Water Bill

Sheryll Murray Excerpts

Monday 25th November 2013 Commons Chamber

[Maria Eagle]

The right hon. Lady is correct. I was about to mention WaterSure in my next breath, if she had waited a moment.

WaterSure was introduced by Labour as a targeted payment to households with three or more children or to households that demand a high use of water owing to a medical condition, yet only a third of eligible households access the scheme. Ministers should set a target and work with the water industry to ensure it is achieved, and use existing data on benefits to ensure that everyone eligible is on the lowest tariff. It is essential that the cost to households of non-payment, by others who can afford to pay—

[Sheryll Murray (South East Cornwall) (Con)]

Will the hon. Lady give way?

[Maria Eagle]

I will give way to the hon. Lady in a moment.

It is essential that the cost to households of non-payment by others, who can afford to pay but who choose not to, is finally tackled. Failing to address this matter is unacceptable when it adds £15 to the average bill and households are struggling with rising bills. It is time to require landlords to provide tenants’ details to water companies, something the Environment, Food and Rural Affairs Committee, chaired by the hon. Member for Thirsk and Malton (Miss McIntosh), has demanded.

[Sheryll Murray]

Will the hon. Lady give way?

[Maria Eagle]

No.

The Department for Environment, Food and Rural Affairs should implement the provisions in the Flood and Water Management Act 2010 on bad debt without further delay.

On the financial practices of water companies, I urge the Secretary of State to press his right hon. Friend the Chancellor to use the autumn statement next week to set out measures to crack down on the tax avoidance that we know goes on in the water industry. We cannot have a situation where water companies are taking strategic decisions with the clear purpose of structuring their financial affairs in a way that leads to worrying—

[Sheryll Murray]

On a point of order, Madam Deputy Speaker. The Secretary of State was generous with his time. I cannot understand why the shadow Secretary of State is not being as generous.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. That is not a point of order; it is a point of debate. The hon. Lady knows full well that it is up to the person speaking to decide whether they will give way. There have been interventions. We will have to wait and see if there will be any more.

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[Stephen Gilbert]

And the hon. Gentleman will know that the coalition Government acted to take £50 off bills in the south-west, which has made a real difference to affordability for my constituents and others who have suffered for a very long time.

[Sheryll Murray]

Will my hon. Friend confirm that his party, which represented all six seats in Cornwall under the previous Government, fought for a long time to get something done about increased water bills and that it took the Conservative-led coalition to do something about it?

[Stephen Gilbert]

As with everything my hon. Friend says, her question was good in part—the first part was very good, but on the second part I am afraid I must disagree. The Liberal Democrats in Cornwall have certainly fought for many decades to redress the unfair water bills that my constituents and others in Cornwall suffer, and thanks to both parties coming together we were able to do that.

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[Alison Seabeck (Plymouth, Moor View) (Lab)]

This is one of those occasions when there are Members with enormous experience of the subject under discussion sitting on both sides of the House. As a result, the discussion we are having is extremely useful. I draw attention to the contributions from the hon. Member for Newbury (Richard Benyon), who said that he has scars on his back from this, which I quite understand, and the hon. Member for Thirsk and Malton (Miss McIntosh)—she is no longer in her place—who has contributed significantly over the years, and it is years, to bringing forward the Bill.

It is ironic that we are surrounded by water in this country—certainly in the south-west, which has some of the highest levels of rainfall, because of the prevailing winds—yet we are in need of additional powers to protect us against drought. Such measures are important, so there is a lot of sympathy with the general thrust of the Bill, but the issue is with the detail and with what is not there. I was concerned to hear the Secretary of State say that he hoped to bring forward—not that he would do so for certain—the clauses to Committee. It would be helpful if the Minister, when winding up the debate, confirmed whether all the clauses specific to the insurance elements, and any other key elements, will be dealt with by a Commons Committee and not left to a Committee in the House of Lords.

Flood insurance is desperately needed to protect domestic properties. A number of Members have seen their constituents flooded regularly, or indeed have been flooded themselves. In Plymouth we are relatively fortunate, but we have small areas that flood regularly. Our biggest problem is the railway, which is regularly cut off. The organisations involved seem incapable of coming up with a solution that does anything other than cut off the far south-west every time there is flooding at Exeter, which is desperately bad news for business. I am not sure how the insurance companies view claims for loss of business, but without doubt there is a loss of business. That is a separate issue, but it is very specific to our region.

Another point that concerns me is that so much of this is being done by order and by statutory instruments—that is, secondary legislation. Indeed, the EFRA Committee, which has done sterling work in this area, felt that the draft Bill relied heavily on secondary legislation in a number of key areas. The Government have obviously not listened with regard to this aspect of the Bill. I am absolutely confident that in Committee my Front-Bench colleagues will press for some of those key issues to be firmly and clearly included in the Bill.

