Mr.
Skinner: You recommended three candidates for local
leadership and they all fell by the
wayside.
Lembit
Öpik: It is difficult to participate in a debate
when the hon. Member for Bolsover is unable to contain himself, but I
shall continue. This
is relevant, because the assurances that the Minister gives now, that
the order will not be used to privatise the water system, fall on stony
ground given the record of Northern Ireland Office Ministers on other
matters, including student
fees. I wish to make
two specific points. Consumers are listening with great concern to this
extraordinarily extensive order, partly because the Government have
tried to make a false comparison between what households pay in
Northern Ireland and in the rest of Great Britain. They say that the
average English household pays so much more for their water. What they
do not say is that this is for privatised water. The Government spent
millions of pounds of taxpayer funds upgrading that system before
selling it off to the highest bidders. They have ignored the fact that
household income in Northern Ireland is 19 per cent. below the UK
average and that nearly twice as many Northern Ireland households rely
on benefits than in the rest of the UK—21 per cent. compared
with 12 per cent.—and that Northern Ireland households also pay
26 per cent. more for fuel, light and power than those in the rest of
the UK. Ministers are forging ahead to
introduce this additional tax and not taking account of the effect of
the additional taxes that are already paid by Northern Ireland
households. We
accept the need for improved water and sewage services; I think that
everybody does. However, the rate payers in Northern Ireland are not to
blame for the historic under-investment. Home owners have paid their
rates. It would be a cruel injustice if they were expected to pay
twice—first, through the regional rate contribution and,
secondly, through new charges for these essential services. The present
proposals are completely unfair and need to be resisted for that
reason. As for the
Minister’s repeated assurances that this is not the gateway to
privatisation, he knows as well as I do, and as well as every Northern
Ireland politician in this room, that this is the pathway to and paving
legislation for privatisation, as the hon. Member for North Down said.
We have no faith in assurances given verbally in this Committee that
the order will not be used to advance a dogmatic privatisation
policy—obviously the policy of new Labour—and we have no
faith that it will not be used experimentally in comparable legislation
with regard to other aspects of the public
sector. It is a matter
of great regret that, in a two and a half hour debate, we have had
neither the opportunity to profoundly explore the details of the
proposed legislation, nor to amend it. However, given that the Minister
has only 12 minutes to respond, I should say that he himself is now
falling victim to the very process that ministerial colleagues have
promised to amend. I look forward to hearing what the Minister has to
say, but barring a miracle, it seems unavoidable that I must resist
this statutory
instrument. 6.48
pm
David
Cairns: This has been an interesting, at times lively and,
occasionally, an informed debate on an important, serious topic. Let me
begin by saying something on which we would all agree. This is not the
ideal process. I would rather that the Assembly was doing this. I am a
devolutionist. I campaigned for— [Interruption.] The hon.
Member for Foyle is goading me; I am looking forward to dealing with
his comments in a moment. I campaigned for devolution in my home
country and I believe staunchly in devolution. These matters should be
dealt with in the local Assembly. Local politicians should get back
into the Assembly and commit to serving in it and making devolution
work. I am sure that we all agree that it would be far better if this
issue were dealt with there. There is no disagreement on
that. I share the
feeling of the hon. Members for North Down and for Montgomeryshire, and
of all hon. Members who have spoken, who have said that we would much
rather do this differently. Of course, we would. However, we are in
this entirely unsatisfactory period of direct rule. I am a Minister in
three Departments in Northern Ireland. With the best will in the world,
there are not enough hours in the day to do the job
satisfactorily—two days a week, frankly, because that is the
number of days that we are in Northern Ireland. There is no
disagreement between any of us on that issue. I wanted to clarify that
at the start.
