Like most things, until something goes wrong, few question the shape of the water industry. Despite the British obsession with complaining about the weather, we’re now experiencing drought. And we know the problem will only get worse over the next 30 years.
The Water White Paper is the government’s plan to reform the water industry. It faces up to the long-term challenges of competition, harmful abstraction, metering and climate change. But on one issue it is silent. It’s the issue that matters to customers most – a plan to keep our water affordable.
Instead of bringing forward plans to tackle affordability or deal with the sustainability of water resources, the government has tabled a short Bill to deal with the specific issue of high water costs in the South West.
The Bill will enable the government to make a £50 payment to households in the South West to reduce their water bills. While this is a welcome initiative to tackle the legacy costs from privatisation in the region, it does nothing to deal with rising bills elsewhere in the country.
The South West has the highest bills in the country, including about 200,000 households that pay more than 3 per cent of disposable income on their water bills, the definition within the industry of water poverty. Yet there are one million people paying more than 3 per cent of their disposable income on water in the Thames region alone.
The cost of living crisis is affecting households now. From April water bills will rise by 5.7 per cent, or about £20, per year. But the government is not accepting any responsibility. Instead it is taking a hands-off approach, leaving it to water companies to design their own affordability schemes, and even giving them the choice to provide it or not.
The government had promised to publish a draft water bill in the spring bringing together affordability, sustainability and business competition issues. It is now widely acknowledged that the Department for Environment, Food and Rural Affairs has failed again, and we won’t see any legislative reforms this year. This means we won’t see any serious action on water from this government until two-thirds of parliamentary time is already used up. Even normally mild-mannered Tory MPs are getting hot under the collar, with Anne McIntosh pressing the point at PMQs.
We should be working towards extending help through a national affordability scheme – so your ability to pay isn’t determined by your postcode.
This is not an issue that is going away. After the 2008 floods, Labour secured a cross-party consensus to speed up reform in the water sector, leading to the Flood and Water Management Act. The government has squandered that legacy and torn up the consensus on water reform.
It is not good enough to sneak through legislation that deals with just one region. We will use the Water (Financial Assistance) Bill presently going through Parliament to raise wider concerns about rising bills and affordability faced by households across the country; and urge the government to think again about delaying wider water reforms.
When Cameron attempts to dodge the big questions on water and make affordability the responsibility of the big society, we will expose it.
Gavin Shuker MP, Shadow water minister