Examination of witnesses (Questions 380-391)|
TUESDAY 13 FEBRUARY 2001
(Mr Harrop) Our view is that, while they are welcome
for those particular groups, they are completely inadequate to
protect the much larger 25 per cent
of people on low incomes generally who find it difficult to meet
their water bills, particularly metered customers. It is only
a tiny minority of that group who are covered by the current regulation.
381. Yet, what are your feelings on the take-up
rate of the present regulations?
(Mr Harrop) I do not have any information on that.
382. Is there a reason why you do not have that
(Mr Harrop) We have not looked at that in detail.
Because we have been interested in a wider client group. We do
not have an opinion on whether the current measures are good or
bad for the group of people they cover. We are interested in what
you do with everyone else.
383. Would you have any concerns over the inconsistency
with qualifying benefits?
(Mr Harrop) The benefits that allow you to take up
(Mr Harrop) Again, if you want to approach water social
policy via targeting small groups with very defined needs, I think
I would like to see a wider group and therefore a wider range
of eligible benefits, but alone it cannot be the answer because
there are millions of people on low incomes who are not eligible
for out of work benefits. People with slightly more income still
have difficulty in affording water bills.
385. So how do you believe the system under
the present regulations can be improved?
(Mr Harrop) Again, it is not a subject that I have
a particular opinion on. I would say increasing take-up and broadening
the range of eligibility is fine, but I think that approach to
helping low income customers is probably inadequate in the long
term, with the regulations, it may be that you can only ameliorate
the situation rather than actually delivering real progress.
386. So you are expressing concern on a range
of issues concerning approval of medical evidence, verification
and , of course, the appeals structure?
(Mr Palmer) Generally we do not have any views about
how those particular regulations are working; it is not a subject
we have looked at closely. The other point is that we are trying
to retain a system in some sense, not change it. We currently
have a system where 80 per cent of the population pay for water
based on ability to pay. What we are looking for is ways to retain
an ability to pay element into the future. A key question, therefore,
for this Committee and the government is whether the current system
based on 1973 valuations is sustainable over the medium term?
If the answer to that is yes, then you can leave well alone. If
the answer is no, then you have to find an alternative and our
proposals are basically about that alternative, because we believe
at some stage you have to change the system.
387. You say that in the light of 25 per cent
of the people living in poverty at the present time?
(Mr Palmer) There are 25 per cent of people living
below half average income. That is not the same.
388. The evidence given to the Committee by
the New Policy Institute says that official figures show that
nearly 1 in 4 people in the UK are living in poverty. That is
25 per cent.
(Mr Palmer) 25 per cent live below one of the government's
poverty thresholds, yes.
389. So your position is that it is for the
government to take the first decision and for them to decide which
of the particular forms of charging should survive, is that it?
(Mr Palmer) Yes.
390. So that, in effect, the political decision
is to say that we keep what we have and try and modify it, or
we assume it does not do the job and we sling it out altogether?
(Mr Palmer) Yes, and there are three reasons for believing
the current system will not survive. One is that it is based on
1973 valuations and, sooner or later, that loses credibility over
time. Secondly, metering is based on a very different type of
tariff and, whether or not it is happening yet, if people act
rationally, those with high rateable values will move more and
more towards metering and that will collapse the system. Thirdly,
there is no tariff structure in place which, in my view, will
support a competition scenario.
391. That is interesting. Do you think that
competition does disadvantage many customers?
(Mr Palmer) The point about competition here is that
the product is basically uniform, so competition will all be on
price grounds, not on different types of water.
Mrs Dunwoody: You have been very helpful, gentlemen.
Thank you very much indeed.
2 Note by witness: or 40 per cent. Back