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Mr. Wiggin: I shall withdraw my amendment, but I do not think that the Minister has done us proud, as he usually does. He is clearly not himself this morning and has fallen into a dilemma—pointed out by my hon. Friends—that one cannot say that the measure is
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inclusive and write a list, and then say that the inclusion of everyone else is implicit. There is a lack of logic about that. I do not wish to vote on the amendment because I am not against such groups of people being included but I feel very strongly that others will regret that words like ''vulnerable groups'' were not included in the Bill. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: No. 254, in
clause 42, page 47, line 5, after 'or', insert 'by'.
No. 255, in
clause 42, page 47, line 22, leave out '(3)' and insert '(4)'.
No. 256, in
clause 42, page 47, line 24, leave out '(3)' and insert '(4)'.
No. 257, in
clause 42, page 47, line 26, leave out '(3)' and insert '(4)'.—[Mr. Morley.]
Clause 42, as amended, ordered to stand part of the Bill.
Clause 43
Guidance to authority on
social and environmental matters
Mr. Wiggin: I beg to move amendment No. 78, in
clause 43, page 47, line 36, leave out 'or mainly'.
This is another probing amendment. The clause refers to guidance on social and environmental matters
''by the Assembly, with respect to appointment areas which are wholly or mainly in Wales''.
My constituency is on the Welsh border, but it is not in Wales. We are lucky to have Welsh water and we are governed by the Environment Agency, which reports to the Welsh Assembly, so there are difficult devolutionary problems for people living in Herefordshire. That is why I seek guidance from the Minister on why
''wholly or mainly in Wales''
is written into the Bill. Unless the area is wholly in Wales, it should not necessarily come under the guidance issued by the Assembly.
Mr. Morley: I can explain. Amendment No. 78 would restrict some of the National Assembly's functions with regard to water undertakers operating entirely within Wales. The problem is that I do not think that there is an undertaker operating entirely within Wales, because the boundaries of the current English and Welsh undertakers are based on the old water board areas prior to privatisation. They were based on the natural river basin catchment areas, which of course is logical. As a result, some of the catchments cross the border, as the hon. Gentleman rightly states. It would create confusion and cause a number of practical problems if the Secretary of State and the Assembly had jurisdiction over their national areas, because there would be splits on the boundaries.
For that reason, the devolution settlement for water regulation provides for jurisdiction to follow company boundaries. That is the logic and the Bill follows that entirely practical precedent. Because no undertaker
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serves an area that is wholly within Wales, the technical consequence of the amendment is that the Assembly would be excluded, and the Secretary of State would have to exercise those powers throughout England and Wales. It is practical management to base the boundaries on catchment areas and not to use political boundaries.
Mr. Wiggin: Will the Minister confirm that if an English person were unable to obtain satisfaction from the Assembly because they lived in England, they would be able to appeal to the Secretary of State? If so, I shall have no problem in withdrawing my amendment.
Mr. Morley: Generally speaking, the line of complaint about water is to Ofwat, which covers both England and Wales. There is no distinction. If someone was unhappy, they could go to their Member of Parliament or local councillor.
Mr. Wiggin: The Minister should have had his Shredded Wheat or Weetabix this morning because he will know that I am probably the only Conservative Member of Parliament with a pass to the Welsh Assembly and I am probably one of the only ones whose constituency also has a Welsh name; Llanllieni.
The Minister's explanation is all right for me, but may not be for others who may wish to seek the guidance of the Assembly. However, the amendment would raise a problem and in the interests of being constructive and allowing the Assembly its full range of powers and abilities in the Bill, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Norman Baker: I beg to move amendment No. 142, in
clause 43, page 47, line 41, at end insert—
'(1A) In particular, before any alteration to the water pricing or consumer charging regimes, the Authority shall receive guidance to—
(a) define a household income to water charge ratio below which consumers will be regarded as likely to have difficulty paying such charges; and
(b) report on such new measures to be considered by the Secretary of State or the Assembly as will address such difficulties.'.
This amendment is about water poverty and charging mechanisms. The Minister is aware of amendments covering water metering so I shall not stray into that territory today. I want to raise the general issue of water poverty and to try to establish what the Government are doing about that. Guidance to an authority on social and environmental matters should take account of alterations to the water pricing and consumer charging regimes by means of the proposals in the amendment.
I am sure that the Minister knows that between 2 million and 4 million people in this country spend more than 3 per cent. of their income on water and that, in 2002, 4.7 million households in England and Wales were in debt to water companies. That is an increase of 11 per cent. since 1998–99. He will also be aware that debts have increased since the water companies' right to disconnect was ended. I am not
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suggesting that that right should be restored because it caused great hardship and many problems.
We must recognise that water debt is rising not because people are wilfully not paying their water bills because they know that they will not be disconnected, although there may be some people in that category and we should deal with them in a different way. Some people simply cannot manage and have problems with their accounts and general management of their finances. When they finally seek advice from the citizens advice bureau or elsewhere—often late in the day when debts of £15,000 or £20,000 have built up—they are advised that the debts should be paid in a particular order. Water bills are low in that order because disconnection is not an option, which is partly why water bills are not being paid and debt is rising. People are genuinely having difficulty with water poverty as a consequence.