The Bill seeks to extend competition, which most people would say is a worthy aim, but not to extend it to domestic bill payers—a point well made by the hon. Member for St Austell and Newquay (Stephen Gilbert). That is another missed opportunity. The Government are failing yet again to get a grip on the things that could make a significant difference to the cost of living that all my constituents are facing. Despite the welcome £50 rebate, the south-west still has some of the highest water bills in the country. The amount paid by people on relatively low incomes is extremely high, and about 200,000 households are described as being under water stress.

[Sheryll Murray]

Can the hon. Lady tell us exactly what her Government did, in the 12 years when they had the chance, to help the hard-pressed, hard-working people of the south-west with their water bills?

[Alison Seabeck]

Their first review cut water bills, even in the south-west, and then, admittedly, as my hon. Friend the Member for Wallasey (Ms Eagle) explained, there was a constant battle and a need to bring something forward. I fully accept that it was a slow process. I personally went to see the Chancellor of the Exchequer to make exactly that point—to say that we needed, frankly, to get our fingers out and do something about bill payers in the south-west. I do not think that anybody argued that as vehemently as I and Linda Gilroy, my colleague in Plymouth, Sutton at the time. Even the hon. Lady, in all fairness, will be aware of the work that went on.

In the south-west we have a high percentage of people, including pensioners and families, with high and essential water needs. In fact, there are more than in any other English area, and some of them are being supported through the WaterSure scheme.

South West Water bill payers are the victims of a botched privatisation process. We have too large an area, with a massive need for capital investment, including cleaning up our shoreline, and very few bill payers to meet those costs. It is a dreadful situation, and one that was not thought through but driven through purely for ideological reasons. This Bill develops the market in water further, with a new retail market. The proposed changes are interesting, but they are not embraced entirely by the water companies, which are asking questions about the need for a provision to allow for retail exits, about why the system is voluntary, and about whether there will be a level playing field for all retailers.

South West Water has expressed concerns about the Government’s ill-considered and risky-to-implement proposals on the relaxation of the selling of licences without reforming abstraction methods, and says that it can foresee problems for rivers. During this debate, people have been tweeting me about the importance of the chalk streams. Indeed, several hon. Members on both sides of the House have touched on that point. The Secretary of State talked about new sources of water. However, if my local water company is saying that it has concerns, I have to be concerned. Equally, if the general public and Members of this House have concerns, the Minister must respond to them when he winds up.

Water companies across the UK, many of them based overseas, are making significant and increasing profits, with soaring dividends for shareholders. I am sure that they would say that the picture of their accounts is much more complicated than that which appears in the headlines, and that, in some cases, they hold significant debts, but that just means we need greater transparency so that we can fully understand where the pressures exist. The new chair of Ofwat has suggested that some of the financial arrangements that these companies pursue are complex, or perhaps they could be otherwise described as hidden, and that they are running a debt in order to minimise tax payments in the UK, but—surprise, surprise—they are still managing to pay out huge dividends. As we have heard, they have announced £1.9 billion in pre-tax profits and given £1.8 billion back to the shareholders. This is a system for the few, not the many. People in Plymouth have been paying through the nose for a basic commodity while shareholders seem to be benefiting. No one denies that shareholders are people who have backed a company for a decent return, but we need to understand that it is a decent return and not an excessive one.

Water is a commodity that needs to be valued because it will potentially become even more scarce as climate change kicks in further. If we do not prepare well for the decades and century ahead, we could be left with water in short supply or prices rising further for the taxpayer. At a time of soaring utility bills, high inflation and stagnant wages, water customers really do need to feel that they are getting a fair deal from their supplier. South West Water has invested in new technology in Plymouth—I recently saw it for myself at its treatment works in my constituency—and there are, at last, some improvements to the local sewage works, but it needs to offset that capital expenditure and the benefits to customers against its profit and dividend levels.

The Bill does not put in place measures that achieve transparency or affordability. The notion of a national scheme to assist with affordability, which has been discussed over very many years, and in depth by the Walker review, needs to be implemented. This Bill could have been the vehicle to do that—another wasted opportunity. Some companies are doing some of the work on a voluntary basis, including, in all fairness, South West Water, but it makes much more sense to bring them all together into some sort of national scheme—to get them all signed up and have a level playing field where good companies feel that everybody else is pulling their weight.

My hon. Friend the Member for Wallasey and the hon. Member for Thirsk and Malton raised a very important point about access to data, particularly in relation to the Department for Work and Pensions. I urge the Minister to do all he can to press the DWP to sort itself out on this one; it is almost a no-brainer.

