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Water Bills

Volume 578: debated on Thursday 27 March 2014

Thank you very much for your welcome, Mr Speaker. May I quickly thank all hon. Members from across the House who have kindly sent me good wishes?

In November, I wrote to water companies stressing the tough times that households are facing and the vital role the industry can play to help reduce costs. Companies have responded positively. Most are holding bills down in 2014-15, with flat or declining bills proposed from 2015. The Government encourage water companies to introduce social tariffs for vulnerable consumers. Three companies now have them in place, with at least nine more expected by 2015.

I thank the Secretary of State for that answer, but two weeks ago his officials told the Public Accounts Committee that his Department did not actually have a target or a measure of what “affordable” means, so when he says that water companies are acting to bring bills down, does he even know what target they are aiming for?

We believe this is an issue that should be decided locally by local companies consulting local consumers, and I am very pleased at the progress being made by companies in the current review.

The WaterSure scheme helps vulnerable households to pay their water bills, so will the Minister explain why he did not support Labour’s amendments to the Water Bill, which would have made information about WaterSure prominent on customers’ bills?

We are absolutely clear that this issue should be decided locally by local companies. There is already a huge amount of information on bills, and there is a limit to the amount that can be given on one particular document.

Of course, the cost of water is relative to that of other utilities. Unlike the energy industry, the water industry has social tariffs, and the Government have stepped in to help 70,000 households. Does my right hon. Friend agree that those schemes help people to pay something towards the cost of the water they use, which is better than defaulting?

My right hon. Friend is absolutely right. There should be a contribution, but in some cases it should be reduced. There is no free lunch. Every time there is a reduced rate for some, it has to be covered by all other hard-working consumers paying their bills.

In Devon and Cornwall, water bills have traditionally been high, but they have been reduced this year by 7%, thanks in no small measure to the Government’s support for hard-pressed households. Will my right hon. Friend congratulate South West Water, which has listened to local people and has just submitted a five-year plan showing that water bills may well fall by 13% in real terms over the next five years, even though it is increasing capital investment by 19%? Is that not an example of what progressive water companies can do if they listen to their local people?

I am very happy to join my hon. Friend in congratulating South West Water on what it has done. A reduction in bills is in marked contrast to what happened under the previous Government, when bills went up by 20%.

We welcome the Secretary of State back to his place after his recent appointments.

On Tuesday, Conservative and Liberal Democrat peers blocked Labour’s proposals to help households that are facing growing water bills at a time when their incomes are being squeezed more and more. As we have already heard, one in 10 households are now paying more than 5% of their income to the water companies, yet as the Secretary of State has admitted, the Government are refusing to lift a finger to help them. Will he tell us the specific reasons why this Government have opposed Labour’s proposals for a national affordability scheme?

I am grateful to the hon. Gentleman for his kind comments.

We are continuing the policy left by the previous Government that this should be voluntary—that is how they legislated as recently as 2010. We are clear that this is an issue that should be decided locally, because if there is a reduction for some customers, it has to be paid for by the remaining customers in that area. We are very pleased that we are seeing progress. We now have a robust Ofwat, unlike under the previous Government, and we are going to see significant changes in prices. We must also remember that we have to keep investment coming in from domestic and foreign sources, because every 1% increase in interest adds £20 to a water bill—there is a balance here.

One of my rural constituents in Kettering has just received a £7,000 water bill, owing to Travellers and Gypsies illegally tapping into the water supply. Anglian Water says that it can do nothing; the police are um-ing and ah-ing; and there have been threats of intimidation against the constituent concerned. Will the Secretary of State or the Minister with responsibility for water kindly agree to meet me and my constituent so that we can resolve this dreadful situation?

I am grateful to my hon. Friend for raising that local issue. He should immediately get in touch with the water Minister, the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall (Dan Rogerson). We will take it up and see how we can help.