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Water and Sewerage Services (Miscellaneous Provisions) (Northern Ireland) Order 2006

Volume 684: debated on Tuesday 4 July 2006

rose to move, That the Grand Committee do report to the House that it has considered the Water and Sewerage Services (Miscellaneous Provisions) (Northern Ireland) Order 2006.

The noble Lord said: The order paves the way for Government’s wider programme of investment in, and reform of, water and sewerage services in Northern Ireland. It also strengthens legislative controls on the abstraction and impoundment of water. I say at the outset of my remarks—which will not take too long—that this is not the order bringing in the water charges. That will come later this year.

The reform of water and sewerage services will improve water quality, give more robust environmental protection and clearer rights for consumers, and enable sustained infrastructure investment which has been sadly lacking. The draft legislation which provides the framework for the reforms was recently published for consultation on 1 June. That is, of course, currently undergoing consultation.

The wider reform proposals include the introduction of domestic water and sewerage charges. That is a contentious issue in Northern Ireland—a fair and honest way to put it. During the general election, not knowing what I was going to be doing afterwards—it certainly never crossed my mind that it would be Northern Ireland—I remember watching an interview on “Newsnight”, when Mr Paxman kept going on about security and the constitution. Whoever it was from Northern Ireland—I forget—kept saying, “Forget that. The biggest issue in Northern Ireland is water charges!”. I thought “What’s all this about?”, as Mr Paxman attempted to say that it was a local issue. The politician in question made it clear. It is therefore a contentious issue.

The Government have responded to concerns about low-income households by proposing an affordability tariff which will benefit nearly a third of Northern Ireland domestic consumers. The measures contained in Articles 3 and 4 of the order ensure that the Government’s commitment to assist people who need help with the new charges is delivered. Basically, they enable the sharing of information between government departments in Northern Ireland. The creation of an accurate billing and contact system for all customers will be facilitated, and up to 200,000 domestic consumers will benefit from automatic payment of the proposed affordability tariff.

We have a duty to protect information in our possession, reflected in the introduction of criminal sanctions for unauthorised disclosure. The purpose of this transfer of information is to put together a process and package which will help poorer people, but this discloses personal financial information and must therefore be protected. The order will come into operation on 1 August, allowing time to put systems in place. The arrangements will be superseded by the main water reform legislation in April 2007.

Article 5 strengthens the department’s enabling powers under the Water (Northern Ireland) Order 1999 to introduce regulations to control water abstraction. It is over seven years since these powers were introduced, and the proposed changes are necessary for the department to introduce a modern and comprehensive abstraction licensing scheme in line with other environmental licensing schemes. The enabling provisions were added to the draft order after it was issued for public consultation, when it became clear that it would be necessary to use the proposed powers to introduce regulations as soon as possible to avoid the imposition of financial penalties by the European Court of Justice. Details of the new controls to be introduced under the extended powers provided for by those provisions are set down in the draft Water Abstraction and Impoundment (Licensing) Regulations which were published for consultation on 8 May 2006. This provides the opportunity for all interested parties to make their views known. The department will consider carefully all the comments made before making the regulations.

The introduction of new controls on water abstraction will help to facilitate the wider process of water reform in Northern Ireland and will also ensure that the Government can meet its European obligations and provide increased protection for the water environment. It is a valuable asset in Northern Ireland’s environment and deserves to be protected for the future. The order is very narrow and is the first relating to water charges. It is purely to have the powers for Northern Ireland government departments to talk to each other and set up a system to be able to help the poorer section of the community in alleviating the water charges. The other is a result of, more or less, European Court decisions to bring a more modern system of abstraction licensing. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Water and Sewerage Services (Miscellaneous Provisions) (Northern Ireland) Order 2006.—(Lord Rooker.)

I thank the Minister once again for clearly introducing this order. I support it in principle, particularly Schedules 3 and 4—which I hope that I have got right. I hope that whoever is put up as the rate charging agency—RCA—performs considerably better than the agency that currently collects rates. It has failed on a number of occasions and has caused myself and itself embarrassment on a personal front, which I will not go into.

Speaking as a farmer, I hope that the enforcement of this order and future orders on water and sewerage will be more readily, more quickly and more thoroughly enforced. We have some pretty bad examples of sewerage and chemical discharges. We had very fine publicity for one of the worst beaches in Europe not long ago, if I remember correctly. That sort of thing is simply intolerable for Northern Ireland, particularly with its growing and badly needed tourist industry. In principle, I support the order. I just raise the issues of better enforcement, stronger enforcement of the environmental regulations associated with water and sewerage, and better attention to leakages. I have also had problems with significant leakage and being charged for water that my and other people’s cattle could not possibly have used, but the comeback is unbelievably cumbersome if one tries to improve anything. I sincerely hope that that will not happen. I imagine that communities, if not every house, will be fitted with water meters in due course. I wonder what the costs of that will be and where it will lie. Having said that, I support the order.

I, too, thank the Minister for introducing the order. I fully recognise that this is not the main order which will introduce water charging in Northern Ireland, but the proposals in this order are linked to that main order—it is a bit of a trailer. It is therefore relevant to raise some of the concerns that I have about water charging as a whole. The Northern Ireland Assembly is suspended, so Ministers in Westminster have proceeded with proposals to introduce additional charges for water and sewerage services. Ratepayers in Northern Ireland already pay for water and sewerage services through their rates. These new charges would be on top of the payment made through the regional rate. It is somewhat unfair to expect the people of Northern Ireland to pay twice for the same services.

