mudhook

There was a debate in the House of Commons the other day about water usage and bills (Hansard 2 June 2008 column 614 onwards).

The main focus was on the high bills in the southwest and the especial difficulties that those on low income have in paying them. Linda Gilroy, a Labour MP from Plymouth who initiated the debate, put the context well: “too many people are struggling to pay bills that are unacceptably high. As things stand, the problem looks set to get worse.”

There was the usual nod to water meters which make people more aware of their water use and, according to Phil Woolas, the minister, reduce overall consumption by ten percent. However, I don’t see meters reducing prices as opposed to consumption in the long run as I explained in my previous water and sewerage post. Andrew George, the Liberal Democrat MP for St Ives, made the interesting point that metering benefited second-home owners by keeping their water usage bills low. Fairness is always complicated.

In the Commons there was a recital of small measures to help but no one seemed to have any effective major idea about getting to more affordable prices here (apart from the Libdem idea of a national equalisation scheme, in effect a subsidy of bills in Cornwall and the southwest by the rest of England, an idea which has its own problems as I outlined in my previous post). The (im)practicality of southwest customers breaking out of the geographic straitjacket into a genuine choice of supplier was not discussed.

I’m afraid it reminded me of HG Wells’s comment about the Fabians: piddling under the door and calling it the stream of progress. I think it’s obvious that customers in the southwest are stuffed: high bills and no choice in supplier. The problem of how to unstuff them is truly difficult. Phil Woolas said that “affordability continues to be a key concern of the government” which shows how desperately bereft of transformative ideas the government is.

Who’s to blame for our present position? Linda Gilroy put it crystal clearly when she spoke of “the botched privatisation by the Conservative government.” Indeed.

I repeat what I said before: it is time the Conservatives came up with some ideas for making better this situation that their party created. They keep very quiet about this problem and I think they aren’t going to volunteer a solution so let’s press them.

related posts

Can Cornwall’s water bills be cut? 6 June 2007

The water of affliction 2 October 2007

Water bills in the southwest are high compared with the rest of England and the government has been under continual pressure to get them reduced.

There is no easy way of cutting the prices charged by a private company, regulated and without competition. The regulatory system hasn’t put a stop to high bills because the company can justify them to the regulator though many customers probably think regulation ineffective in protecting their financial interests. Strengthening regulation so that it deeply cuts bills would amount to the government capping the prices charged by the private company at a level that the company considers destructive to its effective and efficient operation. No government of any party is going to do that.

The Libdems have suggested a national subsidy: our bills here are reduced by getting people in other parts to pay more than the economic cost of their water supply. I agree with an equalisation scheme but have two concerns about this.

Firstly, Libdems argue that Cornwall can run its own affairs without outside intervention. They support an assembly (though a regional English one rather than a national one, I think). Yes, the people who tell us that they want devolution in Cornwall also want people elsewhere to chip in and help to pay our bills. It is incoherent for devolutionists to ask that people in, say Northamptonshire and Cumbria, be required to subsidise private water company bills in Cornwall; or at the very least this needs more arguments than Libdems have so far presented.

Secondly and more importantly, I should like to see them take this case for higher water bills elsewhere to those who will pay more. Perhaps the people of the southeast, where they face drought, will willingly pay more so that we may pay less? Why don’t the Libdems test the waters? Let them ask and let us all see what the response is.

Labour has now come up with an answer. Phil Woolas, the minister for water bills, wonders whether compulsory water meters in the southwest would deal with the high bills. No it won’t. It would simply move around the amounts individual households pay, some paying more and some less than now. Universal metering might reduce the total amount of water used and thus the costs of the company but not by much as the infrastructure for example would be the same. The company would still have to raise virtually the same amount of total money from customers so I expect the effect on bills overall would not be significant. We need to see what the estimated effect would be.

Of course universal metering might be fairer overall than the present system though not to households with young children or sick members, but in any case it does not deal with disproportionately high water bills in the southwest.

Labour has come up with an answer that is not a solution.

The Conservatives got us into this expensive mess when they privatised water supply and sewerage. It would be good to hear some ideas from them about how we find a way through the Northwest Passage of high bills. Don’t hold your breath.

related posts

Can Cornwall’s water bills be cut? 6 June 2007

Tory water bills 6 June 2008