Water Industry (Financial Assistance) Bill

Julie Hilling Excerpts

Tuesday 6th March 2012 Commons Chamber

[Julie Hilling (Bolton West) (Lab)]

I am pleased to be able to speak in this debate. I am not against support for water customers in the south-west, and I absolutely agree that it is unacceptable in 2012 for the Thames—the major river in our capital city—regularly to be flooded with sewage. However, it is also not acceptable in 2012 that hard-working people in my constituency are having to beg for food, or that they are spending more than 5% of their income on water bills. My constituents cannot wait for a further water Bill to address the affordability of water: they need action to help them with their bills and action on social tariffs.

In the north-west of England, the affordability of water is based on deprivation rather than on historical or geographical issues. The bills of United Utilities Water—my local water company—are close to the national average, but income deprivation is worse than in any other region. More than half the country’s most deprived communities are in the north-west, even though we have only 13% of England’s population. Based on Ofwat’s analysis, once households in South West Water’s region receive their proposed £50 bill reduction, affordability problems will be more severe in the north-west than in the south-west. Company social tariffs will not solve the problem. Too many customers in the north-west are in financial need to make in-house cross-subsidy work. It therefore needs a national social tariff scheme that all water companies will pay into. The Government’s hands-off approach, leaving it to water companies to devise their own affordability scheme and even giving them the choice whether to provide one, definitely will not help those people most in need in Bolton West.

There is no definition of water poverty. Households needing to spend more than 10% of their net income on heating and lighting are deemed to be in fuel poverty, but there is no equivalent definition for water. It seems to me, however, that if someone has to pay 5%, or even 3%, of their income on their water bill, they are pretty poor. Some 840,000 households in the north-west are spending 3% of their income on water, and 370,000 households are spending more than 5% of their net income. It is no surprise then—absolutely shocking, but no surprise—that 4,890 tenants of Bolton at Home are in debt, and that 1,462 of them owe between £1,000 and £2,000. This debt is of concern to all of us and adds £15 a year to everyone’s bill.

We need to recognise that some people simply cannot afford to pay their bills. I was told last Wednesday about a 70-year-old lady in Bolton who has just been rehoused in a Bolton at Home house. She had to move out of her last rented home because she could not afford to pay the heating costs. She has had to ask Bolton at Home for a furnished property because she cannot afford to buy her own bed, cooker, carpets or armchair—a furnished property at the age of 70 when she should be able to enjoy her life surrounded by her own belongings. Before she retired she was a care worker, but was never offered a pension scheme and was never able to save for her old age. She is now trying to live off £134 per week for her gas, electricity, water, food, clothing and all her other needs, and her water bill is about to go up by nearly 5%. Such people need help not greater debts.

United Utilities is a good water company and offers financial assistance schemes. It has a trust fund that will make grants to customers in genuine financial difficulty. That can clear outstanding water arrears, which is great, but does not help people to find the money on an ongoing basis to pay their bills. I am also told by Bolton citizens advice bureau that the fund often runs out of money before the end of the financial year, that it rarely assists people who cannot afford to pay the current year’s instalments, and it will refuse a grant if it does not think that the customer has a good enough reason for falling into arrears in the first place.

United Utilities also has an arrears allowance scheme that reduces the balance by £1 for every £1 paid by the customer. Again, however, the customer has to be able to pay the ongoing charges, and if they miss just one payment, they are thrown out of the scheme and will not be readmitted. There are also 5,200 United Utilities customers on the WaterSure scheme, which is for those who have medical or other needs that mean they have high water usage, but that simply caps their bill at the average household bill. United Utilities is also running a feasibility study on a support tariff. However, none of this solves the fundamental problem that some people do not have a big enough income to pay their water bills.

Unlike for other services, my constituents cannot shop around for a better deal. They can buy their water only from United Utilities. These private firms are monopolies, and frankly it is not enough just to expect them to be philanthropists. United Utilities is telling me that company social tariffs will not work for the north-west. We therefore need national action on social tariffs. Water companies can apply to have money deducted directly from benefits, but Bolton citizens advice bureau tells me that its money advice staff are deeply frustrated by that. Of course, we all believe that people should pay off all their debts, but when a person reaches a crisis of debt, priorities have to be made. There is no point paying off a water bill if the person is evicted from their home; the water bill is not a priority if they have no electricity in the house; and the water bill is not a priority is there is no food to feed the children. If a person is on limited income, the advice from all professionals is to manage priority debts. Only when homes are saved or prosecutions avoided are other debts dealt with. As there can be only a limited number of attachments to benefits, it can be harmful if one of them is for water bills.

Finally, water debt is just part of the problem facing so many low-paid people. It is 2012, and we have poor people dependent on food handouts. We have poor people losing their homes, poor people unable to heat their homes, poor people unable to pay their water bills—in fact, poor people paying the price for global economic failure. The Secretary of State should take action now on water poverty. I urge her to do so.