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I believe that I am right in saying that the timetable for PR09, the current price review, will not prevent the Walker review recommendations from being implemented. On Wednesday, the Prime Minister indicated, in reply to my question during Question Time, that the interim report is likely to be available next week. Can the Minister confirm when the final report and recommendations will be available? Finally, before I end
my remarks and allow my hon. Friend the Member for Plymouth, Devonport, to say a few words, may I ask the Minister to confirm in his response that he will meet me and a cross-party group of south-west MPs before the summer recess to discuss the interim findings?
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Alison Seabeck (Plymouth, Devonport) (Lab): I put on the record my thanks to my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) for calling for the debate, and acknowledge what a champion she has been on the issue of water poverty and water efficiency on behalf of our constituents in Plymouth. Her role cannot be overstated.
The Minister will know, from the importance that my hon. Friend and I place on debates and meetings on the subject, that people living in the south-west have major problems with water affordability. My postbag, weekly and sometimes daily, includes casework relating to the high cost of water. Last week I was contacted by a Mr. Carpenter, whose comments reflect the concerns held. He is the owner of a modest flat but finds the charges too high. He cannot understand why we are still paying for the clean-up of the coastline, which is a national asset and which should, in his view, have been paid for nationally. He is not unique in having that view.
That is why I, too, welcome the Walker review and know that the meeting in Plymouth, which I also attended, enabled local people to make very clear to Ms Walker and her team just how damaging the high charges are in keeping families and older people in poverty, rather than getting them out of it.
In the interests of fairness, a cap on bills at the national average would be a starting point in an equalisation process. This, along with help for the most vulnerable families and a move towards universal metering, plus the beefing-up of Ofwat, would dramatically improve the way in which water costs are spread across our community. I look forward to the publication of the Walker review and would welcome a meeting before the summer recess. I have great expectations of the Government’s response to the review.
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Huw Irranca-Davies): I welcome the debate and congratulate my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) on securing it. As she points out, it is—rightly—the fifth debate on an issue of major concern to her constituents and those of my hon. Friend the Member for Plymouth, Devonport (Alison Seabeck). I pay tribute to my hon. Friend the Member for Plymouth, Sutton in no small measure. Over the seven months that I have been in post, she has led delegations of some MPs from the south-west to meet me and advocate on the issues of poverty and affordability for all their constituents.
Let me deal with the points that were raised. I have made it clear to both my hon. Friends on numerous occasions that we understand their frustration about the fact that we have not yet seen Anna Walker’s review. We are all keen to see Anna’s ideas. She has done a very good job, from what I have heard. She has indeed been
down to the south-west and, I think, intends to go back there. The interim report is due to be published on Monday, so the waiting is almost over.
My hon. Friend the Member for Plymouth, Sutton referred to last month’s Adjournment debate on water charges in the south-west, secured by the hon. Member for East Devon (Mr. Swire), who has been part of the delegations that have come to see me. As I said then and reiterate now, I cannot pre-empt the recommendations that Anna might make in her independent review.
I am not an unfair person and I would not normally remark on this, but on an issue of such vital importance, on which delegations have repeatedly come to see me, and following Anna Walker’s visit to the south-west, cross-party support for a way forward is needed. It is a Friday afternoon and there are important things to be done in constituencies, but it is disappointing, with the interim findings due to be published on Monday, that there are no Opposition Members to engage in such a critical debate. The subject is one of the most highly pressured in the UK, and we want everybody to engage and tell us how they see the way forward.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I should correct the Minister. The half-hour Adjournment debate at the end of the day is essentially the property of the Member who moves it, with the guarantee of a ministerial reply. It is not intended for widespread participation.
Huw Irranca-Davies: I accept entirely what you say, Mr. Deputy Speaker. I still have much to learn, as the years go by, in this place.
There is a good reason why the Walker review’s interim findings have not yet been published. The time needed by the review team reflects the wide-ranging nature and the complexity of the issues that the review has been considering. Those include the fairest way to charge for water, the question of affordability, how water efficiency can be improved, and how the problem of bad debt in the industry can be solved.
As my hon. Friends will recognise, there are no easy solutions or quick fixes, and almost every proposed method of charging creates both winners and losers. That underlines the importance of a thorough review, underpinned by robust evidence, which I think Anna will produce. Inevitably, it has taken time to collect the evidence and to listen to the views of different stakeholders, including my hon. Friends.
My hon. Friend the Member for Plymouth, Sutton referred to the workshop that she hosted in her constituency, which I understand was very productive. I am sure that she will agree that Anna has worked hard to engage stakeholders and to collect that evidence throughout the country, including in the south-west. Despite the delay in publishing the interim report, I can assure the House that the Walker review remains a vital part of the Government’s future water strategy.
A key issue that the review is considering is the fairness of different methods of charging for water. In “Future Water”, we said that we believe that near universal metering will be needed in areas of water stress by 2030. The Walker review will also advise on the appropriate pace of progress with metering. Outside
areas of extreme water stress, the case for metering is less clear cut, but within those areas of high water stress there are compelling reasons for it.
Linda Gilroy: I hear what my hon. Friend says, and the south-west is not an area of high stress in the way that the south-east is. Does he agree that once one reaches a certain proportion of meters—it is now about 66 per cent. in the south-west—it makes sense to consider how to move further in order to have a sensible tariff structure?
