DUTY OF WATER AUTHORITIES TO REFUND CERTAIN CHARGES

HC Deb 18 February 1976 vol 905 cc1297-378

3.51 p.m.

Mr. Arthur Jones (Daventry)

I beg to move Amendment No. 1, in page 1, line 6, after 'refund', insert 'by such instalments as shall be prescribed by the Secretary of State by Statutory Instrument'. The wording in the Bill has led to some confusion. The clause provides that on 1st April 1976 it shall become the duty of every water authority to refund. That wording is open to some doubt. One interpretation might be that on 1st April 1976 refunds shall be made forthwith and that there shall be a duty on those to whom refunds will be made to demand that they should be paid immediately. In view of the complications, I do not think that that can be the purpose of the Bill. This matter was taken up briefly by my hon. Friend the Member for Ashford (Mr. Speed) on Second Reading, when he said: Clause 1(1)…appears to be inaccurate since the action taken will be by way of credit set off against general rate."—[Official Report, 12th February 1976; Vol. 905, c. 667.] That raises another matter—namely, that there will not be actual refunds but credits against other demands issued by local authorities. In the light of what I have said, water authorities will be deluged—that was my hon. Friend's word—with demands for cash payments. The purpose of the amendment is to try to establish the position more clearly and to try to avoid such a deluge.

The task of effecting refunds, which will apply to industrial and commercial premises as well as to domestic properties, will be onerous. I do not think that that can be denied. There is a tremendous amount of administrative detail involved. There will be investigations and verifications in many cases. Details of the non-domestic properties concerned are not available at present as only domestic properties benefited from relief this year.

A tremendous job of identification is involved. There are also substantial numbers of domestic properties in receipt of the 50 per cent. relief for the current financial year, despite the fact that they were drained to a surface water sewer. They will not be treated as unconnected for the purpose of refunds. Water authorities can do no other than take all reasonable steps to ensure that refunds are effected as soon as practicable on or after 1st April 1976.

The term "refund" may be misleading as in practice action that is taken in compliance with the obligation will be by way of set-offs against general rate. The Bill should specifically authorise this procedure, otherwise the water authorities may be faced with demands for direct refunds to consumers, notwithstanding that the district councils will make the appropriate calculations and allowances in their rate demands where possible.

The Minister of State, Department of the Environment (Mr. Denis Howell)

I understand what the hon. Member for Daventry (Mr. Jones) has said, but I do not believe that the amendment is practicable. The purpose of the amendment appears to be to allow the Secretary of State to prescribe in the Collection of Charges Order that the making of refunds be spread. This is a different approach to that of other Opposition amendments, which are designed to allow the financing of refunds to be spread.

We take the view that the amendment would prolong the agony of getting over Daymond. The simple fact is that certain ratepayers, certain users of water facilities, or certain householders who have no facilities, have been required to make illegal payments over the past two years. It must follow that they are now entitled to get back their money. If we sought to pay them back the money in instalments, as the amendment suggests, I think that they would feel themselves to be particularly aggrieved.

On Second Reading the view was taken that the last thing we wanted to do was to fail to accept the House of Lords judgment. That judgment is quite clear. If people have paid for two years charges illegally made by the water authorities, it seems that whatever the inconvenience to the water authorities or anyone else, we have an obligation to put the matter right as soon as possible. I do not believe that the instalment system would be accepted. In any case, I do not think it would be practicable.

I believe that people would not accept refunds in instalments but would award themselves what they thought was the credit they should have. If Parliament sought to put into statute form an instalment system which was not acceptable to those who had won their point in law, very serious questions would be raised, and not least for those local authorities which have to collect the money. It would place another tremendous administrative burden on local authorities in trying to challenge some of the householders involved, householders who might think it right, in view of the House of Lords judgment, to take the law into their own hands once more.

We have discussed in considerable detail with the local authorities the scheme by which refunds will be made. When a local authority knows that a property is unconnected it will reduce its rate demand by the amount of the refund. I should be reluctant at this stage, bearing in mind the extreme pressure on the timetable before us—local authorities are now assessing their rate demands, feeding the information to computers and trying to obtain the returns so that the rate demands can go out to the ratepayers on 1st April—to add any further contributory pressures. The principle lying behind the amendment would provide such pressures.

For all those reasons I hope that the hon. Gentleman will realise that the principle in the amendment would not be accepted in equity by the householders concerned, or by the local authorities, as being a practical proposition. None the less, I have some sympathy with what he has said. I hope that the amendment will not be pressed to a Division.

Mr. Graham Page (Crosby)

I am sorry that the Minister has begun with the argument that we are too late to make amendments of this sort, the administrative alterations which have been necessary to effect the plans that he has made with the local authorities and the preparations that they have made to carry out his Bill all making it too late to make further alterations.

I appreciate that the House of Lords found that the people concerned are entitled to refunds but, after all, the repayment will be something of a windfall. I do not think the local authorities, on behalf of all other ratepayers, are morally obliged to make these refunds immediately in one year. It is a large sum of money both to those who have been deprived of it and to those who will have to pay it back. In all the circumstances of the case, everybody thought that the law was as it had been intended to be in the 1973 Act. Certainly in all the debates on the Bill everybody concerned considered that the law was being administered properly, but the House of Lords decided that that was not the case and that certain moneys should be returned. Surely in view of the heavy burden on the general ratepayers, it would be reasonable to spread the repayments over a period of time.

4.0 p.m.

I suppose that 70 per cent. of those who are to receive a refund comprise industrial or commercial ratepayers. They will already have cushioned themselves against this situation and will have been able to pass the charge on to customers. They are now to be paid all that money back in one adjustment in one year. So far as they are concerned, there will be no harm whatever in spreading the payment over a period of time.

The amendment leaves the matter to the Secretary of State to decide what is a reasonable period of time. In the rush to get this Bill on the statute book, it is unfair to ask the Opposition to be specific in their amendment, but this is a matter for the Government to consider. I wish to emphasise that industrial and commercial ratepayers will have made provision for these matters in their accounts, but in the case of domestic ratepayers, in respect of whom it is claimed that there has been an improper payment, it is surely reasonable to ask for an immediate refund. Therefore, it would be possible for the Secretary of State to say that for industry and commerce the refunds will be spread over four or five years, but that in respect of domestic ratepayers who had been deprived of money to which they are entitled the refunds will be made within a year. I hope that the Minister will reconsider the matter and not cast aside the amendment out of hand.

Mr. Jim Marshall (Leicester, South)

I appreciate the point of view put forward by the Minister and I understand his feeling that repayment should be made as quickly as possible. However, we must not under-estimate the degree of difficulty faced by local authorities in working out the amount of money that should be refunded and the additional difficulty of identifying properties in respect of which refunds are to be made.

I urge the Minister, even at this late stage, to think again. Unless some alteration is made in Clause 1(7)(a), local authorities will face severe problems of identification. The Minister should make clear that it will not be possible for refunds to be made immediately. Perhaps words could be added to Clause 1(1) to the effect that the refund should be from 1st April 1976, or on or after that date. That will give local authorities more time to determine the amount of refunds and the properties affected by the House of Lords' judgment.

Mr. Gwynfor Evans (Carmarthen)

I wish to make a plea that domestic rate-payers should be refunded these sums as soon as possible, or certainly as soon as it is practicably possible for local authorities to do so. I am not saying that local authorities should be pressed too hard, but it is surely right that domestic ratepayers should be refunded as quickly as possible because they will not be refunded the full amount that they have paid. We must remember that we are now passing through a period of inflation. In other words, those ratepayers will be receiving that money, less the amount due to inflation. What the water authorities have had is an interest-free loan over that period of time from these rate-payers. Therefore, the sooner they are paid back the better.

Mr. Nigel Spearing (Newham, South)

I wish to comment on the points made by the right hon. Member for Crosby (Mr. Page). Acts of Parliament and rules and regulations do not always give sufficient consideration to practical difficulties of administration. The amendment virtually lays down that local authorities should be asked to make the adjustment twice. That surely will add to the already heavy difficulties in town halls. They already face possible changes in regard to direct billing in the second year.

Local authorities are also faced with having to make a split refund—one refund to the domestic ratepayer in one fell swoop and split refunds in respect of industrial and commercial properties. Since these matters have to be differentiated in rate demands, it will make matters even more difficult for town halls. Many calculations and adjustments have to be made and we do not wish to cause any more confusion in what has already become a sadly complicated issue.

Will the Minister say whether the right hon. Member for Crosby was right to say that a good deal of money has been taken from industrial and commercial properties that are unconnected. I understood that the House of Lords case was fought in regard to domestic properties and that relatively late in the day it was discovered that the judgment applied to a good number of industrial properties, and indeed to many large publicly-owned undertakings that will not now be subject to these charges. I may be wrong in thinking that the main refunds will be made to domestic rather than to industrial ratepayers, and I hope that the Minister will clear that point in his reply.

The question of unfairness in regard to the exemption of large industrial undertakings and the anomalies created is a matter of universal concern to hon. Members on both sides of the Committee, and indeed to the public as a whole.

Mr. James Scott-Hopkins (Derbyshire, West)

I hope that the Minister will carefully consider this amendment, particularly in view of the suggestion that there should be a split between the two forms of refund. The hon. Member for Newham, South (Mr. Spearing) said that there were bound to be administrative complications, but surely there is little cause to hold back refunds for domestic consumers.

The Minister said that if the refunds could be made quickly, this obviously would happen. If repayments are not made reasonably quickly, I know that some of my constituents will certainly withhold automatically the amount they feel they have paid in error and much chaos will ensue.

Mention has been made of the situation of industrial users following the House of Lords judgment and the way in which their payments should be recouped. Therefore, I think that there is a case which the Minister should examine.

I do not wholly accept the argument based on administrative difficulties. It has been suggested that the local authority computer has already been used and that the software of refunding has been worked out. I assume that it is being said that the bills sent out have already gone through the computer.

Mr. Jim Marshall

Will the hon. Gentleman picture a house which is near a road and which has a drainpipe down which the surface water runs, from which it flows directly on to the highway and down a drain? One could argue that that was indirectly connected to a surface water or a foul water sewer, in which case it would qualify for sewage disposal payment, to empty the cesspool if it had one, plus the general service charge. That is the difficulty which local authorities will have to face and determine.

Mr. Scott-Hopkins

I agree that there are difficulties and problems and that the local authorities will have to determine this issue. However, following the judgment of the House of Lords, there is no option for the local authorities——

Mr. Jim Marshall rose——

Mr. Scott-Hopkins

I am sure the hon. Gentleman agrees that we do not want to prolong this debate. The local authorities will have to make a decision. Nevertheless, in principle, surely they have to adhere to the judgment which has been given. The Minister has accepted that that is so. Of course, there are complexities. I would be the first to admit that there will be anomalies.

I hope that the Minister will give serious consideration to the point of view which has been put forward by my right hon. and hon. Friends and agree that under the terms of the amendment it will be perfectly feasible for our proposals to be implemented.

Mr. Ken Weetch (Ipswich)

In the light of all the complexities which have arisen from the House of Lords judgment and from what went before, surely this Committee should consider what in equity is right and what is the correct action to take now that the mistakes have been made and that certain moneys have to be paid back. As a layman I believe that if certain people have been wrongfully charged and have had to pay out money which the law said they should not have paid, they should get their money back as quickly as possible. In equity I cannot see any argument of substance against that proposition.

It has already been said that the provisions of the amendment prolong the administrative agony. In my view that is neither here nor there. At the end of the day we must make the administration fit the equity of the case and not the reverse.

The first principle is that if people who have been unconnected to the sewerage system have been charged, they should get their money back as quickly as possible. The right hon. Member for Crosby (Mr. Page) suggested, I think on the grounds of equity, that there was a distinction to be drawn between industrial and domestic users. All types of domestic users have had the rough end of the stick through these mistakes. The person who was unconnected had the rough end of the stick in the sense that he had to pay charges. As local authorities recoup the charges from other domestic ratepayers who were connected those people will face extra charges which they did not think they would have to face in the first instance. Therefore, to some extent everyone is at a disadvantage. However, the right hon. Member for Crosby made a perfectly fair point. The industrial consumers have already recouped these costs in their pricing mechanisms. Therefore, if my right hon. Friend can suggest any ways in which a distinction can be made, in the nature of the equity of these cases he should try to do so.