We accept the need for improved water and sewerage services, but ratepayers are not to blame for historical underinvestment. Home owners have paid their rates. It would be a cruel injustice if they were expected to pay twice. Therefore, depending on what the Minister has to say, we will reserve our position on this order until we have heard what he has to say when he sums up.

I, too, thank the Minister for his introduction on the matter. It is, as he says, a fairly modest measure. I am glad to see that finally some steps are being taken to comply with European directives. In the Department of the Environment in Northern Ireland there is a serious backlog, and has been for a long time.

As the Minister says, the measure paves the way for water charging in the next year or so. I do not want to get involved in arguments about levels of local taxation in England and Wales and comparing them with those in Northern Ireland. I am familiar with the argument that the noble Lord, Lord Smith of Clifton, has put forward about there being a payment for water in the rates. That is accurate, of course. Then there are arguments about comparability between Northern Ireland and the rest of the United Kingdom.

The point I want to make to the Minister is a different one. The local taxation rate in Northern Ireland is increasing sharply. In the previous debate, the Minister remarked on how it had to be increased more than Ministers would have wanted. All the indications are that it will continue to go up sharply over the next few years, and water charges will be introduced on top of that. Although there may be arguments about lower levels of local taxation in Northern Ireland compared with the rest of the United Kingdom, I ask the Minister to ensure that people are looking at the rate of increase in Northern Ireland. We still have many people who are on lower incomes than here. To increase the combined rates and water charges so steeply over the next few years will cause considerable hardship and will manifest itself in considerable discontent. We do not need that at the moment.

I am grateful to the Minister for introducing this matter. I pick up on a point made by the noble Lord, Lord Glentoran. Can we be sure that metering will go in eventually? The noble Lord is talking about the benefit system. I know a lot of people, as we all do, who are perhaps just slightly over the rate for claiming benefit. They will suffer greatly because of this water order. Is the idea that we will eventually get meters?

I am grateful to the noble Lord, Lord Trimble, and my noble friend Lady Blood for raising the issues and giving us a chance to put some information on the record. We are committed long term to widespread domestic metering. The intention is that as soon as possible every household will be able to choose whether a metered tariff is best for it, but that will take between five and 10 years. In the short term, the availability of domestic metering will be targeted on pension households who request an installation.

The noble Lord, Lord Trimble, made a highly relevant point. I do not have the figures with me. He is quite right to say that there was a hike in the rates; that was the 19 per cent figure. We were very mindful of that when planning the two-year Budget. The commitment was that the water rates should have started this year. That is why the Treasury made the assumption it did and we had a £50 million gap in the Budget. That caused us a little difficulty. The plan is for the water rates to start from next year, and it will be phased in. It is not intended that that large increase in domestic rates will be repeated, simply because if it was, and you brought in water rates on top, you have a recipe for a bit of a problem.

We do not accept that people are paying twice. Everywhere I turned on a tap, water came out; basically that was Stormont and Hillsborough. I did not turn taps on anywhere else. The Water Service in Northern Ireland, with the best will in the world to the people working in it, is, compared with the rest of the UK, a rubbish service. That is the reality. You have to put it as boldly as that. There are areas in Northern Ireland where people turn on the taps and water does not come out. That is, in a way, because of the funding arrangements.

I am not saying there is a magic solution to this, as has been said twice in Question Time in the past week. The Water Service is currently funded out of general taxation. It would take almost the entire Northern Ireland rate to fund the water and sewerage services, so one can see how much extra money is required. Therefore, we have a dilemma; Northern Ireland has the highest rate of public spending per head and the lowest levels of revenue in the UK. Something has to give. The short answer is that Northern Ireland households are not contributing enough to sustain investment in public services. I know that averages can be very misleading, but I have global figures for England, Wales, Scotland and Northern Ireland. They show that in Northern Ireland the average level of household taxation—that is, property charge per household as well as water rates—is £668. For England and Wales, it is £1,337 and Scotland it is just over £1,200. There is a substantial difference there. There is not a figure for water; the water is not being paid for to the amount that it should be even out of local charges.

This will be a bone of contention, but the prize is getting a decent water service, which will require a good level of investment. It is on target for the economic level of leakage for next year. The Northern Ireland water company will be subject to full normalised environmental regulation; it will not benefit from Crown immunity as the Water Service currently does, which is basically how it has got away with providing a less than good service. Over the five-year period up to 2007-08, over £1 billion in capital investment will have been made available to upgrade the water and sewerage infrastructure. The water reform is about enabling that investment to be sustained, which we will not be able to do unless we can find other streams of income; doing it out of general taxation will not work.

On the rate of increase, of those entitled to the affordability tariff 80 per cent are entitled to full housing benefit and do not therefore pay rates. We have developed a unique affordability tariff to assist those households with water charges, so there is an important element of changing over. Also, we are hoping to do it automatically, because when people have to apply for something, you always find people who do not apply and then lose out. At the end of the day, in terms of paying for what you get, metering is the long-term objective, to answer the noble Baroness. There must be a vastly improved Water Service. When people are paying more, they must see a much better service; but we need more resources for that.

On Question, Motion agreed to.