Huw Irranca-Davies: My hon. Friend makes a valid point, and I understand that one of the things that Anna Walker is considering is whether increasing the pace of universal metering in areas where companies have already 60, 65 or 70 per cent. would make a lot more sense. As she knows, some companies have either not started at all or are very far behind the curve on this, but she makes a good point.
We believe that metering can deliver real benefits. It provides a financial incentive to use water wisely and encourages home owners to install water efficiency devices to save money. There are many wins with that approach. There is no better incentive to be water efficient. It also enables companies to design tariffs that encourage the efficient use of water and protect vulnerable customers. My hon. Friend mentioned some examples of tariff trials that are under way. The Walker review is specifically considering the effectiveness of different types of tariff, such as innovative social tariffs, rising block tariffs and seasonal tariffs.
Let us see what Anna Walker suggests in her interim review. She is also considering the costs and benefits of smart metering for water customers, and smart metering provides the opportunity to develop smart tariffs, so they go hand in hand. However, metering can incur costs. It costs money to install and read a meter, and meters need to be replaced when they wear out. Over 30 years, the cost of metering is estimated at about £30 per household per year over and above the cost of unmetered charging, although there is much variability around that figure.
Linda Gilroy: I recently had a visit from some people in connection with smart metering for electricity, and they pointed out that some of the figures have been grossly inflated because some people do not want meters to be installed. I would view that figure with particular caution and urge the Minister to do so too.
Huw Irranca-Davies: As I was careful to qualify, there is great variation in the figures that are quoted. I am not saying that that is the only figure that we should go by.
The costs are met not by individual households, but by a company’s customer base as a whole. The Walker review is carefully assessing the benefits and costs of metering, and the cost-effectiveness of different approaches to metering. For example—my hon. Friend and I have discussed this—a targeted street-by-street roll-out of metering could lower the cost significantly.
The metering rate is increasing by about 2 per cent. per annum, mainly because customers are opting for meters to cut their bills. That incentive is apparent. Meters can help some customers to save money, but the Government are very aware that some customers—whether
metered or unmetered—are struggling with their bills now. They include households that are on a low income but have a high, essential use of water—households that cannot resile from their high use of water—and households in areas with high water bills, notably the south-west.
Water affordability is a key issue for the Walker review. As I said in last month’s debate, households in the south-west do pay more—we cannot get away from the fact—for their water and sewerage services than any other customers in the UK. That reflects the substantial investment that South West Water has made, and has had to make, since privatisation. The cost of such work has fallen on the company’s customers. I am aware that 30 per cent. of our nation’s beaches are in the south-west, and that South West Water customers meet the costs of cleaning up those beaches that everybody makes use of—myself included. I have to declare an interest, as I have regularly camped in the area. I do not stay in luxurious, five-star hotels; I like the outdoor thrill of camping there with my family and making use of the wonderful beaches.
Anna Walker is considering the pros and cons of paying for environmental costs nationally—the “equalisation” to which my hon. Friend referred—and I look forward to seeing Anna’s interim conclusions on the issue. I also referred in last month’s debate to the assistance that is available now—right now—to vulnerable customers through the Government’s vulnerable groups tariff, which is also known as WaterSure. The Walker review is looking at whether that tariff should be widened and capped at the national average bill in high-cost areas. The review is also looking at whether the water care package, which has been piloted in the south-west, should be expanded, and at the role that Ofwat might have on affordability. I look forward to seeing Anna’s thoughts on all those issues. The good thing about Anna Walker’s review is that it is looking at those issues comprehensively, not at one or two in isolation, because it knows that they join up and that the solution will be joined-up.
My hon. Friend asked whether the timetable for the periodic review, PR09, will prevent Anna Walker’s recommendations from being implemented, and whether we will therefore have to wait for the long term. I absolutely assure her that there are procedures for implementing new legislative requirements if they emerge after Ofwat PR09 water price limits. It would not be necessary to wait until the next price review in 2014.
In conclusion, I am confident that Anna Walker’s review can help to achieve the Government’s “Future Water” goals, which my hon. Friends share.
Linda Gilroy: How long will the consultation period be? An interim report is due out, but how long will we have to make any further views known?
Huw Irranca-Davies:
I do not have a definitive date, but our initial discussions with Anna Walker indicate that we are looking for her to consult throughout the summer on her interim findings. They have a lot of meat on them and need proper consultation. She also wants to return to the issue after the summer and in the early autumn. We do not have a definitive date, but, if I seek inspiration, it will be October-ish, probably. That is not a ministerial October-ish but October as in the
calendar. I shall have to be held to that now, I realise, but I think that Anna would like to work towards that.
My hon. Friends’ proposals tie in with the Government’s “Future Water” agenda, and I know that we are all intensely looking forward to seeing Anna’s interim proposals after the weekend. There is only one thing that I am looking forward to as much, and that is seeing the result of the British Lions match on Saturday at 1 o’clock.
I shall of course be happy to discuss the proposals further with my hon. Friends, and with any other south-west Members who have been members of the delegation that my hon. Friends have brought to see me as part of the engagement process; and I shall be happy to do so
before the summer recess. That would be in addition to, not instead of, the meeting that my right hon. Friend the Prime Minister has promised. He has, as it was pointed out, taken a personal interest in the issue, too.
I also understand that Anna will return to Plymouth on 17 July to discuss the emerging recommendations. I know that my hon. Friends will be there for that, and I thank them for keeping up—if I can use only one pun—the water pressure, politically, for their constituents in the south-west.
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