Alison Seabeck MP

Working hard for you

Water Bills

Alison raised the issue of high water bills after obtaining a debate on the issue in parliament. This long running issue had been championed by former Plymouth Labour MP Linda Gilroy. Alison has wasted no time in making it clear to the new government that she intends to maintain the pressure for action on high water bills in Plymouth and the South West.

Text of Speech

Thank you Mr/Madam Deputy Speaker

I'm very grateful for the opportunity to hold this debate and to be the first to raise this issue, in this new Parliament, on behalf of water bill payers in Plymouth and the wider South West.

The problem we face is simple -  water rates in the South West are 25% higher than the UK average, placing an unfair burden on the budgets of my constituents and all residents across the South West of England.   

This is an issue which dates back to the botched privatisation of Water Utility Companies in the 1980s and it is to the shame of all parties that the problem lays unresolved after so many years despite the constant efforts of Hon & Rt Hon members from the South West to keep the matter high on the agenda for the minister's department.    I am pleased to see members from other parties remaining tonight including the member for St Ives who is the new joint Chair of the All party Water group, the new member for Newton Abbott who is carrying on the active interest in water pricing shown by her predecessor. I hope by the end of this debate we might at least have been able to put on record options for consideration including a levy proposal.

It would be very remiss of me at this time not to place on record the thanks which are due to the unstinting efforts and enthusiasm of my former colleague Linda Gilroy, who not only chaired a very active All Party Water Group, but also individually campaigned for many years on behalf of water bill payers.  She was instrumental in organising the many meetings and briefings we had with Ministers and others and produced with the APPG a very thorough paper on the pressures felt by customers and water companies, not just South West Water which in turn fed into Anna Walker's considerations.

In 1989 the privatised utilities were given responsibility not only for the provision of water and the disposal of waste but also for the maintenance of coastline. The minister will be well aware that in the South West we are blessed with some of the most beautiful coastline in the country. Our beaches, bays and coves are famed, and rightly so, but they are an expensive luxury and one that is enjoyed not only by the people of the South West but by people across the country and from around the world. They are a common good and to the benefit of the whole public.   South West Water deserve credit for the work they have done to clean up the beaches.  They have through the Clean Sweep programme invested over £1.5 billion which has modernised sewage treatment all around the peninsula, removing almost 250 crude outfalls and transforming the quality of the region's bathing waters.

These improvements are not, however, Mr/Madam Deputy Speaker, paid for by the whole public. When the water utilities were privatised the public in each area became responsible for paying for the maintenance of the coastline in their region. For the people of the West Midlands this was not a problem - they don't have a coastline - but in the South West where we have 30% of England's coast, the burden of cost is placed on just 3% of the population.    

The Prime Minister himself acknowledged the problem when he said while holidaying in the region some time ago "I understand the unfairness that people feel in the South West that they are paying a lot of money so that there are clean beaches for people like me from Oxfordshire to come and play on."     Indeed the number of tourists to the region continues to grow  with the latest figures showing 21 million visits the vast majority of which are from people coming from outside the South West.

The water industry faces many challenges in the years ahead and none of the solutions come without a cost - they will have to deal with pollution concerns; better manage surface water and flooding; continue to try and provide an affordable supply of water; reduce their greenhouse gas emissions and adapt their service to make it more resilient to climate change.   It is welcome that all water companies are now expected to produce water resources plans for the Environment Agency and Strategic Direction Statements for OFWAT.  These are very useful indicators to assist in the long term planning for the sector but also in terms of assessing the likely impact on bill payers of these works. 

This burden is not a small one. Water Bills in the South West are 25% higher than the UK average. Over the course of a year this equates to an extra £100 and for unmetered customers the bill is considerably higher with an average of £721 as compared with £394. For people on low or fixed incomes this can mean a very substantial amount of their income. Indeed, for those on the lowest incomes, water bills can take 10% of their incomes.   For elderly individuals living alone on a basic pension, and in the south west we have a higher than average older demographic,  or for lone parents with young children and single people in rented accommodation, water bills present a struggle.  

The minister will be know that the area covered by South West Water is large and also diverse ranging from Cornwall in the far west through Devon and taking in parts of Dorset and Somerset. We have some of the poorest areas of the country. Cornwall is the only area of the country to be in receipt of EU Convergence Funding, previously known as Objective One funding and poverty remains an issue despite big moves in the right direction over the past thirteen years.   The Consumer Council for Water (CC Water) has also campaigned actively to try and influence price levels in the South West and have been carrying out research to try and discover what the bill payers themselves feel should be done to remedy the problem.

The bill payers I have spoken to feel it is unfair and indefensible to expect some of the nation's least well off families to shoulder the burden of cost for a system that requires them to pay for the upkeep of beaches.  Beaches that are largely used by wealthier holiday makers from outside the region who do not pay for the maintenance of the coastline in the South West. A solution to this long standing injustice must be found.  Many of my constituents have already lost patience with the process.  A recent letter from one elderly constituent from St Budeaux expressed utter exasperation at the lack of transparency on  how the costs were apportioned. 

