Lady
Hermon: Will the Minister give
way?
David
Cairns: One last time, because I am just about
finished.
Lady
Hermon: I am genuinely grateful to the Minister. Will he
confirm two things? Will he invite the Consumer Council to the next
available meeting slot that he has in his diary, to rebuild their
fractured relationship? There are huge tracts of rural land in Northern
Ireland, as he knows, so will he guarantee that pensioners will be
given meters?
David
Cairns: Yes, I give that guarantee.
Before
closing, I want to deal with the important issue of the environment.
Friends of the Earth and Northern Ireland Environmental Link broadly
welcomed the measures in the draft order, which will improve the
environmental compliance of water and sewerage services. They, like me,
recognise the need for a change to the current arrangements, whereby
the Government effectively act as administrator, service deliverer,
regulator and provider of finance for water and sewerage services. The
quality of water in Northern Ireland is not as good as in Scotland,
England and Wales, and we lag behind in our environmental commitments
to rivers and beaches. However, when there is sustained investment over
a longer period, all will benefit, water quality will improve, people
will see a return on their payments and the investment will make our
rivers and beaches better.
The Government have taken a
long time to develop their policies on the reform of and investment in
water and sewerage services to which the draft order gives effect. It
represents a fundamental pillar of public service reform in Northern
Ireland, and it lays the basis for sustained capital investment not
only in water and sewerage services, but in health, education and other
public expenditure priorities. Without moving the delivery of water and
sewerage services out of central Government and without introducing new
charges, as the order provides for, Northern Ireland could lose up to
£500 million for its public services every year from the end of
the decade. The order
will ensure that we improve the quality of our water, secure long-term
investment in our infrastructure and enhance the rights of the public
in Northern
Ireland.
5.2
pm Mr.
Laurence Robertson (Tewkesbury) (Con): I, too, welcome you
to the Committee, Mr. Caton.
We are in Committee for yet
another statutory instrument dealing with yet another important matter.
Once again, I open my remarks by saying how unfortunate it is that we
are legislating in this way. We have been saying that for a long time.
We have passed one deadline after which the Secretary of State said
that the Assembly would be up and running, or the salaries ended and
the Assembly dissolved. We have passed that deadline without reforming
the way in which we govern Northern Ireland. That is very
unsatisfactory. The Government have made promises to the House, and
they have been broken.
We are now told that the
Assembly deadline is 26 March. As the Secretary of State is so
confident, I should have thought it worth leaving matters as
controversial and important as rating, water, education and
reorganisation of local government to the Assembly. The Government say
that the investment is essential, and that if there are no water
charges, there will be a black hole in the Northern Ireland economy.
However, I rather think that is up to the people of Northern Ireland to
decide which is preferable. Do they think that paying water charges is
preferable to taking money out of the budget? It is important to allow
the Assembly to make those decisions.
I would not say that the
Assembly will not have a lot left to do if and when it resumes, but the
irony is that
many major decisions will have been taken. That is a tragedy. I must
stress how disappointed I am that we have passed the immovable deadline
of 24 November, but we are not reforming the way in which we govern
Northern Ireland. If the March deadline is not met, will we see any
such reform from the Government? As far as I can see, one promise has
been made and broken, and that is very unfortunate. If the order
is not agreed to, what will happen? Will that investment in water in
Northern Ireland go ahead? I would like the Minister to answer those
questions because he rightly said how important the investment is.