I shall go
through some of the key points that have been raised. We have only two
and a half hours—I wish it were longer, but this is the process
that we have got. In the 10 minutes that I have got left let me deal
with those issues. The hon. Member for Tewkesbury asked some sensible,
intelligent, well-informed and proper questions. Indeed, I found it
hard to disagree with the thrust of his concerns. He asked what happens
to the investment if the proposal does not go through. It is hard to
see where the money will come from if it does not because by investing
£300 million to make the water and sewerage services
self-financing, that money will not have to come out of the rest of the
budget. So if we do not do this, we will lose that £300
million. We
could increase the rates, which the hon. Member for Foyle recognised
was a possibility if we tried to raise the money through the rates. Let
us not forget that if we paid water and sewerage services entirely from
the regional rate, it would take up 80 per cent. of it, which would not
leave an awful lot for anything else. So we would have to put up the
regional rates. That is one way of doing it.
The other
reason, however, that the proposal is a better system is that because
of Treasury borrowing rules, with which we are all familiar, the model
that we are establishing, which is not of a privatised company, allows
access to borrowing that will increase further investment. That is why
the Committee could of course reject the order. However, we are already
into next year’s budget allowing for about £85 million of
income to come in. The first order of business for any Assembly back on
26 March would be to find a cut from the budget in the order of
£85 million to £90 million. I do not think that cutting
out that money would be a tremendously stable start for the incoming
Assembly. The
point raised by the Member for Tewkesbury is entirely valid. However, I
do not think that it would give us sustained investment. At the moment,
we are putting in £1 billion—£1 million a
day—opening water and sewerage treatment works all over Northern
Ireland and making good the backlog of under-investment, which was not
just in Northern Ireland. When money has been given out, water and
sewerage has always been at the back of the queue. That has been true
in England, including London—my hon. Friend the Member for
Tooting is nodding. There has been under-investment in London’s
water and sewerage. I used to be a London councillor and can tell the
hon. Member for Tewkesbury that there has been under-investment there,
as well as in Scotland. I accept that there has been under-investment.
We need the investment that we are putting in now, but we need also to
sustain it, and not just in one or two years of boom and bust. I can
say honestly to him that I cannot see how we could do
otherwise. The hon.
Gentleman spoke about the loss of disposable income from the economy if
the charges come in. He is right; there would be. However, let us keep
it in context. We are talking about less than £1 a day. I am not
dismissing that, but it would be less than £1 a day on average.
Some people will pay the average, some much more and some less, but it
will be capped. At the extreme end, when the cap cuts in, we are
talking about £2 a day, for people in a house worth
£400,000 or more. That is not insignificant, but I think that we
can keep it in context. The growth in the Northern Ireland economy is
perfectly capable of absorbing that charge.
Mr.
Adrian Bailey (West Bromwich, West) (Lab/Co-op): According
to my rudimentary knowledge of economics, that money will actually be
recycled into investment in the water and sewerage system, which will
help local industry and create new jobs. It will be recycled in that
way.
David
Cairns: My hon. Friend makes his point very
well. The
Member for Tewkesbury raised the issue of the £650, or
thereabouts, that people in Northern Ireland are paying in domestic
rates against the £1,300-plus in England. It is true that by
charging people £300 on average we narrow the gap—we do
not close it. I am not saying that the gap would be closed because the
rating is revenue-neutral. But he also made the point that, even after
water charges are brought in, households in Northern Ireland will still
be paying less than my and his constituents—some of them
significantly less thanks to the affordability tariff. He raised a good
point and I hope that I have answered his
question. The
hon. Member for Foyle said that the money could be paid through the
rates, which might mean increasing them, but he suggested that that was
the only method under consultation. I refer him to the public
consultation document issued by the Executive when he was Deputy First
Minister. I shall quote it
briefly: “If,
following consultation, it is agreed by the Executive and the Assembly
to move towards the introduction of water charges, this could be
treated either as a direct income to Water Service or a distinct
component of a new or amended rating system.”
It was not just about amending the
ratings system. It was not just about amending the ratings system. The
option of treating the charge as a direct payment to Water Service was
on the table. In fact, the paper went further stating that the options
could be “a uniform
contribution or flat rate per household ... a linkage to property
valuation such as: Net Annual Value (as in England); Capital Value (as
in Scotland)” .... a combination of
these.” That is what the
hon. Gentleman said when he was Deputy First Minister and part of this
Executive. We have chosen the latter option. We are putting forward
something that was under active consideration in 2002, which brings me
to a point that I neglected to mention to the hon.
