. Member for Ogmore and the previous Labour Administration did not introduce social tariffs as part of the 2010 Act. In addition, why were they not minded to introduce amendments at this stage to deal with bad debt, an issue that is exercising water companies? The Select Committee took evidence just last week on the water bills that the average household is having to pay because of the position on bad debt.

[Gavin Shuker]

The hon. Lady is making her points clearly, and I welcome the spirit in which she makes them. We have accepted the timetabling for this short Bill, which will go through quickly. We have been promised a comprehensive water Bill and if we had more time, we would have much to say about bad debt and we would look favourably on any amendments seeking to deal with it. Unfortunately, such amendments have not been tabled for today.

[Miss McIntosh]

I am grateful to the hon. Gentleman for those remarks. I hope that the Minister will confirm that the draft water Bill will contain provisions on social tariffs and tackling bad debt—I do not know whether there is any more recent news as to when it may be published.

The hon. Gentleman also referred to the Anna Walker report and water efficiency measures. Again, I wonder why he did not include any more detailed provisions on water efficiency measures in his amendment. I also wonder what the Minister and the Government are thinking on such measures, given that we are on the brink of the worst drought for at least 40 years. Anna Walker proposed some imaginative measures that households and businesses could take, and it is disappointing that they were not elaborated upon to a greater extent in the natural environment White Paper or the water White Paper. It would be helpful to know the Minister’s thinking on that. A lot of unfinished business on the 2010 Act could have found its way into this small Bill, but we await confirmation that such things will be dealt with in the wider and more comprehensive draft water Bill.

On new clause 1, I am not sure that I entirely followed the hon. Gentleman’s thinking on minimum standards for water company social tariffs. In what regard are these to be “minimum standards”? Are they to be minimum standards for comparative purposes or will they govern how the social tariffs would apply?

[Gavin Shuker]

I understand the hon. Lady’s confusion on this point. A number of options are available to us in terms of amending the Bill. We felt that the most appropriate route to go down was to allow companies discretion on whether or not to introduce a company social tariff, but to ensure that, at the very least, any such tariff met minimum standards set by the Secretary of State and approved by this House. At the moment, we are at the lowest rung of all the possible interventions and we simply seek to move things up one, in the hope of getting towards a national affordability solution.

--- Later in debate ---

We do not propose to require the kind of annual reporting suggested in new clause 1, which would be just the sort of regulatory burden that David Gray’s recent review of Ofwat warned the regulator away from. Ofwat already has a primary duty to protect the interests of consumers and will act in their best interests. A league table would also fail to show the real picture on the ground. The measures of 3% and 5% of a household’s disposable income are useful indicators of risk, but they are not absolute measures of the number of households struggling to pay their bills. In short, therefore, we think that enabling companies to work with their customers to design schemes best suited for their area is a much better solution. I therefore ask hon. Members to withdraw their amendments.

[Gavin Shuker]

The Minister was articulate and charming, but his argument was unconvincing. I am sorry to say that because I have a great deal of sympathy for him and his position. This is a short Bill and the Government want to get it through quickly and cleanly, but we believe our amendments serve a useful purpose.

The Minister clearly ruled out the possibility of a national water affordability scheme. I think I am right in saying that. The Minister is not willing to give that assurance at this stage, but I will go back through Hansard. I thought it was pretty clear from what he said that a national water affordability scheme was ruled out. We believe that that is the wrong approach and that work can be done. If provision is not made in this Bill, we would like to engage with the Minister and work collaboratively to try and find a way to respond to the concerns of the hon. Member for North Cornwall (Dan Rogerson), who raised the possibility of such a scheme, as we have done on previous occasions.

The hon. Member for Thirsk and Malton (Miss McIntosh) asked about the opinions of the water companies. In my experience, the water companies would like a level playing field. It is clear to me that in new clause 1 we do not ask for a one-size-fits-all solution, as the Minister described it. We simply ask that at the same time as the south-west receives the benefits of the Bill, the whole country should receive the benefits of a set of mandatory minimum standards for those tariffs. We do not even require water companies to introduce the social tariffs, but when those are introduced, we ask that they be effective—that they are not just based on guidance, but that the House has the right to weigh in on what they should be. My hon. Friend the Member for Bolton West (Julie Hilling) dealt with issues of national water affordability. She is a strong advocate on behalf of her constituency.

In conclusion, despite my sympathy for the Minister, I intend to press amendment 1 to a Division.

Question put, That the amendment be made.

--- Later in debate ---

[Mr Offord]

I shall comment on the proposals of the right hon. Member for Bermondsey and Old Southwark (Simon Hughes). Some of his comments were interesting and opened me up to some of his concerns, which are shared by some Conservative Members. I shall investigate some further issues afterwards, but I wish to put some comments on the record now.

I am a supporter of the Thames tunnel. I do not think I am considered a spendthrift politician. I am often described as a right-wing Conservative—a moniker with which I am very comfortable. On this occasion, however, I am supporting Thames Water in its endeavours to clean up the river.

I am most concerned about amendment 4, proposed by the right hon. Member for Bermondsey and Old Southwark, according to which financial assistance should be given for “the financing the infrastructure” only if

“secured by a group company which has adopted the equator principles.”

I was not initially aware of what the equator principles were, so I went away to conduct a little research.

The equator principles were established to guide investment for major works and projects in developing countries, particularly those countries that have a limited environmental regulatory framework. Although they are now described as applying to all major projects across the country, the relevant environmental directives here in the UK set much higher standards than anything that appears in the equator principles.

Applications for projects on the scale of the Thames tunnel will be considered by an independent body—in this case, the Infrastructure Planning Commission. I understand that back in September 2010, Thames Water referred the matter back to the IPC. Beyond that, I understand that after investigation, the Secretary of State will be required to look at the project to establish whether it is acceptable; that will be followed by acceptance or rejection by Parliament.

The scale and the nature of the Thames tunnel project has triggered the need to undertake an environmental impact assessment in accordance with the EU EIA directive and the EIA regulations. The EIA process will seek to identify the likely significant effects of the project, which we hope will inform part of the design process and facilitate design improvements, ultimately identifying suitable mitigation measures for any residual environmental and social effects on our constituents. The output of the EIA process—the environmental statement—will convey to decision makers, such as ourselves, the environmental effects of the project, including on local communities.