The Minister may tell me otherwise, but I am not aware of any Government strategy to tackle water debt and they certainly have not used the Bill to do anything about that, which is a pity. I referred earlier to people who spend more than 3 per cent. of their income on water. That figure is important because it comes from the Department for Environment, Food and Rural Affairs. The Minister's own Department has set 3 per cent. of household expenditure as a measure of affordability in its sustainable development indicators and failing to do anything about the fact that that is being exceeded by between 2 million and 4 million people is a failure to follow through their own indicators.
Our amendment would go some way to addressing that, but I confess that it is not the be all and end all or the final solution to the problem. However, it will help in the discussion this morning and, were the amendment to be adopted, it would improve matters. I believe that water poverty is the sort of issue in which Government Members should be interested; some of them are interested in it, judging by what they have said in this and previous Sessions. I hope that there will be some sympathy towards the aims of the amendment.
9.30 am
The Minister needs to deal with the broader poverty issue not simply as part of the water regime but in conjunction with his colleagues at the Treasury and the Department for Work and Pensions. It should not be left to water companies to cross-subsidise to ensure that water is affordable by the poorest in society. The Minister and the rest of the Committee will know that water companies glide over such matters and subsidise people who do not pay their bills; they try to find creative ways of ensuring that people are not disconnected and that water is continually supplied. However, it is not the water companies' job to do that; the problem should be dealt with by the benefits system, but currently that is not the case. That matter could have been included in the Bill, but has not been.
Mr. Wiggin: The hon. Gentleman makes an interesting and valid argument. He will be aware also that the amount of debt owed to water companies is in the region of £700 million and rising fast. That means
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that honest consumers who pay their bills are subsidising both those who cannot pay their bills and those who could, but will not do so. If the hon. Gentleman's amendment were accepted, what would he do about the problem of people who live above properties that are not residential, such as pubs or shops, because they can still have their water supply cut off?
Norman Baker: Mixed hereditaments present a problem. If there is a residential element in a building, the prohibition on disconnection should also apply. That is the socially desirable outcome, although it could make the debt problem worse.
We must adopt a two-strand philosophy: first, to ensure that people have water, can afford it, and are not disconnected; secondly, to introduce provisions to ensure that the benefit system and other appropriate Government measures can alleviate the problems. That second element is missing from the Government's strategy.
After we had tabled our amendment, I received a letter from the National Consumer Council, warmly endorsing it. It said that the
''NCC believes that affordability of water bills is a serious problem for many households with 18 percent of households spending more than Defra's own sustainable development indicator.''
That is another way of expressing the £2 million to £4 million. The letter continues:
''Severn Trent and Anglia Water Trust Funds report customers approaching their charities have the water bill as just one bill in many, and are struggling to meet their basic needs.''
That reinforces the point that some people dealing with their own accounts have problems with multiple bills. The National Consumer Council also says that there is
''a problem with water affordability that affects more consumers than are assisted by the Vulnerable Groups Regulations.''
The Minister may say that those regulations provide a safety net. If the Minister has talked to Water UK, Water Voice and other representatives of the water industry, he will know that the general consensus is that the vulnerable groups regulations do not work. That is partly because no one knows they exist, partly because the criteria are so tightly drawn that no one qualifies under them and partly because people cannot face the amount of paperwork and other paraphernalia that must be gone through to qualify. The vulnerable groups regulations may be a good idea, but they are not working. What does the Minister intend to do about those regulations? That issue should be addressed in any discussion of water poverty and its alleviation, but I have heard no mention of it in discussion of this amendment, although vulnerable groups were mentioned earlier in the debate.
The Government say that customers struggling with affordability should be helped by means of the tax and benefits system. Potentially, that is the proper way of dealing with it, rather than expecting the water companies to find creative ways of solving the problem of water poverty. However, at present that is not the case. That is key to the amendment but goes
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beyond the Minister's brief, which is why I suggested to him that he must discuss the issue with his colleagues in the Treasury and the Department for Work and Pensions.
First, the notional element of income support that is intended to cover water bills has not kept pace with increases in those bills. Between 1988 and 1997, the benefit provided fell from 80 per cent. of the average water bill to just 55 per cent.
Secondly, some groups of vulnerable consumers on means-tested benefits, notably households without children, spend a greater proportion of their income on their water bill than others. The average unmeasured household bill in 2001–02 amounted to 8 per cent. of the income of a single person on jobseeker's allowance, which is a significant amount for someone who has not got very much to start with. The average water bill consumed 5 per cent. of the income of a couple on jobseeker's allowance and 4 per cent. of the income of a pensioner on the minimum income guarantee. The figures for measured bills are not dissimilar; 7 per cent., 4 per cent. and 4 per cent. respectively. Again, I return to the Department's 3 per cent. yardstick. In all those cases, people on low incomes, whom one can describe as vulnerable if one wants to, are paying way in excess of the Government's own 3 per cent. yardstick, or metrestick if they have gone metric.
There are variations between regions. This morning, the Minister pooh-poohed the idea of excluding rural areas from an earlier provision. One of his justifications was that water companies might develop differential charges between rural and urban areas in their own regions. I agree with him that we do not want such a situation to arise. However, he does not accept that there is already a massive variation between rural and urban areas. It is possible for a person living on one side of the street to live in an area serviced by one water company and for a person on the other side of the street to receive a much larger bill from another water company.
The existing huge variation in water company bills exacerbates water poverty. From memory—I apologise if this is wrong—Tendring Hundred has the highest average water bill in the entire country, and it represents some rural consumers.
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