If the whole trouble stemmed from the faulty drafting of the Water Act 1973 and the inadequate arrangements that were made for transitional charges, should not central Government bear some responsibility in financial terms because they were the source of the error in the first place?

4.15 p.m.

Mr. Julian Ridsdale (Harwich)

I am sure the hon. Member for Ipswich (Mr. Weetch) realises that East Anglia faces a 20 per cent. increase in the water rate. It is in that context, bearing in mind that in the prices and incomes policy there is a restraint on wages, that I address myself to the problem.

This is a matter of great importance. The 20 per cent. charge, because of mistakes made by central Government, will fall on a great number of retired rate-payers who cannot afford it. It is for that reason that I ask the Minister to bear in mind that the large industrial users have taken this amount into account already. Indeed, the Government will be refunding huge sums to the large industrial users, but the people who will have to pay for the mistakes are the domestic ratepayers, especially those in East Anglia. The authority does not have reserves like some of the other water authorities because it is a new authority. I hope that the Minister will reconsider his decision to pay our millions of pounds to some of the big industrial users. This is a time of prices and incomes restraint which especially affects retired people, who, because of the mistakes, will have to bear a 20 per cent. increase in charges. The Government should think again.

Although equity may be required, as we must follow equity, so good law must follow common sense. In my view common sense says that we should help the domestic ratepayer far more than is proposed by the Bill.

Mr. Joseph Dean (Leeds, West)

The hon. Member for Harwich (Mr. Ridsdale) made a special plea on behalf of some of his constituents whose water rate will be increased by 20 per cent. this year.

Mr. Ridsdale

I was referring to the whole of East Anglia.

Mr. Dean

I note what the hon. Gentleman has said. However, I have to shed crocodile tears for the hon. Gentleman's constituents. The fundamental mistake was made in the last local government reorganisation in connection with which the right hon. Member for Crosby (Mr. Page) cannot stand aside or be blameless. He played a major part in managing to concoct the mess in which we now find ourselves.

At that time the Government of the day did not know the consequences of the legislation they were passing, as was shown by the judgment in the House of Lords. They assumed that they could carry on with custom and practice which have taken place in the past. Once again the onus of putting matters right in an administrative sense falls upon the local authorities, some of whom were stripped of their powers, who were doing a first-class job before local government reorganisation. Now they have to unscramble the mess.

I remind the House that at the time of the local government reorganisation there was an Adjournment debate dealing with the whole question of the new water authorities. At that time it was suggested that legalised brigandry was taking place because most of the existing large water authorities which were centred on the big cities and which had put millions of pounds into providing water and sewerage services were, at the stroke of a pen, handed over to someone else. The city of Leeds possessed £37 million in valuation and a certain amount in standing debts, but this was taken away and given to the new water authority. The same happened in Manchester where £200 million worth of assets had been built up by the city but was taken away overnight. This is perfect example of a Government introducing a scheme, the end result of which it does not know. This Government now have to pick up the hot potato and to put the matter right.

I hope that people can be recompensed as quickly as possible if they have been falsely charged. What sort of situation would it be, however, if it were discovered that the whole basis of charging for sewage collection under previous Acts was illegal, too? I hope that the Minister will try to create a situation in which the money can be refunded as quickly as possible, but it is no good expecting local authorities to put the matter right over-night. Their calculations for the current year have already been made based on what they will receive in rate support grant.

I hope that the Minister will consider the whole question of regional water authorities. They seem not to be answerable to anyone in particular. Their administrations are highly salaried. They demonstrated their concern for the national economic situation just before the Government and the trade union movement reached agreement on the £6 pay limit. They decided, in their selfish interest, to beat the limit by awarding their chief engineers a £4,000-a-year increase in salary. These are some of the aspects which should be looked at and which go beyond paying money back to householders wh owere incorrectly charged.

It does no good to the status of this House for hon. and right hon. Members to speak in the debate as though their hands are completely clean and they bear no responsibility for what has happened. Let us make clear what has happened in this situation. These water authorities do not even collect the money. The local authorities have to collect it on their behalf and then hand it over to them. Some of the employees of the water authorities get much higher salaries than the chiefs of the local authorities.

Mr. John Farr (Harborough)

I should declare that I have an interest in this matter in that I own one of the properties on which charges were wrongly levied in 1974–75 and 1975–76—wrongly, because it is not connected to the public sewerage system. I am looking for a refund, and pretty rapidly, too. It is wrong for payment of the refunds to be too protracted. The money could be repaid by instalments by all means, if that is the answer, but a pattern of instalments should be established so that all the money should be paid back within six months.

Basically, the burden of what has happened is falling upon rural dwellers. Living in the countryside, whether on a farm or in a village, already has enough disadvantages. Public transport is non-existent, petrol prices have multiplied, and in my constituency a post office has recently closed down.

The payments should be made at an early date, and in full, and there is a strong case for requiring the payment of interest on the outstanding refunds at current rates. I could quote many cases from my constituency where payments were wrongly made up to two years ago. Since then interest rates have probably averaged 12 per cent, to 12½ per cent. Some farmers made substantial payments. It would be wrong for the House to pass the Bill without providing for the payment of interest for the time during which the money is outstanding under any timetable which may be agreed.

I have been lobbied by the Severn-Trent Water Authority which operates in my constituency. It has asked me to make certain points, but I do not recommend them to the House. It feels that the Bill should be amended so that the regional water authorities should make the refund as soon as practicable. Many water authorities would like to stress that the word "refund" is inaccurate, They would like compliance with the obligation to be by way of an allowance against the general rate and they would like the Bill specifically to authorise that procedure. I undertook to mention the points, although I cannot say that I agree with them.

All I want for my hundreds of constituents who are entitled to money paid out years ago is that it should be paid back as soon as possible and that a proper rate of interest should be levied.

Mr. Hal Miller (Bromsgrove and Redditch)

I support the amendment to provide for refund by instalments. I, too, declare an interest in that I was in a hereditament which was not provided with sewerage by the authority, and I, too, am looking forward to a refund. I part company with my hon. Friend the Member for Harborough (Mr. Farr), however, on his suggestion that this should be done immediately and with interest. As regard those not connected to sewers, my fear is that the last state of these men will be worse than the first. The matter is proving of great concern already to my district councillors who have the duty of levying the charges on behalf of the water authority.

The increase in the charge this year is more than 50 per cent. and has been referred to the Price Commission by my district councillors. The charges now exceed the district council rate, and that is a lunatic state of affairs which will be compounded if the money is to be refunded in one go in one year. It is for that reason that I strongly support the objectives of the amendment. We must bear in mind the considerable administrative burden which an immediate refund would impose upon the authorities.

The only point on which I agree with the Severn Trent Water Authority is in its suggestion of a remission of future charge rather than a refund. The Bill has been pushed through with such haste that it has been impossible to obtain reasonable instructions and fully to ascertain its consequences. I am most concerned that the last state of these men will be worse than the first. I hope that the Government will accept the amendment which will allow some breathing space for further consideration of those consequences.

4.30 p.m.

Mr. Keith Speed (Ashford)

The difficulty facing the House is that, for reasons which we understand, we have had only a little time—between Second Reading and today—in which to consider the matters dealt with in the Bill and this means that many of the amendments in my name and in the names of my hon. Friends may be defective.

I agree with the hon. Member for Carmarthen (Mr. Evans). What we are trying to achieve is to get the refund paid not only as quickly as possible, but as quickly as practicable. There is a real danger for both water authorities and district councils that under the Bill as drafted many people will expect to get their refund on 1st April or perhaps within a few days thereafter. There is, as the hon. Member for Leicester, South (Mr. Marshall) said, the question of ascertaining all the properties involved, and unless we later make some amendment to Clause 1(7), we shall make life very difficult for many district councils.

The debate has ranged over the whole question of the different proportions of refunds and whether industrial or domestic ratepayers will benefit. I do not wish to anticipate later amendments, but my information—and perhaps the Minister can confirm this as the matter has been raised by others—is that at the moment 60 per cent. of the refund will go to statutory undertakings or nationalised industries, 20 per cent. to domestic rate-payers, and the other 20 per cent. to non-domestic ratepayers. If that is so, it is a matter which the House may wish to consider seriously when we come to later amendments.

What we are seeking to do is to say, in ways which may be defective—and if they are perhaps the Minister can suggest ways in which we can word this to get the matter clear—that the refunds shall be paid as soon as possible as well as as soon as practicable. We do not wish to make life intolerable for water authorities or district councils which may be facing law suits by ratepayers who do not get refunds immediately because of the practical difficulties. That is what we are about, and if the Minister could respond to that it would be of great assistance. With respect, it is no good the Minister or I saying that the money will be repaid as soon as possible after 1st April. We want to make sure that the matter is legally watertight so that we do not have people going to their solicitors to get them to chase the refunds.

My reply to the hon. Member for Leeds, West (Mr. Dean) is that we shall make progress in this Committee and on the Bill if the House as a whole accepts that no one is guiltless. I accept the reasonable proposition put forward by the right hon. Gentleman on Second Reading. As he said, the previous Conservative Government did not get it right, but the previous Labour and Liberal Oppositions did not get it right either, and many people, including local authorities and others, did not seize on this point. We have made a mistake. We are all genuinely trying to put the matter right and we should not pursue too far a Second Reading debate on the Bill, otherwise we shall sit very late into the night indeed.

Mr. Denis Howell

I respond at once to the closing words of the hon. Member for Ashford (Mr. Speed) and say that that is very much the spirit in which we have approached the Bill. The previous Conservative Administration had all the resources and the advice that I have, and between us we did not pick this up. I do not complain about that, but I think that it is the duty of the House, with a degree of humility, to seek to put the matter right rather than allow the difficulties to continue.

It has been said that we are rushing the Bill through, but we cannot rush something through too quickly if that is being done to put right something that has been proved to be illegal, and I do not think that it helps to try to apportion blame in this matter.

Mr. Graham Page

My personal opinion is that we were all right, except the Law Lords.

Mr. Howell

That is a point with which I have considerable sympathy. After all, it was only by a majority of three to two that the Law Lords decided that we were wrong, and the No. 3 judge said that he had such grave doubts about the rightness of his decision that he put it forward with great hesitation. Nevertheless, on such considerations is the law of this land made, and we are faced with the effect of that judgment. I shall not go any further into the nature of their Lordships' judgment. Suffice it to say that I, as a referee, accept the whistle when it is blown, and we must now try to put things right.

The House would do well to remember that these charges were illegal. My hon. Friend the Member for Leeds, West (Mr. Dean) and the hon. Members for Carmarthen (Mr. Evans) and Harborough (Mr. Farr) are right. In our consideration of these matters we cannot proceed from any proposition other than that the charges have been declared to be illegal. We have to accept that as the starting point for this Bill.

Whatever the Bill says, if anybody in this country,—domestic or industrial—knowing that the charges which he had paid had been declared to be illegal, decided to help himself to a refund, that would create an impossible position. It is doubtful whether the courts would uphold regional water authorities if they were trying to stop people from recovering money which it had been held had been collected illegally in the first place.

What is being asked for in this amendment is retrospective legislation. What we want to do is to get the matter right for the future. What some hon. Members are saying is that we cannot get it right for the future, so let us hedge our bets about the past, let us put an illegality right by instalments. I do not believe that that would go down well with domestic ratepayers, with farmers or even with nationalised industries.

Let me give the House a breakdown of this figure of £60 million, which is what it will cost us. One-third is to be refunded to domestic users and two-thirds to nationalised industries. That makes it attractive for some Tory Members to say, "These are monolithic nationalised industries and we can treat them"——

Mr. Tony Newton (Braintree)

The figures do not make sense.

Mr. Howell

One-third and two-thirds make a whole.

Mr. Newton

What about the other industrial and commercial ratepayers? The figures are to be one-third for domestic users, and two-thirds to the nationalised industries. What about the rest of the industrial and commercial sector?

