On a point of order, Mr. Speaker. You will recall that on 21 January an urgent question was answered by the Minister for Europe on exchange rate movements and their effect on the Foreign and Commonwealth Office budget following the announcement of a £170 million loss in that budget as a result of sterling’s depreciation. In answer to a question from me about hedging, he said that the Foreign Secretary had written to the shadow Foreign Secretary on the subject. After further questioning from my hon. Friend the Member for Kettering (Mr. Hollobone), the Minister for Europe pledged to put a copy of that letter in the Library. I have to report to you, Mr. Speaker, that that letter has not appeared in the Library—and that according to the FCO, that is because the letter was never written. Can we ensure that the Minister for Europe comes to this House to explain not only why this has happened, but all the background to the effect of the depreciation of sterling, and the FCO’s failure to hedge for it, on the FCO’s budget?

I am grateful to the hon. Gentleman for his point of order. He has given to the House a very specific and detailed sequence of events and the House will have heard it; it is very clearly on the record. What I would say to him is that if a Minister promises that a letter will be placed in the Library, it should be placed in the Library, and that should be done without delay; what is promised should be delivered. I hope that the hon. Gentleman will understand if, beyond that, I simply say that I will look further into the matter, and that he has put his concerns very fairly and squarely on the record today.

On a point of order, Mr. Speaker. Yesterday we reached the end of the business on the Constitutional Reform and Governance Bill in Committee, and we then lost time that could have been spent having a vote on new clause 52. There was a problem with how the handover when the House came out of Committee was to be conducted. We were told that that was an unprecedented development. Will you look into what happened? The matter was raised in two points of order yesterday, but I hope that you will examine how it was not handled well and how we need to learn from that, because Back Benchers, who have very little access to time, could have had the opportunity to move something about which many of us felt strongly.

I am grateful to the hon. Gentleman for his point of order. Although I did not receive advance notice of it—I make no complaint about that, I hasten to add—I had a sense, given the strength of the points of order made last night, that this matter might be raised. I hope, therefore, that it will be helpful to the House if I make a short statement about those events.

I certainly do understand there was a hiatus last night—with the business in Committee on the Constitutional Reform and Governance Bill finishing significantly earlier than expected—and the House was informally suspended for just five minutes. I am grateful, of course, to the Deputy Speakers and to members of the Chairmen’s Panel for their flexibility in chairing proceedings, whatever happens. I cannot comment on what happened in Committee—the House will understand that I am precluded from doing so—but I have inquired about new clause 52. I understand that once new clauses 85 and 86 had been agreed to, that decision of the House overtook new clause 52 and so ruled out the possibility of a separate Division upon it. No doubt Report stage will give Back Benchers other opportunities. As for whether the time of the House was well spent yesterday—the fifth day on this Bill—the management of legislative time on the Floor of the House is a matter for the Government.

I beg to move,

That leave be given to bring in a Bill to amend the Compensation Act 2006 to ensure that courts considering a claim of negligence or breach of statutory duty apply a presumption that defendants undertaking a desirable activity have satisfied the relevant standard of care; and for connected purposes.

Last month, a large part of Britain was brought almost to a standstill by significant snowfall and freezing conditions. Local authorities up and down the land ran short of salt and were unable to grit many roads—and in particular, many pavements. Those pavements became impassable, or even dangerous, resulting in slips and falls and keeping some of our most vulnerable citizens virtually prisoners in their homes.

To their great credit, some people decided to help their neighbours and the wider community by clearing not just their own driveways and garden paths but the pavement outside their houses or their children’s schools. Others read their newspapers and decided not to. That was substantially because those newspapers quoted a variety of lawyers who said that if people were to clear the snow off their part of the pavement and then someone were to fall over on it, they might be sued for negligence. Inaction, the lawyers said, was the safer option—and so the pavements stayed uncleared, because the council could not do it and householders would not do it. That is the type of situation that the Bill seeks to address.

Of course, some say that there is not really a problem, because the courts are very unlikely to find the public-spirited domestic snow shoveller negligently liable for any injuries, in the absence of spectacular incompetence. They may be right, but I do not think that the public-spirited domestic snow shoveller feels reassured, and many such people, to be on the safe side, remain deterred from doing the right thing by a fear that the law would not be on their side. What matters in that deterrence is not just the likelihood of a negligence action succeeding, but the likelihood of a negligence action being brought in the first place, incurring all the worry and potential expense needed to defend it.

We now live in a Britain where such negligence actions look more likely than they have ever done. Large legal advertising budgets are spent on persuading us that “Where there’s blame, there’s a claim”, and that there almost always is blame. We have been conditioned to believe that there is no such thing as an accident any more, only a negligent act for which somebody owes compensation, even if they were trying to be helpful at the time. So the safest thing is to leave the snow shovel in the shed. That is not a perception that this House should allow to persist.

Others say that there has been a problem, but that the passing of the Compensation Act 2006 has solved it. Section 1 of the Act states, broadly, that a court considering a claim for negligence or breach of statutory duty, in determining whether a defendant should have taken particular steps to meet a standard of care, may have regard to whether a requirement to take those steps might prevent or limit a desirable activity or discourage people from organising or taking part in it. In other words, the desirability of the activity the defendant was engaged in at the time of the alleged negligence, and the benefit to the community of what he or she was doing, constitute only one of the factors that the court may consider, and it is not obliged to consider that factor at all.

During the passage through the House of the Bill that became the Compensation Act, the Government made it clear that section 1 did not, in their view, represent a change in the law. It was instead a restatement of the existing law, intended to reassure those involved in what the Act described as “desirable activities” that in carrying out those activities, they should not fear negligence actions.

The Compensation Act has now been on the statute book for three years, and I am afraid that the national conversation on snow clearing that we have heard over the past few weeks demonstrates that the Act has not succeeded in that aim. I believe that the House must go further. In addressing the specific issue of a private citizen’s involvement in clearing snow and ice from pavements, we could go much further and make that involvement compulsory, as is the case elsewhere in the world.

In the United States, for example, various municipal codes require homeowners and tenants to clear all snow from the sidewalk adjacent to their homes within a specified number of hours after it has fallen, or after sunrise, if the snow has fallen at night. In Germany, the rules are set out in the Satzung über die Verpflichtung zum Reinigen, Schneeräumen und Streuen auf Gehwegen, which, as you will immediately recognise, Mr. Speaker, is the “Statute concerning the obligation for the cleaning, removal of snow, and sanding on walkways”. It sets out householders’ responsibilities in considerable detail, including the substances to be used for gritting their part of the pavement, the maximum grain size thereof and the specified minimum width of the cleared area. The House will be relieved to know that I do not propose the same legislation here.

I propose that we amend section 1 of the 2006 Act so that when a court considers a claim of negligence against someone who has done something for the benefit of their community, it will not simply regard their public-spiritedness as one factor among many that it may or may not take into account. Instead, there should be a presumption that someone who has engaged in that sort of desirable activity has satisfied the relevant standard of care. The court would not be prevented from finding someone negligent if they had gone about that desirable activity in a wholly incompetent or irresponsible way, but it would start from the premise that those who act to help their community should get a very strong benefit of the doubt. I believe that that will succeed in sending to the public the message that section 1 of the 2006 Act seems to have failed to send.

In many ways, this is a modest Bill. It does not seek to affect what anyone does as part of their employment. It does not seek to compel anyone to act nobly, or to condemn those who do not. It seeks simply to remove an obstacle from the path of those people in our society who are willing to put themselves out for others. I do not doubt that the Bill’s drafting could be improved if it were to make progress, but it is meant to send the message that if someone makes an effort to do the right thing, the law will stand behind them, not in their way. We need people to do their bit.

