Draft Water and Sewerage Services (Northern Ireland) Order 2006

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Mr. Skinner: I know a bit about privatisation, and I know a little bit about how the privatisation of the coal mining industry, in which I worked for 21 years, was taken through the House of Commons. It just so happens that, at the time, I had to watch about 10 or 11 people from Northern Ireland march into the Lobbies with Heseltine and Mrs. Thatcher and the Tory Government to get the privatisation of the coal industry through. It would have failed without them. Do not talk to me about privatisation; that was not something that was denied by a Minister, it was real privatisation, and the people from Northern Ireland, who had feathered their nests for year after year, walked into the Lobby and smashed the coal industry into smithereens. Do not talk to me about that.
The Chairman: Order. In responding, could the hon. Gentleman return to the order?
Mark Durkan: I can assure my hon. Friend that whichever Northern Ireland Members went through the Lobby to support Margaret Thatcher on privatisation or anything else, they did not include members of the Social Democratic and Labour party.
Mr. Skinner: They are still moaning today.
Mark Durkan: I would ask the hon. Gentleman to intervene on them with those points.
Mr. Skinner: If the Chairman will let me, I might, but he will probably stop me.
Mark Durkan: As well as the risks that privatisation gives rise to, which are risks not just for the consumer of Northern Ireland but for the taxpayer in general, we must examine the affordability tariff. The Minister has rightly said that the Government are pleased with the steps that they have taken on the tariff and that it is a much more progressive provision than is available outside Northern Ireland. Hon. Members should understand that one of the key drivers behind the affordability tariff model is the Consumer Council. That clearly shows that the council is doing its job and is prepared to work well and positively with the Government. It has not been adopting some sort of cussed “Don’t talk to us about any of this” model.
The problem arises when we ask about the sustainability of the affordability tariff and its long-term prospects. In the court case, details emerged from e-mails that had been ricocheting inside the Government. An e-mail passing between a civil servant and a special adviser stated:
“However, as you’ll know, the CST’s”—
Chief Secretary to the Treasury—
“letter to the Secretary of State last autumn made it clear that the AT (Affordability Tariff) must not be repercussive and must be reviewed after three years (ie by 2010). Treasury officials have reinforced this point by saying that the AT should end in 2010, though they acknowledge that a devolved administration would be free to continue/develop the policy ... DRP’s view is that, given the close involvement of the CST in agreeing the framework for taking the introduction of charges forward, and that HMT has been very specific that their agreement to the AT extends only to 2010”—
The Chairman: Order. I remind the hon. Gentleman that quotations should be brief.
Mark Durkan: I shall finish off, then. The e-mail went on to say that
“nothing could be said about the position beyond then without seeking formal CST approval, which is virtually certain to be declined in view of the repercussive issues”.
The e-mail gives the impression that thinking is going on inside the Government that has not been publicly shared, and that hidden liabilities and limits are built into what the Government are providing.
When it comes to charges and payments, we see that plans are already being drawn up for debt management. Papers are being prepared by an outfit called the Crystal Alliance, an alliance of Xansa, Echo and AMT-SYBEX, drawing up a risk-based collection strategy. The strategy rather offensively maps Northern Ireland out in terms of “affluent achievers”, “satisfied maturity”, “white collar owners”, “large family suburbs”, “seniors and singles” and “low-income elders”. The seventh item is “rock bottom”. The strategy actually defines a group of people in Northern Ireland as “rock bottom”. I notice that large parts of my constituency are mapped in red as being rock bottom, as well as large parts of other constituencies.
The risk-based collection or “smart debt” strategy involves pursuing the poorest hardest. The poorest—the people who have been classified as rock bottom—are to be the subject of legal action and brought to court far quicker than the affluent achievers or anybody else allowing themselves to be in a position of debt. That is simply socially unacceptable, but it is part of the plans that are being made alongside the order. If hon. Members do not want to subscribe to such cynical social injustice, they should withhold their support from the order.