Other studies have been undertaken that will inform the independent decision makers during the IPC process, including an equalities impact assessment, a health impact assessment and a sustainability assessment. In addition, as we all know, local authorities will be able to make their case directly to the IPC, and they will be able to produce their own local impact statements. Finally, the extensive consultations undertaken by Thames Water comply fully with the Planning Act 2008 and are in line with the Aarhus convention.

It is certainly my view—and I believe it is the view of Thames Water, which is proposing the scheme—that the directives and guidelines are being complied with to an extent that far exceeds the requirements of the equator principles, and I am particularly uncomfortable with that. I am disappointed that the amendment will not be pressed to the vote. I feel that when amendments have been tabled, we should test the view of the Committee on them. I do not understand why the right hon. Member for Bermondsey and Old Southwark tabled this amendment. I would have thought that he had done enough work to be able to speak eloquently about his other concerns. I do not think that he really believes in this measure, which rather muddies the water generally.

The second part of my speech is about the Chris Binnie meeting, which I attended. I was quite surprised to hear that the person who promoted the original plan had decided, after seven or so years, that he felt an alternative was more viable. The viability of the scheme, he said, lay in the fact that it would cost only £60 million as compared with the £4.1 billion he originally envisaged. What he did not address in the meeting, however, was the fact that the £60 million scheme would not fundamentally address the problem of sewage and other contaminants in the river. All it would do is scrape some of the 39 million tonnes of effluent off the top of the Thames and aerate some of the river, affecting fish and livestock living in it. It does not address some of the issues in the EU environmental legislation that we need to address fundamentally as part of the super-sewer scheme.

I was rather concerned to hear that someone who had proposed a scheme only seven years ago had suddenly changed his mind. I felt that some of these aspects should have been considered seven years ago. He said that circumstances, including the financial situation in which the country and Government find themselves, had changed. That reminded me of an old African proverb—that the best time to plant a tree is 20 years ago, and the second best time is now. I ask myself why he did not push this scheme forward at the time. We have had to wait seven years and he now claims that it is unaffordable. I am very suspicious of people who come forward with a professional opinion and then, when circumstances change, decide that better alternatives could have been proposed. In hindsight, it would have been better if he had advocated these proposals originally.

I do not believe that the amendment will be pressed to a vote. If it were, for the reasons I have outlined, I would certainly be against it. I do not wish to detain the Committee any longer—certainly not for as long as the right hon. Member for Bermondsey and Old Southwark did. I look forward to hearing the Minister’s response to some of the points that have been raised.

[Gavin Shuker]

The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) raises a number of important issues through these amendments. In so doing, I believe he makes our case, which we will come on to discuss in the next group of amendments, for proper parliamentary scrutiny in the exercise of clause 2. However, we take a different view on the correct mechanism in this case. We believe that rather than attempting to restrict the powers of the Secretary of State—despite the rather ingenious way in which he has crafted the amendments—the best way to debate major infrastructure works is through a statutory instrument process, before triggering the powers in clause 2. Because we believe that our amendment provides a superior mechanism, we are reluctant to support the right hon. Gentleman’s amendments, although I accept that he has already said that they are, to a degree, intended to probe the Government’s position.

I admit that I was a little confused about the right hon. Gentleman’s own position. Last week he said that he was no longer convinced of the arguments in favour of the Thames tunnel, and I hope that the amendments are not designed to allow him to sit on the fence. In view of climate projections that forecast a substantial increase in the number of flash floods in the region—it is expected that by 2060 the UK’s current single occurrence in 30 years will become one in 11, and that the current single occurrence in 100 years will become one in 30—we think that the need for the tunnel is obvious.

We do, however, agree that the scheme could be accompanied by a number of other measures. It should be borne in mind that the Thames tunnel will still be overwhelmed by large storms occurring perhaps every three months. That demonstrates that the design is not over-engineered, as some would claim, but provides a decent standard of protection for the Thames.

The right hon. Gentleman has indicated that he does not intend to press his amendments to the vote. I invite him to support our amendment 2 later, when these points can be properly addressed.

--- Later in debate ---

[Simon Hughes]

Thank you, Ms Primarolo, and of course I will.

I understand that the Minister realises what the issues are. I heard what the Minister said, and I tell my hon. Friend the Member for Hendon (Mr Offord) that the equator principles are now well-established principles for finance companies that are lending nationally and internationally and they were the best form I could find of a benchmark of ethical standards for financial companies that are lending to utilities. Yes, they were developed in the context of the third world, or the developing world, but they do not just apply there. I understand the points that were made.

The negotiations to which the Minister referred are being conducted confidentially, of course, and I understand that, but I hope that after today’s debate we will be able to ensure—the Minister has offered to do so—that there is engagement across the parties and across the House, including with those of us whose constituents, like his, have an interest in our ending up with a rigorous system for ensuring that Thames Water is accountable. We have flagged up the wider issue, which we want to take elsewhere, with Government.

On the comments of Opposition Members, not least those of the hon. Member for Hammersmith (Mr Slaughter), about the meeting held upstairs, I am grateful that colleagues came to that meeting and others held in this and other buildings about Thames Water. My view is that an evidence-based conclusion should be reached about what the right systems are for dealing with what has been a growing problem for the Thames. We need to make sure that we are all confident that we come up with the right solution, and it is perfectly proper to call people who have views and experience to give evidence. Like the hon. Gentleman, I was slightly surprised that Professor Binnie appeared to move from a view that he had moved on to, back to a view that he had originally held. It is important not to ignore the principle that we should not overspend on a capital project if there are other ways of doing things that give better value for money.

I am grateful for the time we have taken to look at this issue, which is now on the agenda. I am determined that engagement with Ministers should continue and I hope that Ministers will be very positive about making sure that not only the Government but Thames Water and Ofwat engage. May I end by correcting one thing that I mis-said when I was talking about an example that should give us a warning? I was talking about the M6 project and the way it had been funded. I said that the company that ran the project, which is linked to the company involved in Thames Water, had a net worth of £67 million and paid no corporation tax, but I should have said that it had a net worth of minus £67 million. I hope that this makes my point a better one—that a company may appear not to have any money but can be paying out large amounts in dividends. I am grateful to have had the opportunity to put that right and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Gavin Shuker]

I beg to move amendment 2, in clause 2, page 3, line 5, at end insert—

‘(6A) No financial assistance may be given under subsection (6) unless the Secretary of State has laid a draft of a statutory instrument setting out the terms and conditions including the duration of such assistance before, and such draft has been approved by a resolution of, each House of Parliament.’.