January 2010 will not be the last time we have heavy snow, or the last time local councils run out of grit when there is heavy snow, and we want people to feel able to help their neighbours when the authorities cannot. More generally, in times of snow, flood or any other form of adversity, our communities are at their best when people come together and help each other with individual acts of kindness and consideration. That is what strengthens society, and it is our job as legislators to encourage that—or at the very least not to discourage it. I believe that the Bill would support the kind of society that we all want to see, and I commend it to the House.

Question put and agreed to.

Ordered,

That Jeremy Wright, Mr. Mark Harper, Mrs. Maria Miller, Mr. David Lidington, Mr. Philip Hollobone, Rob Marris, Mrs Siân James, Tim Farron, John Hemming, Angela Watkinson, James Duddridge and Mr. Stephen Crabb present the Bill.

Jeremy Wright accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 5 March, and to be printed (Bill 58).

I beg to move, That the clause be read a Second time.

With this it will be convenient to discuss the following: new clause 16—Training and development of employees in water sector—

‘(1) The Water Industry Act 1991 (c.56) is amended as follows.

(2) After section 37(3) insert—

“(4) It shall be the duty of each water undertaker to ensure it maintains investment in the training and development of its workforce. Each undertaker shall be required by Ofwat to include in their twenty-five year strategic plan measures to ensure that sufficient investment is being made in training and development”.’.

New clause 17—Duties for sustainable management and use of water—

‘(1) The Water Industry Act 1991 is amended as follows.

(2) After section (2)3 insert—

“(3A) The Director of Ofwat shall carry out the duties imposed by this section in such a way as to:

(a) promote the sustainable management and use of water;

(b) ensure that the regulatory duty of Ofwat is structured to promote sustainability in the water management supply chain, paying particular attention to innovation in treatment processes, energy efficiency, job security, leakage control and water efficiency activities, including an obligation to promote a more long-term (twenty years or more) approach by water companies to their investment programmes;

(c) promote skills in the water industry, by publishing a skills strategy; and

(d) promote employment in the water industry through an annual report to Ministers on the number of jobs in the sector and in the supply chain.”’.

New clause 18—Role of the Water Services Regulation Authority (OFWAT)—

‘(1) The Water Industry Act 1991 (c. 56), is amended as follows.

(2) After section 2A(d) add—

“(e) to promote—

(i) sustainable water management;

(ii) innovative treatment processes;

(iii) energy and water efficiency;

(iv) job security;

(v) leakage control;

(vi) skills in the water industry; and

(vii) employment in the water industry.”’.

Amendment 22, in clause 43, page 28, line 37, at end add—

‘(6) An undertaker’s charges scheme devised under subsection (1) must be overseen by the Water Services Regulation Authority (Ofwat).’.

May I take this opportunity, now that we have come out of Committee, to thank the Opposition Front-Bench teams and Back Benchers on the Committee, as well as others who have taken a keen interest in the Bill? What was already a good Bill was improved in Committee—and I am sure that it will be an exemplary Bill when it emerges from our deliberations today and goes on to the other place.

This group of amendments relates to the role and responsibilities of Ofwat and the water and sewerage undertakers, and to the design of those undertakers’ schemes of charges. New clause 22 has been tabled in response to concerns raised in Committee about the affordability of water and sewerage bills for some households. The Government are bringing it forward to enable water and sewerage companies to include social tariffs for groups of customers who have difficulty in paying their bills.

Such social tariffs may introduce new cross-subsidies between groups of customers. Ofwat, the independent economic regulator, may not reject charges schemes on that basis out of hand. It still has a crucial role in the process—to ensure that tariffs are in the interests of customers—but it will have to be able to show that any action that it takes in approving or rejecting a charges scheme does not undermine the general principle behind the new clause.

I have one question on that specific point. I applaud the Government for taking on board the feedback that I understand was given in Committee, but I am concerned that, at least in theory, Ofwat could still ignore the attempts by private water companies to provide concessionary rates for customers who are less well off. How can the Minister assure the House that it will not intervene when to do so would be socially unacceptable?

There are safeguards in the new clause, which I will come to in a moment. They include the requirement that Ofwat consult its wider consumer base, because we do not want to solve one problem only to create another. The new clause makes it clear that Ofwat must play a positive role in the charges schemes being brought forward and then work with stakeholders. I have got no further than my opening remarks, and I hope that the hon. Gentleman will allow me to explain a little more.

Under existing legislation, Ofwat has a duty to ensure that charges schemes are not

“unduly preferential or unduly discriminatory”.

The UK Government and Welsh Assembly Government must provide in legislation that social tariffs introducing new cross-subsidies are lawful. We are bringing this new clause forward for that reason, as we believe that it gives Ofwat the legal assurance that it needs to allow companies to bring forward social tariffs.

By way of response to the hon. Member for Montgomeryshire (Lembit Öpik), I can tell him that Ofwat made it clear in evidence to the Committee that it felt that there was not sufficient legal clarity to compel it to consider that approach. This new clause is designed to provide just that clarity; I believe that Ofwat will be reassured in that regard.

As the House is aware, the Walker review of charging for household water and sewerage services published its final report in December. It highlighted the plight of customers who face difficulty meeting their bills because the increase in water metering in some areas can exacerbate the affordability problem for low-income families who had previously been helped by a cross-subsidy inherent in a charging system based largely on a property’s rateable value.

We are considering Anna Walker’s final recommendations carefully, ahead of a full public consultation. One of her recommendations involves possible changes to the vulnerable groups tariff, but we agree with the Committee’s conclusion, prompted by the hon. Member for Cheltenham (Martin Horwood), that it is timely to enable companies to include social tariffs that can reflect local circumstances. Those social tariffs could complement any tariffs that we might want to provide for nationally in secondary legislation in the future.

It would be remiss of me not to praise my hon. Friend the Member for Cheltenham (Martin Horwood) for his contribution in Committee, and I am grateful for that clarification by the Minister. For the sake of the record, however, will he confirm that when private companies seek to provide more generous terms for less well-off customers, the default position for Ofwat is that it will be obliging? Will he make it clear that it will not seek a technical or specific loophole to prevent those more generous terms from being put in place?

I do confirm that that will indeed be Ofwat’s position; the hon. Gentleman is right to raise the matter. The new clause makes Ofwat’s legal position clear, and also puts in place a positive expectation in respect of social tariff schemes. Ofwat must work with the wider consumer base to make sure that the schemes are appropriate, and must not reject them out of hand. The difficulty that Ofwat used to face was quite understandable: even with the existing guidance, it did not feel that there was sufficient clarity in the law.

rose—

rose—

I shall give way first to my right hon. Friend the Member for Scunthorpe (Mr. Morley), and then to the right hon. Member for Wokingham (Mr. Redwood).

I too welcome the new clause, because we need to clarify social tariffs on water use. Indeed, we have a social tariff structure on energy use. My hon. Friend will agree that a lot of work has been done on this subject through reports that he has commissioned and by bodies such as the Consumer Council for Water, but the public need to be fully consulted, so I would be grateful for some assurances about that.

Entirely. That is exactly why we have introduced the new clause in its current form. In effect, we are taking a power that, although tightly drafted, still allows us to go out to full consultation, bring forward the underpinning regulations and guidance and make them fit for purpose. We do not want to pre-empt Anna Walker’s package of proposals, as I made clear in Committee, but we might not have this opportunity again for a couple of years—who knows? In which case, we should introduce the measures now, so that we can move ahead.

In appraising the proposal, it is crucial that we know how the Minister defines people

“who would have difficulty paying”.

Cross-subsidy might be involved, and we want to avoid the pretty poor cross-subsidising the even poorer, so it is important that we know where he is minded to draw the line.

The right hon. Gentleman makes a very good point, but that is absolutely why the Bill should not include specific definitions of who does or does not fall into that category. That is exactly the purpose of going out to proper consultation—so that those terms can be defined and we can accurately reflect not only how those individuals or households are defined, but how such definitions in a local area tie in with complementary national schemes.

