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Water Industry (Financial Assistance) Bill

Volume 541: debated on Tuesday 6 March 2012

Second Reading

Debate resumed.

Question (29 February) again proposed, That the Bill be now read a Second time.

Thank you, Mr Speaker, for calling me back to the crease to continue my batting, in the same way as a nightwatchman who has been put in half an hour before stumps being drawn is asked to come back and play again. Unlike the nightwatchman, I do not expect to occupy the crease until lunchtime, but I hope to score a few runs and make a few points.

A BBC producer reminded me over the weekend that at the outbreak of the second world war, the BBC was showing a cartoon. It stopped it bang in the middle, and then five years later, picked it up from exactly the same point so that people could carry on watching it. I do not suggest for one moment that you, Mr Speaker, or anybody else will necessarily remember what I was saying in the final two minutes of last Wednesday’s debate, although I have no doubt that some Members will have ensured that they have a copy of Hansard in front of them. I will, if I may, take this opportunity to remind everybody of where I got to.

I thanked Ministers for ensuring that the south-west would receive the £50 cut in water bills, and I recognised that the previous Government had done a significant amount of background research to ensure that that could be delivered. I also mentioned, however, that it was the current Government who had had the political strength to deliver it. I suspect that one reason for that was the lack of political commitment or pressure needed to deliver the cut, given that there were only three Labour Members of Parliament in the whole of Devon and Cornwall up to 2005. Members of Parliament from other regions of the UK were putting greater pressure on the Government to deliver projects that they wanted.

I added on Wednesday that until 1997 St Peter’s ward in my constituency was one of the most deprived in the whole country. I therefore argued that the challenge facing that community, where there has been significant regeneration and demographic change, remains as great as ever.

I also remember my hon. Friend the Minister telling the House that the bad water debt added an extra £15 to all our bills throughout the country. The £50 is very welcome, but I was disappointed to hear that there is likely to be a 4% increase in this year’s water rates bill, which is an estimated £24, or nearly half that £50.

I understand that South West Water is expected to meet EU regulations by investing in water infrastructure, and by improving the quality of our drinking water and beaches. However, we have 30% of the coastline and 3% of the population. Communities such as those in the Devon, Cornwall and Somerset peninsula are expected to make a significantly greater contribution to the local environment compared with other parts of the country.

South West Water, like other companies, has a monopoly on the supply of water. Ofwat—its regulator—oversees the economics and the quality of the environment, but we need to widen its remit so there is more competition in the delivery of water. In addition, we need to ensure that there is greater connectivity between neighbouring regions, so that water assets can be transferred to parts of the country where there is a greater demand. It beggars belief that we were told in February that parts of the country will be subject to hosepipe bans because we have failed as a country in the past 20 years to invest in reservoirs and other infrastructure.

To deliver that greater connectivity so that we can deliver water from one part of the country to another, we should make much more of our network of canals and waterways, another achievement of that great Victorian era, which was the basis of our industrial revolution.

I wholeheartedly agree with the hon. Gentleman on the use of the network of canals. This is niche legislation pertaining mainly to England, but I hope those views are extended to include our network of canals in Northern Ireland.

It is fair to say that the Bill affects a specific part of England, and it would not be appropriate for me to start advising the Northern Ireland Assembly what it should and should not do, so I shall continue—I do not have far to go, and no doubt the hon. Gentleman can make his contribution on that later.

I am arguing that to deliver that connectivity, there should be greater use of canals and waterways. I very much welcome the £50 off the water rates, and I am grateful to my hon. Friend the Minister for providing it, but I hope it will be a temporary solution and that the Government make the cut more sustainable by creating greater competition within the market; reforming Ofwat, so that it has a greater role in delivering that competition; making greater use of our canal system and waterways to move water between regions; and explaining how we can reduce the bad debt element of water rates.

I hope that in providing those answers, we can ensure that we stop pushing water uphill and that we have affordable water bills.

I am pleased to be able to speak in this debate. I am not against support for water customers in the south-west, and I absolutely agree that it is unacceptable in 2012 for the Thames—the major river in our capital city—regularly to be flooded with sewage. However, it is also not acceptable in 2012 that hard-working people in my constituency are having to beg for food, or that they are spending more than 5% of their income on water bills. My constituents cannot wait for a further water Bill to address the affordability of water: they need action to help them with their bills and action on social tariffs.

In the north-west of England, the affordability of water is based on deprivation rather than on historical or geographical issues. The bills of United Utilities Water—my local water company—are close to the national average, but income deprivation is worse than in any other region. More than half the country’s most deprived communities are in the north-west, even though we have only 13% of England’s population. Based on Ofwat’s analysis, once households in South West Water’s region receive their proposed £50 bill reduction, affordability problems will be more severe in the north-west than in the south-west. Company social tariffs will not solve the problem. Too many customers in the north-west are in financial need to make in-house cross-subsidy work. It therefore needs a national social tariff scheme that all water companies will pay into. The Government’s hands-off approach, leaving it to water companies to devise their own affordability scheme and even giving them the choice whether to provide one, definitely will not help those people most in need in Bolton West.

There is no definition of water poverty. Households needing to spend more than 10% of their net income on heating and lighting are deemed to be in fuel poverty, but there is no equivalent definition for water. It seems to me, however, that if someone has to pay 5%, or even 3%, of their income on their water bill, they are pretty poor. Some 840,000 households in the north-west are spending 3% of their income on water, and 370,000 households are spending more than 5% of their net income. It is no surprise then—absolutely shocking, but no surprise—that 4,890 tenants of Bolton at Home are in debt, and that 1,462 of them owe between £1,000 and £2,000. This debt is of concern to all of us and adds £15 a year to everyone’s bill.

We need to recognise that some people simply cannot afford to pay their bills. I was told last Wednesday about a 70-year-old lady in Bolton who has just been rehoused in a Bolton at Home house. She had to move out of her last rented home because she could not afford to pay the heating costs. She has had to ask Bolton at Home for a furnished property because she cannot afford to buy her own bed, cooker, carpets or armchair—a furnished property at the age of 70 when she should be able to enjoy her life surrounded by her own belongings. Before she retired she was a care worker, but was never offered a pension scheme and was never able to save for her old age. She is now trying to live off £134 per week for her gas, electricity, water, food, clothing and all her other needs, and her water bill is about to go up by nearly 5%. Such people need help not greater debts.

United Utilities is a good water company and offers financial assistance schemes. It has a trust fund that will make grants to customers in genuine financial difficulty. That can clear outstanding water arrears, which is great, but does not help people to find the money on an ongoing basis to pay their bills. I am also told by Bolton citizens advice bureau that the fund often runs out of money before the end of the financial year, that it rarely assists people who cannot afford to pay the current year’s instalments, and it will refuse a grant if it does not think that the customer has a good enough reason for falling into arrears in the first place.

United Utilities also has an arrears allowance scheme that reduces the balance by £1 for every £1 paid by the customer. Again, however, the customer has to be able to pay the ongoing charges, and if they miss just one payment, they are thrown out of the scheme and will not be readmitted. There are also 5,200 United Utilities customers on the WaterSure scheme, which is for those who have medical or other needs that mean they have high water usage, but that simply caps their bill at the average household bill. United Utilities is also running a feasibility study on a support tariff. However, none of this solves the fundamental problem that some people do not have a big enough income to pay their water bills.

Unlike for other services, my constituents cannot shop around for a better deal. They can buy their water only from United Utilities. These private firms are monopolies, and frankly it is not enough just to expect them to be philanthropists. United Utilities is telling me that company social tariffs will not work for the north-west. We therefore need national action on social tariffs. Water companies can apply to have money deducted directly from benefits, but Bolton citizens advice bureau tells me that its money advice staff are deeply frustrated by that. Of course, we all believe that people should pay off all their debts, but when a person reaches a crisis of debt, priorities have to be made. There is no point paying off a water bill if the person is evicted from their home; the water bill is not a priority if they have no electricity in the house; and the water bill is not a priority is there is no food to feed the children. If a person is on limited income, the advice from all professionals is to manage priority debts. Only when homes are saved or prosecutions avoided are other debts dealt with. As there can be only a limited number of attachments to benefits, it can be harmful if one of them is for water bills.

Finally, water debt is just part of the problem facing so many low-paid people. It is 2012, and we have poor people dependent on food handouts. We have poor people losing their homes, poor people unable to heat their homes, poor people unable to pay their water bills—in fact, poor people paying the price for global economic failure. The Secretary of State should take action now on water poverty. I urge her to do so.

Let me begin by welcoming this Bill. We all know the historical causes of high water bills in the south-west. They go right back to the time of privatisation, when insufficient account was taken of the lack of sewerage infrastructure and the pressure that this would put on companies such as South West Water to provide such infrastructure in the future. In Cornwall and the south-west, we also have just 3% of the country’s population looking after some 33% of the coast.