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

With this it will be convenient to discuss amendment 3, page 3, line 5, at end insert—

‘(6B) Before making regulations or an order under this section, the Secretary of State must lay a report before Parliament on her proposals to make apprenticeship programmes including at a Level 5 and Level 6 standard part of any major works, as well as an estimate of the number of jobs created and benefit to the local economy.’.

[Gavin Shuker]

In this final grouping, we seek to improve the Bill by ensuring that the same parliamentary scrutiny is applied to the wide-ranging powers in clause 2 as we sought to introduce for clause 1, and that the benefits of major works are shared with the whole community, not just shareholders. Amendment 2 recognises that the powers in clause 2 for the Government to provide contingent financial support for exceptionally large or complex water and sewerage infrastructure should be subject to proper debate in the House before they are triggered. As I have already said, it is not our desire to frustrate the will of the House; indeed, there is, by and large, consensus across the House that something must be done to correct the issues with the Thames and that the Thames tunnel presents the best solution for that problem. However, I feel that the clause needs to be considered beyond the context of today and the policy statement that I believe will come out in the House on Monday night.

[Rory Stewart (Penrith and The Border) (Con)]

Will the hon. Gentleman reflect on the idea that proper debate in the House should be required on triggering very detailed financial amendments? Given the lack of attendance in the broader debate about this Bill, is it realistic to expect proper parliamentary scrutiny of something so minor?

[Gavin Shuker]

I am grateful for that point from the hon. Gentleman who has joined us in the debate. I ask him to hear me out regarding this measure. I am sure he has read the amendment and understands that it refers to the process for statutory instruments under which Members who had a particular interest in the matter would be able to go and make representations. We use that system quite commonly across the House and I feel that such additional parliamentary scrutiny would be appropriate for projects such as those we are discussing, which could involve costs of up to £4.2 billion and a long period of tunnelling works and the like, let alone for other projects that we do not currently know about.

As Members of Parliament we scrutinise, debate and legislate, and we are elected to do so. By putting the power to decide whether public money should be risked on large water infrastructure projects solely in the hands of the Secretary of State, we lose that thorough process, which is the most accessible way for Members to engage in legislation here in Parliament. We will see how much interest the Thames tunnel has attracted in the Chamber today as part of the Bill. The debate so far has allowed MPs who represent constituencies that will be affected by the plans to come forward and express the views of their constituents, but it is limited. The debate has also allowed those with experience and expertise in the field from both sides of the House to feed in their knowledge and advice.

However, the clause in its current form concerns us because it means that from here on we risk writing blank cheques for the Secretary of State and her successors when it comes to large water infrastructure projects. The clause will see the decision-making process remain in the Secretary of State’s office—decisions which might lack awareness of how enormous these infrastructure plans are and how they will affect people’s homes and lifestyles.

Let us compare the Bill with other Bills that will be introduced in this Parliament before 2015. We know that a hybrid Bill process will be used in some cases. This is not a hybrid Bill, so it is important that we get the groundwork right in relation to the decision-making process on the Thames tunnel and other infrastructure.

Our amendment requests that such proposals come to the House for debate and allow Members to contribute their knowledge and experience. Accountability and scrutiny are needed if infrastructure plans are to reshape constituencies that Members are elected to represent. It is only right for their input to be considered. Amendment 2 will improve the Bill in that way.

As an aside, although it is essential to our decision whether to move the amendment, I noted on Second Reading in the discussion of the decision-making process on the Thames tunnel that reference was made to the policy intent in the Government’s document, “Major infrastructure planning reform: Work plan” of December 2010, which states:

“Following Royal Assent of the Localism Bill major infrastructure applications will return to ministers for decision as follows: . . . the Secretaries of State for Communities and Local Government and Environment, Food and Rural Affairs will jointly determine water supply and waste water applications.”

I have checked and DEFRA has confirmed that the joint decision-making process is undertaken by administrative means, not statutory means. In other words, although the Localism Act 2011 amended the planning legislation to give Ministers the final decision-making responsibility for major infrastructure, it did not lay down a legal duty imposing the policy intent. So DEFRA will lead on waste water and DCLG will handle planning, including the report from the planning inspectorate, but the Departments have not yet, as I understand it—I look to the Minister to clarify this—decided how Ministers will act jointly in the final decision. That falls short of a legal duty to make joint decisions that place a legal responsibility on both Secretaries of State. It could result in messy horse-trading between the two Departments. If the Minister clarified the exact process, that would be helpful. It may not address our particular concern that proper parliamentary scrutiny is applied to the decision through the statutory instrument process, but it will help us decide whether to press the amendment.

The Minister said earlier that he would share the discussions that he has had with his officials and, as I understood it, with Thames Water, to reassure us about the cost and the process for implementing the tunnel. We have another debate on Monday to approve the guidance on waste water. If not during this debate or the one on Monday, when will he share the discussions that he has had, which he sought to use to reassure Members that the process would be properly managed?

Amendment 3 will sharpen the mind of anyone proposing major infrastructure works by obliging them to consider the requirement to make apprenticeship programmes a key part of that work. Thames Water estimates that the Thames tunnel project will directly create more than 4,000 jobs in the construction sector. The majority will be employed through contractors. Of course, the true number is likely to be higher, given the secondary employment effect. A partnership is emerging with Crossrail’s tunnelling and underground construction academy, which is currently training and placing about 70 apprentices each year. Last week the Minister gave an assurance at the Dispatch Box that the Thames tunnel project will specify in its contracts the number of apprentices who will be employed by contractors.

In amendment 3 we commend that approach, not just for the Thames tunnel project but for future projects. It would require the Secretary of State to lay a report before Parliament on her proposals to encourage level 5 and 6 training programmes—for those Members not fully versed in those programmes, they are equivalent to foundation and bachelor degree qualifications. These major works can take a decade or more to complete, which means that there is ample time to bring a generation of young people into the trades, if the political will is there to require it.