The new clause would also enable the Secretary of State and Welsh Assembly Ministers to issue guidance to undertakers. That would set out which groups of customers we might expect to benefit from social tariffs—the very point that the right hon. Gentleman made. It would also set out the need for detailed impact assessments and consultation with customers and the Consumer Council for Water to determine what might be an acceptable cross-subsidy. We expect Ofwat to ensure that schemes are consistent with the guidance that we will issue.

New clause 16 would require each water undertaker to invest in the training and development of its work force, and to include that in its 25-year strategic plan. There is a laudable intention behind that proposed change, and I shall come to it in a moment. New clause 17 would give Ofwat a duty to promote the sustainable management and use of water, and to promote sustainability in the water management supply chain. It would also require Ofwat to publish a skills strategy and an annual report to Ministers on employment in the water industry.

New clause 18 would introduce a number of additional primary duties for the Secretary of State—or, as the case may be, Ofwat—when regulating the water industry. New clauses 16 to 18 have laudable intentions, but I said in Committee that they were unnecessary, and I shall expand on that, because it is worth elucidating on the Floor of the House the reasons why that is so.

I said in Committee that when we take all those aspects into account, a review of Ofwat in some form is justified, and I shall consider how best to take that forward. I made that commitment in Committee, and I stand by it. In its inquiry last year into the 2009 price review, or PR09, the Environment, Food and Rural Affairs Committee recommended a fundamental review of Ofwat’s role—and I neglected to thank the Committee for its work on all aspects of the Bill. Such a review would, of course, need to look at social, environmental and economic considerations across the board, not just the themes outlined in those three new clauses. There is a strong justification for such a review.

Will my hon. Friend consider whether that review might cover mergers? Water companies are not currently allowed to merge, but they might be, and although there can be problems with mergers, some could bring significant benefits to consumers.

That is a helpful intervention, and I take my hon. Friend’s point on board. In defining the review’s terms of reference, it will be important not only to make them narrow, but to ensure that they encompass the changing situation in the water industry. We might well consider the aspect to which my hon. Friend refers. I cannot give her a cast-iron guarantee, but if we are going to think about a fundamental review, let us think about a fundamental review in all its aspects.

I thank my hon. Friend for being so generous in giving way. He was kind enough to attend a reception about innovation in the water industry. Is he confident that there are sufficient powers available to the regulator and to the Secretary of State to direct the regulator to ensure that there is sufficient innovation in the water industry?

Indeed there are, but that should be considered as part of the review of Ofwat’s powers and duties. We also have to make good not only on Anna Walker’s report but on what might come out of the Cave report. There is unfinished business in driving forward innovation in relation not only to efficiency but to tackling the carbon footprint of the water industry and so on. My hon. Friend makes a valid point.

As I said, I believe that there is a role for Government. I have recently met unions such as GMB, Unison and others, and of course EU Skills, the sector skills council. There is merit in asking whether the guidance should cover the Government’s expectations for the training and development of the work force in the water sector. I can tell the House that I intend to meet my hon. Friend the Minister for Further Education, Skills, Apprenticeships and Consumer Affairs, a near neighbour of mine in south Wales, to discuss the matter and consider what further steps we might take to address the skills gap in the water sector.

I thank the Minister for his generosity in giving way; it just so happens that the three key points that I want to make are on this group .

The Minister rightly talked about the importance of having a holistic or strategic approach to sustainability and water management. It is clear to me that in Montgomeryshire, where the source of the River Severn lies, there is an interrelation between Ofwat’s responsibilities and those of the Environment Agency, and sometimes there can be a conflict. For example, the level of water needed in the reservoirs to ensure that we do not get a drought in the summer can cause overflow in the winter. Does the Minister have a perspective on that, or would he like to write to me to explain how the Bill will ensure that there is a holistic approach to the potentially conflicting interests and needs of Ofwat and the Environment Agency?

I do not think I need to write to the hon. Gentleman, because I can happily confirm that one of the prime aims behind the Bill is the clarification of responsibilities, both for the EA as the strategic national lead and for upper-tier or unitary local authorities, working hand in hand with internal drainage boards and those on the ground in lower-tier authorities, so that they can deliver local leadership and accountability on flood risk management. Those organisations have duties to work with each other and with all the other authorities—duties that are embedded as a prominent part of the Bill.

Amendment 22 to clause 43, on concessionary schemes for surface water drainage charges for community groups, would require an undertaker’s charges scheme to be overseen by Ofwat. The Water Industry Act 1991 already requires water and sewerage undertakers in England and Wales to submit their annual charges schemes to Ofwat for its approval, and that holds true regardless of whether they include a concessionary scheme for community groups. Including a provision in clause 43 stating that the charges scheme must be overseen by Ofwat would simply add ambiguity, as it is not exactly clear what Ofwat is being asked to oversee, or how that would differ from the power that Ofwat already has to approve undertakers’ charges schemes.

That said, I appreciate that hon. Members of all parties want to be confident that community groups will not face unaffordable water bills as a result of site area charging for surface water drainage. I also recognise that there is a clear role and responsibility for Ofwat in ensuring that that is the case. The issue will therefore be addressed in the Secretary of State’s guidance to undertakers.

Clause 43(6) empowers the Secretary of State and Welsh Ministers to issue guidance to undertakers, to which they would be required to have regard. A draft of that guidance, which will be subject to full public consultation, was made available in Committee. It set out in quite some detail the Government’s thinking on issues such as the need for concessionary schemes, which groups should benefit and what counts as an affordable charge for community groups. I bring to hon. Members’ attention paragraph 3.1 of the draft guidance, which states:

“The Government is clear that it does not want to see community groups facing unaffordable increases in their water bills as a result of site area charging for surface water drainage. We expect undertakers to ensure that this is the case and Ofwat will ensure that undertakers have had regard to this guidance in its approval of individual charges schemes.”

That makes clear the important role that Ofwat will have both in approving individual charges schemes, as it does now, and in policing the Government’s guidance to ensure that community groups will not face unaffordable surface water drainage charges.

May I be assured, from what the Minister has said, that groups in my constituency are safe, particularly scout groups, which are very worried about whether they can survive when the charges go up?

Yes, the hon. Gentleman absolutely can have that assurance. We hoped that we would be able to ensure that without legislation, because we already had some guidance in place, but the Bill will provide clarity that schemes need to be worked up across the consumer base. I had an interesting discussion with Church groups about whether we should protect churches to the extent that parishioners come in and say, “Thanks very much, but my bill’s just gone up £10 or £20 to save you.” We need to get the balance right, but the joy of the scheme is that it will have proper local consultation, with proper input from the Consumer Council for Water, local groups and others, so that it is applicable to the local environment. That is a clear responsibility.

Hon. Members can take that assurance back to the churches, scout groups, community halls and others, and tell those organisations to look at the guidance, which is out for consultation, and get their feedback to the Government. I am confident that that sets the way forward so that such groups, which often live hand to mouth, do not use their money and fundraising to pay for surface water charging rather than other things, such as taking scouts on a trip.

To sum up, the objectives of new clauses 16, 17 and 18 can clearly already be achieved within the existing framework. Given the clear commitments I have made, I hope hon. Members will not press them to a Division. I also hope that the hon. Member for Cheltenham will not press amendment 22 to a Division, given that Ofwat already has the power to approve charges schemes, and in view of the proposals in the Secretary of State’s draft guidance on concessionary schemes for community groups.

I echo the Minister’s comments—I am delighted to be at the remaining stages of the Bill, and I hope we can reflect the co-operation and good humour that was enjoyed in Committee.

