Water Bill

Jessica Lee Excerpts

Monday 25th November 2013 Commons Chamber

[Richard Benyon (Newbury) (Con)]

I refer hon. Members to my entry in the Register of Member’s Financial Interests. It is a great pleasure to follow the hon. Member for Stoke-on-Trent North (Joan Walley), for whom I have the greatest respect. She will be a loss to the House when she stands down. I listened to her remarks with great interest, and I will comment on a number of them in due course.

I hope that the House will forgive me if I start by quoting from the water White Paper, about which I feel a sense of propriety. If I say so myself, it was a very good document. It is a rare occurrence in Parliament for such a document to be well received not only by those on both sides of the House but by green non-governmental organisations, by the water industry and by people throughout the sector who are involved in this important subject.

The White Paper asks:

“How do we protect the environment and take less water from our rivers, while meeting the demands of a growing population? How do we encourage innovation and dynamism in the water sector while ensuring it remains a low-risk choice for investors? How do we incentivise less wasteful use of water while keeping water affordable for everyone?”

That encompasses, in a short paragraph, what we are seeking to achieve, not only in tonight’s discussion of the Bill, but across the much wider platform of restoring sustainability in this sector. This is about the balance between the environment and the demands of a growing population; the need for innovation and a new type of investment, which the hon. Lady was right to talk about, without spooking the investor, whose money we need; and stopping waste yet keeping water affordable. The water White Paper was a call to action and a vision for the management of this sector and its theme will, I hope, run and not only through this Bill. As hon. Members on both sides of the House understand, the Bill is just a work in progress in respect of delivering that ambition; it delivers an element, and I particularly wish to discuss the importance of abstraction.

Let me make an obvious point: water comes from nature. It is vital that we understand that we are talking about not just an environmental factor, but a key economic matter. The hon. Lady talked about the Natural Capital Committee. When we discuss natural capital, we need to understand its importance for the economy. We need to consider how we manage water resources in parts of the country with a level of rainfall lower than that in some sub-Saharan African countries. When we talk about development and the needs of the economy in the years ahead, we must address that through the prism of natural capital. I am grateful to people such as Dieter Helm, who guided me in this relatively new—for me and for many other hon. Members—approach to economic thinking. I am proud that this Government have hard-wired natural capital into their economic thinking.

It is a shaming statistic for this country that only 27% of our rivers and lakes are fully functioning ecosystems. I am pleased that we have set about addressing that, through a catchment management approach and targeting our resources in as meaningful a way as possible. We are talking about not only an environmental imperative, but an economic one. We have to comply with the water framework directive. If by 2027 we have not got our house in order and our act together, we will get a slapped wrist and a stonking great fine from the European Union. If we are talking about improving the quality of our environment just so that we comply with a European directive, what a pathetic ambition that would be. We should want to restore the quality of our natural environment because we want to restore the quality of our natural environment and feel proud about this country’s natural systems.

We have what some would call the “God-given” advantage of having 80% of the world’s chalk streams in this country, but in many cases they are failing ecological systems. We have to set about putting that right and making sure that we do not just suck water out of the top of aquifers, such as those of the River Kennet, to provide water for excellent and much-needed households in places such as Swindon; we must set about getting reforms that can address that problem. I really welcome the Bill’s means of ending the very bureaucratic system involved in closing down unsustainable abstractions and of getting this into the five-yearly price review. That is a major step forward, which came about through a proper process of pre-legislative scrutiny. I congratulate everyone, including the Select Committee, on the work that was done in trying to draw that to our attention. Let us make it clear that our ambitions for getting our act together require a new piece of legislation in a new Parliament. It would be a great help if the Minister could assure us in his wind-up that we have a continuing and dynamic ambition to legislate in the next Parliament to make sure that the increase to about 30,000 abstraction licences in England will be properly managed in a fit-for-purpose system that recognises the demands of a growing population and the economic growth potential that that will bring.

On economic potential, let me relate to the House my last experience as a Minister, which was to take a trade mission of water companies and others in the environmental sector—the green growth sector—to Brazil. That BRIC country—the group made up of Brazil, Russia, India and China—is wrestling with the problems that make ours appear small fry. Sao Paulo, the largest conurbation in the southern hemisphere, is trying to address the demands for water and for dealing with waste, and it is desperate for new technologies. British companies from our supply chain sector have achieved great things in the delivery of the greenest Olympics ever and are ready to give work to other British companies and to create British jobs in that green technology sector. So the water sector has a lot to give, not just in this country, but around the world. Understanding that economic driver is as important as the environmental and social dimension to our policies.