5.34 pm
Dr. McCrea: This legislation is a classic example of the Government doing the wrong thing at the wrong time. It seems that they are more interested in getting it done than getting it right. Any justification for the Government proceeding as they intend to do must surely have been removed as a result of the declaration by the High Court in Belfast last week. The first Northern Ireland High Court declaration to Parliament sets out clearly and succinctly that the order was not subject to full consultation. The declaration comes after the Consumer Council mounted a successful judicial review. Parliament must now consider whether it is prepared to pass the legislation by way of an Order in Council, knowing that the consumer voice has not been properly considered and that Parliament has been denied an opportunity to debate the relevant issues fully in advance because the Government abandoned plans to hold a Grand Committee debate.
Like other Committee members, I have spoken to the chairman of the Consumer Council, who is listening to today’s debate. The council has the right to be angry at the manner in which the Minister has portrayed the judicial review. He seems to have said that the Government were found guilty in one out of the 16 cases and that the rest of the cases were totally rejected. It is interesting that the Government’s representatives fought against the Court’s order that the Government should pay 80 per cent. of the Consumer Council’s costs. If the Government are only one-sixteenth guilty and fifteen-sixteenths innocent, why did the Court order that they should pay 80 per cent. of the council’s costs? That was fought by the Government’s legal team, who argued that costs should not be awarded at all. The Minister should carefully reconsider his presentation to the Committee.
Lembit Öpik: Does the hon. Gentleman agree that on the Minister’s logic, if the Consumer Council had brought 32 charges instead of 16 and only one case had gone through, the Government would believe that they are only one thirty-second guilty and therefore less guilty than if all the cases had gone through? There is absolutely no logic whatever in them feeling less guilty because 15 of the 16 charges did not go through.
Dr. McCrea: It would be interesting to know. If things were as simple as the Minister put them, the Court, if it desired to allocate costs proportionately, should have awarded costs of only 6 per cent., but it awarded costs of 80 per cent. That was a statement. If the Minister wants to challenge me on the figure of 80 per cent., that will be interesting. By awarding 80 per cent., the Court was acknowledging the seriousness of the matter and of the breach of faith. The Court’s determination was unusual, as was the declaration that was made to the Committee today. I do not think that that has ever happened before—certainly not in Northern Ireland business.
Apart from the problems with the substance of the draft order, my party and I believe that there are several underlying reasons why the Government should not proceed in the manner in which they are. They lack a mandate in Northern Ireland for their proposals. It is clear from the position taken by all the political parties, the business community and people with other sectional interests in Northern Ireland that there is widespread opposition to the proposals. In our manifesto for the Westminster elections, we gave a commitment that we would endeavour to oppose the Government’s proposals for water charging.
One of my colleagues in the previous Assembly—a member of the DUP—was the Minister with responsibility for this matter and believed that an alternative route could be taken to deal with it. However, the Government seem to be pressing ahead even though they tell us that they are confident that there will be a new Assembly on 26 March. If they are so confident of that, why are they moving this order today? Why are they pressing on with this matter full steam ahead if they are so confident? Methinks they protest too much.
I know that the hon. Member for Bolsover has been exercised today. He said that he was not here because of the Whips, although I saw his name and the Whip from his party said that it was probably because of the normal channels, but he talked about people handing money back and Assembly Members not dealing with the issue of water charges.
I remind the hon. Gentleman that just a matter of months ago, his Government—probably with his vote—voted to give Sinn Fein-IRA hundreds of thousands of pounds for not attending the House. If he wants to talk about consistency, consistency would be encouraging and would be an honourable manner in which to deal with the issue. There seems to be sauce for the goose but not for the gander.
However, that was indirect. We could have dealt with the issues had the Government desired to wait for the Northern Ireland Assembly. The order is not subject to sufficient parliamentary scrutiny. It is one of the most important issues affecting Northern Ireland to come before Parliament during this Session. However, due to the process by which Northern Ireland legislation is dealt with here at Westminster, the order will receive scant attention in Committee with absolutely no possibility of making any amendments, no matter how good. For a Bill with 308 articles and 13 schedules, that is a constitutionally outrageous position. The pre-legislative consultation process does not make up for that inadequacy. Even that process is inadequate. Decisions should be left until—
Lady Hermon: I am sorry to interrupt the hon. Gentleman, particularly while I was agreeing with something he said, which is very rare indeed, but I should like to check once more on a vital point. We are dealing with the devolved matters of water and sewerage. Given that his party has indicated through him that it is opposed to various things in the order, will he give a commitment that his party will seek to undo it, given that with a fair wind and co-operation from his party, the Assembly will be back in post by 26 March?