Mr. Howell

I am sorry. It is not the figures that are wrong, but my terminology. I should have said two-thirds to nationalised and other companies, that is, the whole of the industrial content. It is true that nationalised industries are large units and that there are big concerns such as ICI and IMI in Birmingham, but if we consider the nationalised industries we see that they have recovered this money from millions of their users. What we are talking about are millions of people who have incorrectly been charged for gas and electricity. Had the true situation of the law been realised, their bills would have been smaller.

I cannot say, and I do not think the House ought to say, that it would be an affront to all those consumers to argue that we recognise the plight of the domestic user but we shall totally disregard the plight of millions of other users because they happen to have paid their bills to nationalised industries.

I agree with my hon. Friend the Member for Ipswich (Mr. Weetch) that we have to deal with this matter on the basis of equity. In my judgment we must deal with the matter on the basis of equity. But there will be difficulties.

My hon. Friend the Member for Leicester, South (Mr. Marshall) raised the question of the difficulties of identification. Such difficulties will be nothing like as great now as they would have been a year ago when we gave a 50 per cent. discount, which made it possible to identify all the domestic properties that were not connected. There will be difficulty in identifying those people who have paid the sums of money but who have moved house.

The Bill allows regional water authorities to consider recovering the money in instalments. Local authorities, on the whole, have said that they do not want that because it would create serious cash flow problems for them. They would have to borrow money for that purpose and pay interest charges.

I have sympathy with what has been said about paying interest. That is an argument for getting the matter over and done with as soon as we can. As water authorities have collected the money illegally in the first place, it could be argued that since they have had free use of the money, they should pay some interest. But we are not proposing that at the moment. The hon. Members for Carmarthen and for Harborough must be right in saying that the least the House can do is to pay the money back as soon as possible and to get the matter out of the way.

Mr. Farr

I was prompted to raise the matter because this year the Inland Revenue has started to levy interest on overdue tax. It is illogical for those who have paid money that they should not have paid in the past not to have interest relief on that money.

Mr. Howell

I understand that the charging of interest on overdue tax is not new, but I have not found myself having to pay such interest, so I cannot speak from personal experience.

Mr. Graham Page

If an action were brought, based on the judgment of the House of Lords, for the return of this money, judgment might be obtained and I think that the plaintiff could ask for interest on the money he had paid over, as from the date it was taken from him. Perhaps we should include in the Bill a provision to preclude an action of that kind.

Mr. Howell

The confusion gets worse as the matter proceeds but I am obliged to the right hon. Gentleman for mentioning it and I will have the matter examined.

For the reasons I have given I cannot advise the House to accept the amendment. I know that the hon. Member for Daventry (Mr. Jones) has had views expressed to him by the Association of District Councils, but the views I have had from the treasurers of that Association seem to be at variance. Some of the other local authority associations, when asked about their attitude recently, said "For heaven's sake, get this thing out of the way." They said they had to decide their calculations, what their rate demands were to be, and that if there were any undue delay, they would be in administrative difficulty. For those reasons above all, I ask the House not to pursue the amendment.

4.45 p.m.

Mr. Arthur Jones

I recognise the Minister's difficulties and I know that he has taken wide advice on the problems which have been drawn to his attention. We have had a wide-ranging and interesting debate on the amendment, but to leave the situation as it is will lead to great difficulties and a tremendous number of problems. Some of them have been highlighted during our discussion.

Our purpose is to ensure that repayments are made as soon as possible and I subscribe to that aim. The obligation that was placed upon the water authorities to refund on 1st April 1976 is incapable of fulfilment. Therefore, we should be trying to find some method of easement by which a sensible arrangement can be made. The rigidity which the Minister has brought to the debate on the amendment leads me to the conclusion that he has not been made aware of the practical problems with which the water authorities will be faced. We seek to put the matter right. We need methods to do that which will not create further problems and anomalies. That is the purpose of the amendment.

The amendment refers to such instalments as shall be prescribed by the Secretary of State by Statutory Instrument. That is the key to the amendment and the Minister has not addressed himself to it. The amendment would enable water authorities to meet the timetable and to differentiate between the liability for the refund to domestic ratepayers and to industry. Repayment on the basis of prescribed by the Secretary of State by Statutory Instrument would bring some regulation to the arrangement. It does not introduce any liability for delay in payment or prevent repayment from being made as soon as possible. The purpose of the amendment is to bring some order into repayment. I submit that order will not exist as the Bill stands, and that is proved by the views which have been expressed by the regional water authorities.

My earlier quotation was from the Severn-Trent Water Authority and I know that the Anglian Water Authority has the same reservation, because I talked to the chief executive of that authority this week. Having had the opportunity to bring the matter forcibly to the Minister's attention, I do not think that I can do more. The matter could be further examined in the House of Lords to see whether re-arrangements to Clause 1 are required. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Under-Secretary of State for Wales (Mr. Alec Jones)

I beg to move Amendment No. 2, in page 1, line 7, leave out from 'disposal' to 'in' in line 10 and insert 'paid in pursuance of the Water Authorities (Collection of Charges) Order 1974 or the Water Authorities (Collection of Charges) Order 1975'.

The Chairman

With this we are to take Government Amendments Nos. 3. 4 and 49.

Mr. Jones

These four amendments are part of the Government's attempt to ensure, as I said on Second Reading, that on this occasion we get things right. It is also partly in response to points raised by the hon. Member for Ashford (Mr. Speed) when he drew our attention to the need to tighten up certain of the definitions.

Amendment No. 2 particularly is intended to define more precisely the sewerage charges which are to be refunded. The hon. Member for Ashford, and others, implied on Second Reading that the present wording in the Bill might imply, for instance, that trade effluent charges should be refunded. Since the only charges with which the Bill is concerned are the general services charges collected from all properties under the Collection of Charges Orders, it is appropriate to define them in that way.

The general services charge of course covers items other than sewerage, which are not be refunded—pollution, amenity, recreation and fisheries being obvious examples—so the clause as amended will still refer to charges for sewerage or sewage disposal paid in pursuance of the… Collection of Charges Orders. I think that that meets the point put by the hon Member for Ashford on Second Reading, reported in column 668 of Hansard of 12th February.

Amendment No. 3 is purely consequential on Amendment No. 2, because the latter has the effect of deleting the reference to the financial years in subsection (1).

Amendment No. 4 again is partly in response to the hon. Member for Ashford and is basically a drafting amendment to eliminate any risk of water authorities being required to refund water rates or charges in circumstances where a water supply is in fact made available.

The wording of the Bill might imply that charges had to be refunded in the case of premises which had the use of a communal water supply—for example, as in the case of Jon Migael, to which the hon. Member for Ashford referred on Second Reading. It has also been suggested that it would call for refund when the consumer had not actually used his supply on the relevant date, perhaps even because it was a public holiday. We believe that Amendment No. 4 will close any such loopholes and thus ensure that refunds of water charges go only to those who genuinely did not receive any services from the water authority.

Amendment No. 49 again is consequential on Amendment No. 2, and all these amendments taken together secure. I believe, the tighter and more precise definition that the Opposition called for on Second Reading.

Mr. Speed

I am grateful for these amendments and agree that they go a long way to meet points we raised on Second Reading.

This is the only provision in the Bill where the Collection of Charges Order 1975 is mentioned. On Second Reading, I asked about validation of the Order and mentioned the fears put to me by a number of authorities that, unless it was validated, all kinds of aggrieved parties who did or did not get the 50 per cent rebate could come forward perhaps with legal claims. As the object of this exercise is to stop that sort of thing in future, may I ask the Minister whether his advice on this position is the same as mine, or whether he thinks that there is no danger of the situation I have posed?

I hope that I do not sound churlish about Amendment No. 4, but one has had second or even third thoughts since Second Reading. It largely meets the point I put then, but I wonder whether it meets a point which has been put to me since. If there were a burst main on the day in question, that might well be taken as meaning that on the relevant date no supply of water was made available by the water authority, and thereby one could find that a company or an individual was getting the benefit of this provision. I wonder whether a form of words such as "which were charged on the basis then of a supply of water made available to the hereditament" would meet the point if added to the wording of Amendment No. 4. Would that make it 100 per cent secure? If the Minister is advised that some such wording would make the provision safe from the burst main syndrome, as it were, perhaps the other place could look into it. I want to be doubly sure that there is no legal loophole which could embarrass us all later.

Mr. Max Madden (Sowerby)

As has been said, this whole matter is shrouded in uncertainty. I hope that my hon. Friend will be able to remove some of the uncertainty about the position of garages, a point which has been brought to my attention. These are in particular garages belonging to properties which are themselves connected to the main sewerage and water, and garages the owners of which have been levied for water supplies although the garages themselves are not connected to the main water supply.

Am I right in thinking that in these circumstances refund would be made to the owners of garages which were not themselves connected to the main water supply although the main property was? We are clearly concerned with the question of hereditaments in the Bill, but it does not specifically deal with this point, which has been brought to my notice by a considerable number of constituents with garages not connected to mains supply, although they have previously been levied for water charges. What is their position?

Mr. Graham Page

I add my plea to what the hon. Member for Sowerby (Mr. Madden) has said. I have a number of blocks of flats in my constituency where the garages are quite separate and are under separate assessments. Right at the beginning of this issue, the problem was raised with me whether those garages, not connected to the water supply and not connected to the sewerage but, being separately rated, would come in for the benefit of relief as not being connected. It seems to me that if they are separately assessed and are therefore separate hereditaments, they would come in for relief under the Daymond case.

I should, I feel, ask about the relevant date. "Relevant" is a word frequently used in drafting in order to cover a multitude of sins, but a date has to be relevant to something and in this case it is left a little in the air.

5.0 p.m.

What is meant by the reference to these Orders in the Bill? I recollect that the general services charge was for all services other than the supply of water and I assume that, by naming these Orders in the Bill, we are referring to all services, rights and facilities provided by a water authority other than the supply of water, but perhaps the Minister could confirm that point.

We quote the Orders in the Bill under this amendment, but was it not the basis of the Law Lords' judgment that the Orders were invalid? Are we validating them now and enshrining them in the Bill as valid Orders? This is a questionable procedure because they might not be valid.

Mr. Gwynfor Evans

I do not know whether this is the place to raise the question of properties which are not connected to mains sewers and therefore will gain on the roundabouts of the refunds but could lose severely on the swings of the charges made for clearing their cesspits.

These are not necessarily big houses. In fact the majority are small properties. They could find themselves under a grave disadvantage because of the justice being done to those who have already paid charges which are to be refunded.

Perhaps the Minister would comment on this problem.

Mr. Alec Jones

The hon. Member for Ashford (Mr. Speed) raised the question of the 50 per cent. relief last year on Second Reading and it is matter we have considered in some detail. Our advice is that, provided that Clause 2 is passed and the Government amendments are accepted, the 50 per cent. relief becomes legal and so does the 50 per cent. charge to those who have paid it. That part of the Order was never challenged in the courts.

However, the hon. Member for Ashford dropped something of a bomb-shell on us when he talked about the problem of burst mains. This might be considered as far-fetched, but we shall have to look at it because we want to ensure that the Bill is 100 per cent. right. If the situation is not covered, we shall take steps to cover it in another place.

If properties have a supply of water made available, whether or not they are directly connected, the occupants are not entitled to a refund. The issue is the availability of a water supply, rather than the direct connection.

The right hon. Member for Crosby (Mr. Page) referred to garages with a separate assessment. I understand that owners of garages which are not connected to surface water or sewerage drains will get a refund.

Mr. David Crouch (Canterbury)

Could the Minister explain what he means by connections for the supply of water? Apparently he did not necessarily mean a direct connection to the water supply. Does he mean water supplied by pipe or supplied to a tank by a tanker? It is staggering that in 1976 there are many houses in my constituency, not 10 miles from Canterbury, with no piped water. Are they considered by the Government to be in receipt of a direct supply of water? They get their water delivered in a tanker and put into a tank in the garden in true eighteenth century fashion.

Mr. Jones

I am advised that supply includes the points made by the hon. Member for Canterbury (Mr. Crouch), but we are not dealing with charges for water, only with refunds as a consequence of the Daymond case.

The right hon. Member for Crosby referred to the relevant date in the Bill and said it had to be relevant to something. That is why the date is spelled out in Clause 1(3) and Clause 1(4).