New clause 18 is consequential on a number of amendments to which we will speak later. We had some sympathy with new clause 17, in the name of the hon. Member for Stroud (Mr. Drew), which is similar to our proposal, but we believe that our expression and script is clearer.

Surely not!

I hope the hon. Gentleman agrees.

Basically, as the Minister said, the Select Committee on Environment, Food and Rural Affairs said in its report that we would need to revisit the regulatory framework for a number of issues that arose in Committee. In new clause 18, we are seeking to add a number of responsibilities that we believe should be specified in the Water Industry Act 1991 to reflect the changes that the Bill makes. Currently, those responsibilities are omitted from the Bill and the Act. I hope that the Minister and the House look favourably on those remarks.

The Minister said that Government new clause 22 was an opportunity to give Ofwat a role in approving or rejecting the charging scheme, and ensuring that decisions are commensurate with the guidance to which he referred—I should state that that guidance was drawn to the Committee’s attention on the penultimate day of our proceedings. What consultation has there been on that guidance? Previous guidance was heavily consulted on. Will he ensure that decisions will be taken with that guidance in mind? What direct consultation has there been with Ofwat?

My hon. Friend the Member for Arundel and South Downs (Nick Herbert), the shadow Secretary of State, and I have mentioned on a number of occasions on public platforms that we have serious concerns about affordability. We believe that regard should be had to the Walker report. If it is the wish of the British people that there should be a Conservative Government, we would be committed to introducing a White Paper, as the Minister is aware, to consider both the Walker report and the Cave review in the round—particularly the former—as regards metering and affordability.

We are a little dismayed that the Government have lifted one specific concern about social tariffs and affordability—we recognise that it is a very real concern—because it looks suspiciously like a piecemeal approach. Affordability is best seen in the context of areas such as the south-west, where 40 per cent. of water consumers are on low incomes, spending more than 3 per cent. of their disposable income on water, which is the general classification for water poverty. We wish to be as vigilant about water poverty as we are about fuel and energy poverty. I remind the Minister that while the Energy Bill includes social tariffs, with which we also have some sympathy, the energy sector had a two-year consultation under a proper framework set out in legislation. It was transparent and equitable, and all parties were fully consulted.

Has my hon. Friend considered how the introduction of proper competition into the water industry, for retail as well as for large customers, would solve many of the problems and probably bring prices down without a Bill?

I am grateful to my right hon. Friend for that comment. We are doing some serious work in that regard. We have had some meaningful discussions with the authors of the two reports. We need to take a longer-term view, and that would be part and parcel of the White Paper, but it certainly could have a positive impact on bills.

New clause 22(2) clearly states that subsection (1)

“includes schemes which have the effect of subsidisation by other persons.”

We know that that has the particular legal meaning of “person” and means companies as opposed to individuals and households. Why has the Minister excluded reference to households? He clearly set out that the Government intend a form of cross-subsidisation, but why open that only to companies? What level of advanced consultation has he had with companies about the fact that businesses might be seen to be subsidising individual households having difficulties paying? If the new clause had retained the reference to individuals as opposed to legal persons, the domestic households sector would have been restricted in that regard.

Under new clause 22, as drafted, businesses will be caught by the proposals to subsidise individuals having difficulty paying their bills. As I mentioned, that might be viewed as a stealth tax on business—it could be so used—and, in the current economic climate, could lead to a financial burden on business. What were the Government’s considerations in that regard? Is the Minister really considering doing what other European Union countries have done—imposing an eco-tax on hotels? What is their thinking on that?

As I mentioned, we would have been more persuaded had the Minister gone down the route of the Energy Bill, which gives enabling powers to allow suppliers to provide social price support. Those proposals have been extensively researched and developed over time, and I understand that significant consultations with the parties involved have taken place and that the proposals in the Energy Bill have broad support across the sector. However, my concern is that, in introducing new clause 22 at this stage—perhaps pre-empting a subsequent White Paper and a broader water Bill—the necessary consultations have not taken place. I understand that we are positioned between two extremes, but would he be good enough to tell us the Government’s thinking on that.

I want to press the Minister further. There are significant differences—more than innuendoes—between new clause 22 and the language in clause 43 on community groups. In new clause 22(3), Ofwat is given specific duties to allow concessionary schemes for domestic properties. Clause 43 does not do that, and instead leaves it to guidance for Ofwat to be given specific authority. There seems to be a difference there. Will he explain his thinking behind that? New clause 22(4) states that Ministers must issue guidance relative to subsections (1) and (2), whereas clause 43 states that only undertakers

“shall have regard to any guidance issued by”

Ministers, which appears to remove any compulsion for guidance to be produced. Is that an intended difference? Will he explain the Government’s intention in that regard? Finally, new clause 22(5) states that undertakers and the authority “shall have regard to” the guidance, whereas in clause 43, only undertakers, and not Ofwat, are told to have regard to the guidance. Having achieved what we have achieved in clause 43, we would like to be satisfied that new clause 22 will not result in any consequential differences.

I hope that the Minister and the House will look favourably on new clause 18, because we believe that it is appropriate to set out what the primary duties on the Secretary of State and Ofwat should be. As I said, there are significant consequences for later amendments. We have sympathy with the Government’s new clause 22, but obviously we would like some satisfaction regarding our concerns. In the current credit crunch and economic crisis, the issue of affordability needs to be addressed. However, we would be interested to know why the particular issue in new clause 22 has been lifted from the other significant issues—my right hon. Friend the Member for Wokingham (Mr. Redwood) identified them—that were taken out of the earlier draft Bill.

I start by echoing the remarks of the Minister and the hon. Member for Vale of York (Miss McIntosh) about the positive atmosphere that prevailed in Committee. I share their desire to ensure that that positive and co-operative attitude continues.

New clause 22 is certainly a positive place to start and is broadly based on the ideas behind our new clause 1 in Committee. We have been pleased to add our names to new clause 22 from the Liberal Democrat Benches, in that it seeks to do what we intended with our new clause. At a time of recession, when variable energy prices, potentially rising council tax bills and other things are hitting some of the most vulnerable and poorest citizens in our communities, it is only right that we should pay attention to their needs. We should also pay heed to the fact that the impact assessment on the adoption of private drains has suggested that water bills will have to rise. The Walker review highlighted the issue of metering and the disproportionate impact that it could have on some of our poorest citizens, who are the poorest water customers. It is therefore urgent that the matter be put beyond doubt, because it is possible that the numbers in so-called water poverty will rise.

Water companies have struggled to introduce social tariffs, and that includes even Dwr Cymru and Thames Water, which have tried to do so over many years. The kindest interpretation of Ofwat’s response to many of their approaches to try to introduce social tariffs is that it has struggled with the terms of its remit—I will put it no stronger than that. In answer to the question that the hon. Member for Vale of York asked, the reason why we need the proposal in legislation, and why it is a little special compared with the broad range of recommendations in the Walker review, is that not that many of Anna Walker’s recommendations require primary legislation in quite the same way.

There is clearly a problem, and it is one that is perceived to be connected with the general remit under which Ofwat operates. We heard in our evidence session about the need that had been identified to put the matter beyond doubt in primary legislation. There are not that many recommendations in the Walker review that require primary legislation, and there is certainly not general support for that primary legislation should it derail the Bill before a general election. We also share a desire to get the Bill through before the general election, and new clause 22 seems a good opportunity to tackle the issue in a way that will have general support.

New clause 22 puts the legality of social tariffs beyond doubt. The Secretary of State has drawn the new clause widely. It is not prescriptive and does not pre-empt the consultation that will result from the Walker review, but it does address Walker’s call for social tariffs to be permitted. The Conservative Front-Bench team did not feel able to support our amendment in Committee to allow, in effect, lower water bills for the poorest customers, and the hon. Member for Vale of York has made some slightly grudging comments this afternoon. I do not think that social tariffs for poor water customers are likely to be confused with stealth taxes. I hope that she will feel able to allow the Conservative party to go a little further this evening and support this important new clause. The central issue is fairness to some of our most vulnerable citizens, and in particular for elderly citizens on fixed incomes for whom such bills are unavoidable, who find it difficult to respond to rising bills.

