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Flood and Water Management Bill

There are safeguards in the new clause, which I will come to in a moment. They include the requirement that Ofwat consult its wider consumer base, because we do not want to solve one problem only to create another. The new clause makes it clear that Ofwat must play a positive role in the charges schemes being brought forward and then work with stakeholders. I have got no further than my opening remarks, and I hope that the hon. Gentleman will allow me to explain a little more. Under existing legislation, Ofwat has a duty to ensure that charges schemes are not""unduly preferential or unduly discriminatory"." The UK Government and Welsh Assembly Government must provide in legislation that social tariffs introducing new cross-subsidies are lawful. We are bringing this new clause forward for that reason, as we believe that it gives Ofwat the legal assurance that it needs to allow companies to bring forward social tariffs. By way of response to the hon. Member for Montgomeryshire (Lembit Öpik), I can tell him that Ofwat made it clear in evidence to the Committee that it felt that there was not sufficient legal clarity to compel it to consider that approach. This new clause is designed to provide just that clarity; I believe that Ofwat will be reassured in that regard. As the House is aware, the Walker review of charging for household water and sewerage services published its final report in December. It highlighted the plight of customers who face difficulty meeting their bills because the increase in water metering in some areas can exacerbate the affordability problem for low-income families who had previously been helped by a cross-subsidy inherent in a charging system based largely on a property's rateable value. We are considering Anna Walker's final recommendations carefully, ahead of a full public consultation. One of her recommendations involves possible changes to the vulnerable groups tariff, but we agree with the Committee's conclusion, prompted by the hon. Member for Cheltenham (Martin Horwood), that it is timely to enable companies to include social tariffs that can reflect local circumstances. Those social tariffs could complement any tariffs that we might want to provide for nationally in secondary legislation in the future.