Only one aspect of the Orders was invalid and my advice is that there is no reason why they should not be included in the Bill with the wording we have used.

Mr. Graham Page

Surely it was on the very aspect of payments by those people whose properties were unconnected to a sewer that the Orders were found to be invalid? We are talking about that payment in the amendment.

Mr. Jones

I take the right hon. Member's point, but my legal advice—and I will check it again to make sure—is that there is no reason to fear that the inclusion of these words will present any difficulties. I will look into it again because both sides of the House are anxious to ensure that we do nothing wrong.

Mr. Madden

I am sorry to bring my hon. Friend back to garages, but from what he said about separately assessed garages it seems that if water is available to a garage, it is liable to a water charge. That is rather unclear. Would a rule of thumb definition for ordinary mortals be that if there is a tap providing a water supply, a charge is in order and that if there is no such tap the garage is not liable for a charge?

Mr. Jones

My hon. Friend is again talking about the charge for the water supply. We are not talking about charges for supply. The Bill deals with refunds of the general services charges. If he has a specific point and wishes to contact me, I will try to help, whether it is about water or about sewerage.

Mr. Newton

My understanding is that where a garage is the subject of a separate rating assessment and a separate rate demand it will get a refund, but if it is treated as part of the same hereditament as the house and there is one rate demand covering the rate for the house and the garage, if the house is liable to the sewerage charge so will be the garage.

Mr. Alec Jones

That is right. The hon. Gentleman has expressed it much more clearly than I did, and I am grateful to him.

Amendment agreed to.

Amendments made: No. 3, in page 1, line 12, leave out either of those financial years" and insert "the financial year 1974–75 or the financial year 1975–76".

No. 4, in line 13 leave out to which they did not supply water on the relevant date" and insert "for which on the relevant date no supply of water was made available by them".—[Mr. Alec Jones.]

Mr. Newton

I beg to move Amendment No. 5, in line 14, at end insert— 'Provided that in the case of such charges paid by a public corporation or other body within the public sector, the duty of water authorities to make such refunds shall not take effect until 1st April 1977'.

The Chairman

With this we are taking the following amendments:

No. 11, in page 2, line 15, leave out 'year 1976–77' and insert 'years 1976–79'.

No. 12, in line 15, leave out 'year 1976–77' and insert 'years 1976–78'.

No. 13, in line 15, after '1976–77', insert 'or subsequent years'.

No. 17, in line 17, leave out 'that year' and insert 'those years'.

No. 18, in line 17, at end add 'or subsequent years'.

No. 19, in line 20, leave out 'they' and insert 'one third of them'.

No. 20, in line 20, leave out 'they' and insert 'one half of them'.

No. 21, in line 21, leave out 'during the financial year 1976–77' and insert 'in each of the financial years 1976–77, 1977–78, and 1978–79'.

No. 22, in line 21, leave out 'during the financial year 1976–77' and insert 'in each of the financial years 1976–77 and 1977–78'.

No. 23, in line 22, at end add 'or subsequent years'.

Mr. Newton

The amendments are a double-barrelled attempt to achieve some phasing of the resolution of the problem. On the one hand, Amendment No. 5 provides that refunds to the nationalised in dustries and other public bodies should be deferred for one year and be payable not from 1st April next but from 1st April 1977, which will save the water authorities some money. On the other hand, I suggest that the process of recovery from those who are liable to sewerage charges should be spread over either two or three years.

I have to declare an interest, which I hope I shall not have to declare each time I speak in these debates. I am an unconnected sewerage ratepayer and therefore stand to gain financially from the passage of the Bill.

I wholly support the refunds. I have always thought it unfair that unconnected ratepayers should have to pay the whole charge, and I greeted the House of Lords judgment with enthusiasm, although that enthusiasm is slightly reduced by my realisation of the difficulties. Although in other circumstances I should be inclined to argue that the bill should be met by the taxpayers, in present circumstances there is probably no alternative to recovery from ratepayers.

I am disturbed by what the Minister said about the administrative difficulties of local authorities. If the Minister means that all the data, on the basis of the Bill, have been fed into local authority computers and the sums have been done and nothing can be changed, we might as well have gone home an hour ago. It is not just a question of the timing and the amount of the refunds. There is also the question of the basis on which charges are to be levied in the future. Indeed "in the future" in this context includes 1976–77. If all that has already been sewn up, we are wasting our time.

Mr. Denis Howell

That is not what I was saying. The hon. Gentleman suggests that the views of the House will be totally disregarded. That is not so. There has been considerable discussion with local authorities and regional water authorities on how to put right this appalling mess. We have reached a degree of understanding that, although it is extremely difficult, this is the most convenient way of doing it.

The treasurers have to present their rate estimate to their councils, and that process is going on at the moment. When the councils have endorsed the estimates, information has to be fed into the computers and the bills have to be sent out to all the ratepayers. All I am saying is that if the assumptions on which that administrative exercise is done are disturbed, almost intolerable administrative problems will arise for the local authorities in getting out their rate demands for 1st April.

5.15 p.m.

Mr. Newton

Perhaps I may respond by saying that all I am saying is that the House is in an intolerable position. If the House believes that the proposals in the Bill for the refunds and, more important, the basis of charge from next April, are wrong, we are under the greatest possible pressure to leave those matters wrong for the administrative convenience of local authorities. Although I accept what the Minister says, that is a thoroughly unsatisfactory state of affairs and I do not propose to pay much attention to that argument.

We were concentrating earlier not on the fairness of what we are trying to do in relation to refunds but on whether what we are proposing is fair to those who will have to foot the bill. We are all agreed that it is right to make the refunds, especially to domestic ratepayers. What worries me is the effect that will have on connected ratepayers, who will be faced with a £60 million bill in one year. I am told that in the Chelmsford district it will raise the overall increase in the rate by 25 per cent. Instead of an increase of 9p in the pound in the total rate there will be an increase ofl2p in the pound as a result of the Bill. That 3p in the pound may not sound a large amount, but it will place a considerable burden on less well-off ratepayers, and the House has a duty to those people to consider carefully what it is doing.

It is peculiarly unfortunate that this problem should arise in the coming April. The rating system is deeply controversial and unpopular, and the additional burden will add to the political difficulties and controversies surrounding it. It also comes at a time when attention is being concentrated on the next phase of the incomes policy, and many people who are not well off will be faced with a significant increase in their rate bills. They will say that if the Government are throwing these charges on them they want some compensation on the wages side. It will be difficult to resist that argument. In no way is it helpful to the Government or to general public policy to throw this burden on to ratepayers in one year.

However we may argue about the Water Act 1973, the Lords decision or the Bill, a series of errors and bungles has arisen, I suspect, from ignorance in the Department of the Environment about what life is like outside metropolitan areas. It is unfair that those who live outside metropolitan areas and everyone else should be expected to put the errors right and that two years of errors should be put right in one year.

In purely political terms, we know that two-thirds of the refund will go to the public sector and nationalised industries and about half of the extra charges will fall on industry. Many domestic rate payers will be confronted with larger bills so as to give a windfall handout to large public corporations, many of which will regard the refund as a happy accident. I do not think that that aspect of the matter will be very easy to defend to our constituents when they realise what is happening.

There are two arguments against my proposals for phasing the refunds in terms both of giving the nationalised industries their money a little later and of phasing the recovery charges against other ratepayers. The first is administrative. We have heard a little about that. I do not find it very easy to see why the authorities, which will know reasonably soon the total of what they will have to find, should not simply allocate that as between the next two or three years. They will not have to do much individual work. They will take into account, in assessing how much they have to raise, the average for the next two years instead of the present year. I do not see much administrative difficulty in that. Then they would simply levy charges on individuals according to the total that they will then know they have to raise.

As regards cost, my proposal would actually reduce the financial burden on the water authorities, because, on my figures, they would be making about 60 per cent to 70 per cent of the refunds a year hence, and would have the continued use of that money during the period—that is, they would be keeping more of the money in hand and making only either one-half or one-third of the refunds in the coming year. It would not impose a greater burden of interest charges on the water authorities, though clearly it would mean that the nationalised industries, which would not be getting refunds, would be suffering some small disadvantage over that period. However, if it enabled us to spread the burdens on those connected ratepayers who will have to face this large bill all in one year, I think that most people would think that that was a fairer way of dealing with the mess that we have got into.

I hope that the Minister will give these proposals serious consideration.

Mr. Crouch

My hon. Friend the Member for Braintree (Mr. Newton) moved his amendment with great clarity. I have a lot of sympathy for what he said. He is obviously concerned about the very large amount involved in the total of refunds as a result of the hand-out which the public corporations—I think that my hon. Friend meant nationalised industries in that sense—are liable to enjoy.

My hon. Friend said something in his argument which reflects a situation which may apply in his constituency but which does not apply in other constituencies. One of the things by which I have been struck since we reformed the whole of our water supply and sewerage systems in Britain and set up the water authorities is the enormous differences and discrepancies which have been created in the last few years across the country. In an age in which we talk about harmonisation, we have produced the most calculated chaos that I have ever thought possible to see in my experience as a citizen, let alone as a parliamentarian. Even within my own area of the Southern Water Authority, the differences in relation to the approved charges are fantastic.

I speak with some spirit because my constituency of Canterbury bears the highest approved charges in the whole of the Southern Water Authority. It is hardly a laughing matter, but that is all water under the bridge. I do not seek to make a joke about it.

I want to talk about the differences which exist between areas and, as regards Members of Parliament, between constituencies. I agree that the Bill and the amendments concern the adjustments which the Government and Parliament have to make to deal with the decision reached in the other place. We are talking about refunds and how they should be made, whether quickly or spread over a period. However, the difference about which I am concerned is that there is to be a hand-back to those domestic householders whose properties are not connected to main sewerage, when it has been ruled that they have paid unjustly and incorrectly over the past two years for a service that they did not have—namely, the main sewerage connection service. They are to get the refund now.

In my constituency I am adivsed that that refund is about £30 to £35 a year, on average. In the area of the Canterbury City Council, which is my district council, there are about 1,800 householders whose properties have only a cesspool or septic tank. I must declare an interest here. I do not come within that figure of 1,800, but I live nearby and, as we all do, I declare an interest, although not exactly proudly. We are cesspool owners. I never thought that I would make that declaration so public. One might say that there are certain days when we do not have to declare such an interest. Like Hamlet, when the wind is in the East, I know a hawk from a handsaw. I hope that everyone will recognise my quotation.

The refund in the Canterbury City Council area is about £30 to £35 a year, but the charge just announced by the Canterbury City Council for providing the service of collecting sewage from cesspools is remarkable. The charge has been described by some of my constituents as vindictive, because the council is charging at a rate of £10 per 1,000 gallons. An average householder creates between 9,000 and 10,000 gallons of sewage a year. According to the information I have been given by many constituents who have been to see me or written to me on the subject, that works out at about nine times or 10 times £10—in other words, £100 a year. Some constituents have calculated that they will be paying up to £120 a year for an emptying service for which hitherto, under the old system, they paid on each occasion £6.50, irrespecive of volume. They were paying in effect about three or four times £6.50. That is £20 or £25 a year in the last two years.

We are seeing a hand-back to those 1,800 householders of £30 or £35 of a charge which has now been declared to be an illegal charge. Instead, however, they will be paying out about £100 or perhaps £120 a year for the new service.

I have been keeping an eye on you, Mr. Murton, because you might have regarded me as being in danger of reaching back in time to make a Second Reading speech. I have not wanted to do that, but I wanted to follow up a very good argument made by my hon. Friend the Member for Braintree, and merely to say that there is another side of the coin. I have tried to show that there are problems, and my goodness, my mailbag tells me just how big is the problem that I have just mentioned.

Mr. John MacGregor (Norfolk, South)

I should like to refer briefly to the remarks of my hon. Friend the Member for Canterbury (Mr. Crouch). On Second Reading I referred to the possibility that the Daymond victory would be a Pyrrhic victory for many of those whose properties are non-connected. What he said has proved that that will be so for many people. In my constituency there are many who this year are facing a much higher charge, but it is still not an economic charge in relation to the cost of emptying cesspits. This will bring home the fact that many people have been subsidised in the past by the general body of ratepayers.