The issue is the level of income, because I cannot persuade my fairly poor constituents to have a big increase in order to pay for somebody else.

The right hon. Gentleman makes a fair point. Some of the figures put forward by Thames Water, which I can share with him another time, suggest that the number affected is a small percentage of the overall total. That means that if the money was to be recovered through other people’s water bills, the increase for everybody else would be miniscule in practice, so the slightly poor would not have to pay an undue amount in order to subsidise the very poor. However, he makes a fair point. The key issue with new clause 22 is the need to put the legality of social tariffs beyond doubt. While we have the Bill before us—what the Minister said is quite true: we might not see another water Bill for some years—new clause 22 is a timely amendment.

New clauses 16 and 17 cover issues that we discussed in Committee and on which the hon. Member for Stroud (Mr. Drew) had Liberal Democrat support. The new clauses would ensure that the management of flood risk and water management are sustainable not only in environmental terms, but in social and economic terms, and that we have the skill sets to maintain the duties that we are creating in the Bill.

These and many other amendments have dealt with Ofwat’s remit. I note and welcome the Minister’s acknowledgement that Ofwat’s remit needs comprehensive re-examination. That view is shared by all political parties. Whatever the outcome of the general election, it will be an important issue for the new Government to address. Time is not on our side, so while we have the Bill before us, it seems sensible to make these amendments. I hope the Government will accept them, despite the Minister’s comments so far.

I am delighted to speak to new clauses 16 and 17. In the spirit prevailing in the House today, I commend my hon. Friend the Minister on a near-exemplary performance and his willingness to listen, respond and improve the Bill. The House heard it from me first.

I do not intend to spend long dealing with new clause 22—or, indeed, amendment 22—but I would like to point out that the new clause exemplifies the Minister’s willingness to engage in debate. Some of us were tempted by the Liberal Democrat amendment moved in Committee, but common sense prevailed and we did not have a vote; the Minister was tasked to go away and think about how to introduce individual social tariffs as well as collective ones for voluntary organisations and so forth. That was the nub of the problem. It was not possible to say that we would treat fairly organisations such as the scouts, important though they are, but have no willingness to understand the problems of individual customers. We are talking about some form of cross-subsidisation. As I said in Committee, we have to separate out those who cannot pay from those who will not pay—a growing problem in this industry.

I hear what the hon. Member for Cheltenham (Martin Horwood) says about amendment 22, and I am pleased that he is not going to press it to a vote, but I seek further clarification of whether there has been some narrowing of the methodology that Ofwat will be asked to operate in dealing with cases referred to it where organisations feel that the water company they are paying is being unduly harsh in the charges imposed on them.

I hope that the Minister will clarify the position in his summing-up as we have to nail this issue. He has done invaluable work on a thorny problem, but I hope that we can now move on and be absolutely clear that there is a mechanism whereby if a particular community group feels that it is being unfairly treated, it will have the wherewithal to go to Ofwat, complain and get some action against the relevant water company, particularly given the strong differential between different water companies, as I mentioned in Committee. If the Severn Trent model had been more widely followed, for example, some of the problems that we saw with United Utilities could have been overcome far more quickly.

Although they have tabled at this time, new clauses 16 and 17 in no way move away from our discussions in Committee. However, new clause 16 lays down clearly a duty on the industry to provide skills and training for those who work in it. If I remember correctly, I heard the Minister rightly say that the water industry is not as advanced as the energy or other utility industries in respect of what it already does in that regard. New clause 16 is effectively designed to inform the regulator that water companies will have to demonstrate in detail how they are investing in the training and development of their employees.

I am very much in favour of the hon. Gentleman’s argument, but if we take Welsh Water, for instance, which I believe has a good structure, it has hardly any employees at all, as nearly all its work is contracted out. How will his proposals work out for an organisation like Welsh Water?

That is a particular problem. We have seen contractualisation in all manner of industries, and I always think that the greatest loss is the human capital. What training is going on, who is responsible for it and, if it is not going on, what can be done about it, are issues that are not easy to determine. Given that I am unlikely to push the new clauses to a vote, I hope the Minister has noted that we want clarification of how the arrangements will work in practice. The water industry is a people-oriented industry, and we shall all be the losers if we do not invest in the people who will keep the water flowing.

I should like the water companies to give the regulator details of their total annual investment in the training and development of their employees, details of compulsory employee training and development plans for each successive five-year regulatory period—clearly a long period will be involved—and details of consultation and negotiation between the undertaker and employee representatives on training and work force development strategies. I make no apology for saying that those proposals are a result of my links with Unison, the major trade union involved in the industry. Let me pass on Unison’s thanks to the Minister, who met its representatives, allayed their fear that the Bill would make no provision for training and another opportunity would be lost in an area that had been sadly neglected, and agreed that we must be much clearer about the skills and development programmes that we intend to provide.

Government, the water industry, the employees and the regulator must sing from the same song sheet if we are to have an industry that is fit for the 21st century rather than one that is somewhat historic, both in terms of the infrastructure that we are trying to upgrade and in terms of its failure to invest in people.

New clause 17 also concerns skills training. I was a wee bit disappointed that the hon. Member for Vale of York (Miss McIntosh) felt that her new clause was so superior to mine that I ought to fall on my sword and accept failure. However, I tabled my new clause for a specific reason. I have been talking to the Environmental Industries Commission. As well as containing some nice words about sustainability and the need for a programmed approach to our ability to organise the industry, the new clause has a specific bite to which I want the Minister to respond.

There happens to be an ABB plant in my constituency which produces flow meters. For many years, those at the plant have been telling me that the problem with the water industry and its five-year plans—the beloved “AMP”: no one has yet been able to explain to me what that acronym stands for, but I am sure that it stands for something meaningful—is that we may end up with feast and famine or, dare I say, boom and bust.

During the years in which the industry has agreement on the new expenditure programmes, the supplier companies will be incredibly busy and have to break every record in responding to the demand that they find so difficult to meet. Towards the end of the five-year period, such will be the pace at which the industry has had to proceed that everyone will start waiting for the next five-year structured approach by Ofwat, and there will be very little work to go around.

The aim of new clause 17 is to try to level out some of the activity, given that it is so unbalanced and leads to all manner of problems. As anyone who knows about the water industry will agree, that is entirely counter-productive in the long run. Therefore, I am looking for some assurances from my hon. Friend the Minister. We must consider how we can begin to deal with the problems of the vicious cycle of boom and bust to ensure that the industry can invest over the longer term. It should not think in terms of shorter five-year periods, which is, dare I say it, a drop in the ocean when we consider the history of how we have provided for the supply of water.

We should consider how we can level out investment patterns to ensure that investment is not entirely dependent on the encouragement of the regulatory system; that we get proper operational efficiency within the idea of sustainability, which is where we link in with employee training and development; and that we make the best use of those assets. We will have situations where not just the supply chain but the industry itself will have surplus assets because they have worked so hard to get ahead of the game, but those will not necessarily be employed in the most purposeful way.

I rise to discuss Government new clause 22. As I have said in interventions, we all feel well disposed and warm towards the aim of more affordable water for people on lower incomes, but I find it difficult to welcome the way in which the Government propose to do that, as we need some indication of the detail that needs to follow to make this a sensible and workable scheme.

The best way to make water more affordable for those on low incomes and for those on any kind of income is to introduce competition and get the costs of producing the water down. I believe that it would probably cut the cost by about a fifth if we introduced comprehensive water competition and used the pipe network as a common carrier. It is easy to do. It has already been done in the case of gas and other fluids requiring access to pipelines. There is no natural monopoly in the provision of water, the collection of water or the delivery of water. If there is any monopoly element in the provision of pipes, it can be dealt with quite easily by a proper common-carrier regulated system.

