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18 Mar 2008 : Column 163WH—continued

I shall not repeat the arguments that we have heard, but I shall make a few brief remarks, because water is an issue that is rising up everyone’s agenda. It will certainly rise up my constituents’ agenda, because their council tax, energy and water bills will rise above inflation.
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Water is one factor that is contributing to a squeeze on people’s income, and it must be addressed.

Water was the most significant issue that constituents raised with me before I was elected, and it has been since, just as it has been for my hon. Friend the Member for Truro and St. Austell (Matthew Taylor). It is fantastic that it has risen up the Government’s agenda, too: they now have their “Future Water” strategy, which they published just a month ago, and Ofwat is conducting a review. I congratulate my hon. Friend on securing the debate, because the worry is that the Government’s primary concern is to deal with water-stressed areas. If one reads “Future Water”, one sees lots about improving environmental standards and dealing with water-stressed areas; however, in the south-west, the fundamental problem is not availability of water, but the cost owing to the fundamental structural problems that existed at the point of privatisation.

My hon. Friend has done a great job of ensuring that water affordability is on the agenda. Although it is great that it has made it into the Government’s “Future Water” strategy, it is tagged on to a few pages at the back, and there is a danger that now that is in the document, it will be overlooked. I hope that that will not be the case. Following the meeting with the Minister before Christmas, it was fantastic to see water affordability included in the Government’ strategy, but as I said the key thing is to make sure that it does not slide off the agenda.

There have been some other concessions in the past few years. The water affordability pilot has helped households across the whole South West Water area. Tribute must be paid to the way that South West Water has pushed that pilot forward: it has really driven forward the agenda by ensuring that as many households as possible are opened up to the scheme. It is continuing to roll the scheme out to make it available to as many people as possible, and the company has made every effort to be as helpful as it possibly can to individuals who come to me for help.

Linda Gilroy: I am not sure whether the hon. Lady was as surprised as I was to discover how much people could gain from the work of the water affordability pilot, which, of course, included a benefits check. A third of the 462 people who received that check were eligible for an extra £33.98 a week. I hope that she will encourage her constituents, as I encourage mine, to establish whether they may be entitled to some of that financial help.

Julia Goldsworthy: I thank the hon. Lady for making that point. I certainly try to emphasise to constituents who come to my advice surgeries expressing concern about the difficulty that they have in paying their bills the benefits that the pilot scheme could bring. It makes me wonder whether the scheme has ended up being a lot more expensive than the Government had planned, because not only is it helping to improve the efficiency of people’s water use, but it has highlighted how many people are not claiming the benefits to which they are entitled. That goes back to one of the points made earlier about the need to ensure that data are shared: certainly, a large number of households are not benefiting from entitlements that they should be receiving.

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There has been some progress, but I am afraid that this feels a bit like “Groundhog Day” to me, because that this is probably the third or fourth debate that we have had on this issue since I was elected to Parliament in 2005. In many areas, it feels like one is stuck going round in circles, or perhaps stuck in one of those telephone systems where different menu options keep being presented, but every time an option is selected, one ends up going back to another menu option that directs one back to the start. I would like to give a couple of examples of that type of problem.

In addition to debates in Westminster Hall, we have had the opportunity of meeting with both Ofwat and Ministers. Those meetings have always been conducted on a cross-party basis, because there is a real strength of feeling across the south-west on this issue. On several occasions, Ofwat has directed us to the Minister, saying, “We are just operating the regulatory framework, you will have to speak to the Minister.” We then speak to a Minister in the Department for Environment, Food and Rural Affairs, who says, “Of course I can look at this, but ultimately it is the Treasury that decides.” So then we try to meet a Treasury Minister, but we are directed back to DEFRA and back to where we started. That has been a cause of real frustration, and we are yet to secure a meeting with a representative from the Treasury. If the Minister can give us any kind of reassurance that that meeting might happen, many of us would be very happy.