In acknowledgement of the problem, the previous government set up the Walker Review to examine the case surrounding water charges.     She was asked among other things to examine the current system of charging households for water and sewerage and assess the effectiveness and fairness of the current and alternative methods of charging and the link to affordability.

Anna Walker delivered her extremely thorough report last year having toured the country and visited the South West and Plymouth on more than one occasion.    The report  acknowledged for the first time what most of us knew that the long standing high charges in the South West were a direct result of the privatisation in 1989.

Anna Walker also suggested that to tackle the root causes the options included :

• a specific one off adjustment estimated at around £650 million to pay of SW Water's debt or annual transfers either from government (and in the current economic climate I suspect this is unlikely) or other water customers from around England and Wales.  This too will not be popular because Thames Water customers are financing the Thames Tideway around the city and water shortage issues have a significant future cost in a number of other areas.

• a further alternative would be to rely on a package of proposals targetting specific groups of South West Water customers perhaps through a series of measures such as the use of a seasonal tariff which charged additional summer use - this would pick up second home users but also businesses however it could help some residents with a potential saving of between £40 and £60.  This option is seen as a tourist tax and would require compulsory metering which would also have a cost.   I know that the Hon Member for St Ives has concerns about second home owners and their potential by having meters to benefit significantly and where he believes the system is doubly unfair because as he said in a debate on 2 June 2008 on this subject that he saw it as a way of "rewarding people who should be paying more" (Column 619)

• the wider use of affordability measures an area where South West Water has been very  proactive in terms of trying to identify and assist vulnerable customers  is another option.  Such measures could be more widely applied and are potentially could deliver around £80 per annum for low income households.  This has to be linked to water efficiency which is essential to encourage not only for economic reasons but because water is becoming an increasing scarce resource at certain times and in certain areas.    As a result of this debate I have received some very useful briefings from people on related matters especially around the re use of rain water and building regulations.  I suspect there is a whole new debate to be had here but I wanted to put on record my gratitude to those businesses and organisations who have emailed me because it does flag up why debates in a relatively empty chamber late at night can be very useful and interesting.

• Low income customers with medical conditions could benefit significantly if changes to the current Water Sure scheme as recommended in the review are adopted.  This should result in it being capped at either a national average or regional basis whichever is the lower.  This would have a redistributive effect within the region - it would mean that other SW Water customers could pay more and this would probably not have broad support.      

• A national levy would have the effect of supporting South West Bill payers now but could well in the future find others benefiting from a similar scheme - those in London and the South perhaps.   CC Water's research suggests that with water bills payers social tariffs and surface water tariffs were prioritised but customers did not rule out this type of cross subsidy if it was considered as part of a package of measures.  

I appreciate that some of the options put forward will have consequences for bill payers elsewhere but we must resolve to produce a fairer system that doesn't penalise low income families merely for living on a peninsula surrounded by the sea.   

• The present government have in the work carried out by Anna Walker and their own officials the basis for going forward without further delay.  The last Government had already asked OFWAT to consider the Walker report, They cannot of course compel the regulator to act.  MPs asked OFWAT prior to the last Election to consider how the Walker review could be implemented OFWAT were clearly very willing to do this work and  their position has not changed.   By serendipity OFWAT asked for a meeting with South West MPs today and it has very usefully coincided with this debate and I am sure helped to inform those members present of their position and thoughts on the subject of affordability.

Action on water charges is long overdue and particularly action on behalf of vulnerable customers.  The public have seen improvements to the quality of the water around our coasts and this has without doubt benefited other business particularly those linked to the tourism industry but it has come at a huge cost and left too many people struggling to pay their bills and in this difficult economic position people are very worried about the pressures on their incomes.  

Can the Minister therefore confirm he will meet urgently with OFWAT and ask them to continue with the assessment of Walker and will give them a timetable for bringing forward their advice.    I do not think that South West water bill payers will be very pleased to hear tonight that this has been pushed back into the long grass when we were so tantalisingly close to a decision prior to the election.

Would the Minister advise Hon members of whether, and when, he intends to publish the Water White paper to take forward both the Cave and Walker proposals and is this likely to include looking at the future of OFWAT and its role?

Could the minister also confirm that work is continuing to ensure the widest data sharing possible to both ensure that people receive the help and entitlements they are due.  This work was en train between a range of Government Departments as well as involving other organisations.

Would he also acknowledge that there is an ongoing need for all those bodies involved in environmental improvements in water supply and removal to both inform customers on work planned and to ask their views.  When looking at affordability will he not rely on the Gov Office South West figures which include Wessex water.  It is genuinely believed that the overall position for Devon and Cornwall is significantly worse.  I hope he will give a reassurance that he will ask his officials to drill down into the figures he is given.

Finally will the Minister confirm whether or not he accepts the Walker Review principle that it was right for environmental improvements to be funded regionally except, when there is exceptional expenditure as happened in the south west and if he does, does he not feel duty bound to right the historic wrong which the South West has suffered.