There is European pressure—not that I usually give much credence
to that—and pressure generally to improve the quality of water
and its delivery in Northern Ireland. I repeat my questions. What will
happen if we do not pass the order today or if the House does not
endorse it? Will that investment still go ahead? It would be
interesting to hear the answer to those
questions. Because we
are rushing this measure, we have the problem that there is no support
for it in Northern Ireland. The debate so far has largely been about
the consultation period. That matter went to court, which said that the
consultation was not exactly as it should have been, and we have had a
declaration made to the Committee today. The problem is that despite
the massive consultation there does not seem to be much support for the
measure in Northern Ireland. On one hand, we went to court about the
consultation and, on the other hand, we had massive consultation, but
in the end that is not important because the Government ignore it
anyway. That seems to be the
problem. I shall quote
not a political party—representatives of political parties are
present today and can speak for themselves far better than I could
speak for them—but the Institute of Directors. It is a very
quotable quote which gets to the heart of the issue. I have a problem
with the order, partly for the reasons that I have given and partly for
reasons that I shall come to. The institute
said: “We
continue to object strongly to a charging system based to any degree on
the capital value of property which implies, wrongly, that there is an
inevitable link between property value, the use of water and sewerage
and/or the ability to pay, and which embodies no discipline of
restraint in the use of resources and
services”. That states
the position well. I
am always in a difficult position when attacking the Government because
Ministers and their officials are helpful in briefing me. I do not have
the benefit of civil servants and the Government are always generous in
allowing me access to them and they are always willing to meet me and
to talk to me about such issues. I have a problem because I feel that
it is not good form to attack the Government, but I have a job to
do. The Government say
that the amount of money from water charges in the first year would be
in the region of £90 million to £100 million. However,
there must inevitably be a consequent drop in the disposable income of
people throughout Northern Ireland. One problem that we have debated
many times is the size, or lack of it, of the private sector in
Northern Ireland. We want to increase the private sector, which means
people having more money to spend on goods and services. That is how
the economy works. If we take, for example, £300 from the
disposable income of a
household, that cannot have a positive effect on the private sector in
Northern Ireland. I leave that point with the
Minister. I
want to raise an issue that I do not thoroughly understand and the more
I look into it, the more confusing it gets. The Minister did not quote
the figures today, but it has been said that under the old rating
system in general, taking rates and water into account, a household in
Northern Ireland paid around £650 compared with around
£1,300 in Great Britain. As far as I can tell, the rating system
change will not change that because the Government have told us that it
is revenue neutral. According to the Government, the disparity will not
change or be reduced. Even if the average water charge per household is
£300, that brings the £650 up to £950, which
according to my calculation still leaves Northern Ireland an awfully
long way short of the amount paid in Great Britain. My question is how
accurate is the Government’s claim that the rating system change
is revenue neutral? I am concerned because one of their stated reasons
for the change is to bring the amount that is paid in Northern Ireland
roughly up to that paid in Great Britain. This measure will not achieve
that, so there is something wrong; I have a problem with it. If that is
not the reason for the change, I would ask the Government to stop
citing it as such. I
also have a concern about basing charges on the discrete value of
houses. We have discussed this before, in the rating debate. I cannot
believe that each house can be assessed independently and consistently
across the Province. It seems highly unrealistic to say, “This
house has modern windows and that one has PVC; this house has oil-fired
central heating and that one has gas-fired.” All those matters
are factors in the assessment of the value of a house. Are we saying
that that can be done consistently across goodness knows how many
houses? I sincerely doubt it.
We Conservatives have to find
our own position. As hon. Members are well aware, making a critical
speech is easy, but coming to a conclusion on behalf of one’s
party is not so simple. We accept that it is necessary to invest in
water and sewerage in Northern Ireland. We also accept the need to make
the services ultimately self-financing and agree that there should be
parity among both domestic and non-domestic users across the United
Kingdom with regard to cost. However, we remain concerned about
introducing such a controversial system through the blunt instrument of
a statutory instrument—I am sorry, that was rather badly worded.
We object to using a blunt instrument to introduce it, as has been
done, and we remain concerned about the link to capital values rather
than, by and large, to actual water usage. We are concerned about the
ability to pay and the knock-on effect that that must have on the
private sector economy in Northern Ireland. We are, therefore,
sympathetic to the background feeling. I have discussed the issue with
a number of people in Northern Ireland, and I know where the Government
are trying to go, but I regret the way in which they are going about
it, for the reasons that I have given. I am looking forward to
listening to the debate. I am sure that it will be interesting and that
hon. Members from Northern Ireland will put their cases
forcefully.
5.13
pm
Mark
Durkan: It is a pleasure to serve under your chairmanship,
Mr. Caton, even if the issue before us is not the most
palatable. The order contains some 308 articles spread over more than
250 pages and another 50 pages containing 13 schedules, and we have
only a couple of hours in which to dispose of it. Some of the issues
that it addresses have been the subject of judicial review and, apart
from the judgment, some interesting issues arose in the context of that
court case. The attitude of some hon. Members might be a little
different if they were aware of those issues—such as the sorts
of discussion that went on inside Government and the attempts that were
made to hide from public view and public understanding serious public
policy issues that go to the heart of the matter—all in the
Government’s attempt to scramble the legislation through prior
to the restoration of devolution.
