David
Cairns: I am not in any sense being cavalier about that. I
have said that it was a serious matter and that I will take it
seriously, but I have put it in context. I say to my hon. Friend the
Member for Foyle that I am advised by those who were present at the
final remedy hearing that the Consumer Council continued to ask for an
injunction during the proceedings, even up to and including that
hearing. I am afraid that the hon.
Gentleman has been misinformed that it dropped its opposition when the
judge did not give an injunction in the first instance. I repeat again
the simple fact that if the courts had found against me on 15 counts,
we would not be here today. I would not have proceeded. It is because
we were not found to be in contravention of the requirement on the
great big substantive issue of the consultation period, the statutory
obligation on the Government, that we are here
today. Lady
Hermon: On a point of order, Mr. Caton. I seek
guidance from you. I have been in the House for five years and I have
never seen a High Court declaration specifically
saying: “The
Court has issued this declaration to draw the above matters to the
attention of Parliament and so that Parliament might determine as it
sees fit the appropriate action to take in relation to the processing
of the draft order under the Affirmative Resolution
procedure.” I ask for
guidance for the Committee. Is it not appropriate that Parliament
might “determine as it
sees fit” and be given
that
opportunity?
The
Chairman: I was made aware that this issue might well be
raised as a point of order and I have taken advice. There is no
procedural reason why the Committee should not debate the instrument
that it was nominated to consider at the appointed time. The court
decision is not a matter for the Chair, although it is quite rightly a
matter for debate and for Members to bring up in the next two hours or
so. We can continue to consider the
order.
David
Cairns: Thank you, Mr. Caton. I am grateful for
that clarification. I point out to the hon. Lady that she
read: “The
Court has issued this declaration...so that Parliament might
determine as it sees fit the appropriate action to take in relation to
the processing of the draft Order under the Affirmative Resolution
procedure.” That is what
we are doing. This is the affirmative resolution procedure. The court
has issued this for this Committee. I am going to make some progress
now as I know that other hon. Members will wish to speak on
this. Mr.
Dennis Skinner (Bolsover) (Lab): My hon. Friend has said
two or three times that if the High Court judge had made a decision the
other way we would not have been here. There is another reason why we
would not have been here. If those people in Northern Ireland actually
worked for the money that they get paid, even though they have not
turned up for work for four years, we would not be here either because
they would take the decision on this matter. My hon. Friend the Member
for Thurrock says that he has not been put on the Committee by the
Whips. I have not been either, but one thing that astonishes me is that
when I worked at the pit if we did not go to work we did not get paid.
These people in Northern Ireland of all hues and descriptions have been
able to swan around for four years picking up topside £30,000 a
year for not going to work. And then they come here
moaning that there is an order that has been placed before me and all my
hon. Friends here. The top and bottom of it is that these people who
are moaning want to have their cake and eat it and to have the money in
their pocket as
well.
David
Cairns: I entirely agree with everything that my hon.
Friend says. I would rather that this issue was being debated by a
restored Assembly. I would rather that the Assembly debated these
issue. In fact, the process, and the recognition of the way in which
water had to be paid for, began under the Assembly. If, as we all hope
and pray, we get restoration of the Assembly on 26 March, this matter
will pass back to it. My hon. Friend is right. When the Secretary of
State had the inspired idea of threatening the loss of salaries if
people did not get their act together, it prompted quicker actions.
[Interruption.] I will not give way again. I have
barely begun my speech. I will give way later on if I get the
opportunity. As I was
saying, water is not free. It costs hundreds of millions of pounds each
year to deliver water to our homes and to treat waste water. Billions
are needed to provide the investment to sustain and improve these
services. The draft order provides the framework for domestic charges
which will be set out in detail in a charges scheme produced by the
company appointed to deliver water and sewerage services.
As was set out in 2004 by my
predecessor, my right hon. Friend the Member for Warley (Mr.
Spellar), charges will be based on a standing charge and a variable
element based on capital values. The Government accept that the use of
capital values provides only an approximate correlation to the cost of
service provision but it does direct higher charges to more affluent
areas. This is mitigated by a cap on the highest charges and the
uniform standing charge.