[Simon Hughes]

On that important point, I know from my experience of the Jubilee line extension and other major projects that often the issue is not whether a deal is done that in theory ensures jobs, apprenticeships and training for local residents, but whether such a deal is then monitored and delivered. Often the will is there but it does not turn out that way in practice.

[Gavin Shuker]

The right hon. Gentleman makes his point explicitly and brilliantly. If the lessons of the past 20 years on major infrastructure projects where we have required special social benefits are to be learnt, monitoring is absolutely essential. That is why I think that our amendment’s approach is very sensible. It would require the Secretary of State to bring forward her plan, and an agreement with the infrastructure provider, so that it could be approved by this House. The additional level of scrutiny given would not just be an assurance in the contracts; there would be proper parliamentary accountability to ensure that the benefits, for Londoners in this case, are spread across the capital and give young Londoners a fair start.

We know that the Thames tunnel will be a huge infrastructure project, and we have all seen the bad news on youth unemployment today, so we are calling on the Government to ensure that young Londoners get a fair share of the 4,000 jobs the tunnel will deliver. In short, this is a real opportunity to help guarantee apprenticeships and high-level skills. I hope that the Minister will be able to accept both amendments, which would improve the Bill for Londoners now and for all households in the years to come.

[Rory Stewart]

The hon. Member for Luton South (Gavin Shuker) has made a powerful case for apprentices and for better scrutiny of financial mechanisms. I stand, with enormous modesty, not as someone representing the Thames, but as someone representing a large body of water in Cumbria. However, my disagreement with the amendments, and I suspect my party’s disagreement, is based on profound Tory principles. It is a disagreement not on the nature of scrutiny or the importance of apprenticeships, but on the basis of law, the way statutes should be created, the way administration should be driven through and the importance of the issue. We begin in agreement: apprenticeships are important, as is scrutiny. But Parliament is not the way to do this.

This is an elegant and unencumbered piece of legislation. What we have seen in infrastructure investment over the past 50 years is a complete misunderstanding in this country about the importance of Parliament in infrastructure and where Parliament should not be involved. We have been a catastrophe— not just the Labour Government, but the previous Conservative Government—when it comes to making the right infrastructure investments for this country. Why? It is because, unlike Denmark and Germany, we have never developed a proper attitude towards infrastructure or investment. We have never developed a national investment bank. We continue to believe that highly technical matters, such as those relating to the deployment of water or the details of the financing of infrastructure, can be resolved by Parliament, rather than the kinds of specialists in the World Bank who deliver these projects effectively around the world. We see that in water and, just as powerfully, in broadband.

If the Government are pushing ahead with this legislation, and if we are pushing back against the Opposition, it is because the failings over the past 13 years in delivering infrastructure are reflected in the comments of the hon. Member for Luton South. There are better ways of looking at the financing; there are better ways of looking at apprenticeships.

We have in place flexible apprenticeship mechanisms that are currently delivering more than 100,000 apprentices. Encumbering this legislation or, indeed, any future infrastructure legislation with that degree of detail would not only, as my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) pointed out, prove generally ineffective, as it has in the past owing to a lack of monitoring, but take away from civil servants—which is where it should lie—the real responsibility and accountability for delivering good, imaginative infrastructure projects, well financed and with apprentices in place.

Given the importance of this issue, given that water matters so much to us, given that the drop in public sector demand means that we should make more infrastructure investment, given that we need to be much more creative about how we bring financial mechanisms to bear, given that it is so cheap at the moment to borrow money, and given that it should be possible to make not just this but many more profitable investments on the basis of public sector insurance or financing, I beg the hon. Member for Luton South to withdraw the amendment. It would tie the hands of the Government at a very important moment, when we need exactly this kind of infrastructure and exactly this kind of investment in water not just for apprentices but for economic growth.

The way to proceed is with a serious, responsible approach to infrastructure investment, which will not be delivered through the kind of statutory commitments that the hon. Gentleman proposes.

[Miss McIntosh]

I shall limit my remarks and take a slightly different view from that of my hon. Friend the Member for Penrith and The Border (Rory Stewart), because I believe that there is some merit in parliamentary scrutiny and that, often, we have better laws as a result. Given that there is all-party and, indeed, consumer support for what the measure and, in particular clause 2(6), is trying to achieve, I am sure that in moving amendment 2 the hon. Member for Luton South (Gavin Shuker) is not seeking to delay matters through parliamentary scrutiny.

Will the hon. Gentleman consider this approach, however, which I have shared with the Leader of the House? When we have—as was mentioned in the debate about the first group of amendments—parliamentary scrutiny of draft orders under the Flood and Water Management Act 2010, for example, is it not unsatisfactory that all we are required to do is to vote for or against the statutory instrument? Would there not be some merit in being able to amend it?

I have chaired and served on Statutory Instrument Committees, as all of us have been privileged to do from time to time—although I hope that the Whips do not take that as a bid to serve on any in the future. As a humble Back Bencher, however, I believe—and this is where I part company with my hon. Friend the Member for Penrith and The Border—that if we are going to have scrutiny we should be able to amend statutory instruments. I find it unsatisfactory that we may have an amendable motion but not the power to amend a statutory instrument. I just plant that thought in the minds of the hon. Gentleman and of other hon. Members.

[Gavin Shuker]

I am grateful to the hon. Lady for her warm approach to our amendments and for her suggestion. To be clear, we would not necessarily have chosen the process that we are engaged in with this Bill, which is a money Bill. A hybrid Bill might have provided an opportunity really to scrutinise the two projects that, as the Minister has already said, the Bill is about.

[Miss McIntosh]

Bearing in mind the history of hybrid Bills in this House, and the length of time and the amount of dissent that they can involve, I am not sure that that is the path the hon. Gentleman really, truly wishes to go down.

--- Later in debate ---

[Richard Benyon]

I agree with my hon. Friend. It would be wrong to put in the Bill requirements that might or might not suit today’s world, but that would be wrong for the future. The Government, in negotiations with private sector companies and through the planning process, are involved at many levels in the development of such contracts. We can impose our desires and our will. The companies and the Government can be held to account if they fail on these matters. I believe that to prescribe to such a level of detail would be wrong.