I have always argued that we have spent way too long in recent years talking about the problems and not enough time talking about the solution. I am delighted that we now have a solution to the unfairness of high water bills in the south-west, through the measure in this Bill to deliver a £50 discount on all household bills. I pay credit to the Minister for all the work that he has done to make that a reality. He has managed to deliver a policy where the previous Government were unable to do so. I remember talking to Labour candidates even at the last general election who said that although there was a problem, nothing could really be done about it. We have proved that something can be done, and where there is the political will, there is a way. I hope that the Minister does not feel that Devon and Cornwall MPs have lobbied him too ferociously on this issue. I feel there were times when he saw a Devon or Cornwall MP approaching him that his face dropped somewhat, as he knew the subject that was up for discussion. I hope that has not put him off the counties of Devon and Cornwall, because this move is very much welcomed by everybody there.

There has been some discussion about whether the £50 rebate is enough. However, it is important to remember where we were just a year ago. There was not going to be a Government-funded discount; in fact, the discussion at that time was very much about what might be achievable through a national social tariff. That would effectively mean having a pot of money funded by all the water companies, at the expense of water bill payers across the country, with resources allocated on the basis of affordability. That would have disproportionately helped those in the south-west—it would have helped some in other parts of the country as well—but it would have been paid for by water bill payers across the country. The decision that the Government have finally come up with—to find public money to fund the discount, so that it does not cost water bill payers elsewhere in the country money—is a sensible solution. Importantly, it separates the historical unfairness of high water bills in the south-west from affordability, which it seeks to address through the company social tariff. That is the right approach, and we should welcome it. We in the south-west should not look a gift horse in the mouth and say, “This isn’t enough,” because I think that £50 is a significant discount, which we should all welcome.

I would like to pick up on what my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) said about the projected rise in water bills from South West Water. This is an issue, because with the Government having done their bit and finding some money to create a genuine discount for people in the south-west, it would be a dreadful state of affairs if it was all swallowed up by water bills in the south-west being increased anyway. As my hon. Friend said, that could take up around half the discount. However, the Government have done their bit and found the money; we now need South West Water to do its bit by showing restraint in the bills it issues and by developing the social tariff. Most importantly, we need Ofwat to do its bit. I very much hope that the Minister—if he can do one last thing—will hold its feet to the fire, and keep the pressure on Ofwat to ensure that it keeps those bills under control.

Finally, I want to touch on how we might create downward pressure on water bills in the longer term. I am encouraged by what I have seen on that issue in the remainder of the White Paper, which deals with the development of proper competition on the retail side, particularly in the business sector. Businesses will not benefit from the £50 discount, but if we can increase competition at the retail end, we should be able to achieve downward pressure on their bills. I welcome these proposals.

In London, there is a real need for improvement to the sewerage system. The present network of major sewers was designed for a 19th century city. London’s population is now 7.6 million, but it is projected to rise to 8.3 million by 2021 and to 8.8 million by 2031. It will then have doubled since the major sewers were built. It is remarkable that the system has managed so well for so long, and is a tribute to Bazalgette and the others who designed and built it. It is, however, clearly inadequate, and has been so for some time.

The present system consists of combined sewers, which convey foul sewage and rainwater run-off to the sewage treatment works before they are discharged. When the combined sewers reach capacity, the combined sewer overflows—CSOs—are designed to discharge excess untreated waste water into the River Thames. This avoids overflows and back-ups through manholes and into individual properties, but it means that as soon as the hydraulic capacity of the sewage treatment works is exceeded, sewage is pumped directly into the Thames. In fact, some parts of London, including my constituency, also have a problem with sewage back-up, and the Counters Creek relief scheme that Thames Water is seeking to implement will bring an end to that appalling problem, which has affected thousands of my constituents over the past few years. It happened three times in four years during the latter part of the last decade. I welcome the implementation of the Counters Creek relief scheme—a major scheme across west London—but the result will be even more sewage going into the Thames. The river will continue to bear the brunt.

Discharges can occur following as little as 2 mm of rain; they happen approximately 60 times a year. The Thames is tidal between Hammersmith and Beckton, and when CSOs discharge, the resulting sewage and litter flows up and down the river with the tide. In winter, it takes about a month for non-biodegradable waste to get from the head of the estuary at Teddington to the sea. In summer, when water levels are lower, it can take up to three months. It is in summer that we get the worst response and the worst smells.

In future, sewage might flow into the Thames even on dry days unless the situation is managed. In any typical year, 39 million cubic metres of untreated waste water—a mixture of sewage and rainwater—are discharged. The frequency and volume of untreated waste water entering the tidal reaches of the Thames have increased, and will only increase further. This level of waste entering the environment is not tolerated anywhere else in the UK, and it should not be flowing into the main river of our capital city. Something clearly needs to be done.

The discharges affect the river in several ways. First, polluted water increases health risks to recreational users of the Thames, whose numbers I am pleased to say are increasing year on year. Secondly, the aesthetic impact of CSO discharges is offensive. Materials such as faeces, toilet paper, wipes, sanitary products and other “flushable” items, including hypodermic needles, regularly end up in the Thames at Hammersmith. All of this causes slicks of pollution to float on the river before being washed up on the foreshore. Thirdly, sewage discharges harm the ecology of the river by reducing dissolved oxygen levels in the water. In extreme events, this can result in the death of fish and other wildlife, often in large numbers. There are therefore strong environmental, health and economic cases for the Thames tunnel.

The Thames tunnel will work with the existing system of sewers, with improved sewage treatment works and with the Lee tunnel to reduce the frequency of CSO discharges. This Government and the previous one have conducted serious studies of the issues behind the tunnel. Investigations have been carried out by the Department for Environment, Food and Rural Affairs and by independent bodies, resulting in the 2007 regulatory impact assessment, the Thames tunnel needs report, and DEFRA’s 2011 strategic and economic case for the Thames tunnel. They all conclude that the tunnel is the most comprehensive solution available at the most proportionate cost.

A number of alternatives have been suggested. The first is that we have a system to mitigate and reduce the dissolved oxygen levels in the Thames. This involves using the so-called Thames Bubbler oxygenation craft, as well as hydrogen peroxide dosing. This has helped with fish mortality in some places, but it is not sustainable; neither is it a complete solution and neither will it work in a tidal river.

The hon. Gentleman is making an eloquent speech. Does he agree that the Bubbler and the sustainable drainage system will not remove things like heavy metals, pesticides and all the other contaminants that go into the river through the CSO system he describes?

That is absolutely right; it is a sticking plaster approach. I have reservations about the tunnel, which I shall come on to, but I am making the case that the tunnel is the only sensible solution thought of so far because many alternatives have been put forward but they are simply not sustainable.

SUDS—sustainable drainage systems—are one alternative. There is nothing wrong with them. They reduce the amount of surface run-off blowing into the sewerage system and complement other measures. However, the Government policy statement makes it clear that to prevent rain water and run-off entering sewerage systems completely will require either a new system designed to meet the principles of SUDS and source control or a completely new conventional separate water system, which would be disproportionately expensive. Although it can be installed effectively in new developments, trying to retrofit all London’s properties to the required level is simply impractical. It is impractical, too, to create extra capacity in the existing sewerage system. Existing sewers cannot be enlarged or duplicated because the system is so large and complex and has so many cross-connections that most of the network would need to be enlarged to prevent CSOs from discharging.

The Government’s report says that substantial duplication and enlargement to most of the sewers would entail massive construction work throughout inner London, enormous disruption and extremely high costs. Converting a combined drainage system into a separate drainage system would involve the provision of a completely new network of sewers approximately 12,000 km in length. Every existing property would require connecting to the new system and the cost and disruption would be high and might lead to a large number of misconnections, which could create a legacy of problems.

Any of those alternatives, if they were sustainable, would cost many times the cost of the tunnel—whether it be a SUD system or a separate rain water and sewerage system. What the opponents of the tunnel have been left with—I am sorry to see that the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) appears to have joined them—is the idea of a shorter tunnel. This is a tunnel that would cover just west London—the so-called Selborne tunnel, named after the author of the report sponsored by Hammersmith and Fulham council.

The shorter tunnel has none of the advantages of the longer tunnel and brings many more problems. It would effectively mean sewage stuck in the shorter tunnel for up to two weeks at a time while it became septic and could go nowhere—clearly it can flow only through the existing network of sewers in east London as capacity becomes available there. It would also require far more storage on land in west London. Thames Water’s response to the Selborne report—I have no brief for Thames Water—was quite devastating, pointing out its follies and fallacies. Indeed, if we read the Selborne report, we find that it does not talk about the shorter tunnel because it was realised that it was not a workable proposition. It would cover only half of the CSOs in London—that is, it would do only half the job. East of Battersea, sewage would continue to go into the Thames; west of Battersea, including in my constituency, the tunnel would regularly be full of sewage, with all the attendant problems of smell and disease that that can cause.