There is also frustration about the fact that water poverty is not recognised as being of equal importance to other poverty issues. Fuel poverty is the obvious example, and there are many clear parallels to be drawn with that in terms of the impact that water bills have on those with the lowest incomes and the benefits to the environment that could be achieved by improving water efficiency. I have concerns about how Warm Front operates as a national scheme and about its ability to identify isolated, vulnerable households.

Fuel poverty is a problem that has been recognised; there is a winter fuel allowance. In 2004 the Government’s “Cross-Government Review of Water Affordability Report” identified the fact that by 2010

So we knew four years ago that, for those pensioners, water bills will be at least as big an issue, if not a greater one, than their fuel bills, yet there is no comparable scheme to provide assistance to them. I am not entirely sure why water poverty is not being recognised by the Government in their actions.

The Government are also trying to hit their own target on child poverty. Tackling water affordability in the south-west is one of the key measures needed to allow the Government to hit that target, but responses to the parliamentary questions that I have tabled do not make it clear whether water poverty has any input to the working of the child poverty unit. I found it difficult enough to understand how the unit works, given that the Treasury is responsible for targets on child poverty, yet the answering Department for questions on the unit is the Department for Children, Schools and Families, and the Department for Work and Pensions takes a lead
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in providing resources for the unit. Again, one feels like one is going round in a circle when trying to work out whom to ask to ensure that water poverty is included for consideration by the child poverty unit. When I asked that question explicitly in November 2007, the answer that I received was:

A variety of other measures are given, but water poverty is not explicitly mentioned. Will Minister reassure us today that water poverty is actively being considered by the child poverty unit, and that his Department is making representations to the unit to ensure that water poverty is firmly on its agenda?

I would like to give one other example from very recent experience of talking to people who have been affected by water quality problems and who are feeling real frustration about the way the operation of different Departments has made it very difficult to provide a joined-up approach to or even an understanding of the potential effect of the issue of water quality. On Friday, I spoke to some mussel farmers in my constituency who work on the River Fal. A series of areas that they work in have been downgraded by the Food Standards Agency because of the flesh samples that have been taken from the mussels, which means that the mussels must be moved somewhere else before they can be sold. That creates additional cost for the mussel farmers that threatens their livelihood. The FSA’s analysis of the mussels clearly shows that the incidence of a harmful bacterium—E. coli, I think—is rising, which is affecting the water quality. However, the Environment Agency is saying that water quality standards in these areas are improving, so nothing is being done to try to tackle the underlying problem, even though it is manifesting in the quality of mussel flesh. Once again, there is frustration that different Departments and bodies are not working in a joined-up way, and people are finding themselves going round in circles.

The hon. Member for Plymouth, Sutton and my hon. Friend the Member for Truro and St. Austell have gone into some detail about the type of solutions that we need to deal with water problems. The type of environmental solutions that my hon. Friend mentioned—the use of capital-intensive resources to purify water—would help not only water bill payers, but the mussel farmers on the Fal. Such environmental solutions are long-term measures that need to be actively pursued, and it is great to see them included in the Government’s strategy.

Linda Gilroy: I thank the hon. Lady for giving me the opportunity to refer to what the hon. Member for Truro and St. Austell (Matthew Taylor) said in his opening speech. He gave a very good account of the challenges and the potential costs of meeting those challenges. Do the Liberal Democrats welcome the fact that Labour was the only party to have anything on water in our 2005 manifesto? We aimed to ensure that the costs of diffuse water pollution and dealing with it were laid at the point of the polluter and not at the customer.

Julia Goldsworthy: I am very disappointed that the hon. Lady has not read the environment part of our manifesto, which raised some of these issues. I have
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been charitable to her in praising work on raising this issue, and I think that it is uncharitable of her to imply that the Liberal Democrat MPs in the south-west have been doing nothing, when my hon. Friend the Member for Truro and St. Austell has been campaigning on this issue for the past 20 years and has been our environment spokesperson at various times.