Thames Water is holding the launch for a jobs and skills report in the House on 20 March, to which MPs are invited. Its jobs and skills forum will promote the work that it is carrying out in this area. Thames Water will also look to gain from the experiences of other large-scale infrastructure projects. It is right for the Government to support and encourage Thames Water in those efforts.

Apprenticeships are central to ensuring that our work force are equipped to help build economic growth. There are huge opportunities in the project, if we can embrace them, for Londoners who are seeking work and training to be involved in a really high-profile scheme for a number of years. They can then take the benefits into other sectors and industries. However, we do not feel the need for further legislation to provide that encouragement. Nor is it necessary or appropriate to require the terms and conditions involved to be included in a statutory instrument. For that reason, I ask hon. Members not to press the amendments.

[Gavin Shuker]

I thank all Members who have participated in the debate. I listened carefully to what the Minister said, and I am slightly concerned that he and the hon. Member for Penrith and The Border (Rory Stewart) have tried to talk up amendment 3, a modest amendment, into a big, overbearing piece of regulation. It is not. It would not just apply to this project but protect us in future, and I gave a clear commitment to the Thames tunnel throughout my speech.

I listened to what the Minister said about apprenticeships, and I believe that his heart is in absolutely the right place. We will all want to pull together to ensure that the Thames tunnel project, which I am certain will go ahead, employs apprentices and ensures that there is a legacy for London. I will therefore not press amendment 3, but I do seek to press amendment 2 to a Division.

Question put, That the amendment be made.

Water Industry (Financial Assistance) Bill

Gavin Shuker Excerpts

Tuesday 6th March 2012 Commons Chamber

[Gavin Shuker (Luton South) (Lab/Co-op)]

Allow me, Madam Deputy Speaker, to convey the apologies of the shadow Secretary of State, who has been unable to attend owing to the split sitting of this Second Reading. I am sure that that is true of many other Members across the House.

We have had a robust discussion of a variety of issues, and I am heartened by the contributions of different Members. I shall start with last Wednesday’s contributions. The hon. Member for Thirsk and Malton (Miss McIntosh) pressed the Minister for an amendable motion on the debate on the waste water national policy statement, asked about the lack of an impact statement, raised concerns about the Government’s actions in the negotiations on flood insurance, and asked where the comprehensive water Bill was. We share all those concerns.

My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) raised understandable concerns about the King Edward memorial park in his constituency and educated us on the importance of fire sprinklers. I hope that the Government will work with him and us to ensure that the comprehensive water Bill responds to this aspect of fire safety. The hon. Member for St Ives (Andrew George) made a typically insightful speech that recognised the actions of Members on both sides of the House to reduce bills in the south-west. He also made a compelling point about the national treasure status of Devon and Cornwall’s beaches, which is a point that we accept.

My right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock) spoke powerfully about the Deptford high street Thames tunnel site, demonstrating once again that she is a powerful advocate on behalf of her constituency, and the hon. Member for Hendon (Mr Offord) confirmed his view, which we share, that the Thames tunnel is both essential and desirable for the ongoing health of the river and Londoners.

My right hon. Friend the Member for Exeter (Mr Bradshaw) asked where the comprehensive water Bill was—a theme that many Members picked up on—and established that the welcome £50 reduction would be quickly wiped out by a lack of action more broadly on affordability.

The hon. Member for Newton Abbot (Anne Marie Morris) asked a number of technical questions—in particular, about park homes—to which, given the six-day hiatus in this Second Reading debate, I would expect the Minister to have a comprehensive and erudite response.

My hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) was generous and forward-looking in thinking not just of her constituency—for which she has helped to secure water affordability payments—but about affordability more broadly. She reiterated our question: where is the Government action to quell rises in water bills beyond the direct subsidy to the south-west?

The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) asked his own questions about the Thames tunnel. To be clear, we do not necessarily agree with the alternative proposals to deal with the problem, many of which have more to do with short-term political interests than the long-term benefits of being good custodians of the natural environment.

The hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile), in what was originally a very short contribution, paid tribute to his predecessor, Linda Gilroy. When it comes to water, I am sure he will represent his constituents’ interests in the same way. He was less generous, however, when he talked about three Labour MPs as perhaps being one reason why more action was not taken. I would say that those three Labour MPs more than punched above their weight in bringing the issue to the fore.

My hon. Friend the Member for Bolton West (Julie Hilling) talked about debt in her constituency and gave us real stories of customers struggling to pay their bills. The hon. Member for Camborne and Redruth (George Eustice)—another Devon and Cornwall Member—talked about the nature of the scheme to award £50.

My hon. Friend the Member for Hammersmith (Mr Slaughter) talked about the need for the Thames tunnel, in his typically forthright style. He did not hold back from saying what he really thought, including about his local council. He also slew the myths of the Selborne commission—a sensible thing to do in a debate such as this.

[Mr Slaughter]

If my hon. Friend has any lingering doubts about the need to alleviate the sewage going into the Thames, he is welcome to join me and my constituents at 10 o’clock this Saturday when Thames21 will be doing a deep clean just by the sewage outlet at Hammersmith bridge. I am sure he will find ample evidence there of why we need such alleviation.

[Gavin Shuker]

I believe that is what is known as a helpful intervention from my hon. Friend.

The hon. Member for North Cornwall (Dan Rogerson) talked about the nature of the privatised settlement, and raised the possibility of the Bill being used to extend payments to other areas. I hope he will look carefully at our amendments to ensure that the issue has proper parliamentary scrutiny as the legislation goes through.

My hon. Friend the Member for Stretford and Urmston (Kate Green) talked about affordability, social tariffs and data sharing, all of which are essential if we want to reach a broader affordability settlement.

The hon. Member for Tiverton and Honiton (Neil Parish) talked about bill payers in Devon and Cornwall, and returned to the theme of competition, which we obviously look forward to hearing more about in our comprehensive debates on the Bill.

Last but not least, my hon. Friend the Member for Edmonton (Mr Love) talked about the consequences of the 50 discharges each year on average, and about Deephams, the site in his constituency.