Amendments Nos. 13, 18 and 23, which are in my name, at first sight may appear to be directed exactly to the same arguments as those put forward so ingeniously by my hon. Friend the Member for Braintree (Mr. Newton), but they are probing amendments desired simply to raise a technical point. On the arguments of my hon. Friend the Member for Braintree—I described them as ingenious because I was very much disposed to disagree with his amendments until I heard the way in which he put them forward—he has a case, although I should much rather see the case in relation to the nationalised industries argued on the amendment in his name, Amendment No. 32, which gives us an opportunity to debate the position of the nationalised industries. I am not satisfied that the Minister has yet given a sufficient justification for the inclusion of the nationalised industries. Although he may be right that the administration and additional costs of operating his amendments would not be great, there is a great onus on us to make this as administratively simple and as quick as possible. Even if it is only marginal, I should prefer to see that done.

I take the point regarding costs that if we delay the nationalised industries' charges for a year we are adding to the burden not of water authorities but of the nationalised industries. It is probably better to get this matter over quickly and not have this burden for a further year.

My only point in putting down Amendments Nos. 13, 18 and 23 was to raise a matter which has been put to me by a number of people, including the Rating and Valuation Association. My amendments are designed to cater for cases where claims for refunds are not determined before 1st April 1977. I realise that will not happen in many cases. It is to be hoped that nearly all the refunds will have been paid by the end of the next financial year.

Nevertheless, we have already agreed that there will be some complications in the administration and chasing up of people to whom refunds are due. It is possible that some cases will not have been settled before 1st April 1977. I am trying to find out what will happen to those cases. As the Bill stands, people with whom there are still arguments up to and beyond 1st April 1977 would not get the refunds to which they were entitled. My amendments may be technically deficient. However, if there is a problem, I hope that the Government will look at it.

5.30 p.m.

Mr. Speed

I should declare an interest, as I did on Second Reading. I, too, am unconnected. It appears that almost the entire House is unconnected in these circumstances.

My hon. Friend the Member for Braintree (Mr. Newton) made a number of important points. Like my hon. Friend the Member for Norfolk, South (Mr. MacGregor), I think that on balance there is a strong argument in favour of proceeding as quickly as possible.

We have the particular problem of the connected low-income ratepayer about whom my hon. Friend was concerned. We know that he is not entitled to a rate rebate on these charges. I do not argue that he should be entitled to such a rebate. We should keep the matter totally divorced. However, he will face a fairly considerable increase in charges.

My hon. Friend the Member for Canterbury (Mr. Crouch) referred to the problem of the unconnected ratepayer who will be faced with considerable charges for emptying his cesspool. One reason for that is that he will be bearing the costs of the water authority in treating the sewage. That was not the situation before.

It would be helpful if the Minister could advise the House how the connected low-income ratepayer can be benefited. If he is not entitled to a rate rebate but is on supplementary benefit—I ask the Under-Secretary of State to go back to his previous incarnation and give us some advice—is it possible that, if there were a considerable increase as a result of the increase in water charges, the connected low-income ratepayer might get some help from the Supplementary Benefits Commission? We are on new territory. I do not argue that such benefit should come within the rate rebate system for many reasons. I think that the Minister will agree with me about that. But there will be a problem.

I am not convinced that the answer is to delay matters. My hon. Friend the Member for Braintree has highlighted the problem in many areas. We shall listen with interest to the Minister's explanation of how the problem can be met in the interests of the considerable numbers of people who will be affected.

Mr. Alec Jones

First, I should advise the House that the Government are of the opinion that they should reject the amendment if it is pressed to a vote.

The hon. Member for Braintree (Mr. Newton) indicated that we had covered some of this ground in the previous debate. He suggested that phasing of the type he was describing would mean a saving of money for the water authorities. However, we do not think that it will save money. The total cost to the water authorities of deferring payments to the consumers concerned would, in the ulti- mate, be increased. My right hon. Friend dealt with the administrative difficulties. Any system of phasing would of necessity increase administrative difficulties. There is no way round that problem.

I agree with the hon. Member for Braintree that we are in an intolerable position. However, we are in that position in consequence not of the Bill, but of the decision in the Daymond case.

The hon. Member for Canterbury (Mr. Crouch) referred to a hand-out to public authorities. I think that on reflection he might wish to change that phrase. It is not a hand-out. It is a repayment of illegally levied charges. The word "handout" sometimes has an unfortunate connotation. I am sure the hon. Gentleman did not mean that. The repayment of illegal charges will be of benefit ultimately to other consumers in the public sector.

I agree about the harmonisation of costs. That item will be included in the consultation paper which the Government hope to publish shortly. However, it is not relevant to this point.

Mr. Speed

The hon. Gentleman said that the repayment would be of benefit to other consumers in the public sector. Most nationalised industries are in heavy deficit. Therefore, is not the real beneficiary the Treasury?

Mr. Jones

We are trying to do everything possible to prevent public enterprises getting into deficit. Therefore, anything we can do to help reduce the deficit ought to be, and I am sure is, welcomed by Members on both sides of the House.

The hon. Member for Canterbury referred to the charges facing his constituents. The emptying of cesspits was the responsibility of local authorities who are now moving towards charging the economic costs involved in that operation. I was staggered that so many right hon. and hon. Gentlemen opposite apparently lived in cesspools. I do not mean that. I mean that so many of them live in properties where cesspits are the rule rather than the exception.

The hon. Member for Norfolk, South (Mr. MacGregor) said that he regarded his amendments as probing amendments. I shall deal with them later. The hon. Gentleman specifically asked how we proposed to deal with claims which might not be met before April 1977. As I said on Second Reading, we intend to use a degree of publicity to try to ensure that people are aware of their rights and how they should make claims. I should point out that the duty to make the refund continues until it is discharged. It does not end in April 1977.

The hon. Member for Ashford (Mr. Speed) asked me to draw on my previous incarnation—I do not know whether that is the right word—or service in expressing his concern about the connected low income ratepayer. This is a matter of considerable concern to everyone. Rate rebate is no longer available for this service because it is outside the scope of local government.

The hon. Gentleman asked about supplementary benefit. I should not like to speak on behalf of the Department, but I will do so. If I am wrong, I will write to the hon. Gentleman about it. The Supplementary Benefits Commission has discretion to take account of increased charges of this kind which supplementary benefit claimants are asked to meet. I am sure that the Commission will exercise that discretion. If I am wrong, I will seek to correct that impression.

Mr. Speed

Could the same rules be extended to the type of constituent about whom my hon. Friend the Member for Canterbury (Mr. Crouch) spoke, who might be unconnected but faced with a heavy increase in charges? I do not want to press the Minister for a definitive answer but that is the other side of the coin.

Mr. Jones

The hon. Gentleman presses me too far, but I take his point. The Supplementary Benefits Commission would be concerned not with whether the complainant was connected or unconnected but merely about his weekly outgoings. I am sure that what I have said applies in both cases.

We ask the House to resist Amendment No. 5, which seeks to delay refunds to public sector bodies until the financial year 1977–78. The amendment implies that the burden on individuals should be reduced at the expense of public sector bodies. There are several reasons why that is not desirable. It is not desirable to prolong the agony involved in settling the problems that were created by the Daymond decision any longer than is necessary. It is better and administratively cheaper to deal with it in one year rather than two.

However, in all equity I do not understand why public corporations should be treated differently. Illegal charges are still illegal whether paid by public corporations or anyone else. There is no obvious reason why gas and electricity consumers should be required, in effect, to subsidise water authority consumers. That would be the result of making the nationalised industries wait for a year.

The amendments in the name of the hon. Member for Norfolk, South would allow the water authority to phase recovery, whereas the amendment in the name of the hon. Member for Braintree would compel water authorities to do so over either two or three years. There cannot be an hon. Member who is not sympathetic with the objective of minimising the cost to connect consumers. Neither I nor any other Minister is happy at the prospect of an increase in charges averaging about 21 per cent in one year.

To spread the recovery over a number of years would involve an increase in the total cost which, in the end, the consumers—whom we are all anxious to protect—would have to bear. If the water authorities do not recover the full cost next year they will run into deficit on their revenue accounts and, thus, will have to borrow and pay interest to cover those deficits. Phased recovery inevitably will lead to an increase in administrative difficulties and costs. So far we have been fortunate that the water industry, unlike some other industries, has managed to avoid running into deficit. I hope that the hon. Member for Ashford will agree that it is in no one's interests for the water authorities to run into such deficits.

To the extent that the amendments in the name of the hon. Member for Norfolk, South give power to phase recovery, it is agreed that the water authorities should have the option of phasing if they so wish. They are responsible bodies and should make the choice themselves. The Bill does not prevent the water authorities from doing so. The Water Act already allows them to balance their books, taking one year with another. Therefore, the hon. Gentleman's amendments are not necessary, because that provision is already included.

For those reasons we do not think it proper to accept the amendments.

5.45 p.m.

Mr. Newton

I find all the arguments which the Minister has advanced profoundly unsatisfactory. My amendments are meant to be taken together. There are two sides to them—a delay of some refunds and a delay of some recoveries, which would be to the net benefit of the water authorities in the next financial year. I do not want to speak to those amendments except as a package. Even if I were willing to take each side separately I could not let my heart bleed for the interest charges which the water authorities would have to pay if there were a delay, because those authorities have had this money interest-free for two years already and, therefore, have already benefited from it. Why should my heart bleed over the loss that they might incur when no one proposes to do anything about the benefits that they have already enjoyed over the past few years? That argument does not stand up.

There is also the argument about who is subsidising whom. I should be happier if there were the remotest chance that the unfortunate nationalised industries would refund the additional price increases that they levied on their customers. However, there has been no suggestion of that. If there had been, the Minister knows very well that his Treasury colleagues would have put a clamp on his mouth in 10 seconds flat.

Mr. Alec Jones

Nor is there any suggestion that other industries will pass on the benefit of refund to other consumers. The hon. Gentleman's comments must apply not only to industries in the public sector but to industry right across the board, otherwise he is being unfair.

Mr. Newton

That is a fair comment to make. There is, as I have said, the tangled question of who is subsidising whom. Industrial and commercial ratepayers outside the public sector will have to pay tax on these refunds. I should like further information on this. Rates are an allowable business expense against profits and will, therefore, have to be accounted for to the Treasury for tax purposes. The Treasury will get a claw-back from private industry and commercial undertakings. It will not get a claw-back from the public sector because that sector, broadly speaking, does not make profits and will, therefore, pay no tax.

Although I shall not press the amendments, as I am sure the Minister expected, the arguments advanced against my proposals are not watertight. They do not stand up on the ground of costs. It is far too tangled a question to decide who subsidises whom. However, I believe that the net overall effect of the proposals will be to benefit the Treasury because there will be a reduction in the deficits of the nationalised industries which the Treasury would otherwise have to finance, coupled with the tax claw-back from private industry. Therefore, we are talking about a small increase in taxation financed at the expense of sewerage-connected ratepayers. I do not find that particularly easy to justify. However, I shall seek to withdraw the amendments.

Mr. Graham Page

I want to ask the Minister what he meant by his last few sentences. He said that water authorities would have power to phase refunding. What are we talking about in these amendments? The Bill begins On 1st April 1976 it shall become the duty of every water authority to refund…". That will withdraw the water authorities' power under the 1973 Act to phase any repayment of this sort. However, the Minister said that the water authorities would have complete power to phase, and refund by instalments—to delay repaying these industries until next year, the year after or the year after that. Is that the case in favour of these mandatory words at the beginning of the Bill?

Mr. Newton

Perhaps the Minister will comment on that when I have finished. I would not want any lengthy comment on what I have said, as long as his arguments can be clarified.

Perhaps he could say something about cesspool emptying, the arrangements for which vary widely in different areas. The implication of what my hon. Friend the Member for Canterbury (Mr. Crouch) said is that his local authority has been charging people the sewerage charge and emptying the cesspools free of specific charges. My local authority last year charged me half the sewerage charge and also a sum for emptying the cesspool. I suspect that we do not have enough information about the situation in different areas to judge the Bill properly.

What does the Minister think is the broad picture? Are local authorities emptying cesspools or not and are they doing so free of charge or not? We cannot consider the Bill properly until we know the basis on which we are discussing it.