Linda Gilroy: I certainly appreciate what the hon. Member for Truro and St. Austell has been doing. Both of us have been campaigning on this issue since the water industry was privatised. I did not mean to be at all curmudgeonly about the contribution that the Liberal Democrats make. I would also point out that there is no Conservative Back Bencher here, and Conservative Back Benchers do not attend the cross-party meetings with the Minister, although they are invited to them.

Julia Goldsworthy: The hon. Lady is correct. It is interesting to note that although the Conservatives are well represented in the south-west, both in the area covered by South West Water and in the Government region, not a single one of those Members is here to comment on this issue. That is disappointing.

My hon. Friend the Member for Truro and St. Austell spoke about long-term solutions. Obviously, the only permanent solution will be some kind of equalisation measure that spreads the burden more fairly. As the hon. Lady and my hon. Friend have said, the take-up of the vulnerable groups tariff is higher in the south-west than in any other part of the country; however, there are still plenty of people who could benefit from it but are not taking it up. As the average cost used to calculate the tariff is an average of South West Water bills, which are the highest, people on the tariff still face high bills. We need a permanent solution to the problem, and we must recognise that more could be done to support vulnerable groups.

The use of a rising block tariff would spread the burden more fairly, but, ultimately, it would not get around the structural problem that has left South West Water bill payers in their current situation. We need to be explicit about the fact that a rising block tariff should recognise different groups, so there would not be a continuation of the current situation in which second home owners benefit from the infrastructure that is provided to their doors, but pay the lowest bills because they are not there to use resources. Any tariff system would have to take that into account.

Dan Rogerson (North Cornwall) (LD): The mention of second homes has tempted me to intervene on my hon. Friend. Second home owners would no doubt comment, and I am sure that my hon. Friend would agree, that as they are not there all the time, they do not place the same demand on the water system as those who are. However, the problem is at times of peak demand. Despite all the investment by South West Water, the sewage processing system in some parts of the south-west is increasingly under strain at peak times. Even though people do not live in those second homes all the time, the infrastructure has to be able to cope at peak times, and a rising block tariff system would mean that second home owners made a fair contribution.

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Julia Goldsworthy: My hon. Friend makes an important point. I have run out of time, so I will conclude. There have been encouraging signs from the Government, but we would like them to take real action, sooner rather than later, to help us to break out of what has been a frustrating cycle. I hope that the Minister will convince us that the cycle has been broken.

10.32 am

Martin Horwood (Cheltenham) (LD): I congratulate my hon. Friend the Member for Truro and St. Austell (Matthew Taylor) on securing the debate, which, as he said, is not the first on this issue. His determination and persistence in dealing with this matter, over many years, on behalf of his constituents do him enormous credit.

Some of the issues that are relevant to the debate are specific to the south-west peninsular. Hon. Members from Cornwall enjoy a national asset in their stunning landscapes and coastlines, and as a user of the county’s beaches, I, personally, do not begrudge the people of Cornwall a mechanism by which to redistribute more fairly the cost of keeping those beaches clean. I certainly would not object to second home owners paying a fairer share.

Linda Gilroy: Is that a manifesto commitment?

Martin Horwood: I did use the word “personally”.

As my hon. Friend said, 2008 is a crunch year in relation to setting policies for the decades ahead. The Government’s water strategy is at a critical point. There is shared awareness that our current approach to water is unsustainable and that climate change will make the need for action only more urgent. Several environmental organisations have come together under the umbrella of the “Blueprint for Water” and identified a series of policy opportunities that will be present in 2008 that could put us on a more realistic and sustainable path.

First, the Government’s water strategy provides a welcome opportunity to review social and environmental guidance to Ofwat. The issue of surface water drainage will coincide with the final report of the Pitt review and the Government’s response to it. As 600 households in my constituency were flooded last summer, I am particularly interested in those documents. The control of the amount of phosphates in domestic laundry products, which sounds like a narrow issue, is a welcome reminder that climate change is not the only environmental issue that we face.