The hon. Member for Bolsover
believes that this matter should be dealt with by people in the
devolved Assembly, and I agree. The Programme of Government Committee,
which has been established since the St. Andrews agreement,
agrees as well. It has written to the Secretary of State asking that
this order be deferred, and that the future of the Water Service, water
reform and wider revenue matters including the rates be left for the
devolved Executive and the devolved Assembly to address.
We are capable of addressing
those questions and making the hard choices. We are capable of making
better choices that protect the public interest of the people who we
represent in Northern
Ireland.
Mr.
Skinner: Quite frankly, although the hon. Gentleman talks
about things being deferred, we have already heard the Minister say
that this matter was on the agenda when the decision to dissolve the
Assembly was taken. I do not know whether my hon. Friend was one of the
members of the Northern Ireland Assembly; perhaps he will tell me. They
could have given all the money to Farepak, or something like that, but,
of course, they have not done that; they have put it in their pockets
and for four years they have been laughing all the way to the bank.
Then my hon. Friend comes here complaining that an order four years old
has landed in Parliament and there has been no time to consider it. He
could have considered it at leisure. He and his colleagues could have
had days and days—not two and a half hours—and dealt with
it on their own. The truth is, they dodged the column, took the money
and ran
off.
Mark
Durkan: I can tell my hon. Friend that the SDLP dodged
nothing and contributes nothing to creating or prolonging suspension.
The hon. Gentleman might very well have that argument with the
Democratic Unionist party and Sinn Fein, which kept on sustaining
suspension in various stand-offs and failed negotiations. He might take
it up with the Government, who refused to accept proposals made by the
SDLP to restore the Assembly and face people with the responsibility of
turning in and making the institutions work—otherwise, salaries
off, lights out. We made those proposals more than two years ago, but
the Government refused and thought that it was better to continue the
litany of side-deals, which just led to
more backsliding and getting nowhere. Meanwhile, the real public
interest and the real public policy issues that need to be addressed in
Northern Ireland, such as the future of the Water Service, have been
neglected. The point
that we are making to the Government is that MLAs were still
discharging a role. I never lobbied for the proportion of salaries paid
to be increased from 50 per cent. to 70 per cent., as a previous
Secretary of State did; that came on no approach or representation from
the SDLP. When the Government indicated that they would be cutting
salaries, the SDLP made no representations. At St. Andrews, when
questions on the continuity arrangements were asked, the SDLP did not
even raise the issue of salaries, allowances or anything else. My hon.
Friend might want to check what, if anything, other parties
did.
Mr.
Skinner: Did you take the
money?
Mark
Durkan: In taking devolution forward, we want to take all
the major decisions that are needed to protect public services in
Northern Ireland. The Water Service did not enjoy the scale or rate of
investment that it needed over many years, which is why there are major
issues. The Executive and the Assembly were addressing those issues
during the previous period of devolution—not on the basis of
moving towards privatisation of the Water Service or on the basis of
imposing water charges in the way that the Government have done. The
Executive agreed, in the context of a public consultation on rate
reform, to consider revenue for the Water Service as well. One option,
which was specifically written into that public consultation just a few
months before suspension, was clearly linking the regional rate to the
Water Service. That linkage used to be there. It was abolished by
direct rule and we were looking at restoring it, but in a much clearer
and more specific way than ever before. That is the position of a
number of parties in Northern Ireland.
We want to make transparent and
visible our water revenues, so people cannot say, as the Minister has
today, that people in Northern Ireland do not pay for their water. Most
people in Northern Ireland assumed that they were paying for their
water through their rates bill. We would have favoured arrangements
that would have made that even clearer, even if it might also, at the
same time, have made that burden somewhat heavier. People cannot
pretend that those of us who are seeking a deferral of the order are
trying to duck the underlying issues and
questions. We
need to be clear that a number of issues arise that are not covered by
the order. I can accept that hon. Members representing constituencies
throughout Great Britain assume that the order must just about cover
everything; the fact is that it does not. This is only one part of a
much bigger and more complicated jigsaw. There will be the whole
question of the operating licence. That is still work in
progress—we do not know about it, so we are being asked to
legislate on it in the blind. We understand that the Strategic
Investment Board is working with the Water Service on the capital works
programme, but that is not available for public consultation, and it
may not be for some while
yet. Let me mention
the strategic business plan for Northern Ireland Water Ltd. Surely that
is hugely
relevant to whether there is a sound case for proceeding. Whether there
is a sensible and sustainable strategic business plan is relevant to
people’s comfort with legislation. I do not believe that hon.