Does the hon. Gentleman agree that our aim is to address some of the environmental problems of the river apart from the death of the fish on which so many people seem to focus, and that because the shorter tunnel would not comply with the urban waste water directive, the whole exercise would be pointless?

The whole exercise has been a PR exercise, a sham and a spoiler. Those who have supported, or are supporting, the shorter tunnel have no credibility when it comes to resolving environmental and other problems. By all means let people criticise the Thames tunnel on its merits, but let them not propose this chimera as an alternative.

As a Hammersmith Member of Parliament, I have had to deal with all the propaganda and misleading statements that have appeared over the past five years under the auspices of Hammersmith and Fulham council. In fact, there is a huge amount of consensus about what needs to be done, and, to a large extent, about the solution, at least in principle. It is agreed that we must resolve the problems of sewers flooding the Thames, and that a tunnel is the best way to do that. We can argue about the route and about the cost, but both this and the last Government, mayoral candidates, most local authorities and most London Members of Parliament of all parties are of one mind, and it is not helpful to suggest otherwise.

Let me summarise the recent history of the campaign against the tunnel in Hammersmith. It began because this was an EU scheme: it began as an anti-EU campaign. Then it was claimed that it would despoil all the local parks—such as Ravenscourt park, which is about half a mile from the Thames—or that Furnival gardens would be dug up, which was never the intention. There were also false claims that housing estates would be demolished to make way for the tunnel portals. None of that has helped to identify the reasons for what is being done.

I sympathise with individual residents’ groups who are concerned about what is happening in their immediate areas. My constituency contains at least two of the sites involved. The Acton sewage tanks are on the very border of my constituency, and I hope that the fact that the tunnel will begin at that point will mean an improvement, because tanks that often cause problems of smell and are unsightly will no longer be needed. The other site is the Hammersmith pumping station. I have had the pleasure of going down into it—as have the hon. Member for Hendon (Mr Offord) and many others—to see the appalling conditions that exist when raw sewage is pumped into the Thames. At that site, the necessary building work will be contained within the parameters of Thames Water’s own development area. Of course we should be concerned about the disruption caused by building work, and should encourage Thames Water to use the river wherever possible to take spoil away, but, as far as I can see, Thames Water is working quite closely with local authorities and others, when that is allowed, to ensure that that disruption is minimised. It will clearly be necessary to keep an eye on the situation.

The one issue that is of concern in Hammersmith and Fulham is what is going to be the main drive shaft of the tunnel, which was to have been at Barn Elms in the constituency of the hon. Member for Richmond Park (Zac Goldsmith) but will now be in south Fulham, in the constituency of the hon. Member for Chelsea and Fulham (Greg Hands). I feel for the residents of Fulham if disruptive work is to take place there, but much of the blame for that must lie with the local authority, which, by running an extraordinarily outrageous campaign against the tunnel on principle and on entirely false premises, has failed to engage with Thames Water other than to try to take it to court to prevent it from proceeding with the project at all. By contrast, the hon. Member for Richmond Park and other London local authorities have played a blinder in negotiating with Thames Water, pointing out the problems involved in development in one area or another. It seems that the people in Hammersmith and Fulham will have to put up with the main drive shaft because of the incompetence of their own local authority.

I find it strange that the main defence put up by Hammersmith is that 95% of what is going into the river at present is water, and only 5% is sewage. Raw sewage is, by definition, a mixture of water and other products. I am not sure that that quite answers the question of how we are to have a sustainable River Thames in the future. I was fascinated by the following statement by the hon. Member for Chelsea and Fulham in his explanation of why he is opposed to the tunnel:

“Anglers, rowers and sailors will experience personal benefits from the tunnel”.

Never before have I heard not having to swallow human excrement proposed as a personal benefit. There is a complete lack of reality about what is actually happening. At present, people who walk along the Thames towpath see raw sewage floating in the river on a regular, weekly basis. That is a disgrace to London, our capital city, and something must be done about it.

We must keep a careful eye on both where Thames Water is intending to build and the cost of this project. It is true that costs have escalated over time. Both Front-Bench teams have made the point that Thames Water’s bills are the lowest in the country, and even after the anticipated additional cost of the tunnel, its bills will be near or below the national average water bill. Although that is true, it is no great comfort to those of my constituents on low incomes who will have to pay the additional cost. Because there is a clear and overwhelming need for the alleviation of sewer flooding, the attitude to this issue of both Thames Water and the Government has been somewhat blasé.

Ironically, the Bill contains provisions for both the construction of the tunnel and subsidies in respect of excessive water bills. I am not suggesting that that may be required in the London area at present, but we must be aware that there are many very poor people in my constituency and across London who find it difficult to pay their water bills in addition to everything else. I would like either the Government or Ofwat to conduct a more critical analysis of Thames Water’s plans and the costs. We did that in respect of Crossrail, which is another major civil engineering project in London, to try to keep down, or drive down, costs, and I believe we should do the same for the Thames tunnel. It is not good enough simply to say that there are social tariffs and that the bills will be no higher than the national average. People are being asked to pay substantially extra on top of bills they may already be struggling to pay.

I am grateful for the House finding additional time to debate this issue, which is vital for London. There are only a handful of opponents, including those representing Hammersmith and Fulham. It is extraordinary that they do not have a response to what is a national embarrassment and a health hazard, and something that we can no longer sustain in London—a river that is getting back to the state it was in in the 19th century, when the Bazalgette scheme was necessary. Whenever we discuss projects such as HS2, Crossrail and the Thames tunnel, I am always ashamed that there seems to be a reluctance to undertake great civil engineering projects, in which this country led the world in the 19th century.

I hope that there is a solution, and I suspect that it is the Thames tunnel project. In going forward with it, the Government must consider the sensitivities of the various local areas and the cost.

Clearly, I am delighted that the Bill has been introduced. I would have liked to have seen it some time ago and I am very pleased that the coalition Government have responded to the call from people in the south-west for a measure of support towards the incredibly high costs that they pay for their water—or, more accurately, for the disposal of their sewage, as that is what we are talking about. We talk about water bills, and as a generic term I suppose that is fair enough, but in reality we are talking about the cost of dealing with sewage. As we heard from the hon. Member for Hammersmith (Mr Slaughter), that is clearly an issue in other parts of the country, too. This is very much a Bill of two parts and I shall not seek to comment on the question of what is required in London, other than to say that I sympathise with London MPs who see the costs that their constituents will pay in the future. Whatever scheme we use, and, clearly, the hon. Gentleman thinks that this is the right scheme, there will be greater costs for their water—or sewage—bill payers. From a south-west perceptive—that is, from a Cornish and Devonian perspective—people have been paying these bills for a long time, as we have heard. They are not worried about the future; they have been dealing with this problem since privatisation and, as we have heard, it goes back to the way in which the water industry was privatised.

My speech is somewhat timely. I shall not seek to comment in detail on the inquest that has just reopened in Taunton, but we need to remember just how controversial the process of privatisation and how it was undertaken were. The water poisoning incident at Lowermoor in my constituency still concerns people today and I shall follow with interest the outcome of the inquest into the death of Mrs Cross and the question of whether information was withheld from people as privatisation was introduced.

On the broader, rather than the narrow, point, may I say that those of us with London seats do not try to make the case that our bills are as high as those for people in the south-west and have always argued for a better deal for them? Any argument about the Bill, for us, concerns part 2 and the terms and conditions under which the Government might support Thames Water with any funding for big projects.

My right hon. Friend is absolutely right. The Bill offers opportunities for other parts of the country in that if the Secretary of State felt subsequently that measures should be put in place to look after the interests of water bill payers—or sewage bill payers—in other regions, the Bill would allow them to do that. That is very welcome to all parties.

Let me return to my point about privatisation in the south-west. I do not have the figures to hand about whether much of a receipt was realised at the time, but, clearly, the liabilities companies were being asked to take on were quite high. I suspect that some income was coming into the Treasury at the time of privatisation and a small “green dowry”, as it was called, was provided to the south-west to deal with the recognised cost of clearing up the woeful underinvestment in sewage treatment around a very long peninsula. If a fairer assessment of the real picture had been undertaken at that time, bill payers in the south-west could have been spared a great deal of hardship. It is worth putting on the record that more account could have been taken of the situation at the time. Rather than everything being rushed through, there could have been a better deal at that point that more fairly reflected the burden being placed on my constituents and those of other hon. Members in Devon and Cornwall.