This Bill deserves proper scrutiny, because the issue of water affordability is not going to go away. Across the country, families are under real pressure. We therefore welcome the help extended to the south-west, and we praise the many Members, in all parts of the House, who have raised that point, both in this Second Reading debate and in the run-up to it. However, the problem of water affordability does not stop at the River Exe. In a moment, the Minister will stand up and talk about financial assistance—indeed it is in the very title of the Bill—but today, across this country, a fifth of all households are spending more than 3% of their income on water. What assistance does this Bill extend to the 400,000 households in Wales, the 460,000 households in Yorkshire, the 780,000 households in the Severn Trent region or the 1.1 million households here in the Thames region that fall into that category? Sadly, the legacy of this legislation will be what it does not do, as it offers no help for millions of hard-pressed households.

We know that the pressure on budgets will only increase—the White Paper makes that much clear. Populations will increase, as will scarcity of water in large parts of the country. We in this House must therefore take action to keep water affordable. The Government promised us a proper water Bill—significant legislation, far-reaching market reform and action for customers. However, their own water White Paper—their blueprint for water—was delayed by six months. Our Cave, Pitt and Walker reviews gave the Department a clear direction of travel. Everyone across the House accepts that what is needed is a comprehensive package, tackling water issues, introducing changes and then letting the industry settle down and deliver. What we need is a proper water Bill, but Ministers have lost their slot in the Queen’s Speech. Indeed, just last week I asked the Minister across the Dispatch Box:

“If tackling drought, conserving water and reforming abstraction are so important, why has the Secretary of State delayed her own Bill?”—[Official Report, 1 March 2012; Vol. 541, c. 410.]

His response was that he was not privy to the contents of the Government’s legislative programme for the next Session of Parliament. That is a shame. I would have hoped that someone had pointed out to the Minister that he had lost his slot. Everyone in the House seemed to know that, apart from him.

This mini-Bill proves that the pilot light is on at DEFRA, but that there is little legislation coming through any time soon. Customers, investors and water companies will rightly ask: where is the beef? This delay is serious: we are to see no action to curb the unsustainable abstraction of our rivers and streams, no time scales to increase competition in this highly regulated monopoly market, no changes to ease water scarcity—exacerbating the extreme drought conditions that we are already experiencing—and no action to keep water affordable across the UK.

This legislation is for the future, but the cost increases are for now. This April, water bills are set to rise by an average of 5.7%, which will add £20 to the average bill. We will seek to amend the Bill to ensure that those who are struggling to pay will have access to a social tariff. It is unfair to extend the situation in which a postcode lottery determines whether people can afford to pay their water bill. We know that the Government have ruled out extending national social tariffs beyond the WaterSure scheme, even though that scheme reaches only a third of eligible households. They have walked away from making further social tariffs mandatory. Under their plans, the design of social tariffs is to be left to private companies. In fact, in the DEFRA draft guidance, companies are even given the choice of whether to provide one at all.

In the short term, we know that tackling the bad debt that raises all our bills, pooling cross-subsidy to make it more effective, requiring landlords to share the names of their tenants, as they do in the energy sector, and setting minimum standards for social tariffs can all make a serious dent in the cost of water. We know what works, and we are willing to work with the Government to introduce comprehensive reforms to achieve that. So which of those measures will DEFRA commit to? None of them. That is not good enough.

[Andrew George (St Ives) (LD)]

How would the hon. Gentleman answer the questions that he has just put to the Government?

[Gavin Shuker]

We have been very clear about the measures that we believe the Government could take right now to make a real dent in water prices. We are not going to talk about the long term but do nothing in the short term, which, with the exception of the measures relating to the south-west, this Bill is the very definition of.

The Government must do what only they can do. Their White Paper talks about water for all, but merely offers affordability for some. We will not oppose the Bill this afternoon, but we will table amendments next Wednesday to improve it. Ministers should not deny the existence of the quiet cost of living crisis that is very real for many families across the country. Instinctively, we all feel that water should be affordable. As the Bill progresses, I hope that the Government will accept our amendments to improve it. In doing so, they could help to ensure that there is water for all.

Oral Answers to Questions

Gavin Shuker Excerpts

Thursday 1st March 2012 Commons Chamber

[Richard Benyon]

The hon. Member for Stockton North (Alex Cunningham) made a very good speech yesterday, in which he pointed out the folly of the easy fix that people constantly suggest to me: building a vast pipeline from his constituency to mine. We know that that is prohibitively expensive, but we can get greater interconnectivity between water companies, and thus water flowing from areas where it is plentiful to areas where it is not.

[Gavin Shuker (Luton South) (Lab/Co-op)]

If tackling drought, conserving water and reforming abstraction are so important, why has the Secretary of State delayed her own Bill?

[Richard Benyon]

The hon. Gentleman presupposes what is—or is not—in the Queen’s Speech. I have to confess that I am not privy to that; the Queen will announce the contents. We have said that the Bill will be available for pre-legislative scrutiny, but we do not need a Bill to deal with many of the issues that we are discussing on the drought. We can introduce the abstraction incentive mechanism—a bit of a techy issue, but one that can make a difference right now to the sustainability of water supplies.

Water Industry (Financial Assistance) Bill

Gavin Shuker Excerpts

Wednesday 29th February 2012 Commons Chamber

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

I congratulate the Government, because they have done an extremely fine job. Frankly, I find the comments about the £50 reduction being cheeseparing a bit sad.

I was interested to hear the comments of the right hon. Member for Exeter (Mr Bradshaw) and I agreed with him on many points. He said that he is concerned that the £50 will be wiped out by price rises. As I said, there will be price rises across the country. Is he saying that the Opposition would have provided more money to give a greater subsidy? If so, how would they have funded that? I will leave him to ponder that.

[Gavin Shuker (Luton South) (Lab/Co-op)]

The hon. Lady asked about Opposition policy. We support the £50 payments in the south-west, but are looking for further action on water affordability across the piece, which this Bill does not provide.

