Water Industry (Schemes for Adoption of Private Sewers) Regulations 2011

My Lords, I apologise that I was not here for the opening of the Minister’s speech. I had not been made aware that today’s running order had changed, and I worked off the business papers rather than today’s list. It is just one of those things. I should say at the outset that we very much welcome the regulations. They reflect the work that we did in Government. If you are one of those people who live on an estate with private sewers and you are impatient for them to be adopted by the sewerage undertaker, you might be asking why it has taken so long. We had a consultation in 2003, another one in 2007, a third one in August last year, and now finally we have the legislation needed for this to take effect from October this year. Certainly some of my former constituents in Shepherd’s Croft in Portland will be delighted. They live in former prison officers’ accommodation where the Crown used to be the owner of the estate and the housing. They are responsible for the sewerage, which was never brought up to the standard at which the water company was willing to take it on. There remained a whole series of problems about who would pay, the Crown or the residents, when sewage was bubbling up in people’s gardens. I do not think any of us wants to see that. It will be a relief to them and to many others around the country that a way forward has now been found. That very much informs my fulsome support for what is being done here. I have a couple of questions for the Minister. I have read the accompanying papers, which are very helpful and complete. Indeed, the completeness is probably the reason why I might not have grasped some of the detail. Once I got on to the latter pages, the details might have passed me by, and I can only apologise if my questions are answered in the detail. It appears that over the long term there are good net benefits to be had from making this change. My reading was that after 32 years the net benefit would start to accrue. Obviously that is welcome, but it is important to ask about the short-term costs being borne by the sewerage undertakers. If my reading of the notes is right, the costs are around £1 billion which then has to be absorbed by customers because ultimately the sewerage undertakers, the water companies, will seek to recoup those costs from their customers. The analysis shows that the cost to individual customers of recouping them would be between £3 and £14 per annum. I am interested in finding out more about how that might break down. I know that this is difficult to anticipate, but I am sure that the department will be in communication with Ofwat about how this is going to be regulated to ensure that customers are treated fairly. For example, it will be interesting to know the difference between business customers and domestic customers. In the announcements that have been made about South West Water customers, and how their situation might be improved given the high water bills paid by domestic users in that region, there is a proposal that business customers should pay more so that domestic customers pay less. That raises a legitimate question not only for the water companies, the sewerage undertakers, but also for businesses across the country about whether they will be the ones asked to pay the bulk of the costs of dealing with the legacy of private sewerage and drainage systems. Alternatively, will they be applied evenly across domestic customers as well? There is a also question about whether the geographic distribution of these costs will be evenly spread or whether, because of regional variation—in the case of the south-west, the large extent of the coast and the cost of sewerage treatment in that area is high—each undertaker will have effectively to wash their face. Questions will be raised with regard to South West Water in particular, which I know has been very active given the Walker report and other things. Will South West Water’s customers end up losing the benefit of the announcement made by the Chancellor in the Budget if they have to pay extra costs because of the particular liabilities in that region? My only other question concerns the exemption in Clause 5 of the statutory instrument for private sewers and exempt private lateral drains on Crown land. This goes back to my experience as a constituency MP in Dorset, where prison officers’ houses were built on Crown Estate land and subsequently have been sold on. Where the lease to such properties has been passed on but the freehold remains in Crown ownership, will homes in those circumstances be exempt from this transfer because they are on Crown land or will the transfer go ahead, allowing them to benefit from the sewers being maintained and the possibility of the roads then being adopted as well? I know that this is a big issue for some residents. Having made those comments, I am happy to support the regulations.