Members from other parts of the country have said to me, “Well, you live in that wonderful part of the world and have that coastline. You enjoy it, so you’ve got to pay for it.” They should try saying that to a young person living with their family in the ward in which I live and in which I spent the early part of my life, St Mary’s ward in Bodmin, which is one of the most deprived wards in the south-west. I would venture to suggest that a young person growing up in that ward might well spend far less time on the beaches of Cornwall than people from other constituencies who come down and visit, or than those who are fortunate enough to own a second home in my constituency that is very close to the beach. My hon. Friend the Member for St Ives (Andrew George) has already discussed the costs sometimes involved in connecting water and sewerage systems to isolated and remote properties, which may be unoccupied and have low water bills because they are on meters. Those costs are borne by people living inland, on the peninsula, who probably do not get the benefit of going to the coast very often.

Actually, I rose to talk not about people in Plymouth but about the additional costs that the water company has had to bear of placing pumping stations in places that will not spoil tourists’ views of a harbour or a beach. That is certainly the case in some places in Cornwall. People do not see those costs but South West Water bill payers have been burdened with them.

The hon. Lady makes an excellent point, and we can set that against the background of what others have said in this debate and in our previous debate on this. People in our part of the world have low incomes and comparatively high housing costs—not as high as those of constituents here in London, but much higher than in the north-west or the north-east. When combined with a low income, those costs are a significant pressure on people’s spending power.

I am delighted that the coalition Government have recognised that this problem needs to be dealt with, but it is not easy. The previous Government looked at the issue for some time and I pay tribute to those who have previously campaigned on this, including many Members who are still in the House. Members from my party and some Conservative Members, as well as Linda Gilroy, who was very useful to have involved, along with the hon. Member for Plymouth, Moor View (Alison Seabeck) and the right hon. Member for Exeter (Mr Bradshaw), all helped to put pressure on the then Labour Government to take action. We got as far as getting the Walker review, so I suppose we should be grateful for that.

Before the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile) leaves the Chamber—oh no, he has gone—I wanted to draw attention to something he said earlier about the problem being partly due to the fact that there were only three Labour MPs in the south-west. Clearly, it is about quality, not quantity, but on that premise, given that we have a very large number of MPs from the Government parties in the area now, I assume that everything we want in the south-west will happen. That was a little churlish because the hon. Member for North Cornwall (Dan Rogerson) is right that there was complete cross-party effort on this.

I think we can point to the time before the Labour Government, during the early days of the privatised industry, when, although there was a preponderance of MPs in the area from the Government party, we did not get anything. We have to recognise that there has been a problem and that it is being dealt with to some extent.

The company still has work to do, so we are not looking at a static position. We are looking at the fact that, as the hon. Member for Hendon (Mr Offord) said in his excellent contribution in our previous debate on this issue, raw sewage is still being washed out. That happens in London, as the hon. Member for Hammersmith has described, and in coastal locations such as Trevone, which I mentioned in an intervention. Water companies argue that that is a very rare event, happening two or three times a year, but the statistics show that it happens far more than that. Rainfall patterns are changing and development patterns have changed. We have, fortunately, got some affordable housing and market housing built in some of those communities, but that has added to the burden on the sewerage systems, which are just not up to the job. South West Water still has work to do and it also has to take responsibility for taking over the private sewerage systems. I welcome that change, but it will add to the costs going forward. The measures are long overdue and will, I hope, help to offset some of the burden on bill payers.

I have some concerns about the debt model that has been agreed between Ofwat and the water companies. The debt that has been taken on over previous decades to provide infrastructure is not being paid off to any significant degree. Under the debt model, those loans are repackaged periodically.

The water companies and Ofwat argue that that is a great deal because it keeps the cost of borrowing down—if we were to start to pay off these things now, we would put bills up even higher. I see that, but I am concerned that, essentially, we are saying that the Government’s sensible proposal will have to continue for ever, because we will never, ever pay off some of the significant debt that has been arrived at to put in the infrastructure. I hope that Ofwat will continue to look at the issue, because my constituents come to me and say, “At least we must have paid off a lot of this money by now and we must be getting to the point where the bills will start to go down.” No we are not, because the debt is constantly repackaged. That issue perhaps needs to be examined.

Hon. Members have talked about national WaterSure, or social tariffs. I know that the advice from the Treasury is that that effectively amounts to a tax—we need to examine that—but any scheme that seeks to help those who are struggling the most ought to do so regardless of where those people live. Even after the welcome investment in tackling inequality in bills across the country, people in my constituency and in other constituencies across Devon and Cornwall—because of low income, high housing costs, and high water and sewage costs—will still be worse off than people in other parts of the country.

I accept that other hon. Members will say, “Come on, you are getting this and surely you must be satisfied with it,” but I will be satisfied when I think there is a fair deal for people in my constituency and in neighbouring constituencies. As I said in a Westminster Hall debate earlier this year—or perhaps at the end of last year; memory fails me—I hope that we reconsider having some sort of national tariff. If measures are kept within region, the pressure on the other bill payers will be so high that those measures will not be allowed to be significant enough to meet the need.

We also need to keep a close eye on the profits of the water companies. In an excellent contribution to the first part of the Second Reading debate, my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) mentioned the sometimes arcane business models and the layers of companies that manage to pass on significant dividends. Ofwat could do more to look at the profits there. As my hon. Friend the Member for St Ives said, the leadership at South West Water is far better than it was and those people have engaged hugely with the campaign to deliver on this issue. They are being open and realistic about what is achievable, but all water companies need to consider the contribution that they, too, could make to perhaps providing a more generous WaterSure or social tariff scheme. We need to be vigilant about that.

Does the hon. Gentleman agree that another shortcoming of the WaterSure tariff is the fact that it is available only to those who are on meters? That is good if it encourages people to go on to a meter, but there is a problem with blocks of flats where it is not practical for people to go on to a meter. Some of those people are in temporary rented accommodation, and it is not their call whether they go on to a meter.

The hon. Gentleman is absolutely right, and we might be talking about some of the people who are worst off, because they live in smaller flats or houses in multiple occupation. I hope that as the Government move forward with their review of water policy they will consider whether any resource could be put into finding technological solutions to overcome those problems. At a time when we are considering smart metering and all sorts of things to do with energy, there must surely be a solution that allows metering for all water consumers, no matter where they are. A small investment, perhaps in that, or some encouragement to companies that might be coming up with such ideas, would help to deal with the issue. The sooner we can get everybody on to a meter, the sooner we will take the burden from those who, thus far, have been unable to take advantage of metering. The hon. Gentleman makes a strong point.

I should perhaps conclude by returning to the issue of fairness and who these measures are designed to help. South West Water feels strongly that it would like to see help for small businesses—it is concerned about that. I sympathise with that point of view, although we have to be realistic about how much money there is, and therefore about the support that will be available to residential customers if businesses are covered as well. It is difficult to distinguish between the smaller and the larger businesses, some of which are national and quite profitable. They would see a benefit that was nothing to them, but which would suck up money that could go to a residential customer down the road.

Second homes are an issue, as one might expect me to say. The Government’s proposals contain a careful appraisal to make sure that nobody gets £50 off their bill if they are currently paying less than £50, or we would be giving them money. I suspect that many in that category are people on water meters who are not using much water because the property is empty much of the time, as a second home. If, as the Bill moves beyond Second Reading, anything more could be done to examine the issue and make sure that it targets people who live in the area and pay higher water bills, I would welcome that.

I am delighted that the Government are moving on the matter at last. I hope they continue to examine ways in which we could help the very poorest consumers through social tariffs. I congratulate the Minister on tiptoeing through the various minefields surrounding the subject and coming up with the Bill that we are debating. I look forward to it making progress and becoming an Act.

It is a pleasure to speak in the debate. Many hon. Members have noted that the Bill seeks to deal with two specific local issues, the south-west in respect of the first clause and London in respect of the second, but the Bill is widely and non-specifically drawn.

I take the opportunity to ask about Ministers’ broader strategic intentions. In what the clauses encompass there is some real potential for development of the Government’s broader water strategy, and I am keen to explore two questions in relation to that. The first is affordability. A number of hon. Members, including the hon. Member for North Cornwall (Dan Rogerson), who has just completed his excellent speech, have raised some important issues about that. In common with other non-south-west Members, I want to put it on record that I have no concerns at all about ensuring a fair water deal for customers in the south-west, but customers across the country are struggling with water bills, as a number of hon. Members have pointed out, as the cost of living rises, and the cost of water and other utilities creates additional pressure on household budgets.