Flood Defences (Exeter)

Gavin Shuker Excerpts

Wednesday 22nd February 2012 Westminster Hall

[Richard Benyon]

The right hon. Gentleman, who was a Minister in DEFRA, will understand that these things are done in spending rounds. Very few flood schemes go from conception to commissioning in one year, which is why we base it over a spending review period. The excellent chairman of the Environment Agency will confirm—our figures have been sent to the Public Accounts Committee—that there is a 6% difference. The last Chancellor in the previous Labour Government, of which the right hon. Gentleman was a member, announced shortly before the general election that there would be 50% capital cuts in budgets. I will be generous to the right hon. Gentleman and say that if his party had won the general election it would not have cut the capital budget by 50%, but it would certainly have cut it. I think that he would have also implemented all the recommendations of the Pitt review into those very damaging floods in 2007, part of which form the basis of the partnership funding system that we have introduced, and part of which resulted in the implementation of local flood risk management through lead local flood authorities. That is very important for communities such as his, and I hope that we can work together constructively in the coming months to achieve a result for those people.

It is the nature of flood and coastal defence investment that there are always more projects than national budgets can afford at any one time—there always have been and, sadly, always will be. Some 5.2 million homes are at risk from flooding and we want to protect as many of them as possible. Funding has always needed to be prioritised, and that would be the case even if capital budgets had not been reduced in the spending review.

As we have heard today, the Environment Agency is developing an option for Exeter that is expected to cost £25 million over its lifetime. Under the new partnership funding system, that might attract approximately £13 million funded by the general taxpayer. That leaves a shortfall of £12 million. Many schemes are funded totally by the taxpayer. What we have now in our partnership funding scheme is a totally transparent system. For years, communities such as the right hon. Gentleman’s wanted schemes like this to go ahead, always believing that total funding by the taxpayer would be available, but always just missing out and never knowing why—now they can see a transparent funding system.

The right hon. Gentleman talked about the “independent” Environment Agency. It is part of DEFRA; it is the Government in terms of spending flood money. The people in the Environment Agency are the experts. They have developed that transparent funding system on the lines of the recommendations of the Pitt review and have come up with the scoring for what can be achieved for his community.

Exeter is an excellent example of why we have had to change the funding approach and introduce the partnership funding scheme. The new approach follows recommendations made by Sir Michael Pitt’s review of the 2007 flooding, in which he said that local communities should be allowed and encouraged to invest in flood risk management measures so that more can be done and more schemes can be introduced. He also said that future investment plans should not simply assume that the cost of flood alleviation is met centrally. Those recommendations were accepted fully by the Government. If we had carried on with the old system, we would be placing an ever-increasing burden on the general taxpayer to meet the long-term costs of flood defence alone. Those costs are expected to rise considerably with our changing climate, as the right hon. Gentleman predicted in his speech.

The old system artificially constrained how much could be done in each town and city because Government funding has always been, and always will be, limited. The old system meant that schemes were either funded in full, or not at all, based on top-down decisions. Many worthwhile schemes, such as in Exeter, were knocked back for funding, in many cases without a realistic prospect of ever going forward. At a cost of £25 million, the Exeter scheme would have been in that category, doomed never to have had a high enough priority for full funding. Transparency and greater local involvement is at the heart of the new partnership funding system. Instead of meeting the full costs of a limited number of schemes, national funds are spread further in order to achieve more overall. Many schemes will continue to be fully funded, where value for taxpayers’ money is sufficiently strong.

In other cases, such as Exeter, national funding is available to part-fund the project. This approach creates space within the system for local and private contributions to help pay for the significant benefits to land, property, infrastructure and other assets realised when defences are built. There are potentially many sources of funding to tap in to, both public and private.

Last year, the community of Morpeth found itself in a similar position to Exeter. The proposed scheme in that area did not meet the old criteria for full funding, so it was deferred, potentially indefinitely. Under the new approach, the Government were able to meet around half of the costs of the scheme. Leadership was shown by Northumberland county council, meaning that the scheme is now fully funded and will proceed in the coming months, with half the money—coincidentally, up to £12 million—met from local sources. This example shows the power of the new system, and there are many others that I would like to point to; this is important in addressing one of the right hon. Gentleman’s points.

In south Derbyshire, Nestlé contributed £1.7 million to a £7 million scheme to protect 1,600 homes and further financial contributions have been made from industry and other means. In other areas, the planning system has been used to unlock schemes, whether through section 106 money or some other form of funding, rather like exception site housing schemes in rural communities. The income from those schemes goes to deal with flood and coastal erosion risk management. In respect of another scheme in York, York city council is finding the money to bring it above the line.

The new system has already helped secure £72 million of external funding for schemes in the next three years—more than 500% higher than during the previous spending period.

[Gavin Shuker (Luton South) (Lab/Co-op)]

Will the hon. Gentleman give way?

[Richard Benyon]

If the hon. Gentleman will let me finish this point.

Early indications suggest up to a third more schemes are likely to proceed than if we had kept up the old all-or-nothing system.

[Gavin Shuker]

I am grateful—

[Mr Joe Benton (in the Chair)]

Order. I am sorry, but under the rules for half-hour debates, an Opposition spokesperson cannot intervene.

Food Prices and Food Poverty

Gavin Shuker Excerpts

Monday 23rd January 2012 Commons Chamber

[Mrs Spelman]

If we thought that the groceries code adjudicator would put prices up, there would not be the current cross-party support across the House for creating one.

The important point is that we need a degree of humility and candour about the Labour party’s record. As has been noted, Labour has shown extraordinary candour in the wording of its motion. We must be clear that the hon. Member for Wakefield is calling on the coalition Government to introduce the adjudicator early in the next Parliament. I am not sure whether she knows the outcome of the next election, but the motion clearly indicates that she has written off Labour’s prospects of forming the next Government—she is certainly not alone in that. It is always good to start a debate with an issue on which we can make common cause, but the good news for her is that we will not wait until the next Parliament to introduce the adjudicator.

[Gavin Shuker (Luton South) (Lab/Co-op)]

The Secretary of State is keen to tie down the timing of the introduction of the grocery code adjudicator, so when will she commit to do so?

[Mrs Spelman]

As I am sure Opposition Front Benchers are aware, the lead Department on the grocery code adjudicator, both for the Government and for the Opposition, is of course the Department for Business, Innovation and Skills, but we have been very clear as a Government that we are fully committed to introducing the adjudicator as soon as possible.

