Water Bill

Mark Spencer Excerpts

Monday 6th January 2014 Commons Chamber

[Thomas Docherty]

I know that you are a fan of all things Yorkshire, Mr Deputy Speaker, and I will come on to Yorkshire Water in a moment, if the former Minister will bear with me.

As the hon. Lady said, among those who do not pay there are those who can pay. That is unfair on decent customers who meet their obligations and we believe the time has come for more robust action to be taken. Some 80% of those who do not pay are in rented accommodation. One of the challenges facing water companies is tracking down those who refuse to pay because they move homes far more often than the average person. The only way to track them down effectively is to require landlords to provide water companies with a list of tenants. Individuals moving property would not then disappear from the system and evade paying their debts.

The measure would be a simple step and it would not require a disproportionate amount of new bureaucracy to implement. It is estimated that approximately half of total bad debt falls into the category of “can pay, won’t pay”. The Select Committee, of which the Minister was previously a member, has unanimously backed the measure throughout this Parliament, so why the opposition from the Government?

[Mr Mark Spencer (Sherwood) (Con)]

I understand, and sympathise with, the point the hon. Gentleman is making, but there is no legal way to force a tenant to inform their former landlord of a forwarding address. How can a landlord know what information to supply to the water companies, so they are able to track former tenants?

[Thomas Docherty]

I am grateful to the hon. Gentleman, who I think is a recent addition to the Select Committee. I do not think he was a member of the Committee when we had this discussion, so for his benefit I will say that it is quite simple. As the water companies have said, they would be supplied with names and addresses. The onus would then be on them to carry out the necessary activity to match up the appropriate individual, and there would be no significant burden on the landlord, the local authority or social housing provider. The burden for that work would fall on the water company. He will recall from our time in Committee that I was not always the water industry’s biggest fan, but on this the Select Committee, the water industry and the Opposition are united, so again I come back to this question of why the Government are so opposed to the proposal.

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[Thomas Docherty]

I congratulate the Minister on stating the blindingly obvious. Of course, the landlord would have to provide that information, but it is not the longest list in the world, and it is information that landlords have anyway, so the Opposition, like the Select Committee, find it difficult to comprehend why it would be so onerous for landlords to provide a list of their tenants by property. If he has specific examples of hard-pressed landlords who have made representations to him, I am sure he will refer to them when he responds.

For the fourth time, I ask myself the question: why the opposition from the Government? The Secretary of State has had his usual Pavlovian reaction to a suggestion that the Government should take action. It appears once again that when Parliament, the Select Committee and the water industry ask DEFRA to do something, its knee-jerk response is to think of spurious reasons why it should not or cannot do it. Our new clause would be a pragmatic and efficient measure that would help to drive down costs on all decent households, help water companies to do their job and ensure that all customers meet their responsibilities.

Our second new clause—new clause 10—recognises that not all water companies have done all they can to tackle the problem of bad debt. As I mentioned earlier, although the average bad debt figure is about £15, there are wide variations across the country. As the hon. Member for Newbury (Richard Benyon) pointed out, that is because some, such as Yorkshire Water, have worked with customers and debt advice groups, such as Citizens Advice, to put in place measures to help customers genuinely struggling to access payment packages and programmes, but unfortunately that is not the case across the country. Too many water companies have come to the unsurprising conclusion that, because they can pass the cost of bad debt on to their other customers, they need not bother to do anything about it themselves.

That is why we have tabled new clause 10. We want to give Ofwat and water companies a clear and unambiguous signal that hard-pressed customers should no longer be treated as a cash cow by companies that cannot be bothered to meet their own responsibilities. Where the regulator and the Department are satisfied that water companies are not doing enough to pursue bad debtors, the cost should no longer be passed on to other customers. Taken together, not only would our two new clauses be practical measures, but they would send a clear signal that while we will do more to help those who are struggling, we expect all customers and water companies to do their fair share.

Our third new clause—new clause 8—would help to ensure that customers know about the help for which they are eligible. In 1999, the last Labour Government introduced WaterSure to help low-income metered households with high essential water use. WaterSure caps the bills of metered households in receipt of a qualifying benefit or tax credit at the average bill for that water company’s operating area. It applies to households with three or more children under the age of 19 living at home or where someone in the household has a medical condition that necessitates high water use. It is an important measure that at the time received cross-party support and which, according to the latest figures that the Minister gave us in Committee, has helped 70,500 households in England—I think a similar scheme has helped approximately 20,000 households in Wales. Although that is welcome, we believe that that level is unacceptable. Given that, as the Consumer Council for Water has said, only one third of eligible households are in receipt of the benefit to which they are entitled, the Government have been guilty of complacency.