However, those who are introducing the new clause need to give us more indication of how poor people have to be to qualify under it. It seems to be a cross-subsidy scheme. As the Minister has been gracious enough to accept, if the very poor are beneficiaries, everyone else could be losers. The Liberal Democrat spokesman suggests that it will not mean much of a loss for people on fairly low incomes because not many people would be helped by the scheme. That may be true.

I am sure that the right hon. Gentleman was listening carefully, but that is not what I said. I said that, because the subsidy was going to be spread across a very large number of people—in Thames Water’s proposed scheme, the suggestion is that 95 per cent. would be subsidising and only 5 per cent. benefiting, although that might be a bit niggardly—that would mean a terribly small increase for everyone else. That is what I meant—that the moderately poor would have hardly any increase at all.

I think that that is what I said in slightly different language. I said that not many people would benefit. The hon. Gentleman is saying that only a very small percentage of people would benefit. However, I think that he will find that quite a lot of people think that their water bills are too high. It is not just the people on the lowest 5 per cent. of incomes who think that their water bills are too high. I suspect that perhaps half the people think that their water bills are too high and a lot of them will be very disappointed, so we need to send the right signals if we are really talking about only 5 per cent.

While the hon. Gentleman is right that, on the numbers, the increase for the other 95 per cent. will not be huge, there will none the less be some increase for people who are clearly really quite poor as they are in the bottom 6 or 7 per cent. of the income scale—because, on the hon. Gentleman’s numbers, they will be excluded. We therefore need to have a better feel for the numbers before we can come to a fair conclusion on this; we need to know how big the increase will be, how many people will be paying it, and how many will benefit. I still think it would be much better to find a way of reducing the bills generally, as that would alleviate problems for the many people who find the water bill difficult to afford and feel that it has increased too much in recent years with no improvement in the service.

I also wish to make a few remarks on new clause 18, tabled by my Front-Bench colleagues. It may be sensible, but both the Government and Opposition Front-Bench teams need to help me a little by explaining what they mean by sustainable water management. It is one of those phrases that people trot out; they say, “Wouldn’t it be a good idea to have sustainable water management?” It is very difficult to say, “No, we don’t want that,” as nobody wants unsustainable water management, but we have to unpack this common jargon and explore what it means. If it means we are going to have some common sense on the provision of clean water in adequate quantities at all times of the year and in all years to my constituents, I would welcome that. If it means that the water companies will do rather better in handling the disposal of foul water than at present, which would also matter a great deal to my constituents, I would welcome that very much, too.

Let me offer one of quite a few possible examples of poor water service in my constituency from the main monopoly provider. There is an area of nice housing where there has been over-building on floodplain land. That has led to too much surface water, which the drainage system cannot handle, so the surface water rushes through the housing area, hits and knocks out the pumps that are meant to take the foul water safely underground, and the foul water then swells up from underground and mixes with the surface water already running around in this low-lying housing area. As a result, people have very unpleasant things coming into their drawing rooms and kitchens, and they then cannot live in their houses for the next year while they are being cleaned out, dried out, re-plastered and so forth. That is totally unsatisfactory in 2010 in the United Kingdom, which is meant to be a rich and caring country with lifestyles of a sensible level.

If having sustainable water management means stopping such things happening, and saying to companies that allow them to happen, “You have some responsibility and you need to come up with solutions more urgently out of your rather generous cash flows and large capital programmes,” I am all for having sustainable water management. I suspect that this is what a lot of Members would find that their constituents want. They want more than the sensible and fine words in these various new clauses; rather, they want to know that something will actually happen. That is why I say this could be a very good idea, and I welcome what my Front-Bench colleagues are trying to do, but it can work only if the Minister both agrees that it is a sensible idea and then puts the detailed provisions into the regulations, so that monopoly local providers are under an obligation to deal with the obvious offences that we see in the service they are delivering.

The water industry as a whole has all the characteristics of a monopoly provider. Were we to have three dry and hot summers in a row—oh, blessed memory, when we had such things—I am sure that we would run out of water very quickly and be told we had to kill all our plants in our nice gardens because we could not afford to water them any more. That should not happen. These companies should be able to handle such weather conditions. Above all, however, they should be able to handle conditions in which we have quite a bit of rainfall. This country has had a lot of rainfall over many years; we seem to be having a succession of wet and damp winters and summers at present. Companies should be made to organise things so that they are able to handle such eventualities, because if customers cannot switch to another company that will do the job properly, it is terribly important that there is a regulator in place that will take the necessary action. I therefore hope that if we are in favour of sustainable water management, that means we are in favour of tackling these problems vigorously and thereby reassuring my constituents that they will not be flooded in future.

I welcome the work that other Members have done in Committee and it is good to see the Bill back to complete its remaining stages so early, as that bodes well for its passing through the other place and into legislation. I particularly welcome the addition of clause 44, which fulfils the request made by a number of Members on Second Reading, including myself, for an examination of the debt issue. I shall move on swiftly, before I am told that this is not a Third Reading debate.

I welcome the product of another discussion in Committee—the one on social tariffs—and the work that the hon. Member for Cheltenham (Martin Horwood) has done, alongside Labour Members, in promoting new clause 22. I understand that new clause 22 is modest in its extent—it certainly is as far as fulfilling the Walker review and meeting the challenges in the south-west are concerned—but it is more welcome than the somewhat curmudgeonly comments made by Conservative Members. It gives clarity to something for which there is a great deal of pressure. Legislation needs to provide the regulator, at an early stage, with the ability to allow water undertakers to introduce some of the novel ways that they have been trying out, so as to ensure that there are methods that allow customers in vulnerable situations and those under great pressure in paying their water bills to get back into payment habits, to stop building up debt and to contribute at a level that is possible for them.

So I welcome the work done in Committee, but I wish to seek an assurance from the Minister because this provision is modest. If my understanding is correct, it is simply an intra-regional arrangement, rather than an inter-regional one such as would be needed to fulfil some of the recommendations of the Walker review. I hope that its welcome inclusion in the Bill in no way diminishes the Government’s commitment to examining the full range of measures that could assist in tackling affordability problems, which are nowhere more acute than in the south-west region, in which I live. The Walker report put on the record for the first time the fact that the extent of the under-investment in the region’s sewerage at the time of privatisation in the 1980s was £650 million. This new clause will in no way begin to address that. I thus seek an assurance from the Minister, because I was slightly apprehensive about his comment that it could be another two years before we have this opportunity again.

I welcome what the Minister said about the necessity for a review of Ofwat and its powers, and the way in which Walker envisages new charging and metering arrangements working would certainly bring that in its train. Indeed, I met the regulator earlier today to discuss how she is progressing with the Minister’s welcome request for her to proceed with the examination of those aspects of the Walker review and the options that it set out for addressing the pressing affordability problems in the south-west. I am more convinced than ever that we will need a range of regulatory and Government measures, and not just the narrow ones envisaged in new clause 22, to put right the 20-year pain that we have been experiencing.

I support the new clause, but I seek the Minister’s reassurance that it does not diminish the Government’s appetite for introducing further early proposals to implement other necessary aspects of the review.

I rise to speak in support of Government new clause 22, which will enable water companies to operate social tariffs with the aim of reducing charges for individuals who would find it difficult to pay in full. It will make it clear once and for all, beyond any doubt, that Ofwat will have such powers. We are familiar with this concept from the similar system of having reduced council tax charges for low-income households. Hon. Members will also remember that in pre-meter days, water rates were strongly linked to household rates, so we understand the concept that, in an unequal society, this is one way of helping those on the lowest incomes to receive commodities such as water. Likewise, there are measures in the Energy Bill to tackle fuel poverty.