Dr. McCrea: I can assure the hon. Lady that I have no right whatever to make a commitment about what will be done in the Northern Ireland Assembly or through the Executive. [Interruption.] She may laugh at that, but she has not the ability either, because she could not amend the order even if she wanted to. Her ability is not really exciting either. To mock others is not necessarily the best way to go about the democratic process.
I will give the hon. Lady this promise: if an Assembly and an Executive are running, this is one of the major issues that must be tackled seriously. I cannot give a policy regarding the final outcome, because I might not be in the Executive. However, I can say that it is a major issue. It is a key issue. It is one of the most important issues affecting Northern Ireland, and I believe that it is one of the most important issues that the Executive would have to consider if it were up and running. That is a commitment that I can give.
Mr. Skinner: What is your personal view?
Dr. McCrea: The hon. Member for Foyle was talking earlier about his “hon. Friend the Member for Bolsover”. I was going to say to him that with friends like the hon. Member for Bolsover, from some of the statements that he was making, I do not think that he really needs enemies.
Judy Mallaber (Amber Valley) (Lab): Could the hon. Gentleman satisfy Committee members’ curiosity to know what his party’s position is and whether it would seek to reverse the order if it were in a position to do so when, as we hope, the Assembly gets going again?
Dr. McCrea: If the hon. Lady will rest herself a little and wait, I will come to the issues that are exciting her mind. [Interruption.] For he who waits, it is sometimes beneficial. That is what the process is all about—being able to deal with the issues that come before us. Although there are significant accounting issues in relation to the self-financing of water charges in Northern Ireland, ultimately the existence, or detail of water charges should be a matter for the people of Northern Ireland to determine. There are clear implications for spending in Northern Ireland of not proceeding with water charges. However, as a member of a party that believes in devolution, I believe that those choices should be made by the people of Northern Ireland, through their elected representatives in the Assembly.
The idea that nothing has been paid in the past is not factually correct. For many years the proportion that we were paying was through the regional rate. That has to be acknowledged. In fact, we need to find out where that money was directed. We are talking about the amount of money needed for the infrastructure, water, sewage and so on. For over 35 years, because this House was unwilling to take on terrorism, the money was diverted and spent on security measures. For many years, therefore, infrastructure was neglected, for which we are now being asked to pay. Other constituencies were not experiencing that situation—[Interruption.] Thankfully, they did not experience it. Yet in reality a large portion of the budget was redirected towards security measures. Had the House taken that more seriously and taken on terrorism rather than placating it, we could have had more money to deal with day-to-day issues in Northern Ireland.
That relates specifically to the detail of the order. No account has been taken of the fact that that contribution has been made for many years through the regional rate. Also, the Government were disingenuous in their justification for the water charges. They said that they sought to justify water charges on the basis that they were addressing the water framework directive, but then they devised a system that did not even meet its requirements.
The Government have used the water charges as a mechanism to increase the level of local taxation in Northern Ireland. In reality, water charges have been used as a cover to mask the increase in the level of taxation on the people of Northern Ireland. At the same time, there has been a significant increase in the regional rate and a new rating valuation system. Although there might be a justification for a separate charging mechanism for water charges, there does not necessarily need to be significant increases in the overall tax burden.
Furthermore, the Government have reneged on proposals on the reinvestment and reform initiative. As initially proposed, water charges were to be regarded as qualifying revenue when considering the capacity to avail of the barring power under the RRI. Since then, however, the Government have changed the rules and as a result there is no barring advantage on water charges. Indeed, when compared with the overall Northern Ireland budget, water charges make up a very small percentage of local spending. In essence, the significant additional burden of water charges on the householder makes very little difference to the amount that is spent.
I turn to privatisation. Frankly, this order is privatisation by the back door. I know that people and parties believe in privatisation—
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Prepared 29 November 2006