The Minister previously claimed there was no need for the new clause because all the water companies already provided this information. For the benefit of Members who have not had a chance to look at the amendment paper, we are proposing that information about the eligibility criteria and how to apply should be included in all water bills. He believes that all water companies already provide this information, but unfortunately for him the reality does not match his statement. Not only do his own figures show that the current approach is not working, but our own anecdotal research shows that customers are not even aware that WaterSure exists. We want to make it clear to water companies that they must do much more to promote the scheme, and we want Ofwat and the Government to hold them to account if they do not. I hope he has reflected not only on the evidence we presented in Committee, but on his own figures and the evidence from the CCW, and will listen to common sense.

Finally, our fourth new clause—new clause 7—deals with the central problem of the failure of the voluntary approach to social tariffs. As we have set out, too few water companies are helping too few customers through social tariffs, and it is clear that left to their own devices many water companies, by their own admission, will never introduce such schemes. That is why we are proposing a national affordability scheme to end the postcode lottery and ensure national standards for eligibility. We would expect schemes to be funded by the excess profits of the water companies, not by other water bill payers. As I have said, last year these companies made an eye-watering £1.9 billion in pre-tax profits and paid out £1.8 billion to investors. The idea, for example, that Yorkshire Water, which paid out £240 million, cannot afford to provide support through social tariffs is clearly nonsense.

Enough is enough. Hard-pressed households need real help now, and these new clauses are four practical and simple measures that would ensure they get it. It is time for the coalition to match our commitments.

[Mr Spencer]

I want to make some brief comments that were too long for an intervention, particularly about new clause 3, tabled by my hon. Friend the Member for Thirsk and Malton (Miss McIntosh). I sincerely hope that, in summing up, the Minister will reflect on today’s debate, which has shown recognition across the House that consumers and our constituents are finding it very difficult to pay their household bills because of pressure on the household budget. It is worth saying that the Government recognise that challenge and are doing their best to assist, not least by turning around the failing economy that they inherited. Needless to say, a section of society will find it very challenging to pay their utility bills, and the Government have an obligation to try to assist and support them.

There is another group of people who are unwilling to pay, as a result of a frankly malicious intent to avoid paying the bill that is due to be paid. It is vital that the water companies have the power to decide which cases fit into which categories. Those who are clearly unable to pay should be able to receive assistance, support and sympathy from the water companies. New clause 3 goes some way towards assisting the water companies to identify people within the benefit and welfare support system, who may be in need of extra assistance.

I am somewhat sympathetic to new clause 8, too, which was tabled by the hon. Member for Dunfermline and West Fife (Thomas Docherty) and is designed to ensure that water companies put the neediest customers on “the lowest possible tariff”. Those who find themselves under pressure in the most challenging of circumstances are often those least able to identify from their bills which is the correct tariff for them to be on and least able to challenge the water companies to put them on a better tariff, allowing them to afford to pay their household bills. I hope that the Minister will give further consideration to that, if he is minded to do so.

Finally, I support those who have said it is difficult to understand why the Department for Work and Pensions or the Department for Environment, Food and Rural Affairs are unable or unwilling to supply the necessary data to the water companies. I hope that when the Minister sums up, he will be able to shed some light on those thoughts.

[Mr Redwood]

I hope that the Government will look at the issue of unpaid bills. Colleagues of all parties are right to draw attention to the problem—one of the many sources of excess cost in the water industry, which it would be good to reduce or eliminate. It is undoubtedly the case that we pay dearly for our main utility provision in this country, and I fear that the main reason why water bills are high and will stay high is that there is no competition. It is a great pity that this Bill will not introduce proper competition into water as into other areas, as it would make a lot of difference. The amendments are designed to deal with the situation of having regional monopolies that are in many cases unresponsive and have high cost structures. Then there is the particular problem of customers deciding—quite wilfully, when some of them are perfectly capable of paying—not to pay their bills. Clearly, more needs to be done on that.

There is some good in all the amendments before us this evening, but I am not persuaded that they take the trick. It might be helpful to know who the tenant was, but if the tenant cannot be traced to where they have gone, it will be impossible to get them to pay. It might be useful to know something more about the benefits and financial circumstances of individuals, although there are issues of privacy and the handling of data that could cause difficulties, but that then fails to enable us to come down hard enough on the people who can afford to pay, which is the real issue.

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I wish briefly to refer to aspects of the Flood Re scheme and the amendments that relate to it. The adaptation sub-committee, which advises the Committee on Climate Change, has, through its chairman, Lord Krebs, made various points about the importance of getting the scheme absolutely right at this stage rather than later on. In a letter that he wrote to the Secretary of State for the Environment, Food and Rural Affairs about the awareness of flood risk and the importance of taking account of rising flood risk levels, he said that there are at least five issues that the Government need to address but have not yet done so. Given that, as we heard earlier in the Secretary of State’s statement on flooding, we know that we are now going to get events of this kind far more regularly, it is incumbent on Parliament to make sure that the insurance scheme that is being introduced is absolutely fit for purpose.