Free and fair competition is the key to a healthy market, and it is right that the adjudicator should make sure the market is working in the best long-term interests of consumers. In this Session, we published a draft Bill to allow pre-legislative scrutiny. It was a popular measure, welcomed on both sides of the House, and as the Leader of the House said on 15 December 2011:

“There will be a second Session of this Parliament, and the Groceries Code Adjudicator Bill is a strong candidate for consideration as part of it.”—[Official Report, 15 December 2011; Vol. 537, c. 937.]

So there is no delay, but it has to be done right.

It is important to bear it in mind that, overall, the Competition Commission found that retailers are providing a good deal for their customers, and they should not be prevented from securing the best deals and passing the benefits on to their customers, but, similarly, we are clear that they should be required to treat their suppliers lawfully and fairly.

During pre-legislative scrutiny, the Business, Innovation and Skills Committee suggested that third parties should be allowed to lodge complaints. Our position remains that it is more appropriate for complaints to be lodged directly or indirectly by suppliers, but we are open to considering further arguments on extending the range of those who can trigger an investigation. That is the benefit of pre-legislative scrutiny. We recognise that third parties, including trade associations, have a valuable role to play, so the adjudicator will be fully free to gather evidence from trade associations once an investigation has begun.

The draft Bill provides the adjudicator with the power to name and shame retailers that are in breach of the code, and we believe that, in a highly competitive market, retailers will not risk reputational damage from unacceptable behaviour towards suppliers. If negative publicity proves insufficient, however, the draft Bill contains a reserve power for the adjudicator to impose financial penalties, subject to an order made by the Business Secretary but without the need for primary legislation.

I hope the House agrees, therefore, that these measures represent significantly more progress than was made under the previous Government and should be generally welcomed.

Oral Answers to Questions

Gavin Shuker Excerpts

Thursday 24th November 2011 Commons Chamber

[Mrs Spelman]

I think that the hon. Lady would agree that the Courtauld commitment has helped, through voluntary agreements with different sectors of the economy, significantly to increase recycling targets. We have recently concluded new responsibility deals on packaging with the hospitality and catering sector. As part of that ongoing progress, I remain committed to the Courtauld process further extending into the community, and of course we will consult shortly on new opportunities as they arise.

[Gavin Shuker (Luton South) (Lab/Co-op)]

The incoherence of those two answers serves as testament to the fact that the waste review comes from a Department of missed opportunity. Put simply, green growth creates jobs. The economy is in dire straits. Growth has flatlined; confidence has tanked; and 1 million young people stand unemployed. My question is simple: what will the Secretary of State do about it?

Environmental Protection and Green Growth

Gavin Shuker Excerpts

Wednesday 26th October 2011 Commons Chamber

[Richard Benyon]

I am very grateful to my hon. Friend, and I hope that Labour Members were listening to what he said.

[Gavin Shuker (Luton South) (Lab/Co-op)]

rose—

[Richard Benyon]

I will give way, but then I want to make some progress.

[Gavin Shuker]

The Minister is extremely generous in allowing interventions. I was initially trying to be well behaved and not to intervene on him, but I would like to echo the comment that the natural environment White Paper is fine in and of itself. There will be consensus about biodiversity—an issue about which I believe the Minister feels strongly—across the House. The key issue, however, is resource. There are many environmental and local groups applying to get funding to do the things that are set out in the White Paper, but only £7.5 million has been put behind it.

[Richard Benyon]

The hon. Gentleman is talking about our nature improvement areas, and I would be happy to talk further to him about them and about the level of our ambition, which exceeds that of the previous Government. There is no money left, as someone once said when he left a note in a desk. I have to remind the hon. Gentleman of that, but we have made biodiversity and reversing its decline an absolute priority—both for this Department and the Government.

Public Bodies Bill [Lords]

Gavin Shuker Excerpts

Tuesday 25th October 2011 Commons Chamber

[Andrew George]

Whether I get it is a matter for the hon. Gentleman to judge and for me to emphasise that of course I do.

[Gavin Shuker (Luton South) (Lab/Co-op)]

The hon. Gentleman is making a series of good points about the retention of the AWB. However, his hon. Friends have raised the views of farmers. Is he aware of the survey carried out in and around the New Forest by Stuart Harding, who saw 44 farmers at random, 37 of whom were opposed to the abolition of the AWB?

[Andrew George]

I am grateful to the hon. Gentleman. I must admit that I am not fully aware of such surveys. As I said in response to an earlier intervention, the view is not universally held across all agricultural employers, some of whom have privately explained to me that they find that the framework that the AWB provides creates inefficiency in how they negotiate and establish agreements, sometimes admittedly verbal, with their work force.

--- Later in debate ---

[Andrew George]

I am grateful to the hon. Gentleman for acknowledging that the very distinctive region of Cornwall deserves such devolution.

The hon. Gentleman makes a perfectly decent point, although I have to say that provided that the Government follow their word about the Bill being the enabling framework for abolitions to be made by order, he and his colleagues in Wales will be able to advance the idea of variable geography with regard to retaining protection for agricultural workers when orders are made. However, that is perhaps a debate for another day.

[Gavin Shuker]

The hon. Gentleman is being extremely generous with interventions—I appreciate it.

The hon. Gentleman seems to have a lot of faith that the enabling framework in the Bill leaves the Government with an open mind about this matter. He listed a number of matters involved other than the minimum wage, such as other terms of employment and pay and conditions. Unless I am mistaken, I have not heard him mention sick pay so far, but we know from the Commission for Rural Communities, a body that is itself to be abolished under the Bill, that that will take £9 million out of the rural economy.

--- Later in debate ---

[Mr Paice]

Clearly, the worker will negotiate with his putative new employer. [Interruption.] I will be more objective: the real world says that that worker is unlikely to move to someone who will pay him less than the job that he is leaving. That is the reality.

[Gavin Shuker]

rose—

[Huw Irranca-Davies]

Will the Minister give way?

--- Later in debate ---

[Mr Anderson]

rose—

[Gavin Shuker]

Will the Minister give way?

[Mr Paice]

No; I will make some progress. I, too, heard the right hon. Member for Cardiff South and Penarth (Alun Michael).