I am very pleased that the Minister has been willing to listen to Members on this issue and to put this measure into the Bill. I know that things have been rather rushed and were done only just in time—after the Walker review came out, there were concerns as to whether the measure could be fitted in—but it is important to pass the measure, which mirrors measures in the Energy Bill and is similar to something that we already do with council tax.

The new clause states that the Minister “must issue guidance” that includes the

“factors to be taken into account”

when water companies draw up such schemes. The guidance will then go to Ofwat. I understand that for Wales, Welsh Assembly Government Ministers will draw up the guidance that Ofwat will use when dealing with water companies that operate wholly or mainly in Wales, such as Dwr Cymru, Welsh Water. Will the Minister confirm that that is the case? I would like to ask a further question on that. We know that Dwr Cymru is extremely proud of the fact that, this year, it managed to give back to every household a dividend of about £21. That was quite controversial because many households did not really notice the difference. The poorest households noticed because that is an enormous amount to them, but the most well-off households did not necessarily particularly notice it. There has been considerable criticism that the money could have been invested in improving the sewerage system in places such as Llanelli, or in working towards the adoption of sewers with which there have been major difficulties in the past for local communities who have had to pay continually for repairs. This issue is controversial, and I would like the Minister to tell us whether the guidance from Welsh Assembly Government Ministers to Ofwat could include guidance on how to deal with dividends, or whether this issue can be decided only in advance in relation to charges. That would be of interest to the water rate payers of Wales. I look forward to the Minister’s clarification of this issue. I strongly support the principle behind the new clause, and I very much look forward to its operation.

The debate has kicked us off very well indeed. As I expected, there has been a good debate on this part of the Bill. I shall try to deal in detail, but fairly rapidly, with some of the points that have been raised. I can give all hon. Members the assurances that they seek, including the right hon. Member for Wokingham (Mr. Redwood), who made a valid point about rushing ahead and whether we are pre-empting what might be the ideal. I think that I can give him the assurance he requires. I acknowledge that, as the hon. Member for Vale of York (Miss McIntosh) has commented, the measures on social tariffs have come late in the day, and I shall explain why. I hope that I can persuade her to join us on this matter and approach it in the same spirit that we have dealt with the rest of the Bill, because we have an opportunity here.

Let me deal first with the question of why now. The hon. Member for Cheltenham (Martin Horwood) talked about putting matters beyond doubt legally. That is the purpose of the measure, but this issue was specifically raised by Ofwat and others in our evidence sessions. In response to Committee members, they said that the impediment to moving on this matter was lack of clarity in the law. We knew that there was huge support for this approach in Committee, and my hon. Friend the Member for Stroud (Mr. Drew) was right to say that I am a listening Minister. It has been a struggle to bring forward a proposal in time, but I pay tribute to my Bill team, who worked very hard. They spoke to stakeholders outside the House to try to get this right, and I think that we have something good.

I do not want to legislate for the sake of it, but I believe that our proposals are broadly welcomed. To pick up the remarks from several hon. Members, including Labour Members, I should like to bring forward legislation rapidly when we return after the general election, if I am in a position to do so, and we have an opportunity in this debate to achieve a consensus on the matter.

Why are we including provisions on social tariffs and bad debts, and not other Walker review recommendations? The review was tasked with looking at a number of wide-ranging and complex issues, which meant that it was published later than we initially hoped. We are amending the Bill to include provisions to tackle bad debt and, because of concerns raised on Second Reading, we have also introduced this provision on social tariffs.

The social tariff measure was a firm recommendation in Anna Walker’s interim report, and her final report said that it should be a priority. This is a timely opportunity to include it because, as has been noted, we need to act soon to help customers who are already facing real hardship. However, other recommendations in Anna Walker’s report, and the Cave report that I mentioned previously, require a lot of further consideration. I assure the House that we will consult fully on them. Although it is still the Government’s intention to bring forward any new legislation that is needed, I should point out that not all the recommendations in Anna Walker’s report require legislation.

In response to the question about businesses, I want to make it clear that the present wording is quite deliberate. We have been working very hard and burning the midnight oil to get it right. As I have made clear, part of the mechanism is that water companies will consult their customer bases before any scheme is implemented. That consultation will have to cover the acceptability of any cross-subsidies, as our guidance will make clear. We will, of course, consult properly on that guidance in the first place.

The right hon. Member for Wokingham quite rightly had reservations about whether this provision should be brought forward now, but it is framed in such a way that it does not pre-empt Anna Walker, or the detail inherent in a proper consultation exercise. I am sure that he would support the idea that we should consult not only those who might benefit, but people who might be asked to carry the burden.

The Consumer Council for Water made its concerns clear, and we framed our approach accordingly. We are not setting out specific proposals now, but ensuring that we have the power to consult and bring in such proposals at an appropriate time.

Will the Government take note of the work done by CC Water, in the context of the water review, to assess the extent to which people will tolerate some form of cross-subsidy?

I assure my hon. Friend that we will take that work into account. The council has done a very good sensitivity analysis of the extent to which people are willing to bear some sort of burden.

There is one matter that I want to knock on the head. We had a very good debate in Westminster Hall the other day, when we discussed possibilities for dealing with the legacy issues in the south-west that arise from the original privatisation of the water companies. I said that the idea of a seasonal tariff was one of about six, seven or a dozen options, but it is not for me as a Minister to say that is the only one that we should take up. In fact, Anna Walker made it clear that a package of measures might need to be brought forward.

Contrary to speculation in the Western Morning News and other newspapers, I am not advocating any particular approach. We need a proper consultation with the wide consumer base before any measure is brought forward. No stealth tax is being imposed, and the fact that we are having this debate in full public view on the Floor of the House shows our desire to get the balance right.

I am very grateful to the Minister for being so helpful, but will he answer my query? Does the law as it stands place a duty on a water authority to deal with foul water that escapes and causes problems, or do we need to strengthen the law?

I shall return to that issue in a moment. I believe that such powers exist—not in this Bill, but under existing water industry legislation. However, I shall seek some inspiration to recall the exact Act.

I hope that the hon. Member for Cheltenham will accept my assurance that we are seriously minded to undertake an all-encompassing review of Ofwat. Rather than try to include or identify in the Bill some of the issues that might be needed on Ofwat, however, we should do such work properly, in the round, and look at how we meet all the different challenges.

The explicit assurance that I and the Scout Association were looking for, however, was on the exercise of the remit in respect of the concessionary charges scheme. We want an assurance that Ofwat will clearly see that it is responsible for ensuring that the scheme is fairly applied to community groups.

The hon. Gentleman gives me the opportunity to put on record how we see the proposals working. Ofwat would be responsible for scrutinising and approving all charges schemes, and for ensuring that schemes complied with its price limits, were not unduly preferential or discriminatory, had regard to Government guidance, and protected customers. The proposals would make it clear in law that companies could bring forward concessionary schemes for community groups in their charges schemes, and Government guidance to companies would set out how we think those concessionary schemes would work. In approving the charges schemes, Ofwat would ensure that companies had regard to that guidance, and we would not expect Ofwat to approve a charges scheme that did not follow that guidance.

It is not for the Government to tell individual companies how to structure their scheme for charges. Severn Trent is working very well, because it has come up with a scheme that responds to its local, wide-ranging customer base. If a Minister did that work, they would create not least some market uncertainty, which could ultimately push up prices. Severn Trent has run a successful concessionary scheme. Yorkshire Water has also already set fair and affordable area-based surface water drainage charges for its non-domestic customers, so in such cases it might not be necessary to introduce concessionary schemes. However, if companies are allowed such flexibility, they will be able to reflect the circumstances in their area.