Other policies this year will have an impact on water usage, including the finalisation of regional spatial strategies. In Gloucestershire, the RSS response to the widespread flooding there was to increase its housing allocation to 56,000, thereby increasing urbanisation and, quite possibly, the risk of flooding. That is a strange and unjoined-up piece of Government thinking.

The EU water framework directive requires all member states to restore the ecology of their rivers, lakes and wetlands by 2015, for which member states’ draft plans, including that of the UK Government, are needed this year. The mid-term review of the common agricultural policy will provide a Europe-wide opportunity to address pollution and ecology in relation to agriculture, which impacts on water. Above all, the periodic review of
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water prices—PR09—provides a blueprint for water that identifies an opportunity to

Those comments chime with what my hon. Friend said in his speech, and I commend them all to the Minister.

Currently, there is not a good example of joined-up thinking. Perhaps the combination of PR09 and the water strategy offers something deeper: the opportunity for a complete rethink on the role of Ofwat and its relationship with the water companies, consumers and the environment, which is needed. My hon. Friend spoke about the need for a more imaginative approach to land use from Ofwat, to deliver clean water at lower cost and with a lower environmental impact. I commend that idea to the Minister. Let me give an example from Gloucestershire.

During last summer’s floods, Severn Trent reassured the Gloucestershire people that the guaranteed standards scheme would compensate them for the loss of their water supply following the loss of the Mythe water treatment works. However, it later reneged on that assurance, denying compensation that would have cost it about £10 million, simultaneously assuring City investors that their £300 million profits would not be unduly affected by the floods. Astonishingly, Ofwat has so far backed Severn Trent—I say so far because my conversations with Ofwat on this issue continue—on the grounds that the floods were beyond its control. That is true, but all floods are beyond the control of water companies, and they are explicitly included in the guaranteed standards scheme. The submissions to Pitt from the police and others show that Severn Trent’s response to the flooding of the Mythe contrasted quite sharply with National Grid’s ability to notify emergency services in time to protect the Walham substation and prevent flooding there.

Perhaps the fundamental problem is that Ofwat’s remit is from a bygone era of privatisation, when the economic viability of water companies was the top priority, rather than consumers’ interests and the protection of the environment. The Government’s water strategy statement, “Future Water”, looks complacent on that front, because it baldly states that the

However, I have some more examples. Ofwat still pursues the concept of an economic level of leakage, as though the millions of gallons of water that are leaked by the likes of Thames Water would be acceptable if that could be proved to be economic. The energy used to clean and pump water is wasted entirely if a huge percentage is leaked. That is no longer acceptable in the era in which we are supposed to be tackling climate change.

Energy is also wasted if a huge proportion of the water that reaches people’s houses and offices is flushed down the toilet. I acknowledge that the Government are beginning to take action on that issue, but that is happening painfully slowly. Why are not rainwater
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harvesting and grey-water recycling, which are relatively cheap to install in new builds but expensive to fit retrospectively, compulsory in all new buildings?

My hon. Friend pointed out that metering would help. He also explained how it could be combined with increasing block tariffs to safeguard the less well-off in society. The Government accept that fitting meters will, on average, reduce household water consumption by about 10 per cent. Priority areas for water metering should be those where water is scarce and where bills are high, such as in the south-west, but if we factor into the equation energy use, as well as water use, the argument for universal metering becomes unanswerable. But on this issue, again, despite years of discussion there is to be yet another review.

The combination of metering and the laissez-faire regulatory approach will have social impacts. I do not have time to explore the relevant options except to commend many of the recommendations based on combining tariffs or benefits and learning from the affordability pilot in the south-west. Obviously, the answer to many of the questions will probably be yet more consultation, but the Government must be aware, after years of debate on such issues, that consultation is not a substitute for action but a recipe for continued social and environmental harm, while we all wait for them finally to act.

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