My constituents find it impossible to understand why the regulator seems to have no teeth and simply rubber-stamps increases in bills. I am sure that the Minister will say that is not the case, but that is how it is viewed by my constituents. We know that the regulator has to perform a complex balancing act, with requests for increases from companies because they need to develop major schemes such as new ring sewers, new reservoirs, and so on, but my constituents are not convinced that anybody is listening to them. No one would argue against the vital work on infrastructure, protection against flooding and drought plans, which the Bill champions, but what is missing is the fairness agenda. The Government fail to understand that if my constituents feel they are being unfairly penalised while shareholders, perhaps overseas, are benefiting, this legislation will have failed and this Government will have failed them.

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[Sheryll Murray (South East Cornwall) (Con)]

I welcome the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall (Dan Rogerson) to the Front Bench, and I pay tribute to my hon. Friend the Member for Newbury (Richard Benyon), who led on the Bill from the beginning.

We often take water for granted. Not everyone in the world is so lucky. Indeed, I have walked, with some of my staff, along the beautiful coastal path between Looe and Polperro to raise money for WaterAid.

I have done in-depth research into the job that South West Water does in my constituency. I thank Chris Loughlin and his staff for taking the time to show me around Restormel treatment works, which is the biggest treatment works in Cornwall—it does not supply my constituency, but it is based there—and the Torpoint waste water treatment works. I now understand more about what happens to the water that falls out of the sky. During these visits, at either end of my constituency, I was fascinated by the work undertaken and have a much better understanding of the level of investment being carried out to ensure that our water is clean and our waste water properly treated. That investment does not come cheap, of course. While water bills in South East Cornwall and the far south-west reflect that investment, they have been unusually high for a number of years. I again thank my hon. Friend the Member for Newbury for showing a clear understanding of the matter, and the Chancellor for the contribution of £50 to each household towards that higher than average cost in Cornwall.

I want to highlight two concerns. First, we should not put in place legislation that will further increase the cost of our water. It is imperative that we monitor water quality without putting an expensive burden of regulation on our water companies. I am thinking in particular about our beaches and coastal water. We must remember that the south-west is a tourist area, and it is vital that local hard-working families do not have to pick up the cost burden of further European legislation. We must not become the Government of red tape. The Department for Environment, Food and Rural Affairs and other Departments have done much to reduce the burden on industry following the mess left by the previous Labour Administration.

Secondly, any legislation must allow water companies to be able to react quickly to circumstance. We do not need legislation that says that everyone must be consulted in triplicate. There is no point in putting sandbags out once a town has been flooded. When the need arises, water companies must be able to do what is necessary to save lives, homes and businesses. Tragically, my constituency has been hit more than most by the weather and by flooding—it is a key problem. I thank the former Secretary of State, my right hon. Friend the Member for Meriden (Mrs Spelman), and my hon. Friend the Member for Newbury for visiting it on a number of occasions to see the situation on the ground for themselves.

[Mr Charles Walker]

My hon. Friend is making a powerful speech. Is it not the case that if homeowners cannot get insurance their homes become, in essence, worthless, because nobody will give them a mortgage on them?

[Sheryll Murray]

Many of my constituents who live in the areas affected by flooding have a particular problem getting insurance. I speak as someone who, many years ago, worked in the insurance industry and dealt with domestic insurance. One constituent was told that she could get insurance after 10 flood-free years, and was flooded after nine-and-a-half years. My constituents cannot afford to pay repair costs every time it floods. Will the Minister consider ways to mitigate the causes of flooding and to help people to get the insurance they desperately need? Some of my constituents have been caught in a flooding trap: they cannot get insurance to be able to recover from floods and, as my hon. Friend the Member for Broxbourne (Mr Walker) said, they cannot sell their home at a reasonable rate because the flooding has caused a type of blight.

South East Cornwall is not rich. Wages are frequently below average, with many people relying on seasonal tourist work. The Bill must not place an extra burden on them. It is not just the Opposition’s constituents who are hard pressed. The Opposition must accept that they need to look at solutions, rather than sitting and sniping from the sidelines about increasing bills, and making cheap political points.

[Mr Walker]

I thank my hon. Friend for her tireless campaigning on this subject. She has worked with Members across the House to bring this important matter to the attention of the Government and she deserves to be thanked for it.

[Sheryll Murray]

I welcome my hon. Friend’s comments.

I ask the Minister to look at South East Cornwall as an example. As my neighbour, he knows my constituency well. I am happy to meet him to discuss the many individual stories I have heard about flood insurance, if that would be helpful.

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[Thomas Docherty]

I will come on to that point in just one moment. As my hon. Friend the Member for South Shields mentioned, the latest figures show that more than 80,000 households have sought advice from citizens advice bureaux about water bill debts in the past year, which is almost exactly the same as the figure for how many sought help because they could not pay their energy bills.

