Water and Sewerage Charges (South West Water)

Sarah Wollaston Excerpts

Wednesday 9th March 2011 Westminster Hall

[Dr Sarah Wollaston (Totnes) (Con)]

I congratulate my hon. Friend the Member for Torbay (Mr Sanders) on securing the debate and on raising this really important issue.

I shall start by reading from an e-mail that I have received from a hard-working 52-year-old constituent of mine, Mr Bamber. This is the first time that he has written to his MP:

“I’m having a pay rise of 0.0% this year, but being a good bloke it’s for the good of the country. Then my water bill arrives—it’s risen by 9.75635%. I’m mad, and I’d like something done about it.”

He is not alone; I have received several e-mails. Another disturbing fact was raised in an e-mail from a constituent who pointed out that his elderly mother, who is 80, has a water bill of £1,040, despite existing on a post office pension and being in substantial difficulties.

Although we all appreciate schemes such as WaterSure, many constituents have great difficultly in accessing them. I was particularly disturbed by a visit to my surgery this week by the husband of a constituent who suffers from severe multiple sclerosis. He brought with him evidence that he had sent to South West Water of her very much increased water usage as a result of her condition, and of the fact that she is on the higher rate of disability living allowance. They have, however, been declined access to WaterSure, which I am sure hon. Members agree is a complete disgrace. I hope that South West Water address that matter immediately.

The issue is one of unfairness. As my hon. Friend the Member for Torbay has pointed out, our constituents do not have any choice in the matter, other than to live somewhere else in the country, which is clearly ludicrous. The rises have been described as 8.1%, but for many constituents, they are nearer 10%.

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

Does my hon. Friend agree that there is a case for suggesting a cap, which would not allow the 8% rise to apply in the south-west?

[Dr Wollaston]

I agree completely. If Ofwat were doing its job properly, it would see that that is inherently fair. It is completely unreasonable to expect anyone to deal with a rise of more than 5%. Near 10% is totally outrageous, particularly given that our constituents have no choice whatever in the matter.

As other hon. Members have said, we are not, as is often assumed, a wealthy area. Some 22% of people in the south-west are pensioners, which is well above the national average. No one would suggest that pensioners are a wealthy group, but they are none the less being subjected to outrageous rises in their water bills. Will my hon. Friend the Minister take all those points into consideration? It cannot be fair for 3% of the population to shoulder the burden of cleaning up 30% of the coast. Of course, none of us feels that we could have continued using 200 sea outfalls to dispose of sewage, and we all welcome the economic boost from the infrastructure programme instituted by South West Water, but it is clearly unfair that the burden of that necessary programme should fall on our constituents.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

It is a great pleasure to serve under your watchful eye today, Mr Amess. I congratulate my hon. Friend the Member for Torbay (Mr Sanders) on securing this important debate. I also congratulate him on his long association with this issue and on standing up for his constituents, like so many other hon. Members, of all parties, this afternoon.

My hon. Friend raised several issues, but a key point was about the role of Ofwat. Other hon. Members, not least the Opposition spokesman, mentioned its role, and it is important to understand how it operates. I am surprised that the hon. Member for Copeland (Mr Reed) has not quite grasped the fact that it is an independent body. It would be entirely wrong of me, as the Minister, to try to influence its approach to its independent role, which is written in statute. That is not to say that we are sitting back and allowing the status quo to go on existing. We are testing, deeply and in great detail, whether Ofwat is fit for purpose and in a suitable condition to go to the next phase. Twenty years after privatisation, it is right for us to examine all aspects of the water industry.

David Gray, a highly respected individual who has great experience in the regulatory world, is carrying out a detailed review. I urge the hon. Member for Copeland and all those who are interested in this fascinating subject to understand the review that is taking place, and the role that Ofwat plays. I am determined that the constituents about whom so many hon. Members have spoken so movingly should be at the forefront of our minds while we consider the issues in question. Ofwat has an important duty to protect and stand up for them, independently of the Government. When the Government get things wrong Ofwat has a duty to tell them so. It also has a duty to ensure that the water companies, which have monopoly interests, are responsible to the people concerned. I take that duty very seriously.

The hon. Member for Plymouth, Moor View (Alison Seabeck), who is no longer here, made a point about water poverty. My hon. Friend the Member for Torbay and others mentioned that there might be some people in the House—I am yet to meet them—who believe that the south-west is full of comfortable people who have moved there in retirement and are relatively wealthy. I know that, largely, the opposite of that is true and that many people and communities suffer high degrees of deprivation. Of course, there are wealthier communities. However, if people assume that any community in the south-west can take such a water bill increase because there is no poverty, they make a fundamental error. That is something I take very seriously.

Yes, I speak to people from the south-west, and, yes, I will listen. That point was raised by my hon. Friend the Member for Totnes (Dr Wollaston). I have listened and will continue to listen to people in the area. I know what an important issue this is and that it is a political as well as a social issue. The matter is fundamental to the concerns that hon. Members have voiced for much too long. I recognise that we must come forward with solutions and, in a moment, I shall talk about how we will achieve that.

I hope that I can address some of the other issues during my remarks and, of course, I remain willing to deal with them. A point was made about the adoption of private sewers. I cannot say precisely when we will introduce proposals on that, but the coalition has a very clear commitment to dealing with that important issue and to ensuring that we do so as equitably as possible. The hon. Member for St Ives (Andrew George) also has a long background in talking about the subject, and I appreciate the support, the many conversations that we have had and the assistance that he has given me on the matter. I accept his point about a default position, and I will follow that up with South West Water and continue to have conversations with him.

My hon. Friend the Member for Camborne and Redruth (George Eustice) has provided me with an interesting idea. I can tell him that officials are crunching his numbers as we speak and that he has contributed some thoughtful suggestions. At this stage, I cannot say how we will take that forward, but I will keep in touch with him. In passing, comments have been made about privatisation. All I shall say is that £90 billion has been invested in the water industry, which is a considerable achievement, and that other Governments have had endless opportunities to reverse what happened 20 years ago. I recognise the very real belief in the south-west that, in the case of that area, not enough thought was given. I will address some of those points, too.

First, I shall discuss the specific issue at hand. Ofwat has announced that average bills for household customers of South West Water in the coming year will increase from £486 to £517, which is an increase of 5.1%. Nearly all that increase is due to inflation, as water bill increases are linked to inflation.

[Dr Wollaston]

May I raise the point that the accepted figure is 8.1% because the figure that the Minister quotes assumes that people will be switching to water meters?

[Richard Benyon]

My understanding is that that is the figure over the piece. However, I am happy to look into that and give my hon. Friend an absolutely clear and unequivocal answer, because it is important that we know that figure. In her earlier remarks, I think she raised the point about why we use the retail prices index rather than the consumer prices index. [Interruption.] Sorry it was not her; it was my hon. Friend the Member for Torbay. Bills have been tied to inflation since privatisation because, when inflation is higher, water companies’ costs increase. As is the case with other regulators, Ofwat uses RPI. Although RPI was higher than CPI this year, it was actually lower than CPI when last year’s bills were calculated, so average bills that year were lower. We can argue about percentage points, but that is an important factor. Let us take that matter forward in our consultation, which I will come to in a moment.

I am acutely aware that nobody wants to see higher bills, particularly in these tough economic times. However, we should not lose sight of the fact that the money raised will pay for £159 million of investment in the region during the next financial year, which will benefit customers. I know that that sounds trite, and I am not diminishing the effect of the increase, but we must recognise that there are also benefits, including £14 million to improve tap water quality, £10 million to repair crumbling sewers and £28 million to further reduce pollution incidents.