Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence

Examination of witnesses (Questions 380-391)



  380. Yes.
  (Mr Harrop) Our view is that, while they are welcome for those particular groups, they are completely inadequate to protect the much larger 25 per cent[2] of people on low incomes generally who find it difficult to meet their water bills, particularly metered customers. It is only a tiny minority of that group who are covered by the current regulation.

  381. Yet, what are your feelings on the take-up rate of the present regulations?
  (Mr Harrop) I do not have any information on that.

  382. Is there a reason why you do not have that information?
  (Mr Harrop) We have not looked at that in detail. Because we have been interested in a wider client group. We do not have an opinion on whether the current measures are good or bad for the group of people they cover. We are interested in what you do with everyone else.

  383. Would you have any concerns over the inconsistency with qualifying benefits?
  (Mr Harrop) The benefits that allow you to take up those regulations?

  384. Yes.
  (Mr Harrop) Again, if you want to approach water social policy via targeting small groups with very defined needs, I think I would like to see a wider group and therefore a wider range of eligible benefits, but alone it cannot be the answer because there are millions of people on low incomes who are not eligible for out of work benefits. People with slightly more income still have difficulty in affording water bills.

  385. So how do you believe the system under the present regulations can be improved?
  (Mr Harrop) Again, it is not a subject that I have a particular opinion on. I would say increasing take-up and broadening the range of eligibility is fine, but I think that approach to helping low income customers is probably inadequate in the long term, with the regulations, it may be that you can only ameliorate the situation rather than actually delivering real progress.

  386. So you are expressing concern on a range of issues concerning approval of medical evidence, verification and , of course, the appeals structure?
  (Mr Palmer) Generally we do not have any views about how those particular regulations are working; it is not a subject we have looked at closely. The other point is that we are trying to retain a system in some sense, not change it. We currently have a system where 80 per cent of the population pay for water based on ability to pay. What we are looking for is ways to retain an ability to pay element into the future. A key question, therefore, for this Committee and the government is whether the current system based on 1973 valuations is sustainable over the medium term? If the answer to that is yes, then you can leave well alone. If the answer is no, then you have to find an alternative and our proposals are basically about that alternative, because we believe at some stage you have to change the system.

  387. You say that in the light of 25 per cent of the people living in poverty at the present time?
  (Mr Palmer) There are 25 per cent of people living below half average income. That is not the same.

  388. The evidence given to the Committee by the New Policy Institute says that official figures show that nearly 1 in 4 people in the UK are living in poverty. That is 25 per cent.
  (Mr Palmer) 25 per cent live below one of the government's poverty thresholds, yes.

Mrs Dunwoody

  389. So your position is that it is for the government to take the first decision and for them to decide which of the particular forms of charging should survive, is that it?
  (Mr Palmer) Yes.

  390. So that, in effect, the political decision is to say that we keep what we have and try and modify it, or we assume it does not do the job and we sling it out altogether?
  (Mr Palmer) Yes, and there are three reasons for believing the current system will not survive. One is that it is based on 1973 valuations and, sooner or later, that loses credibility over time. Secondly, metering is based on a very different type of tariff and, whether or not it is happening yet, if people act rationally, those with high rateable values will move more and more towards metering and that will collapse the system. Thirdly, there is no tariff structure in place which, in my view, will support a competition scenario.

  391. That is interesting. Do you think that competition does disadvantage many customers?
  (Mr Palmer) The point about competition here is that the product is basically uniform, so competition will all be on price grounds, not on different types of water.

  Mrs Dunwoody: You have been very helpful, gentlemen. Thank you very much indeed.

2   Note by witness: or 40 per cent. Back

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