The hon. Gentleman asks what the previous Government did. As we have heard today, we took decisive action to help families. We were the only Government to have forced a real-terms cut in a price review. He joined the House in 2005, which is interesting because it was the previous price review in which there was a real-term cut. The previous Government introduced WaterSure—the first social tariff scheme.

[Sheryll Murray]

Will the hon. Gentleman enlighten us on his proposals? We have heard an awful lot about the problems but not much about his or his party’s solution.

[Thomas Docherty]

If the hon. Lady shows a bit of patience, she might hear more detail from us than we heard today from the Secretary of State.

The previous Labour Government passed legislation that allowed the water companies to introduce their own schemes. Those companies had assured the country that they were keen to do so, yet almost four years after that legislation was passed, how many of them have kept their promises? How many water companies have developed a scheme within their region? How many of those fat-cat boards have put even a fraction of their obscene profits into the pockets of the hardest hit households? Just three out of 20 of the most successful and profitable companies in the country have lifted a finger to help their customers. It is no wonder that the most charitable description of the system, as offered by Citizens Advice, is “ad hoc”.

What did we hear from the Secretary of State today? What was his response to corporate failure and what was his proposal to help customers? He has written a second letter to his friends, the water bosses, not to demand real action but to make a helpful suggestion. He does not believe in Government intervention. No matter how much the market fails and the companies drag their feet and how many customers cannot afford the inflation-busting prices, this is a Government who do not believe that they should act. We on the Labour Benches do not share that belief. We believe that when fat-cat bosses will not act, the Government must.

As my hon. Friend the Member for Garston and Halewood (Maria Eagle) said, we will introduce a national affordability scheme. I welcome the points made by my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck), who has been a constant champion of hard-pressed customers in the south-west region. Along with other Members, she raised the subject of flooding and flood insurance, which is an important issue. We share the concerns of many Members from across the House about both flood defences and how households can secure affordable insurance. The latest figures from the Environment Agency put the cost of damage to property in the past year at £277 million, almost £200 million of which was household damage.

We heard an excellent speech from the Chair of the Environmental Audit Committee, my hon. Friend the Member for Stoke-on-Trent North (Joan Walley), who highlighted the problem eloquently. The Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), highlighted the important and often overlooked issue of surface water run-off. The Opposition welcome the principle behind the proposed new scheme, Flood Re, but like the Select Committee we have serious and legitimate concerns about the fact that the Bill contains only one clause on that matter.

My hon. Friend the Member for Kingston upon Hull North (Diana Johnson) spoke from the heart about the problem of flooding. I am sure that the House would acknowledge that she has been a champion for her city, and I hope the Minister will provide real answers to the important issues that she raised.

I understand that Ministers are hastily drafting new clauses even now, but they must be adequately scrutinised. The issue has been raised by Members on both sides of the House, so will the Minister give a firm undertaking that the new clauses will be tabled in time to be reviewed adequately in Committee? Will he assure the House that such crucial amendments will not be rushed out at the last minute without due scrutiny?

We also heard from Members on both sides of the House about the tax paid by the water companies. As my hon. Friend the shadow Secretary of State has already said, it is simply unacceptable for water companies to make £1.9 billion in pre-tax profits and pay out £1.8 billion to shareholders. That is why we need to give the regulator broader powers to step in to protect customers and to ensure that fat-cat companies play by the same rules as other businesses. We want to ensure that excess profits, rather than heading to shareholders’ pockets, are used responsibly to reduce bills and improve infrastructure such as the Thames tunnel.

The hon. Member for Broxbourne (Mr Walker) mentioned abstraction. Not for the first time, he raised his concerns about the damage to chalk streams and asked whether I would set out our party’s position on the environmental impact issue. I am always keen to oblige him, so let me set out clearly our view of the crucial need for environmental mitigation. Even when the Government have tried to introduce reform, they have failed to follow through. As the Environment, Food and Rural Affairs Committee has warned repeatedly, a half-baked proposal to introduce upstream competition without proper abstract reform is worse than the status quo. As the WWF warned today,

“The licence system is completely broken, unsustainable and out of date”.

Why have the Government ended up in that mess? As in so many other cases where the Government have decided that something is difficult, tricky or requires them to act, they have just pushed this off. It should be no surprise that the Secretary of State ideologically opposes any Government action, but I wonder why the Minister responsible for water, the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for North Cornwall (Dan Rogerson), has simply gone along with his boss’s laissez-faire attitude to our natural environment. Simply to promise, as Ministers apparently have, that the Department will do something in the next Parliament shows a lack of credibility.

Let me be clear: if Ministers have found thinking of solutions too hard, they should postpone all upstream reform until we have Ministers and officials who will stand up to the vested interests who are damaging our rivers.