Mr. Alec Jones

By decision of the House, charges for emptying cesspits are a matter for local authorities and not for water authorities. Regional variations are considerable, for the charges levied not only by the local authority but by the organisation emptying the cesspit. In some areas, it is done privately, in others by local authorities and in yet others by a mixture of the two.

Mr. Crouch

Is it not a fact that water authorities may decide to charge local authorities for the service of sewage disposal and that the local authority will then decide what rate it will itself charge? I understand that the Southern Water Authority charge to district councils for this service is £2.44 per thousand gallons and that then the local authority may decide to charge up to £10 for that service. Is that so?

Mr. Jones

I am told that the water authorities are empowered to charge for the treatment of sewage and not for the emptying of cesspits. It is the treatment which benefits the consumer. As for Clause 1(1), I confirm that water authorities have the power to phase recovery of these costs if they wish to do so.

Mr. Newton

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Miss Janet Fookes (Plymouth, Drake)

I beg to move Amendment No. 53, in page 1, line 14, at end insert— (c) the court fees and costs of persons summoned for arrears in respect of properties without sewerage or water supplies on the relevant date". The amendment seeks to put right the anomaly, which I mentioned on Second Reading, that certain ratepayers who were disconnected felt under no legal obligation to pay the charges which, by the Daymond judgment, were found to be illegal. Nevertheless, some district authorities went ahead and summoned them and they were involved in court costs. In the event, it was found that they need not have paid the charges, and it seems unfair that, although refunds will be made, they will not, apparently, receive any refund of court costs.

Many people paid up because they feared that the bailiffs would come to collect their furniture if they did not. The Plymouth firm of solicitors who acted for Mr. Daymond think that many thousands of people may have been involved and that in South-East Cornwall at any rate people faced an average charge of about £1.60. It seems fair that refunds should be made on this score as well as the basic refund.

I hope that the Minister will accept the amendment or at least its spirit if, as we are frequently told, the drafting is defective. That always seems the swan song on these occasions. I look forward with interest and hope to his response.

Mr. Robert Hicks (Bodmin)

I support the amendment so ably moved by my hon. Friend the Member for Plymouth, Drake (Miss Fookes). As she said, this matter arises directly out of action taken by the Caradon District Council in my constituency and the subsequent decision of Liskeard Magistrates' Court. The court fees and costs of those summoned for arrears in respect of properties without sewerage or water supplies on the relevant date should be added to the list of refunds which will be made from 1st April this year to those charged for sewerage or sewage disposal who were not linked to the mains.

The Caradon District Council made a firm decision to pursue the enforcement of payment of the sewerage rate from unconnected ratepayers even while the litigation was in progress. The Liskeard Magistrates' Court acceded to that request and refused to grant an adjournment pending the outcome of the litigation. I do not know whether this situation is typical of the whole country or exclusive to my part of the world. My evidence is that local authorities elsewhere were able to delay enforcement action and that courts were prepared to grant adjournments.

That did not happen in South-East Cornwall. Distraint warrants were issued against many people who were not connected to the main sewarage system and who refused to pay the sewerage charge. Subsequently, to avoid a visit from the bailiffs, they felt that they should pay. I can confirm that the average court costs involved in the Caradon area amounted to £1.60. These people were obliged to pay that amount, but the subsequent ruling by the Law Lords confirmed their original view. They should therefore be included as eligible for a refund.

It is essential to write this provision into the Bill or the court costs might not be refunded by either the water authority or the district council, who may hide behind the argument that they have no legal authority to do so. I hope that the Government will consider this request sympathetically. The Minister of State said earlier that we should be dealing with this problem on the basis of equity. No problem arises about identification. I therefore hope that we receive a favourable response from the Minister.

6.0 p.m.

Mr. Farr

I, too, believe that the amendment deserves support, and I hope that the Minister will make the necessary concession. We are talking about another fair deal for the customer, rather in line with the question of interest charges. We are making a plea that court fees and costs be refunded.

There are several instance throughout the country in which people have had to pay court fees and costs. It is common sense that the matter be rectified. I can see that the Minister is anxious to jump to his feet to accept the amendment as one of common sense and plain justice. The inclusion of words to this effect in the Bill could save much litigation when the Bill is enacted.

Mr. Arthur Jones

I support the amendment, which was argued in principle on Second Reading—this is column 692 of Hansard for 12th February—by my hon. Friend the Member for Plymouth, Drake (Miss Fookes). There- fore, the Government have had a chance to consider the amendment and I am sure that they are ready with an acceptable reply.

Rectification may not be best done through repayment of water charges. Would it not be simpler for proceedings of this nature to be declared null and void and for a refund of the court fees and costs to be made by the court in question without involving the regional water authorities? In fairness, the matter must be dealt with. I hope that the Minister will respond accordingly.

Mr. Alec Jones

I will not disappoint the hon. Lady the Member for Plymouth, Drake (Miss Fookes): I will deal the swan song to the amendment immediately.

The amendment is technically defective. It would allow court fees to be repaid to people with unconnected properties who were summoned for arrears in their general rates. However, that is not the reason for the Government not accepting it.

The hon. Lady raised this point on Second Reading. I accept that it is a good point. If only we were having to deal with good points and find the right answers, life would be easy. I agreed on Second Reading to consider the matter. I have done so. Although I have the greatest sympathy with the point made by the hon. Lady on Second Reading and again today, I must tell her that the Government cannot accept the amendment.

It is a question of deciding what is practicable. Where can we draw the line in cases such as this? The hon. Lady mentioned the figure of £1.60 for court fees and costs. For some people £1.60 is a considerable sum. For others, it is a relatively small sum. If court fees are to be refunded, why not solicitors' costs and the amount spent on telephone calls, postage, and travelling expenses, and people's own assessment of the value of their time?

We have found that there would be insuperable difficulties about trying to define legitimate costs. The Bill is about the refund of illegal sewerage charges and not about other charges. Because of the difficulties about drawing a line in a reasonable place, we decided, having considered the matter, that it was not possible to go any wider than the Bill proposes.

If there are cases of considerable and genuine hardship I am sure that the water authorities themselves will be prepared to consider sympathetically what action they can take. I sincerely regret that I am unable to move on the lines suggested by the hon. Lady.

Mr. Graham Page

I have never heard such a disgraceful speech from the Minister. I know that he was greatly distressed about it. He was trying to get the best that he could get from his brief. He failed. He suggested, in effect, that those who resisted an illegal claim will now have to bear their own costs. The amendment asks that such people be refunded their court fees and costs. I understand that to mean the normal party and party costs in litigation.

I suppose that I should declare an interest as a solicitor. However, I was not involved in any cases of this type. I wish I had been.

It is simple to get the costs taxed by the court. This happens in every case, whether one wins or loses. Every figure in a case can be made definite. It does not matter whether the costs amount to 60p or £6 or £6,000. It is a matter of principle. My hon. Friend the Member for Plymouth, Drake (Miss Fookes) mentioned £1.60. I presume that is the fee on the summons or distraint warrant.

Mr. Denis Howell

The right hon. Gentleman charges much more than that.

Mr. Graham Page

Indeed. Many people from whom money was illegally claimed felt as a matter of principle that they should fight the issue. They may have instructed solicitors, who, in turn, may have instructed counsel. These people were told that they were in the wrong but the Law Lords later decided that they were in the right. Therefore, the expense to which they were put should be refunded. All they need to do is to go to the water authority with the receipt for their court fees and the bill from their legal advisers. They should then be refunded their expense.

I hope that the Government will not go away with this stain on their character of having deprived of his costs the ordinary person who, like Hampden in the past, tried to stand up for his constitutional rights.

Mr. Crouch

We have reached a remarkable situation. The Minister spoke sweet, soothing words to my hon. Friend the Member for Plymouth, Drake (Miss Fookes) as though he was about to accept her amendment. He then brushed it aside, presumably because he had been advised by officials in his Department that the matter is too difficult for them to sort out.

The Committee cannot accept such an attitude from the Minister. It is not good enough. We are here to represent our constituents but, above all, we are here to ensure that Parliament delivers justice and not injustice.

I am quite worked up about this. We are talking about illegal charges—that is the phrase Ministers have used today. Because of those illegal charges, unnecessary costs were incurred. The costs do not amount to just £1.60. There are such items as travelling costs, solicitors' costs and telephone calls.

The Minister must return to his Department and tell his civil servants to work this out. I have a letter here from the Southern Water Authority mentioning a budget of £71 million. Let the water authority add a few thousand pounds to that to cope with this injustice. The Minister must not expect Parliament to condone an injustice. The Government's attitude is utterly and completely wrong, and we cannot accept it.

Mr. Speed

I must admit that when my hon. Friend the Member for Plymouth, Drake (Miss Fookes) first spoke on her amendment, and when I heard her remarks on Second Reading, I was not entirely convinced, but as the debate has continued I have become more and more convinced that an important question of principle is involved. Presumably Mr. Daymond received his costs at the end of the day. Presumably he is not out of pocket. However, those who might have jumped into the breach if Mr. Daymond had dropped dead may be considerably out of pocket.

We are talking about refunds of approximately £60 million. My guess is that the aggregate amount of the court costs spread over a few thousand people will be between £20,000 and £40,000. Parliament would emerge from this debate with a rather cleaner taste to the mouth if it could meet this specific point. I know that the Minister has tried to be helpful and I appreciate that he is a fair man, but it is no answer to say that if people go to the water authorities they will find a sympathetic response. Many people have their pride and will not wish to do that.

I understand from some of my hon. Friends who are legally qualified that reasonable costs could be calculated. I hope that the Minister will reconsider his position. Justice should not only be done but should be seen to be done for those who, through the fault of Parliament, have been disadvantaged.

Miss Fookes

I am as gratified by the enthusiasm shown by my hon. Friends as I am disgusted by the mean approach of the Minister. It seems unfair that people should be asked to bear their costs. I do not accept that the amendment is not practicable. The difficulty is that the Government do not wish to respond. I am not prepared to withdraw the amendment.

Mr. Alec Jones

This is not a question of not wishing to act.

Mr. Farr

Then do something.

Mr. Jones

It is all very well for the hon. Gentleman to make that sort of remark from a sedentary position. Perhaps he will do me the courtesy of listening to me again. I do not deny that it is relatively easy to make an assessment of legal costs, but the legal costs which some people were forced to meet might have been infinitely less than the real costs which were incurred by many others. That was the point to which the hon. Member for Canterbury (Mr. Crouch) drew attention when he talked about bus fares.

We are in a genuine dilemma. If we are to meet these costs, are we to confine repayments to those who took court action or are we to draw a line which will include the real costs which were forced upon those who did not take the matter to court? I have in mind those who wrote their own letters, made their own telephone calls and conducted their own case at court. They might have spent considerable time undertaking those tasks. That is the difficulty which I have tried to put to the Committee. To say that the Government have displayed a disgraceful attitude is to misuse the word "disgraceful". One could describe other elements of this matter as being disgraceful.

6.15 p.m.

I do not know whether the hon. Lady will believe me, but between now and when the Bill reaches another place I shall reconsider the matter to ascertain whether there is some means of meeting her case. I ask the hon. Lady to accept that it is not rejected because of unwillingness on our part to reconsider the matter or unwillingness to find a solution. We are faced with genuine difficulties. How would a man who travelled 50 or 60 miles to visit an authority by bus or car a year or 18 months ago prove to the authority that he made such a journey? It is asking a lot of us to frame regulations to meet such cases. Nevertheless, I am prepared to reconsider the matter.

Mr. Graham Page

I think that the Minister has come round to our way of thinking to a considerable extent. We are grateful for that.

It is not difficult to determine court fees. That is the first item. The second item is costs. I take that to mean legal costs. Perhaps witness expenses are included as well. Such expenses are not difficult to ascertain. There will be a solicitor's bill of some sort for legal costs. Solicitor-and-client costs can be cut down to party-and-party costs. That is happening in litigation all the time. If the litigant has appeared in person he cannot expect to be paid for his own services and for advising himself, but he can expect to be paid his attendance as a witness in his own case. His costs of attending, for example, is the sort of item that is dealt with every day by the courts.

