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Water and Sewerage Charges (South West Water)

It is a pleasure to serve under your chairmanship, Mr Amess. I have not had the experience before, but it is certainly a pleasure. Today, I am raising a matter that is of great concern to the people of Devon and Cornwall and has been for as long as I have been a Member of Parliament, and I suspect for longer than any of us here today have represented our local communities. I had the pleasure of raising this issue in an Adjournment debate previously, but this is the first time that I have been able to do so as a Member of Parliament on the Government side of the House. The fact that the problem has remained almost exactly the same for so long is both a reflection of the intractable nature of the issues involved and a sad reflection on the record of previous Administrations. They had time to tackle this injustice, but sadly they were unable to come up with a solution. I sincerely hope that the Minister who is here today will not let our Government follow the same path. Of course, the problem is the disproportionately high water bills in the south-west. Although the new Ofwat settlement has only just been released, the indication is that the average bill in the region will be £517 a year and the price rise will be about 8.1%. Rather mischievously, Ofwat had initially told the press and the public that the rise would be only about 5%, but that forecast assumed that customers would adapt their behaviour in the future. It is accepted that more people will move to using water meters. Around 70% of water customers in the south-west already have one and Anna Walker predicted that that figure would rise to 80% by 2015. Moving to water meters would save those south-west customers around £400 per year, but the money still has to be found from somewhere. Metered bills will rise in response to the dwindling supply of high-paying unmetered customers, adding more than £200 to the bills of metered customers. Metering and in-region social tariffs have long been identified by Ofwat and the Government as an easy solution, but they do not have an impact on the underlying problem. Even if one takes the price rise as a 5% average, that is still far too high for most people to cope with in this age of austerity. It is also important to remember that I am talking about average bills. Many of my constituents now face water bills far in excess of £1,000. That reflects a range of circumstances, from medical conditions that require extra water to simply having a larger family. As always, unmetered customers suffer the worst. The average bill of £517 in the south-west compares starkly with the average bill in London, for example, which even for unmetered customers is only £332 per year. The privatisation of utilities was meant to open up sectors to competition and to empower consumers, but the privatisation of water has done nothing of the sort. Can one imagine the outcry if electricity prices were 60% higher in Newcastle than they are in London? Any electricity company that tried to implement such price disparities would simply see its regional market share evaporate. Hopefully we are all aware of the background to this problem. The privatisation of water in the late 1980s left South West Water with a backlog of infrastructure improvements to invest in. Combined with a tiny customer base and a lengthy coastline, that backlog meant that under the system of regional monopolies South West Water customers would pay higher bills in perpetuity, with their only recourse being to move somewhere else in the UK. For all its inaction, the previous Government at least recognised the problem. The result is Anna Walker's report into water charging, chapter 14 of which focuses specifically on the south-west. The coalition is about to respond to her report, which again makes this debate timely. I want to cover briefly three points that are relevant to what is happening now and hopefully the Minister can take them into account when he is developing the final policy on this issue. First, the role of Ofwat needs to be assessed very closely. Ofwat's role as the regulator must be to protect customers and as Regina Finn, its chief executive, said herself:"““People can shop around for the best deal on many things, but not water. Our job is to do this for them.””" I am afraid that the overwhelming view of my constituents is that that ““job”” is not being done. Many of them see Ofwat as hindering rather than helping the situation in the south-west. Whereas bills fell slightly ahead of inflation in other areas, the south-west has seen the very large rise that I described.