[Mr Spencer]

I rise to speak to amendments 1, 2, 3 and 10, particularly amendment 1, which stands in my name.

There is enormous frustration in Nottinghamshire about the fact that when a new development takes place there is an obligation to connect and that often means that the public sewer, which is already under pressure, becomes flooded. Many Members will recognise that villages in our constituencies have grown over a number of decades. Often in Nottinghamshire, those villages have a working sewerage system but no one has developed a surface water system. That means that when somebody builds a new conservatory at the back of their house the local authority allows them to put the downpipe into the public sewer, and that puts pressure on an already pressurised sewerage system.

The problem is exacerbated when a new road is built. There is a good example of that in Nottinghamshire, where the Hucknall inner relief road, which has been permitted by Nottinghamshire county council, is about to go right through the town of Hucknall, and the plan includes dumping the surface water from that new road into an already flooding public sewerage system. That is unacceptable. To put it into Sherwood language, while we have got diggers on the ground digging up the whole town to put a new road in, it is not beyond the wit of man to put an enormous pipe underneath the road to take the surface water and not put it into the public sewer and flood the homes of people who are already suffering from sewage flowing through them.

[Neil Carmichael (Stroud) (Con)]

We have exactly the same problem in my constituency of Stroud in connection with Slimbridge and a relatively old sewerage system. The real question is how we manage to calibrate the capacity and quality of the systems, certainly some of the older ones, within the context of this Bill.

[Mr Spencer]

It is very difficult, but we can make sure that anything new that is built does not make the problem worse. We have an obligation to try to improve things as developments take place. What causes enormous frustration is that the bodies responsible, whether it is the sewerage company or the highway authority, pass the buck so that, in effect, the person who causes the problem does not take responsibility for solving it but it falls on someone else.

Another example is a small village in Sherwood called Farnsfield, where there is already flooding. A developer is applying to put a large number of houses and new roads at the edge of the village, and there is no surface water system. The poor people in the old village who are suffering with sewage flooding their homes are going to have that problem made much worse if the new development takes place and the surface water is put into an already overflowing sewerage system. I appeal to the Minister to see whether he can find a way to encourage, if not force, local authorities to take responsibility when they allow planning permission for a new highway or road and make sure that the highway authority that is developing the road, or the developer that is developing a new estate, picks up the cost of solving the problem that they are creating and disposes of the surface water responsibly rather than putting pressure on an existing, overflowing sewerage system.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

I want to speak to new clause 13, which I have tabled. It is headed, “Unlawful communications”. Several hon. Members have asked me about that, and I apologise because it is a little confusing. It does not deal with unlawful communications but unlawful connections, or, more colloquially, misconnections. The new clause would amend section 109 of the Water Industry Act 1991, and that is why it uses the word “communications”, which is used in that Act. It is exactly the same as an amendment that was included in the draft Flood and Water Management Bill of 2009 but sadly had to be dropped from the final Bill because of a lack of legislative time as we approached the 2010 general election. The reason for tabling the new clause is to find out why the provision has not been included in this Bill.

Misconnections occur when separate surface water and foul water sewers are wrongly connected by households or businesses. The reasons for this range from the over-enthusiasm of household DIYers to cowboy builders and plumbers connecting to the first and most convenient sewer, which is often the wrong one. The consequence is pollution of groundwater, watercourses, streams, rivers, and, in my case, a local lake. The problem comes to light only as a result of the visible pollution that we can see, which is sometimes accompanied by some rather unpleasant smells, as has affected local communities in my constituency.

The cost of tracking this down once it has been discovered is very difficult to quantify, because it is extremely difficult to find out where the misconnections have taken place. It is also very time-consuming. As a result, it is a significant problem, particularly in more densely populated areas. A large number of misconnections are occurring in parts of my constituency.

Thames Water estimates that one in 10 homes in its area are misconnected. The Department for Environment, Food and Rural Affairs estimates that 300,000 homes in England and Wales were misconnected in 2009 and, ominously, that the number will increase to 500,000 by 2015.

Part of the solution, of course, is better information about and greater awareness of the problem of misconnection. Some steps have been taken to try to address that. Thames Water has set up an industry strategy group, as have other water companies. My local authority has sent leaflets to areas particularly badly affected. Of course, we can do better, but the reality in my constituency and up and down the country—this is verified by DEFRA figures—is that, as current misconnections are dealt with, others are adding to the problem and it is getting worse, not better. I could cite instances in my constituency and I am sure that other Members have similar examples.

Part of the reason for the problem is that, although water companies can disconnect from the connected drains, they cannot redirect them into correct sewers; only local authorities have the power to do that. If, for any reason, the householder or business does not carry out the works, the local authority has powers to do so and to bill that individual or organisation for the costs. New clause 13 seeks to grant water companies the same enforcement powers as those available to local authorities. They could then deal directly—they already deal with other aspects of the problem—with misconnections.