The Bill offers Ministers the opportunity to think creatively about how Government can help to relieve those financial pressures, and perhaps to give some indication today of their thinking in that area. Social tariffs have been rightly identified as the route to achieving that, but there is a clear need for the industry and Government supporting the industry to ensure that we raise the game. Water is clearly not a luxury and some families, such as those with young children and families where there is ill-health or a disabled member of the household, are hit particularly hard. WaterSure is helpful in addressing some of the additional need that arises for those families, but it applies only to families with more than three children in the household and the take-up is not particularly good. Only about a third of households that could benefit from WaterSure are taking advantage of the scheme.

The hon. Member for North Cornwall and others mentioned the need to spread water metering more widely and some of the properties where that is quite challenging. It is also important to recognise that without the benefit of well designed social tariffs, families with higher levels of water usage because families are larger or because of health and other needs may find that water metering worsens their position. It is therefore important that we design very carefully the way in which we apply tariffs to meet the needs of particular families and to support those on lower incomes.

I urge the Minister to recognise the lessons that have been learned in relation to social tariffs from the energy industry, and work that has been done with energy utility companies. The first and extremely important lesson is that a hands-off approach is not sufficient. If it is left to the industry alone to apply the sorts of tariffs that support low-income households, the result is poor protection for the poorest consumers. There would be a lack of information about tariffs and the benefits of more favourable tariffs would more often accrue to better-off customers who can pay by direct debit, for example, which reduces industry costs but passes the benefits to those who can operate their personal finances in that way. Customers often end up on a tariff that might initially have been quite good for them but becomes inappropriate, and there is a lack of proactivity on the part of the supplier to seek to inform individual consumers and improve their position. That is understandable in a market where competition pertains, as is the case for energy utility companies, but it will happen all the more in a market that is effectively a series of regional monopoly markets, as is the case for the water industry.

There have been some interesting experiments on improving the coverage of social tariffs and affordable bills in the energy industry, and I hope that Ministers will take those into account in relation to water supply. There have been some interesting experiments on entitlement to the benefits that support low-income families or those that meet a particular additional need, such as disability benefits. There has almost been a two-way trade in working around that linkage with the receipt of benefits. It is of course possible to think more creatively about how information held by the Department for Work and Pensions and other agencies on who is in receipt of financial benefits could be used more widely to identify households that might also be eligible for social tariffs, a point the Secretary of State alluded to in her opening remarks last week. Although I appreciate the concerns about data sharing, I think that the benefits would surely outweigh the risks and urge Ministers to think imaginatively about how the data could be shared effectively.

My hon. Friend talks with a great deal of experience in this field. Could she offer a view on whether the introduction of universal credit will make it more straightforward to operate a social tariff through the benefits system or slightly more complicated because it will be less easy to pull out certain elements and see where people’s needs are?

I will not venture to speculate on that—it is disappointing that I, a universal credit junkie, do not have an answer. This is one of the rare moments when I say that it might be useful that universal credit is a household benefit, because water is of course a household bill and so the calculation might be easy. However, a number of the elements of local financial support, such as council tax benefits, will not be within universal credit, so it might not be a straightforward indicator of which households and properties are particularly likely to be linked to high water usage. I hope that the Minister will take the opportunity to discuss the localising of benefits with colleagues in the Departments for Work and Pensions and for Communities and Local Government and to explore what the options might be following the introduction of universal credit. The Secretary of State for Work and Pensions certainly makes great claims about the access to data that universal credit will both rely on and introduce, and I think that it is undoubtedly the mood of the House that we would want to see the data used effectively and constructively, with careful attention to privacy and data sharing concerns, in order to help bring water bills down.

As I have said, the linkage to those in receipt of benefits works two ways. It is not just a case of looking at benefits data and identifying people who might be eligible for a social tariff; it is also about looking at people who are on social tariffs and ensuring that they are in receipt of all the financial support to which they might be entitled through the benefits system.

The Minister may be aware of—and if he is not, I urge him to go and look at—the excellent schemes that have been developed with energy utility companies in order to link benefits checks, proactive benefits advice and entitlements assessments, working closely with a number of charities, to customers on social tariffs. That interesting model has worked well in several parts of the country, with several utility companies and advice agencies working in partnership, so I hope that he will consider whether it might work for the water industry, too.

I endorse strongly what my hon. Friend the Member for Bolton West (Julie Hilling) said about help for people struggling to pay water bills, and I ask the Minister also to comment on consumer education in terms of water usage, because if households can use water more efficiently, they will also help to manage their bills.

My second issue relates to clause 2, and I shall look again at its wider potential beyond the immediate need that it seeks to address—that of resolving the serious problems in London. It relates to the substantial infrastructure investment that the Bill envisages but which I again encourage Ministers to think about using proactively in terms of infrastructure development throughout the country.

At Davyhulme in my constituency, United Utilities operates a large sewage and water treatment plant, which was built in the 19th century but has been at the forefront of technical innovation and development since it was established—and no more so than now. Its groundbreaking sludge treatment project, which when fully up and running will be the largest such programme in the world, takes raw sewage and effectively transforms it into renewable energy sources, with the treatment by-product being used as soil conditioner.

That interesting and remarkable project has already benefited from modest financial support from the Government for its pilot stage, but, if drawing such green energy supplies from sewage and water treatment is to be a real runner, we might want to encourage substantial national investment in it. It is estimated that the Davyhulme plant, when fully operational, could supply green energy to 5,000 homes in the north-west, so there is substantial potential for such energy sources to become a major part of the Government’s renewable energy strategy. I should therefore be interested to hear from the Minister what discussions are taking place with his colleagues in the Department of Energy and Climate Change to link investment in our water treatment sector to the development of new energy supplies.

Under clause 2, I see how Government thinking about their role in supporting the industry’s development through investment or pump-priming might be taken forward. There is a real win-win possibility, which I am sure the Minister will want to explore.

I am grateful to have had the opportunity to raise these wider issues in the context of this Bill. I appreciate that it has not been introduced to deal with the long-term strategic issues of infrastructure and affordability, but in the absence of any other water legislation, or of any sign of new legislation, this may be the only legislation that we have to work with for some time to come, and it would be a great shame if we were not able to maximise its potential.

I thank the Minister for all his work in getting this Bill into Parliament so that we can deliver the £50 saving to water rate payers in the south-west, because they are a hugely deserving cause, as one would expect me to say.

As other Members have said, although we have only 3% of the country’s population, we have 30% of its beaches. We welcome many holidaymakers to Devon and Cornwall—they are most wonderful places to go to, and I encourage every Member to do that—but of course people from throughout the country use those beaches, so a small share in the cost of cleaning them up and looking after them will be gratefully received, and is necessary and fair. I thank the Chancellor for getting the money through, because we inherited a very difficult financial situation from the previous Government. They had 13 years to sort this out in much better economic times; we have managed to find the money in very difficult economic times, and that is a worthy achievement.

We must look at the profile of the people who are having to pay those bills in Devon and Cornwall. A large percentage of the population are elderly, including a lot of people who have been retired for a long time, and may have retired on good incomes but have found that inflation and other things have taken away their buying power.

Does my hon. Friend agree that the average income per household in my constituency and the wider south-west is about £23,000, which is way below the national average?

I do indeed. We have to look at the income profile of people’s salaries and wages. We rely a great deal on tourism, which, while it is essential for the whole area, is not necessarily the most highly paid industry in the country. It is right to give support to the people paying those bills.

The money that South West Water has made available to clean up the beaches is essential. Whatever the rights and wrongs of water privatisation, we must realise that before the industry was privatised, the infrastructure had not been dealt with. That meant that a huge backlog of work needed to be done on the sewerage works throughout Devon and Cornwall, and the cost of that was bound to impact heavily on water bills. In my constituency of Tiverton and Honiton there is a £2.8 million scheme to improve Cullompton sewerage works, which started last November and is due for completion in June. South West Water has also spent £340,000 on a scheme to enhance Allers water treatment works, and there is another scheme to enhance the Cullompton works. It is key that the company carries on putting the infrastructure in place so that we can get much cleaner beaches. We have beautiful countryside in Devon and Cornwall, but we should not forget that people mainly come for our beaches, so it is absolutely right to keep them clean.

We must consider those who are unable to pay their bills. There is a national cost of over £15 per bill to make up for those who cannot pay. The combination of those who cannot pay and those who will not pay is always the most difficult thing for Governments and companies to deal with.

My hon. Friend the Member for Camborne and Redruth (George Eustice) talked about businesses. The Bill covers not businesses but private households. Businesses need much more competition. I urge the Minister not to let the horses frighten him. At the moment, the companies are saying, “You can’t possibly give us more competition, because that will frighten away investment from the City.” We do not want to frighten away investment, but neither must we be frightened away from looking at where we could create greater competition. In Scotland there is one nationalised company for wholesale water, and retail companies that can compete with one another. With our privatised water companies in England, Wales and Northern Ireland, we can look into ways to create more competition and then get the bills down for businesses too. It is essential that businesses, as well as householders, in Devon and Cornwall should benefit. The trouble is that if we spread the money for the £50 reduction across businesses as well, householders would lose a significant amount of it.