There is no
direct link between the regional rate and the cost of providing water
and sewerage services and the fact which must be faced is that the
average household contribution for services in Northern Ireland is
roughly half that made by households in Great Britain. It is simply the
case, utterly fair, not draconian and not in any sense a tremendously
radical imposition to say that households in Northern Ireland
households need to make a greater contribution, just as households in
Scotland, England and Wales already
do. Some have argued
that funds should be raised through the rates. That approach would deny
funds to other essential public services. We would need to use
80 per cent. of the income from the regional rate to run water and
sewerage services. It has also been argued that there is a legacy of
under-investment that should be rectified before contemplating the
introduction of charges and that something like this happened in
England. That disregards the fact that over £1 billion has been
invested to upgrade the water and sewerage infrastructure in the last
five years. We are spending around £1 million a day in
investment in water and sewerage.
As for comparisons with
England, I must point out that that was in the context of water
privatisation. We are not privatising the water service in Northern
Ireland. The company which takes over water and sewerage services will
be wholly owned by the
Government. A number of respondents said that account should be taken of
the relative poverty or higher costs in Northern Ireland. But a range
of indicators show that Northern Ireland is not the poorest region of
the UK. All we are asking is that householders in Northern Ireland make
a fair contribution for the services they receive. When services have
been phased in over three years the average contribution that we will
ask people to make is less than £1 a day for the water and
sewerage services that they enjoy. I know that there is a kind of can
pay, won’t pay campaign in the offing, but we need to fix on the
fact that at the moment in England and Wales people are paying on
average £274 for water and sewerage charges and in Scotland it
is £275. In Northern Ireland they are not paying
anything. Many respondents to the
consultation raised questions about protection for those on low
incomes. We take protecting people on low incomes extremely seriously.
Our proposal for an affordability tariff will mean graduated charges of
£90 to £180 per annum for households in receipt of
housing benefit, rate rebate and the new rate relief. Initially, these
charges will be lower. They will be between £30 and £60
next year, rising over the three year phasing-in period. These measures
will assist as many as 200,000 households. It will be funded centrally,
not by other charge payers, and will deliver the Government’s
commitment to introduce charges that are fair and affordable. At the
risk of provoking my hon. Friends, the affordability tariff that we are
introducing in Northern Ireland is far more generous than any such
scheme in England and far more generous even than the 25 per cent.
council tax related discount that exists in Scotland.
The poorest 200,000 households
in Northern Ireland will pay bills that are reduced below the levels
that my constituents pay. My constituency is one of the poorest in the
country and has a very high level of unemployment. Life expectancy in
my constituency is much lower than in Northern Ireland and deprivation
and poverty is also much higher. My constituents have to pay this sum
and I do not see why constituents in Northern Ireland should not pay
it. If they do not pay it, my constituents will have to pay more in
taxes to subsidise the non-payment policy in Northern Ireland. This is
a matter of equity. It is a matter of fairness. We are not doing
anything draconian. We are not doing anything unfair. Some of the
scaremongering that has been put about is
reprehensible.
Lady
Hermon: The Minister has just waxed lyrical about the
affordability tariff. I have read the 307 articles and the 13
schedules. Could he point to the article in the order that guarantees
the affordability schedule that he has just
outlined?
David
Cairns: As the hon. Lady knows, the Bill takes powers to
introduce a scheme of charges that we shall consult on separately. I
think we are going out to consult on that next week or very soon
thereafter. That is where the detail will be contained. That will be a
matter for consultation. I hope that that answers her
question. The
affordability tariff is at the heart of this. It protects those on low
incomes. In welcoming these
measures, the Consumer Council, Advice Northern Ireland, Citizens Advice
and Help the Aged, sought commitments that these arrangements will
continue beyond 2010. The draft order does not limit the duration of
the affordability tariff. Help the Aged was concerned about the take-up
of the existing benefits that will provide a passport into the
affordability tariff. That is a serious point. The Government need to
work closely with Help the Aged, the Consumer Council and others to
identify people who may be eligible for the other benefits that would
passport them into this. I give a guarantee that we will work very
closely on this. There was
concern that charges would rise dramatically in 2010 once the
Government’s commitment that charges would not exceed England
and Wales averages during the first three years expired. From that
point on, the setting of charges passes over to the independent
regulator, just as in England and Wales, and the need for investment
and infrastructure will have to be balanced with efficiency savings by
the company and consumer tariffs. I fully accept that when a new charge
is being introduced how it will work needs to be made clear. I
recognise that we have a job to do to explain to people in an awareness
campaign how the new charges will work, because there has been some
scaremongering about it, and to explain how people can get the
assistance that they need if they are entitled to it.
