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6.7 pm
Helen Jackson (Sheffield, Hillsborough): The Tories' failure to understand the basic proposition with which my right hon. Friend the Minister began his speech--that water is an essential public service--was why when, before the general election, one mentioned the water industry and fat cats, most electors were halfway to putting their cross by a Labour candidate's name. Their misunderstanding of what a public service such as the water industry meant was a significant factor in their whole-hearted rejection by the country.
On 11 May 1993, I introduced a ten-minute Bill--the Water (Domestic Disconnections) Bill. I did so because, on 28 April, I had received a parliamentary answer that contradicted what the hon. Member for West Chelmsford (Mr. Burns) has said; it spelt out how, in the year following privatisation, domestic disconnections rose threefold, from 7,000 to 21,000. Nobody at the time said, "This is appalling"--the Conservative Government certainly showed no signs of being worried. In the same year, there was an equally disturbing increase in the number of cases of dysentery, especially in large conurbations such as Birmingham. Public health authorities and environmental health officers were concerned about the public health dangers of leaving a household without running water, and I pay tribute to the Chartered Institute of Environmental Health, and officers such as Howard Price, for devising a Bill that would have outlawed domestic disconnections.
The Bill was supported by hon. Members on both sides of the House. The former Member for Batley and Spen--a Conservative--many other hon. Members and I all made the point that, if housing legislation provided that a house without running water was not fit for human habitation on public health grounds, we should have no part as a Parliament in allowing private water companies to deprive homes of running water. That would, in itself, create a public health risk. That is the view of the British Medical Association, the Royal College of Nursing and anybody involved in public health in this country.
Mr. Shaun Woodward (Witney):
Nobody in the House would disagree with the hon. Lady about public health, and no one would wish to see any truly vulnerable person cut off. However, we must be careful not to distort the picture. The hon. Lady chose the figure of about 20,000 disconnections in the first year after privatisation, but she well knows that, in the previous year--when water companies were in the public sphere--there were about 15,000 disconnections. If the hon. Lady thinks that privatisation is such a bad thing, can she explain why that figure of 20,000 disconnections--which I accept--has fallen to such a point that, between April and September
Helen Jackson:
I was expressing concern about disconnections, not privatisation, and I am glad that the hon. Gentleman believes that everybody in the House should agree with me. I hope that that is partly why every hon. Member will support the Bill in the House tonight. The numbers have fallen from that appalling figure of 21,000 is not only because of the public concern generated at the time, but because--in response to that concern--many water companies started to introduce pay-as-you-go systems, resulting in the budget payment meters with trickle-valve systems which, in the end, had the same effect. The hon. Member for Witney (Mr. Woodward) looks puzzled, but such systems do leave domestic properties without water.
To their credit, local authorities--particularly those in large urban communities--and public health institutions became extremely concerned that the accelerated introduction of budget payment units, particularly in Birmingham and the north-west, created a serious public health risk. Those authorities challenged the scheme and, with the help of my hon. Friend the Member for Birmingham, Northfield (Mr. Burden)--who had a subsequent Adjournment debate on the subject--they mounted a significant campaign to raise those concerns. The official disconnection rate started to fall because so many companies introduced budget payment units.
If all hon. Members agree that we should not leave a house without access to running water, they will fully support clauses 1 and 2 of the Bill, which the hon. Member for West Chelmsford (Mr. Burns) spent so long saying were not good.
Mr. Brian White (Milton Keynes, North-East):
A number of people use pre-payment budget meters as a way of budgeting and want to continue with that. What would my hon. Friend say to them?
Helen Jackson:
That is a very good point. My right hon. Friend the Minister made it clear that one of the purposes of the Bill as regards charging systems is to encourage water companies to enter into many flexible arrangements to make it easy for their customers of restricted means to pay for their water. Any budget payment system by which households can pay more easily is to be welcomed. However, we should not welcome the hidden cut-off within those systems which could leave households without water.
The fact that the Conservatives are still exercised by this issue exposes the flaws in their philosophy, which dates back to the time of privatisation. At that time, everything that we received as a public service had to be part of the market and had to be seen as a commodity--whether it was the sun, the rain or the air--and putting obviously public commodities into the hands of private companies somehow gave those companies the green light to maximise their profits by profiteering.
All of us in the Chamber tonight should be thankful for the early action of this Government in ensuring, through the windfall tax, that those moneys obtained by profiteering will now, instead of going into the pockets of the privatised water companies, create jobs and training through the new deal. Without the change of Government,
that shift of thinking would not have happened, and we would still have a Government with a knee-jerk response who would say that any privatised utility was bound to be wholly good and that any suggestion otherwise was bound to be wrong.
That exposes the Tory philosophy on these matters, but it also exposes the failure of the previous Government fully to understand the structure of the water industry's costings. When we pay our water bills, we are paying not simply for the water that comes out of the tap, but for the management of the whole water environment. We are paying for the way in which reservoirs are managed, for leisure activities on them, for the wetlands, for waste water management, for sewerage and for the treatment of drinking water. The last accounts for less than 50 per cent. of the costs of the industry. The volumetric element--how much goes through the taps--accounts for one quarter of the rest of the fixed costs of supplying drinking water.
The assumption that payment must be on the volume of water that an individual uses in the home bears no relation to the actual cost structure of the industry. Inevitably, therefore, problems are built into that assumption--which brings me to the second element of the Bill: the section on charging systems.
I welcome the end of compulsory metering, and the introduction of much more flexibility and choice in the way in which companies and customers can approach the water charging system. As part of that, it was clearly necessary to extend the option of using rateable values beyond 2000. It is important to recognise that the chief argument against universal metering--it is supported by most water companies--is that it is very expensive. On top of the capital expense of introduction, there is the year-on-year cost of an individual bill based on a volumetric amount, measured by a device that has a limited life, is bound to go wrong, will need maintenance and checking and is open to contradiction. A fixed charge based on a property does not change a great deal from year to year and overhead costs are significantly lower, as most water companies generally recognise.
Both the British Medical Association and the Royal College of Nursing would view universal metering as worrying on health grounds. I am concerned about the pensioners on low incomes who worry about the cost of water every time they boil a kettle for a cup of tea. That is not an effective way of ensuring public health.
The households that gain from a switch from an unmeasured to a measured charge are those that pay at the top rate, and the extra costs will have to be borne by others.
Mr. Woodward:
I share some of the hon. Lady's reservations about metering, but who does she think will pick up the tab when people move from a fixed charge to metering?
Helen Jackson:
The water companies will pick up the tab, as they have the job of managing the system as efficiently as possible. A huge part of their responsibility involves introducing an equitable method of charging. I warmly welcome the Minister's proposals to encourage water companies to come up with schemes that make the charges fair, but I am seeking clarification because the choice in the Bill appears to be rather one way.
People can move, at no charge, from unmeasured to metered charges, but I would like domestic customers also to have the choice to move to a notional rateable value if their houses are built after 1990, or to some other form of unmeasured charge. I hope that the companies will take that possibility seriously, as it would reduce their overheads, and there would be a two-way choice. I am sure that Ministers will take up those points in Committee.
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