We need South West Water to be clear about why it is putting its bills up by another £20 or so. Although that might be justified, we do not want it to eat significantly into the £50 that we have provided to help people with their bills. We must remember that the south-west has been singled out because it has the highest water bills in the country, mainly because of the cleaning up of the sewage works.

The final point that I want to raise is about the London tunnel and the sewerage works in London. Last week I made an intervention that caused one or two long faces among Opposition Members, but I shall repeat the point. One night, when I was travelling back from here on my bicycle towards Chelsea bridge, going into Battersea, there was a low tide and I could smell the sewage being pumped into the River Thames. I question whether that should be happening in 2012. A company, a farmer or anybody else who polluted in that way would be prosecuted. Is there one law for some and another law for others?

It is high time this issue was dealt with. I know that that involves a huge expensive infrastructure project, but in the 21st century it is essential to clean up the sewage that goes into the Thames. Every time there is a tremendous amount of rainfall, the sewage works cannot cope and out goes the sewage into the Thames. The water companies have the right to do that—whereas a business that did it would be prosecuted immediately. I am delighted that this project is to be undertaken. I know that parts of London do not welcome it because of how it will affect them, but for the greater good of the capital and of the Thames, it has to be done.

Rather unusually, I will start my contribution by seeking to resolve a confusion that has been in my mind over the past couple of weeks. I received a letter from the Minister, as did all London Members, pointing out that discussion of the Thames tunnel would be prioritised in this Second Reading debate. It also mentioned the national policy statement for waste water. Although the letter states clearly that that is before Parliament, I have been unable to gain reassurance that it will be debated on the Floor of the House. I seek the help of the House on that. I will comment on the Thames tunnel, but I will also touch briefly on the national policy statement for waste water, because it affects my constituency.

Like other London Members, I am shocked by the regular reports about the consequences of the discharges into the River Thames, even though my constituency does not lie on the river. I am shocked by the number of discharges—about 50 a year, or one a week. The discharges can have cataclysmic consequences for people who live along the Thames. That is an extremely important issue. There is European legislation under which countries that do not clear up such discharges will be fined. That should weigh on us heavily, not only because of the level of the fines that will be imposed, but because it highlights our responsibility.

I have been impressed by the 10 years of hard labour, if I may call it that, that has gone into the preparation of the Thames tunnel scheme. I have listened closely to the debate, and I have heard many people’s views and received many letters and e-mails about some of the proposed alternatives. Like most Members who have spoken, I remain to be convinced that any of those will address the existing needs. Broadly speaking, I am therefore in favour of the Thames tunnel project. My concern is about its affordability for individual water consumers and its cost and likely value for money.

We have talked a lot about water poverty. I am sure the Minister will say that Thames Water bills are low compared with those in other parts of the country, but we must consider water poverty. If we define water poverty as having to spend 3% of income on water, more than 1.1 million Thames Water customers are affected. If we define it as 4% of income, more than 600,000 are affected. That is twice the level in any other water authority area, which should concern us.

The previous Government introduced the WaterSure scheme to place a cap on water bills for low-income families whose water usage is metered. The problem is its narrowness, and the fact that take-up has not been widespread. Only a third of eligible consumers make use of it. That represents roughly 3,600 families in the Thames Water area, where more than 1.1 million consumers live in water poverty, so it does not really address the problem. I will not go into detail about social tariffs, because other Members have done so, but I am sceptical about the scheme as it is currently constructed, and we need it to be changed enormously to address the problems.

My final point about water poverty is that the Thames tunnel will cost consumers roughly an additional £50 a year, or £1 a week on their bills. The Minister will say that that will take Thames Water bills only up to the national average, but the consequences for the 1.1 million consumers already in water poverty will be extreme, and must be taken into account.

I shall now turn to the value for money, the costs and the delays of the project. It has been going for 10 years now. The study was started up in 2001 and was carried through to the development of the scheme in 2005. As the debate has shown, the scheme is still being consulted on and there is still significant opposition to it. It might not be very well-informed opposition, and it might not address the issues that need to be addressed, but it is there. Perhaps the Minister could say something to reassure us about whether the £4.2 billion cost can be kept to. Will the ambitious time scales upon which that cost is based be realised? Can such a complex and, if I may say so, risky project be delivered at that cost?

To echo what my hon. Friend the Member for Hammersmith (Mr Slaughter) said, the public sector will be supporting some of the riskier aspects of the project. Are the Government getting to the bottom of how to get value for money? We could go into the issues of public-private partnerships and the private finance initiative, but I remain to be convinced that the project will be delivered on time and to cost. I should like some reassurance from the Minister about how we can ensure that Parliament and the Government play a role in protecting the Thames Water customer and the UK taxpayer and ensuring that the project delivers for them.

The national policy statement on waste water is related to my local project at the Deephams sludge works. Like the Thames tunnel, Deephams currently discharges into a river—the River Lea, a tributary of the Thames—which contributes in a smaller way to the discomfort along the Thames. The technology at Deephams dates back to the first half of the last century. To put it crudely, it is exhausted. There was little investment until the last year or two, when significant new investment was made in preparation for the national policy statement.

Deephams was not a problem some years ago. It was in the Lea valley, quite a long way from my constituents, many of whom did not know it existed and were not concerned about it. That is not the case now, which is a primary reason why I am raising the matter. During the past 10 years housing has come to the edge of Deephams, and there are consequences, including the statutory nuisances from sludge works, such as the pungent smells. Thames Water will say that it does not get many complaints about the smells, but there are sound reasons why the number of complaints is not as great as it should be—not least the confusion caused by the fact that a number of different facilities in the Lea valley can contribute to those problems. Constituents living close to Deephams regularly take up the consequences of the lack of investment with me.

I should say something positive about the national policy statement, because much in it is to be welcomed. There is no longer a preferred option for the redevelopment of the Deephams site, which shows flexibility, leaving open a wide range of options. I strongly welcome the increased priority given to design. The policy statement talks of sustainability, durability and adaptability, which are important considerations for the redevelopment of the Deephams site.

The national policy statement recognises the need for flexibility and talks of the likely population increase for which Deephams must provide a facility: the population will go up from 850,000 to nearly 1 million over the lifetime of the project, so recognition of that is welcome. Finally, the national policy statement recognises that most of the infrastructure is woefully out of date and must be replaced.

I want to build on those welcome changes to the national policy statement, and I ask the Minister, if he has time, to comment on some of my suggestions, the first of which relates to the central role of Ofwat, which will be responsible for funding capital infrastructure. I understand that Ofwat has responsibility for ensuring that capital infrastructure comes in on cost and on time, but based on previous experience, I make a plea not to limit the preferred options to be considered for Deephams, and not to restrict what can be done to existing legislative requirements.

The national policy statement recognises the critical need for flexibility, and to find innovative and sustainable solutions. We should not base proposals on existing need—as I have said, the national policy statement recognises that the population will increase and that there should be flexibility—but there should also be flexibility in welcoming higher standards, which will undoubtedly be introduced. There will also be legislative change during Deephams’ period of operation.

Climate change will come to the fore—we are now in the midst of a discussion of drought, but there will be other climate change issues in future. Everyone keeps talking about the green agenda, but we need to introduce the new technologies into our water system. I shall come back to that in a few moments. Thames Water will claim that the recently improved project in Reading is state of the art, but the problem for Deephams is that development will come 10 to 15 years down the road. So we need to consider not what is state of the art now, but what will be state of the art in 15 years. I hope that the Minister can reassure the House that the Government recognise the need for these flexibilities, because there is a danger that Deephams will be out of date by the time it comes on stream. It is incumbent on Thames Water and the local community to consider what alternatives there are, and what other technologies could be used.

I want to mention two such technologies that are being piloted in this country but have not been fully rolled out, although they are being used in the United States and China. My knowledge here is suspect, so I hope that nobody will press me too closely, but there are things called integrated fixed-film activated sludge—I can give Members a definition if they want—and moving bed biofilm reactors. Council officers at the London borough of Enfield speak about little else at the moment; they can wax very lyrical about it.

Council officers sympathise with the idea of introducing a combination of the two technologies to future-proof Deephams in respect of the factors that I have mentioned, including climate change, improved water quality and population increases. Is the Minister aware of, and sympathetic to, those technologies? They are not mentioned in the national policy statement, but it would be welcome if he could say something helpful about them. We recognise that the introduction of new technologies has a cost implication, but there is growing evidence not only that they can respond more flexibly to future pressure, but that over time they work out much cheaper.