Members from Great Britain would legislate on utilities in their own
areas if they were told, “That information will be worked out
later—we will sort that out in the future. Just legislate for
this now so that there is no going back if we get things wrong on those
details.” There
is the whole question of governance. Again, that is work in progress.
It is like the strategic business plan—unavailable for any of us
to scrutinise or to give feedback or input on. Where is the asset
management plan? Where is the estate management plan? We are told that
they are still being worked on and that they are still in the offing.
There is no clear asset inventory for the Water Service, and it will be
not be available until after the legislation has come into
force. I ask my hon.
Friends whether they would legislate for their own constituents in the
absence of key details that will influence the effective working of a
public service—determine whether the GoCo works or collapses
into a crisis that will then be used to justify its rushed
privatisation as the best way of taking the liability off the public
hands. Those issues will determine the bills that consumers will be
asked to pay by the company. Those issues will determine whether the
consumer interest is protected in the way that the Minister has
represented. Some
people have been able to glean from the plans to date that there are
strong concerns about whether the business plan is sustainable and
whether there are unsound or inappropriate assumptions. If those
concerns are valid, there is a huge future liability for Northern
Ireland consumers and a potential liability for the taxpayer in
general. Hon. Members are very conscious of the taxpayers that they
represent. They should remember that in Northern Ireland we had the
experience of electricity privatisation, which was completely botched
by the Government to the cost of the consumers, who have been paying
more than they should have ever since. The taxpayer lost out as well as
a result of the poor terms of the privatisation. The same applies to
Belfast International airport. On the basis of that experience, hon.
Members from Northern Ireland want to ensure that we are not lining up
for more of the same. The Minister has said that the water service is
not just an important issue in its own right; the choices will affect
other services and their funding, and there will be other consequences.
Northern Ireland Members are only trying to be vigilant on such
issues. I say to hon.
Members representing British constituencies that the same attitude and
approach that has been shown by the ministerial team and the civil
service on this order could come to a Department near them, on issues
that are far closer to their constituents. We would be hearing a very
different tone if that happened, and much sharper levels of concern.
Hon. Members would be concerned at the way in which policy was driven
if it happened to them.
A major issue centres on some
sort of agreement between the Secretary of State and the Treasury made
in 2005. We still do not have the terms of that agreement, and they are
not known. When some of us went to meet the Chancellor recently we
asked the Department of Finance and Personnel and the Office
of the First Minister and Deputy First Minister whether they could
inform us of the terms. Obviously, they are relevant, and we want to
know what assumptions are in effect, not just on water but on wider
public expenditure. Again, that is
unknown. We must also
be concerned by the fact that the order allows for the introduction of
private sector ownership of the new water company without any public
consultation. Do my hon. Friends really think that it is sound to
provide for a GoCo—a publicly owned company—and legislate
so that it can take on private sector ownership without any public
consultation? I would be surprised if they agreed to do that lightly to
public services nearer their own
constituencies. The
privatisation threat is not distant. There was a strategic financial
review involved in this whole exercise, conducted by a consortium led
by the UBS investment bank. It pointed overwhelmingly towards
privatisation, and it was clear that private sector involvement would
be the main driver in the control of the water service rather than it
being a matter of ownership percentages. Options were identified in the
report for raising private sector finance and for going further towards
privatisation. Let us be clear: Ministers must be aware of all that,
because it emerged in the court case that there were emails between
civil servants and a special adviser. One of the questions that came up
was, “can you clarify why
you do not want to commit to consultation before the sale of shares by
this administration? Is this because you do not want to give the
impression that the government has any plans to sell shares? Our line
up to now has been that privatisation has been ruled out for the
foreseeable future and you have also said (helpfully) that if necessary
we can go further and say categorically that this ministerial team will
not
privatise”— fair
play to them— “(we
have not deployed this publicly yet). However, as you’ll know,
Treasury are pressing us to review whether there would be benefits from
greater private sector participation ... in 2008 ... Such a
review could conclude that there would be advantages to bringing in a
private equity partner which would mean selling a minority
shareholding.” That was
the real agenda going on inside Government, but it was not put in the
explanatory notes or into the public domain. I ask my hon. Friends to
consider whether they might think twice about simply nodding the order
through.
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