If a claimant goes to a water authority with a note of his expenses, and if the authority thinks that he is being extravagant, there can be a compromise. If there is no compromise the issue can be taken before a taxing master. Again, that is happening every day. When there are town planning appeals and the inspector advises the Minister that the costs should be paid by one side or the other, the costs can be negotiated between the Department and the claimant. If negotiations fail the matter goes before a taxing master.

Mr. Alec Jones

Is there not a difference between trying to deal with costs that might be incurred at this moment or in the future and the situation with which we are trying to deal—namely, establishing the real costs of an action that may have taken place more than 12 months ago?

Mr. Page

I assure the hon. Gentleman that costs that have been incurred a long time ago are often taxed. People always complain about the delay in the law, but costs are often taxed 10 years after being incurred. The courts find no difficult in doing that.

I am sure that the parties would not find any great difficulties in compromising over costs. If we have the Minister's recognition that the Government wish to recompense those who were justified in fighting a claim and who spent money in doing so, in legal costs, court fees and travelling expenses, I am sure that my hon. Friend will be happy to leave the matter to the Minister for his reconsideration

Mr. Farr

When, from a sedentary position, I inadvertently said that I thought the situation was disgraceful, I did so because I thought it was disgraceful that we did not have the benefit of the presence of one of the Law Officers. We have a complex Bill that is based on a narrow decision by the Law Lords. One of the Bill's sponsors is the Attorney-General. I think that the Bill would make much more rapid progress if the right hon. and learned Gentleman were present. If we had the advantage of his presence the Government Front Bench would know the legal answers. I certainly do not know them, and I do not suppose that many other hon. Members have the necessary legal knowledge.

I am not a solicitor, but I should have thought, as my right hon. Friend the Member for Crosby (Mr. Page) has said, that it is not beyond the capacity of the legal profession to define the costs that are applicable and to include such a definition.

I thank the Minister for what he has said. Once again, I urge him to acknowledge that it would be frightfully nice if one of the Law Officers looked in to see how we were getting on and to see whether he could help.

Mr. Crouch

I cannot join my hon. Friend the Member for Harborough (Mr. Farr) in wishing to see the presence of one of the Law Officers. I am very happy to leave the matter to the present occupants of the Government Front Bench.

This is a short debate on an important amendment. It might be a small matter, but we think it significant and important. There is an injustice that is measured, perhaps, in a few tens of thousands of pounds. Nevertheless, I think that it is an important matter.

From my position it is very difficult to know what is going on on the Government Front Bench. I do not know whether, on the Government Front Bench, a nod is as good as a wink or a smile as good as a scowl. Perhaps the Minister will say whether he is considering the arguments put to him. We do not wish to criticise him personally, because we should like to see him exercise influence over his officials rather than the other way round.

When the Minister was speaking I sensed that he had been fed with all kinds of difficulties by his officials and that they were taking the view "It is extremely difficult to do these things and you cannot expect us to produce the necessary forms to cover situations involving people who travel five miles or 50 miles." Only this afternoon hon. Members have been meeting constituents who have been putting to us the enormous costs of travelling on buses, let alone trains, about which we shall be hearing next week.

I hope that the Minister will assure the Committee that he appreciates the force of the arguments that have been put to him and the reasonableness of our plea for justice. I hope that he will go back to his Department to see whether it is possible to accommodate our suggestions, particularly in view of the helpful remarks made by my right hon. Friend the Member for Crosby (Mr. Page), as an ex-Minister and also as a lawyer. Will the Minister give further consideration to this matter?

Mr. Alec Jones

I am prepared to look again at this matter to see whether a scheme such as that proposed by the right hon. Member for Crosby (Mr. Page) can be implemented. However, I make no commitment, because I believe that there are still genuine difficulties.

Mr. Hicks

I wrote to the Minister of State on this matter on 5th February. May we be told how widespread is the problem? Are we talking only about South-East Cornwall, or is the problem much more general?

Mr. Denis Howell

I should need notice of questions about letters written to me on 5th February. However, I can tell the hon. Gentleman that the problem is not confined to one part of Cornwall. I support what was said by my hon. Friend the Under-Secretary of State for Wales. We shall examine the matter. The difficulty lies in the question where one should draw the line. If it is possible to define the costs incurred and they can be proved, I believe that it is reasonable to seek to meet the point. On the other hand, it would be unreasonable to try to meet all sorts of other costs that cannot be proved at this stage, even if they are incurred. In that spirit we shall look again at the matter to see what we can do, although I repeat that we make no commitment as to action to be taken at a later stage.

Miss. Fookes

I warn the Ministers that I shall look upon their activities with a beady eye, but in the light of the Minister's assurance, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Denis Howell

I beg to move Amendment No. 6, in page 2, line 8, leave out shown as a seperate item in the valuation list" and insert "liable to be rated".

The Chairman

With that amendment we may also take Amendment No. 7, in page 2, line 11, leave out it was first so shown" and insert "liability to a charge began and Government Amendments Nos. 8, 9, 10, 14, 16, 29, 30, 39, 40, 46 and 47.

Mr. Howell

After the involved argument on the previous amendment, this series of amendments seems to be even more involved. But I assure the Committee that these are technical matters, and I am sure the Committee will agree that they are necessary. I hope that the hon. Member for Harwich (Mr. Ridsdale) will conclude that this series of amendments meets the interesting point that he makes in his Amendment No. 7.

I should like briefly to explain the situation. These amendments are intended to meet the case in which a new property is completed during the year, without sewerage, but is not entered on the valuation list until some time later, which may be after the end of that financial year. The ratepayer will have paid the sewerage charge, along with the rates, from the date of completion and should clearly have that charge refunded. The amendments will tie eligibility for refund to the date on which the property became liable to be rated, and so to the date from which any sewerage charges were paid. I hope that the Committee will accept the amendment.

Mr. Arthur Jones

I wish to ask the Minister about the occupancy of properties initially. A property could appear on the rating list as an initial assessment, but would it not be more equitable for the date to be that of rateable occupation—which is somewhat different from the way in which the amendment is drawn?

Mr. Denis Howell

I do not think the hon. Gentleman is right, but I undertake to examine the matter and to communicate with him. If the hon. Gentleman is right, we shall take steps to alter the provisions elsewhere.

Amendment agreed to.

Amendments made:

No. 8, in page 2, line 11, leave out 'shown' and insert 'liable'.

No. 9, in page 2, line 13, leave out 'the occupiers' and insert 'persons liable to be rated in respect'.

No. 10, in page 2, line 14, leave out 'which have' and insert 'with'.

No. 14, in page 2, line 16, leave out 'the occupiers' and insert 'persons liable to be rated in respect'.

No. 16, in page 2, line 16, leave out 'to which they supply water' and insert 'for which a supply of water is made available by them'.—[Mr. Denis Howell.]

Mr. Ridsdale

I beg to move Amendment No. 24, in page 2, line 25, leave out paragraph (a).

The Chairman

With this we may take the following amendments:

No. 25, in page 2, line 28, leave out 'or indirectly'.

No. 26, in page 2, line 29, leave out 'or surface water or both'.

No. 27, in page 2, line 29, after first 'or', insert 'for foul water and'.

No. 28, in page 2, line 29, leave out 'or both'.

No. 31, in page 2, line 31, leave out 'facilities which drain to'.

Mr. Ridsdale

I mentioned this matter on Second Reading, but since, in the meantime, I have received more information on the subject, I come to this debate with even more vigour.

When I originally mentioned this matter I thought that the larger domestic ratepayers would benefit far more than would the smaller ratepayers and non-domestic ratepayers. I gather that the figures show that these provisions will affect 60 per cent, larger users, 20 per cent, domestic ratepayers and 20 per cent, non-domestic users. My fear is that the Bill as drafted will exclude some people who otherwise would have benefited.

Many occupiers—ratepayers—will be angry if the Bill is not amended. The words in page 2, line 29, "or surface water", and in lines 31 and 32 the use, in respect of the hereditament, of facilities which drain to a sewer or drain so communicating could be interpreted so as to debar a number of hereditaments from eligibility for refunds. May we be told whether that is the case? I wish to safeguard the interests of the smaller domestic ratepayers, and I hope that we may be given an assurance on that point.

The second point I wish to mention concerns the benefit accorded to a hereditament from "run-off" by gravity which results in the surface water flowing to a street gutter. Should that be regarded as one of the services paid for on the general rate levy of the district council, as should the disposal of surface water which drains directly to a surface water sewer?

6.30 p.m.

I fear that those two matters may work against some of the domestic ratepayers. For that reason I suggest that paragraph (a) should be excluded, although I shall wait to hear the Minister's answers to the points that I have made. I hope he will assure me that many domestic ratepayers will not be excluded, but that he has taken them into consideration in his calculation of 20 per cent.

Mr. Jim Marshall

I have a great deal of sympathy with the hon. Member for Harwich (Mr. Ridsdale). I wish to bring to the Committee's attention some of the difficulties that the hon. Gentleman has foreseen, but I should like to illustrate those difficulties in greater detail than did the hon. Gentleman.

I sympathise with my right hon. Friend, because he has the extremely difficult job of trying to sort out the consequences of the Daymond case. Although I do not wish to drag in all the points made on Second Reading, I cannot help feeling that there are easier ways of dealing with these difficult cases.

It is essential that we do not make the situation worse than that which pertained under the previous legislation. I believe—I know that this is the feeling of district treasurers throughout the country—that lawyers could have a field-day with the Bill and that domestic ratepayers who are now anticipating refunds are likely to find that they do not receive those refunds. It is essential that we make the position clear here and now.

The root cause of the difficulty lies in Clause 1(7)(a), and especially in the inclusion of the words "surface water". It is to those words that I wish to direct the bulk of my remarks. We shall have a nightmare over identifying the place to where the water drains—whether it be into a public sewer carrying foul water or into a public sewer carrying surface water. We shall also have to establish whether it goes into those respective sewers directly or indirectly. One can envisage a situation in which making decisions in particular cases could not be done readily, and would take a great deal of time. Moreover, we could well face the situation in which domestic ratepayers have to pay not only the sewage disposal charge for emptying their cesspool but, at the same time, the general service charge. I should like to quote a few examples to illustrate my view.

One example is a house, or any other kind of building, with a cesspool in the middle of a field, where the surface water obviously drains naturally. Under those circumstances the conditions for receiving a refund are satisfied and the people concerned will, in future, have to pay only the charge for emptying the cesspool. But what will happen if the house is not situated in the middle of a field but does have a cesspool and a drainage pipe carrying the water from the roof into the garden? There is no direct link between the garden and the adjacent highway but undoubtedly there is an indirect link between the drainpipe and the highway, because in the highway there is a drain into which the water from the house flows indirectly. Does that constitute a ground for qualifying under the Bill? Will the owner have to pay the sewerage charge in future, but receive a rebate for the past? Does the indirect linkage mean that in future he will have to pay not only the sewage disposal charge, for emptying the cesspool, but also the general service charge? That is one type of difficulty that could arise.

My right hon. Friend may say that common sense should and will prevail in future. However, past experience, especially in the light of the Daymond decision, shows that common sense does not necessarily prevail. Therefore, we cannot accept that there are easy or ready answers to these questions.

Another example is that of a house which has a cesspool that is connected via a drain-pipe, sewer or drain to a soak-away some distance from the house. The local authority will have to ascertain whether the water from that soak-away goes into a public sewer, either directly or indirectly. It cannot automatically assume that it will go into a sewer. In-deed, in most cases it will not. Therefore, people in such a situation will qualify for the exemption in the future and the rebate for the past. However, there may be one or two cases in which the water from the soak-away goes into a public sewer carrying either foul or surface water. The local authority in that instance cannot assume that neither of the conditions is fulfilled.

Another example is that of a house with a cesspool, a drain-pipe and a sewer or drain leading into a stream into which the surface water drains. Most streams are not public sewers. However, in some instances a stream is a public sewer. Therefore, we shall have the situation in which some domestic ratepayers will receive advantages under this legislation. They will receive a refund for the past and will pay only the sewerage disposal charge in future. However, due to the anomalies in the drafting of the Bill other ratepayers, where the stream is registered as a public sewer, will not receive benefit and in future will have to pay for the cesspool to be emptied, plus the general service charge. That is the type of anomaly which I hope the Committee will not allow to arise under this legislation.