To sum up, it would be helpful if the Minister commented on some of these issues. I strongly welcome much of what is in the national policy statement, but if Deephams is to address the issues of concern to people in my constituency and round about, we need to build in the flexibility to allow them to develop the technologies that will address the issues of the future.

Allow me, Madam Deputy Speaker, to convey the apologies of the shadow Secretary of State, who has been unable to attend owing to the split sitting of this Second Reading. I am sure that that is true of many other Members across the House.

We have had a robust discussion of a variety of issues, and I am heartened by the contributions of different Members. I shall start with last Wednesday’s contributions. The hon. Member for Thirsk and Malton (Miss McIntosh) pressed the Minister for an amendable motion on the debate on the waste water national policy statement, asked about the lack of an impact statement, raised concerns about the Government’s actions in the negotiations on flood insurance, and asked where the comprehensive water Bill was. We share all those concerns.

My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) raised understandable concerns about the King Edward memorial park in his constituency and educated us on the importance of fire sprinklers. I hope that the Government will work with him and us to ensure that the comprehensive water Bill responds to this aspect of fire safety. The hon. Member for St Ives (Andrew George) made a typically insightful speech that recognised the actions of Members on both sides of the House to reduce bills in the south-west. He also made a compelling point about the national treasure status of Devon and Cornwall’s beaches, which is a point that we accept.

My right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock) spoke powerfully about the Deptford high street Thames tunnel site, demonstrating once again that she is a powerful advocate on behalf of her constituency, and the hon. Member for Hendon (Mr Offord) confirmed his view, which we share, that the Thames tunnel is both essential and desirable for the ongoing health of the river and Londoners.

My right hon. Friend the Member for Exeter (Mr Bradshaw) asked where the comprehensive water Bill was—a theme that many Members picked up on—and established that the welcome £50 reduction would be quickly wiped out by a lack of action more broadly on affordability.

The hon. Member for Newton Abbot (Anne Marie Morris) asked a number of technical questions—in particular, about park homes—to which, given the six-day hiatus in this Second Reading debate, I would expect the Minister to have a comprehensive and erudite response.

My hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) was generous and forward-looking in thinking not just of her constituency—for which she has helped to secure water affordability payments—but about affordability more broadly. She reiterated our question: where is the Government action to quell rises in water bills beyond the direct subsidy to the south-west?

The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) asked his own questions about the Thames tunnel. To be clear, we do not necessarily agree with the alternative proposals to deal with the problem, many of which have more to do with short-term political interests than the long-term benefits of being good custodians of the natural environment.

The hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile), in what was originally a very short contribution, paid tribute to his predecessor, Linda Gilroy. When it comes to water, I am sure he will represent his constituents’ interests in the same way. He was less generous, however, when he talked about three Labour MPs as perhaps being one reason why more action was not taken. I would say that those three Labour MPs more than punched above their weight in bringing the issue to the fore.

My hon. Friend the Member for Bolton West (Julie Hilling) talked about debt in her constituency and gave us real stories of customers struggling to pay their bills. The hon. Member for Camborne and Redruth (George Eustice)—another Devon and Cornwall Member—talked about the nature of the scheme to award £50.

My hon. Friend the Member for Hammersmith (Mr Slaughter) talked about the need for the Thames tunnel, in his typically forthright style. He did not hold back from saying what he really thought, including about his local council. He also slew the myths of the Selborne commission—a sensible thing to do in a debate such as this.

If my hon. Friend has any lingering doubts about the need to alleviate the sewage going into the Thames, he is welcome to join me and my constituents at 10 o’clock this Saturday when Thames21 will be doing a deep clean just by the sewage outlet at Hammersmith bridge. I am sure he will find ample evidence there of why we need such alleviation.

I believe that is what is known as a helpful intervention from my hon. Friend.

The hon. Member for North Cornwall (Dan Rogerson) talked about the nature of the privatised settlement, and raised the possibility of the Bill being used to extend payments to other areas. I hope he will look carefully at our amendments to ensure that the issue has proper parliamentary scrutiny as the legislation goes through.

My hon. Friend the Member for Stretford and Urmston (Kate Green) talked about affordability, social tariffs and data sharing, all of which are essential if we want to reach a broader affordability settlement.

The hon. Member for Tiverton and Honiton (Neil Parish) talked about bill payers in Devon and Cornwall, and returned to the theme of competition, which we obviously look forward to hearing more about in our comprehensive debates on the Bill.

Last but not least, my hon. Friend the Member for Edmonton (Mr Love) talked about the consequences of the 50 discharges each year on average, and about Deephams, the site in his constituency.

This Bill deserves proper scrutiny, because the issue of water affordability is not going to go away. Across the country, families are under real pressure. We therefore welcome the help extended to the south-west, and we praise the many Members, in all parts of the House, who have raised that point, both in this Second Reading debate and in the run-up to it. However, the problem of water affordability does not stop at the River Exe. In a moment, the Minister will stand up and talk about financial assistance—indeed it is in the very title of the Bill—but today, across this country, a fifth of all households are spending more than 3% of their income on water. What assistance does this Bill extend to the 400,000 households in Wales, the 460,000 households in Yorkshire, the 780,000 households in the Severn Trent region or the 1.1 million households here in the Thames region that fall into that category? Sadly, the legacy of this legislation will be what it does not do, as it offers no help for millions of hard-pressed households.

We know that the pressure on budgets will only increase—the White Paper makes that much clear. Populations will increase, as will scarcity of water in large parts of the country. We in this House must therefore take action to keep water affordable. The Government promised us a proper water Bill—significant legislation, far-reaching market reform and action for customers. However, their own water White Paper—their blueprint for water—was delayed by six months. Our Cave, Pitt and Walker reviews gave the Department a clear direction of travel. Everyone across the House accepts that what is needed is a comprehensive package, tackling water issues, introducing changes and then letting the industry settle down and deliver. What we need is a proper water Bill, but Ministers have lost their slot in the Queen’s Speech. Indeed, just last week I asked the Minister across the Dispatch Box:

“If tackling drought, conserving water and reforming abstraction are so important, why has the Secretary of State delayed her own Bill?”—[Official Report, 1 March 2012; Vol. 541, c. 410.]

His response was that he was not privy to the contents of the Government’s legislative programme for the next Session of Parliament. That is a shame. I would have hoped that someone had pointed out to the Minister that he had lost his slot. Everyone in the House seemed to know that, apart from him.

This mini-Bill proves that the pilot light is on at DEFRA, but that there is little legislation coming through any time soon. Customers, investors and water companies will rightly ask: where is the beef? This delay is serious: we are to see no action to curb the unsustainable abstraction of our rivers and streams, no time scales to increase competition in this highly regulated monopoly market, no changes to ease water scarcity—exacerbating the extreme drought conditions that we are already experiencing—and no action to keep water affordable across the UK.

This legislation is for the future, but the cost increases are for now. This April, water bills are set to rise by an average of 5.7%, which will add £20 to the average bill. We will seek to amend the Bill to ensure that those who are struggling to pay will have access to a social tariff. It is unfair to extend the situation in which a postcode lottery determines whether people can afford to pay their water bill. We know that the Government have ruled out extending national social tariffs beyond the WaterSure scheme, even though that scheme reaches only a third of eligible households. They have walked away from making further social tariffs mandatory. Under their plans, the design of social tariffs is to be left to private companies. In fact, in the DEFRA draft guidance, companies are even given the choice of whether to provide one at all.

In the short term, we know that tackling the bad debt that raises all our bills, pooling cross-subsidy to make it more effective, requiring landlords to share the names of their tenants, as they do in the energy sector, and setting minimum standards for social tariffs can all make a serious dent in the cost of water. We know what works, and we are willing to work with the Government to introduce comprehensive reforms to achieve that. So which of those measures will DEFRA commit to? None of them. That is not good enough.

We have been very clear about the measures that we believe the Government could take right now to make a real dent in water prices. We are not going to talk about the long term but do nothing in the short term, which, with the exception of the measures relating to the south-west, this Bill is the very definition of.

The Government must do what only they can do. Their White Paper talks about water for all, but merely offers affordability for some. We will not oppose the Bill this afternoon, but we will table amendments next Wednesday to improve it. Ministers should not deny the existence of the quiet cost of living crisis that is very real for many families across the country. Instinctively, we all feel that water should be affordable. As the Bill progresses, I hope that the Government will accept our amendments to improve it. In doing so, they could help to ensure that there is water for all.

I thank hon. Members on both sides of the House for their participation in this debate. It is good to hear that the issues tackled by the Bill are at the forefront not only of my mind but of those of other hon. Members. Also, it is a pleasure to be lobbied by my hon. Friend the Member for Camborne and Redruth (George Eustice). He should not worry about collaring me in the Lobby, and neither should any other hon. Member. If I give the impression of putting my head down and trying to get through it as quickly as possible, I regret that. I congratulate him and Members from the south-west from all parties on the pressure that they have brought to bear to achieve a measure to alleviate what we accept is an unfairness that dates right back to privatisation 20 years ago. I congratulate them on the success that they have achieved thus far in getting this legislation introduced.