Let me make it clear that we will expect all companies that move to area-based charges, of which there are currently only four, to assess whether a concessionary scheme is necessary for their customers, and to ensure that community groups do not face unaffordable surface water drainage charges. Government guidance will make that clear, and I am sure that the hon. Gentleman will provide some input.

Companies will decide which community groups are included in their concessionary schemes, although we have published draft guidance; the Government will provide guidance on the types of organisation that should benefit, and examples of best practice. I think that we got it right with the draft guidance that we supplied to the Public Bill Committee on its opening day on 7 January. The Chairman referred to the package of documents on the desk in the Committee Room. We expect companies to decide to which groups to grant the concession by assessing the benefit to the community, consulting their customers and undertaking an impact assessment. That will ensure that all such schemes are fair for all customers. The absolute assurance is that concessionary schemes will not be brought forward where there are issues of unaffordability for community groups, scouts, churches and so on.

I hope that the House will forgive my pressing this point. In fact, just for once, it is not the ministerial guidance that we, and the Scout Association, are worried about. The concern is whether Ofwat’s remit will still conflict with this issue, and about the fact that Ofwat is not mentioned in the new clause. As long as the Minister can give the assurance that Ofwat will see it as its role to support the implementation of these schemes, we can all relax and attend our scout events.

The answer is a straightforward yes.

I was pleased to have a very productive meeting with my hon. Friend the Member for Stroud and members from Unison. I also met friends from the GMB with my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) and led a delegation with my right hon. Friend the Member for Makerfield (Mr. McCartney). We dealt with issues to do with skills within the utility sector and throughout the water sector.

One of the problems with the water sector is that it is fragmented in comparison with the energy sector, for example, so there is a good role for somebody in bringing people together. That is why I want to seek a meeting with my hon. Friend the Minister for Further Education, Skills, Apprenticeships and Consumer Affairs to talk about how we can lend our weight to trying to get an all-encompassing approach, right down the supply chain and across the industry, so that companies do not have to struggle with a more piecemeal and short-term approach to skills development. EU Skills has been working with members of Water UK to develop a detailed and comprehensive work force planning tool. The key skills issue for the sector is the ageing work force; 11 per cent. are due to retire in the current regulated period, and increasing numbers in subsequent regulatory periods. We all have a role to play, and I will certainly play mine.

My hon. Friend the Member for Stroud talked about the price review and about trying to flatten out some of the decisions on investment and, linked to that, skills and training. For the first time ever, we have the five-year PR09 in the context of a 25-year strategic direction statement to consider the long term as well. DEFRA and Treasury Ministers have encouraged companies to bring forward their expenditure early in the PR09 process, where that is in the interests of customers, in order to flatten out the traditional wave shape that we have sometimes seen. Let us not forget that PR09 allows for more than £22 billion of expenditure to 2015; that is good for jobs and leads to a need for skilled workers.

In his introductory remarks, the right hon. Member for Wokingham expressed support for competition in the water industry to drive prices down. Many issues arise in a purely competitive approach. First, we are in a devolved situation. The right hon. Gentleman is a former Wales Office Minister, as I am, and he will know that Welsh Assembly Government Ministers have a key role to play, as does Welsh Water—Dwr Cymru—which has a somewhat different structure from other such companies. Although it is not without flaw, it is generally perceived in Wales to be a good model of a mutual approach towards water utility provision.

The right hon. Gentleman also talked about the transfer of water. That is not an unfeasible engineering solution, but we need to take into account the carbon impact if long distances are involved. As he rightly said, sustainable water management, among other things, might well be a good idea, but let us do it within the review of the full role of Ofwat.

To pick up the right hon. Gentleman’s earlier point, I have had inspiration on where provision already exists on undertakers. Section 94 of the Water Industry Act 1991 requires undertakers to drain their areas appropriately, and Ofwat is required to ensure that they are able to fulfil those functions. There is also public health legislation and nuisance legislation, both of which would be relevant to powers to prevent and redress instances of local foul sewage pollution. Having been on the receiving end of overflowing sewers, as I said in Committee, I have a great deal of sympathy with that issue.

I turn to the comments of my hon. Friend the Member for Plymouth, Sutton. First, I welcome her work and that of other hon. Members in lobbying on the whole range of issues raised by Cave and Walker, in the south-west and more broadly. I hope that an additional Bill can be brought forward very soon, but we need to take this opportunity to act as well. We have made it clear that we will consult fully on Walker, but we have also already asked Ofwat to examine the recommendations in the report, not least in relation to the south-west, and to advise Ministers accordingly.

I look forward to a rescheduled meeting with the Prime Minister soon, with my hon. Friend and other colleagues. As she rightly said, we need to find a solution to the problem in the south-west. Anna Walker has given us some useful signposts and pointed squarely to where the problem arose. It could have been sorted right at the beginning. My hon. Friend mentioned the long-term impact, and the 25-year long-term planning approach that we now have is a useful way forward.

My hon. Friend the Member for Llanelli (Nia Griffith), alongside other Welsh colleagues, has been assiduous in lobbying to ensure that many of the measures in the Bill are also applied in Wales. I can confirm that Welsh Assembly Government Ministers will produce the draft guidance there. I hear once again her support for the transfer of private sewers, which is an issue that affects all of us in Wales. The Welsh Assembly Government have taken it forward in a slightly different way from that used in England, as we would expect, but as Welsh MPs we all have a role to play in getting involved in the process and ensuring that our constituents who are the most affected are the first to receive transfer where possible.

The only matter on which I will disappoint my hon. Friend is that of whether the guidance can specify how dividends should be shared out. Dividends are a matter for each company, but of course Ofwat, in its overall regulatory role, takes account of the water companies’ ability to fulfil their functions within the price-setting mechanism. Within the guidance under the Bill, however, dividends are a matter for the companies.

In considering how that framework will work, will the Minister also continue to consider how companies can transfer money within wider groups that they are part of? That is significant in some areas. It is not just about dividends for shareholders but about how funds are moved around within groups.

That is a valid point, and it is one thing that we will want to examine in considering the role of Ofwat.

I hope that I have provided the necessary assurances. We are not pre-empting Walker, we are putting a mechanism in place so that we can deliver for the people who are hardest hit by affordability problems. We have already provided for what is set out in several of the amendments, and I have made clear my commitment to a full and comprehensive review of the regulator. That is not to say that its current role is remiss, but we recognise that the challenges that it faces now are significantly different from those at the time of privatisation.

Question put and agreed to.

New clause 22 accordingly read a Second time, and added to the Bill.

New Clause 2

Regular maintenance of water courses

‘The Environment Agency must undertake a programme of regular maintenance work of major water courses on an annual basis with quarterly reports to both Houses of Parliament.’.—(Miss McIntosh.)

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

With this it will be convenient to discuss the following: new clause 9—Staffing and resources for the Environment Agency—

‘(1) The Secretary of State must make an assessment of the staff, equipment and resources required by the Environment Agency to implement the provisions of the Act in accordance with the lessons learnt from the floods of 2007.’.

New clause 20—The role of Fire and Rescue Authorities during major flooding—

‘(1) A fire and rescue authority must make provision for the purpose of rescuing people and protecting them from serious harm in the event of major flooding in its area.

(2) In making the provision required by subsection (1), a fire and rescue authority must—

(a) secure the provision of such personnel, services and training as may be necessary efficiently to meet all reasonable requirements;

(b) make arrangements for dealing with calls for help;

(c) make arrangements for obtaining necessary information; and

(d) make arrangements for ensuring that reasonable steps are taken to prevent or limit damage to property resulting from action taken pursuant to such provision.

(3) Where—

(a) a fire and rescue authority maintains specialist resources (“the first authority”);

(b) major flooding has occurred or is likely to occur in the area of another fire and rescue authority (“the second authority”); and