Gentleman.
Mark
Durkan: Will the Minister give
way?
David
Cairns: No. I accepted in my speech that the capital value
of a house is not an absolute guarantee that the person living in it
has a high income. It is a proxy, but I must say to the hon. Member for
Tewkesbury that it is the same proxy that his party chose when it
brought in the council
tax. It is a proxy,
but we are putting extra safeguards: the metering safeguards for older
people and the affordability tariff, whereby a pensioner who has a very
small income and who lives in a large house will be eligible for the
affordability tariff, and will not be clobbered with a big bill because
they live in a big house. I hope that provides comfort on that
point. The hon.
Member for South Antrim spoke about the judicial review. We are not
seeking to hide this matter. We have put it in the Libraries of both
Houses and put it in front of everybody here. I was trying to put it
into the broader context of the fact that attempts were
made to stop this going forward. The hon. Member for Foyle asked why we
could not wait until 1 April. I think that I have addressed that point.
The budgetary implications of this kick in on 1 April and we are
looking to get an income in the first year. If that does not happen, we
will have to find that money from elsewhere in the budget. As some of
my hon. Friends pointed out, the hon. Gentleman was fierce in his
denunciation in Opposition but when challenged as to whether or not he
would continue that opposition once back in the Assembly he sensibly
chose to remain silent. He knows that if we want to get the investment
in, the money must come from somewhere. It can come either from this
method, which was under active consideration by the Executive before
the suspension—
Mark
Durkan: It was a matter of public
consultation.
David
Cairns: The hon. Gentleman never even mentioned in his
speech that it was under consultation. He would not have mentioned it
unless I had pointed it out.
Mark
Durkan: On a point of order, Mr. Caton.
Hansard will show that I did refer to
consultation.
David
Cairns: The hon. Gentleman did refer to consultation, but
he said that all that was being consulted on was making this a
component of the rates.
Mark
Durkan: I am sorry, but I did not say
that.
David
Cairns: Hansard will be the judge of this. I
understand why local politicians are opposing this measure. No one will
go back to their constituencies saying, “Guess what guys, I
voted to put £300 on to your domestic bills so that you can pay
for water.” However, how can my hon. Friends go back to Tooting,
to Livingston or to Thurrock saying, “I voted for a situation
where you have to pay £270 to £300 water charges, but we
are not having people in Northern Ireland paying it. Guess what, the
gap will be made up by your taxes, because Northern Ireland is funded
by the taxpayer to a higher degree than anywhere in Scotland, even
after security costs have been taken into
consideration.”
Mark
Durkan: Will the Minister give
way?
I will not say to my
constituents, who are significantly poorer and who have significantly
lower life expectancy and wage rates than those in almost any seat in
Northern Ireland, that it is all right for them to pay water charges
but not for the people in Northern Ireland to do so. That is simply not
fair. The hon. Member
for Montgomeryshire focused on the privatised water companies in
England and Wales. When directly challenged by my hon. Friend the
Member for Glasgow, North to make a comparison with Scottish Water, he
simply ignored her question. The fact of the matter is that under the
system involving Scottish Water, which is administered by
a
Liberal Democrat, people in Scotland are still paying £275 for
their water charges. That is not a charge that is being levied in
Northern Ireland. There was a
lot of proper talk about an environmental protection agency, which I
sincerely hope we will get sooner rather than later. I know that my
hon. Friend the Member for Thurrock said that we have heard that
before, but we are on track to it. The hon. Member for North Down also
properly sought environmental assurances. I think that they are
included: removing Crown immunity by having a GoCo removes the
protection that the Government can throw over bits of land and property
that they own and which means they are not subject to the full scrutiny
of environmental regulation. This will expose what happens in our water
and sewerage system to the full glare of environmental
regulation. At the
heart of this issue, we all accept that there is a need to get more
money into the water and sewerage system in Northern Ireland. The
question is: how do we do that? The answer is that people should have
to pay their fair share.
Question
put:— The
Committee divided: Ayes 12, Noes
4.
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