Water seems to have been in the news on a daily basis recently, which reflects how precious the resource is to each and every one of us. Despite the confidence of the right hon. Member for Exeter (Mr Bradshaw) that we live in a rainy country, parts of the United Kingdom have been affected by drought for many months now, and that is likely to continue into the summer.

We must act now: it is imperative that we have a system in place that provides a secure water supply now and for the future, while continuing to protect the environment. That is why we are dealing with the situation we face at the moment. We brought together experts and key players in the water industry at a drought summit. We do not need legislation to get on and tackle some of the drought-related problems; we are doing that right now.

I often find myself making speeches about the particular river of concern in my constituency—the River Kennett—and I am also lobbied by Members across the country about the water that flows, or does not flow, through rivers in their constituencies. Of most concern to this Bill is the river into which the Kennett flows—the Thames. Today, the proposed Thames tunnel offers the most timely, comprehensive and cost-effective solution to the combined sewer overflow problems and the dumping of raw sewage into our river.

My right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) asked for the case on the tunnel to be compared once again with other proposals put forward. I have to say, however, that none of the alternatives identified during the extensive studies carried out over the past decade has been found swiftly or adequately to address the environmental and health objectives for the Thames tideway while simultaneously complying with our statutory obligations.

I compliment the Minister on his clarity and consistency on this issue. Does he share my frustration, however, that when I go back to my constituency I find the hon. Member for Chelsea and Fulham (Greg Hands)—as a Government Whip, he should be helping this Bill through the Commons—running a vitriolic campaign against the tunnel and a local authority that not only spends tens of thousands of pounds on a misleading campaign, but as of last night is threatening to sue the Secretary of State for Communities and Local Government to prevent him from safeguarding sites in the borough? Can the Conservative party get its act together on this issue?

I thought that the hon. Gentleman was going to make a helpful intervention, but he made his point eloquently once again.

The alternative proposal for a shorter western tunnel would allow large volumes of raw sewage to continue to flow into sections of the Thames—exactly what the Thames tunnel is designed to avoid. It is clear that the public do not want raw sewage going into this iconic river through one of the most important cities in the world.

In what I must say was a great speech, we heard from my hon. Friend the Member for Hendon (Mr Offord) about how serious is the issue of combined sewer overflows—not just in London, but around the country. He added his own perspective on other elements of the Bill. I can assure him that combined sewer overflows are monitored robustly and that action is taken where permits are breached or problems with the environment are identified. Beyond the Thames tunnel, some £1 billion is being invested further to reduce the impact of combined sewer overflows across the country.

We are ever mindful of the costs involved in the Thames tunnel project. We remain convinced that there is an economic case for it. Part of it is Thames Water’s estimate that the project would directly employ about 4,250 people in the construction and related sectors, as well as providing further secondary employment. The Thames tunnel team actively support the Crossrail Tunnelling and Underground Construction Academy, which is currently training and gaining employment for 70 apprentices a year. Following the Crossrail model, the Thames tunnel project will specify in its contracts the level of apprentices that will be employed by the contractors.

Let me say that I remain sceptical on cost, which is where I believe Ministers should be on a project of this size. We are receiving the best possible advice, and the work will be ongoing. I cannot possibly stand here and say now that costs will definitely be pegged at the current estimated level, but we will try to deliver this project within budget and effectively for the people of London and the country as a whole.

I am sorry, but I am a bit short of time, and I may be about to answer the point. Despite the concerns raised by my right hon. Friend the Member for Bermondsey and Old Southwark, Ofwat regulates the ring-fenced regulated businesses and ensures that customers receive value for money from them. Who ultimately owns that ring-fenced business makes no difference to customers; the licence conditions attached to the ring fence provide the necessary protections. Thames Water’s structure is similar to that of several other water companies.

We heard eloquent and passionate speeches from the right hon. Member for Lewisham, Deptford (Dame Joan Ruddock) and from the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), reminding us of the potential impacts of the tunnel’s construction on their constituents. I remain ready to work with them to try to minimise the impacts in any way I can. I am very conscious of the effect that it can have on communities.

My hon. Friend the Member for Thirsk and Malton (Miss McIntosh), my right hon. Friend the Member for Bermondsey and Old Southwark and the hon. Member for Edmonton (Mr Love) asked for an opportunity to amend the waste water national policy statement. We are, of course, happy to have a debate on the policy statement, and, like other debates in the House on national policy statements, it would be a yes or no debate. Best endeavours are being made to ensure that it is held before the Easter recess, and I hope that that provides the necessary reassurance. As for the other project to which the policy statement refers, the Deephams sewage treatment works, Thames Water intends to begin the phase 1 consultation in about June this year. It is still working on a preferred option, and aims to submit a planning application in late 2013 or early 2014.

The hon. Member for Wakefield (Mary Creagh), the shadow Secretary of State, sometimes reminds me of someone having a fight in a pub when the lights have been turned out. She flails around in all directions, and causes as much damage to her mates as to anyone else. She had to intervene later in the debate to tell us that she was, in fact, supporting the Bill, which is a great relief. That was underlined by the hon. Member for Luton South (Gavin Shuker), and we are grateful for his support as well.

Despite the concerns raised by the shadow Secretary of State, the powers in the Bill are appropriately drafted. Although we currently have no plans to use those powers other than to assist South West Water customers and in relation to the Thames tunnel, we heard many calls today—including, again, calls from Opposition Members—for us to legislate to help reduce the problems of water affordability around the country, and to invest in new infrastructure to help make the country more resilient to droughts in future. As the water White Paper made clear, given our growing population and changing climate, our need for infrastructure investment will not diminish. We should leave ourselves the flexibility to offer similar Government support to future projects if the case is strong. However, it is inconceivable that any nationally significant infrastructure project would proceed with Government backing unless the case had been fully debated, as the Thames tunnel project is at present.

Let me repeat the Secretary of State’s commitment: we will publish a draft Water Bill for pre-legislative scrutiny in the coming months, and it will cover the remaining legislative commitments set out in the water White Paper. The market reform proposals in the White Paper will be a key part of the Bill, and are a direct response to Martin Cave’s invaluable report.

In the few seconds that I have left, I want to talk about affordability. One of the necessary provisions is the ability for us to issue guidance on water company social tariffs, so we can address the issue of water affordability nationally. The reduction in South West Water bills to which we are committed addresses an exceptional historic unfairness, but we recognise that many people in the south-west and elsewhere are struggling to pay their water bills. We are encouraging all water companies to introduce social tariffs to reduce those bills in order to help people who would otherwise struggle to pay them, and we will publish final guidance on the design of the tariffs in the spring.

My hon. Friends the Members for St Ives (Andrew George) and for Newton Abbot (Anne Marie Morris) were keen for us to expand the existing reach of the WaterSure scheme. I assure the House that we have considered that carefully, but, as Members will appreciate, we have to make tough decisions about the use of limited public funds.

I am sorry, but I cannot.

My hon. Friend the Member for Newton Abbot expressed the fear that not all household customers would receive assistance. We know that in some cases the bill payer is the landlord or manager, for example in a park home, a block of flats or sheltered accommodation. I assure my hon. Friend that we are working with South West Water to ensure that the money reaches the people, in whatever residence they live.

As the water White Paper explained, keeping water affordable is vital, but it is also vital for us to use water more efficiently. While there are many uncertainties in connection with the weather, the one thing of which we can be certain is that it will become more unpredictable. That is why we are taking action now, and why we are responsible for ensuring that we use water wisely so that we can retain a secure water supply in the months and years ahead.

I am grateful for the support of Members in all parts of the Chamber, and I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Water Industry (financial assistance) Bill (programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Water Industry (Financial Assistance) Bill:


1. The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee, on consideration and on Third Reading

2. Proceedings in Committee, any proceedings on consideration and proceedings on Third Reading shall be completed at one day’s sitting.

3. On that day, proceedings in Committee and any proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption.

4. On that day, proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption.

5. Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, any proceedings on consideration or proceedings on Third Reading.

Other proceedings

6. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Mr Vara.)

Question agreed to.

Water Industry (financial assistance) Bill (Money)

Queen’s Recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a),

That, for the purposes of any Act resulting from the Water Industry (Financial Assistance) Bill, it is expedient to authorise-

(1) the payment out of money provided by Parliament of any expenditure incurred by the Secretary of State by virtue of the Act, and

(2) the payment of sums into the Consolidated Fund.—(Mr Vara.)

Question agreed to.