[Jessica Lee (Erewash) (Con)]

I thank my hon. Friend for all the work he has done in this area and for his expertise. I hesitate to interrupt his flow—to use a water analogy—but he just mentioned the social aspect. Does he agree that volunteers play an important part in managing all this country’s waterways, particularly through the Canal & River Trust? In my constituency, where the waterways play a hugely important historical and heritage role, I have set up the Erewash rangers scheme to try to recruit more volunteers along the waterways.

[Richard Benyon]

I am grateful to my hon. Friend for her intervention. If I felt a degree of paternalism towards the water White Paper, I feel one even more towards the Canal & River Trust, which is one of the great successes. It has seen volunteer numbers rocket since it went from being a government organisation—as British Waterways —to being in the charitable sector, and Members on both sides of the House should take pleasure in its success. Will the Minister respond, if not tonight, at some point, to the real concerns that the CWT has about clause 12? I hope that we can allay its fears because, as the Secretary of State rightly said, the CWT will be an important player in delivering the kind of connectivity we want in our water sector. The CWT will also be a huge resource, in terms of the economic regeneration of our cities, the potential for tourism and the social dimension of volunteer numbers. So I hope that the Minister is able to address the CWT’s concerns, which have been eloquently voiced to hon. Members on both sides of the House.

A debate is rightly taking place about the affordability of water. That was of primary importance in the Government’s mind as we developed the vision in the water White Paper and in the Bill, and I know that it is a great concern of the Minister as he steers the Bill through. Those who believe in price caps can relax about water, because we have a price cap for water—the five-yearly price review. Ofwat provides a price cap for customers, albeit one that is done by negotiation. It has been an effective way of keeping water relatively affordable, although I know that some of my colleagues from the south-west have views on that—we have partly addressed those. Obviously, there are ongoing concerns about water prices, so it is also important to recognise what the Walker review said. It found that the rateable value of a property bears no relation to a customer’s ability to pay and it discovered that 40% of low-income households live in the top rateable value properties.

The concerns and fears that people have about increased metering do not necessarily correlate with the idea that we should leave as many households as we can paying for water through a rateable system. In the next price review period, possibly with the aid of some legislative stimulus, we could see a much higher rate of metering. Knowledge is power for households. We will not be having this debate in 20 years’ time, because we will all be managing our utilities on our laptops at work. We will be able to see that a rocketing in our water usage could be down to a leak in the system. We will be able to manage our household bills more effectively. The high level of metering in the south-west and the work that Southern Water and Thames Water are doing to increase the level of metering should be applauded and supported.

The WaterSure scheme and other social tariffs are important tools, but we should consider the whole question of affordability in a much more holistic way. The effect of a freeze in council tax, of getting more families on low incomes out of paying tax altogether and of other measures will have infinitely more impact on the total expenditure of those households than will tinkering around the schemes with some of these points.

My hon. Friend the Member for Thirsk and Malton (Miss McIntosh), the Chair of the Select Committee, made an important point about bad debt, but I refer her to her own local water company, Yorkshire Water, which is an exemplar in dealing with bad debt. The money we all pay on our bills for bad debt varies around the country. Some are paying £14 or £15 and some are paying a lot more, because our water companies might be bad at dealing with bad debt. I was impressed to hear that, at Yorkshire, a resolve scheme negotiates repayment terms for customers with arrears of more than £500. A couple years ago, some 5,000 customers paid back £650,000 of bad debt, and the water company wrote off £1 million of bad debt. It is that kind of partnership approach that is delivering a much lower figure of bad debt, which should be seen in the context of affordability. Ofwat estimates that the next year’s price review could reduce bills by between £120 million and £750 million, which seems an awfully wide difference.

Of course we all want to keep water bills low and as many people as possible out of water poverty, but we concentrate on that at the risk of reducing investment. I have spoken about that matter recently in the House and I will continue to do so. A high level of investment is better for customers. It is about stimulating innovation and resilience and reducing the impact on the quality of people’s lives and ultimately on the bills they pay.

The hon. Member for Stoke-on-Trent North mentioned my comments about the drought. In the spring of 2012, the Environment Agency said to me that there was a 3% chance of us having enough rain through that summer to refill the reservoirs and depleted aquifers. We were fortunate because it started to rain in May. It rained right through the jubilee and stopped just as the first athletes started arriving in the Olympic village. We all thought, “Thank goodness”, although we did have a number of flooding incidents in certain areas. That rainfall might have caused us a problem that summer, but we were planning very seriously for a third dry winter. I put to the House this question: are we really content to see people in the most economically active part of the UK, which is sixth largest economy in the world, reduced to collecting their water from standpipes in the street? That is the sort of image that brings down Governments and causes wholesale, serious and endemic problems in society, and we must use this Bill to avoid that.