Many consultees welcomed the
Government’s decision to enable pensioner households to be
metered, but felt that metering should be extended to all homes as that
represents the fairest basis on which to level charges. We are
committed to a long-term and planned introduction of meters, but for
logistical and other reasons we cannot move from having very few meters
to having everybody metered, so we will phase it in beginning with new
homes and allowing pensioners, if they choose, to switch to
metering.
Andrew
Mackinlay: Is the Minister saying that people cannot
volunteer for metering at an early stage? Will it be done
geographically, moving through the Province, or will there be
opportunities for people who do not fit into the category of retired
people to flag up that they want it in
advance?
David
Cairns: We are still deciding exactly how we will move
forward on the phasing in of metering. In the first instance the
priority, as I am sure my hon. Friend would agree, is to allow
pensioners and new builds the opportunity. There is clearly no point in
allowing new houses to be built without meters. After that
we—and the Assembly, hopefully—will bring forward further
ways in which metering will be phased in across the rest of Northern
Ireland.
I want to
turn briefly to the business model that the draft order establishes for
the delivery of water and sewerage services, what is inelegantly
referred to as the GoCo. Obviously, it will not be called the GoCo but
Northern Ireland Water Ltd. The legislation allows for flexibility so
that water and sewerage services can be delivered in the most efficient
and cost-effective way possible. It is in the interests of all
concerned, particularly consumers, that that should be so. Of course,
any change in the future status of the company under devolution will be
subject to a triple lock. The Minister responsible would have to decide
that he wanted to
change the status of the company, and would then have to convince the
Executive that they wanted to do so. There would then have to be an
Assembly vote—in such matters, that would have to be a
cross-community Assembly vote. That is a triple lock in moving forward
and changing the status of the company. The
GoCo will be placed under robust regulatory scrutiny and we will set
that out in a licence appointing the GoCo, which will be issued for
consultation shortly. The Northern Ireland Authority for Utility
Regulation will oversee delivery of what will, by anybody’s
yardstick, be an extremely challenging programme of efficiency
improvements so that charges are no higher than they have to be. The
regulator will have to balance costs to the consumer against investment
needs, as with any industry, but the draft order provides appropriate
controls.
I know that
the precise nature of the regulatory regime has excited some comment,
and rightly so. It is a key, important and complex area. That is why we
made a number of changes to the draft legislation as a result of the
representations, which included representations from the General
Consumer Council, among others. I said at the outset that I have worked
closely with it and I welcome that close working. I am not remotely
dismissive of the important and positive contribution that it has made,
even if the actions of the past few weeks have been somewhat abnormal
in terms of the relationship between the Government and the consumer
council. We made a number of changes to the draft legislation as a
result of the representations to reinforce the role of the consumer
council in dealing with customer complaints: in respect of statutory
requirements to consult the consumer council, in connection with
procedural matters that concern the submission of the council’s
plans and its ability to issue advice, and in respect of removing some
departmental powers to direct the regulator.
It is my
belief that the draft order provides a robust system of regulation that
reflects best practice and up-to-date utility regulation. Frankly, it
is beyond all comparison with the status quo where I am responsible for
everything that goes on and for ministerial oversight of the operations
of the water service, and where the water and sewerage service is
regulated by no one.
I should also emphasise that
the draft order introduces a step change in the rights of consumers,
who will have guaranteed rights concerning the services that they can
expect, which they do not have at present. There will be rights to
water and sewerage services, guaranteed standards on issues such as
pressure, and schemes will be allowed to be made that will compensate
consumers if those standards are not met.
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