Yet another example is that a house with a cesspool but with a drain-pipe directly linked with a sewer or drain leading to the highway in which there is a drain-away. The local authority will have to determine whether the drain in the highway is connected, directly or indirectly, to a public foul water or surface water sewer. In some cases it will be, but in others it will not. In the cases where it is, the people will receive benefit, but in the cases where it is not they will not receive benefit. I do not believe that we can allow that type of situation to arise under this legislation.

I have attempted to draw the Committee's attention to the undoubted difficulties that will arise.

I should now like to refer briefly to advertising hoardings. I make no point about the virtue, or lack of virtue, of advertising. Moreover, I am not a rating expert. I say that in case the right hon. Member for Crosby (Mr. Page) later corrects what I say. The advertising hoarding itself is not rated, but the right to advertise is. One cannot level a general service charge on a right and one will not be able to level a general service charge on the advertising hoarding. If one goes round the large towns one sees that many advertising hoardings have gutters to take away excess water. The water from the advertising hoardings undoubtedly, either directly or indirectly, goes into a public sewer carrying either foul or surface water. However, even though the owners of the hoardings are using the sewerage facilities provided by the regional water authority they will not be eligible to pay sewerage charges. Moreover, they will not be eligible to pay the general service charge. That strikes me as rather stupid. I mention it to illustrate the difficulties.

I ask my right hon. Friend to think again. I put such a suggestion forward when we discussed another part of Clause 1. I apologise for not being present when my right hon. Friend gave his reply. However, I assume from his present countenance that, in any event, it would have been negative. This point is, perhaps, the crux of Clause 1 and will be the main source of difficulty and irritation amongst ratepayers. Something must therefore be done. I do not expect my right hon. Friend to withdraw subsection (7)(a), but we must recognise that it is the inclusion of the words "surface water" that will give rise to the bulk of difficulties to be faced by local authorities.

Mr. Eldon Griffiths (Bury St. Edmunds)

I apologise to the Minister for not having been able to be present earlier because of other parliamentary engagements. The hon. Member for Leicester, South (Mr. Marshall) has done a service to the Committee and his constituents by illustrating some of the practical ramifications which can arise in this complex area. I support my hon. Friend the Member for Harwich (Mr. Ridsdale) in what he said about the term "surface water" and, in paragraph (a)(ii), the phrase "drain so communicating". On a first reading of (a)(i) almost no one would appear to qualify for relief because it could certainly be held that very few premises in this country do not in one way or another drain off, possibly through the subsoil, to one of the conduits referred to in that subsection.

I do not suggest for one moment that on a Bill which the Government rightly want to make progress they should accept an amendment to strike out a clause, but I hope that the Minister will discuss with his advisers whether "surface water" could exclude almost anyone from getting relief. Under the term "drain so commu- nicating" one could construe that to mean that by it almost any form of runaway of foul water would be covered, and that that, therefore, could disqualify a person not connected to the sewerage system from receiving relief.

A good deal of the problem arises from the definition of "a public sewer" I took the trouble to look up the definition, which is described in this Bill as having the meaning assigned to it by Section 38(1) of the Water Act. I have more than a passing familiarity with that Act. The relevant section says that a public sewer has the meaning assigned to it in the 1936 Local Government Act. I am not, therefore, very much wiser, but a more precise definition is required, possibly on the face of this Bill, to avoid any confusion.

In layman's language I believe that what is intended is that people should be able to recover their charges if it can be shown that the arrangements they have do not communicate with what the local authorities previously understood to be a conduit that took foul water to a sewage works. In view of the legal difficulties that there have been over this issue we must get the matter right this time. I hope that the Minister will not hesitate, if necessary, to include a lengthy definition clause at the end of the Bill to avoid any confusion.

6.45 p.m.

Mr. Graham Page

The Committee must be indebted to the hon. Member for Leicester, South (Mr. Marshall) for the examples he gave; they made it easy for us to understand the difficulties which will arise if the clause is unamended.

I cannot understand why the draftsmen chose to break away from the definition in the order. This was understood by the local authorities and it would be quite easy for them to continue to apply it. Yet for some reason the words have been apparently deliberately changed. The subsection says a public sewer provided for foul water or surface water or both". The order with which the local authorities have now become familiar contains the words foul water or foul water and surface water". so that the words "or both" come out. That is exactly what is contained in Amendments No. 27 and 28. If those words in the order were included in the Bill that would meet the examples given by the hon. Member for Leicester, South. In every case it would have to be shown that foul water was involved. I do not think it would be difficult for the local authorities or the water authorities to say which sewer carried foul water. It would not matter whether it carried surface water.

Perhaps I might assist my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) in his search for a definition of a public sewer. In my student days I always understood that a drain drained one house and that a sewer drained two or more. I do not know whether that definition stands in law. I have not examined the 1936 Act. I hope that a full definition may be put in the Bill.

I have one further point which supports Amendments No. 27 and 28 and a return to the wording in the order. The Explanatory and Financial Memorandum says: Clause 1(7) defines the properties in respect of which sewerage charges are to be refunded: in general, refunds will be made only for properties which are totally without a sewerage service from the water authority". I am sure that in ordinary language one would not understand a surface drain only to be a sewerage service. I hope that we may return to the wording of the order which the water authorities and the local authorities understand and which is embodied in the amendments.

Mr. MacGregor

I wish to speak to Amendments Nos. 27 and 28 which have a marginal advantage over Amendment No. 26 in that they are in line with the original definition in the order. I have four reasons for doing so.

The first concerns the question of administrative simplicity and cost saving for the local authorities. When he was dealing with the first amendment today the Minister said that it would be much easier for local authorities to identify and trace those to whom refunds should be paid compared with the situation before the 1975 order. That is correct, but, of course, it would be much easier still if we simply provided a definition in line with the 1975 order. My district council and others from which I have had representations have made it clear that they will have to go through all the rating details again in order to discover exactly who under the new definition should get a refund. In some cases it will be extremely complex and time consuming for them to do so.

Mr. Hal Miller

I thought I heard the Minister say that the 1975 order had enabled the Government to identify the premises in question, so presumably the Minister must follow the logic of that remark and accept what my hon. Friend is saying.

Mr. MacGregor

My district council and others say that they will have to retrace the different householders because the thing is not on all fours with the original 1975 order. Although it is easier because they know who is unconnected to foul sewerage, they will have problems of the surface water drainage, and they will have to look through those, and in any case it will be difficult to establish what is the position. There are still considerable administrative complications, which could be solved by this change.

One argument which the Minister can put forward for the change is that in a sense it will save money for those ratepayers connected, because by this definition there will be fewer ratepayers unconnected. I suspect that at the end of the day the administrative savings in going back to the 1975 order will outweigh that. That is the first point, that it would greatly aid local authorities.

Secondly, there is the inconsistency of the Government's position. I have here a letter from the Department of the Environment to all the chief executives of district councils. The letter is dated 23rd January, and it makes clear that the scheme is designed to follow some of the principles in the administration of the 1975 order and the 50 per cent remission, but then it says: The legislative proposals include a definition of an unconnected property which is different from that used in the 1975 Collection of Charges Order. Later it says: Some properties which qualified for a 50 per cent remission last year will not be eligible for refunds. It is inconsistent to try to base the scheme as much as possible on the 1975 order in certain respects but not in others.

My third point follows from that last quotation, because it will be difficult to put across to many ratepayers who qualified for the 50 per cent remission last year that they do not qualify for the refund. I should not be able to explain that on a public platform. It would be much more simple to go back to the position that those who got the 50 per cent. remission will get the refund. It will be difficult to explain the whole process to ratepayers, and we should not be put in that difficulty.

My next point was made by the hon. Member for Leicester, South (Mr. Marshall) both in his speech on this amendment and earlier, and that is the unfairness to some ratepayers who may have to pay the general water charge because they are connected to a service drain, a highways drain, and also have to pay the cesspool charge because they will have their cesspools emptied. We have agreed that in many cases the cesspool charge will be higher than they faced in the past. As I read the Bill, there will be some who will have to pay both ways.

Finally, I have a question to ask. Will the definition of those without sewerage in this clause be the same as that under Clause 2, or will it be possible under Clause 2 for water authorities to go for a different definition for ratepayers without sewerage facilities? In other words, will the situation in future be different from that which we are imposing under Clause 1 for the refund?

Mr. Farr

It seems to me that this subsection (7)(a)(ii) is intended to enact that premises for which refunds are to be made must not only be such that they do not have a drain or sewer directly or indirectly communicating with a public sewer—either foul or surface water or both—but also that the occupier must not have the use, in respect of those premises, either directly or indirectly, of such a public sewer.

As we have heard from some of my hon. Friends, and from the hon. Member for Leicester, South (Mr. Marshall), complex issues can arise in the case of surface water drainage. To assist me in decyphering these complexities I am lucky enough to have the benefit of a number of illustrations which, unfortunately, I cannot arrange to have circulated in the Official Report.

There are two examples of not drained. These are all examples under subsection (7)(a). There is one example of a property which is drained, but not by a sewer or drain. There is one example of a property which is drained by a sewer or drain. There are no fewer than four examples of properties which are drained by sewer or drain communicating. In addition, there is an illustration of those examples where the occupier has the use of facilities which drain to a sewer or drain communicating.

One can see that these are matters of great complexity, and the Committee would do well to consider exactly what it wishes to do. Certain regional water authorities are disturbed about the complexity of the situation and they have a suggestion to put forward to clarify it and make it easier to understand and operate the system.

It has been explained to me that there are places where roof and surface water drains from premises via a fall-pipe across a pavement—not through any denned gutter or channel—into the kerbside gutter and thence ultimately to a public sewer. There are also cases of lock-up garages from which the roof water, and perhaps also the tenants' car wash water, flows across the forecourt and into a gulley. That is a separate type of illustration, and in these cases it is felt that the occupiers of these premises are benefiting from the enjoyment of the water authorities sewerage services and should, in equity, pay for them.

Mr. Jim Marshall rose——

Mr. Farr

I ask the hon. Gentleman to interrupt me later on, because it will be difficult for me to explain the case if I am interrupted in mid flow.

Mr. Graham Page

My hon. Friend will be down the drain.

Mr. Farr

The occupiers of these premises are clearly enjoying the benefit of the water authorities' sewerage services and should pay for them. Only those not enjoying such benefits should be entitled to a refund. The case of these latter can quite adequately be described by saying, in the language of sub-paragraph (ii), as one where the occupier of the hereditament does not have the use, in respect of the hereditament, of facilities which drain to a sewer or drain so communicating". that is, communicating with a public sewer.

However, it is felt that the use of the phrase in sub-paragraph (ii) "facilities which drain to" might be construed as denoting something more specific than the casual type of drainage arrangements to which I have referred. To avoid this danger, the phrase, in my view and in the view of some of the regional water authorities, should be omitted, and the question of how the premises are drained and the consequential entitlement of the occupier to a refund would then be one of fact rather than one of construing the esoteric meaning of the word "facilities".

It is to be noted by the Committee that this subsection and subsection (8) deal only with refunds, and thus the whole question of how water authorities are to determine questions of charges for sewerage and sewage disposal in the future is left undetermined, as the specific definition of unsewered hereditaments, and the specified provisions made for dealing with hereditaments subject to special rating—basically gas, electricity, and other undertakings of that nature—are confined to refunds.

7.0 p.m.

I urge the Minister, who has been patient in listening to my explanation, to take the opportunity to remove doubts about the future and to avoid another Daymond situation by specifically empowering water authorities to adopt this definition for the purpose of future charges. It is felt that the Bill, by confining the definition to the refund situation, implies that it cannot or will not, or will not necessarily, apply to future charges, and is virtually asking someone to take an authority before the courts for a further interpretation of the vague and indeterminate provisions of Section 30 of the Water Act 1973.

I believe that the points I have raised have substance, and I hope that the Minister will deal with them.

Mr. Crouch

On a previous occasion, Sir Myer, I asked whether you were bored. I am sure that you are not bored with this debate.

I do not believe that I have ever heard a better sewer speech than that made by the hon. Member for Leicester, South (Mr. Marshall). I have been all fouled up in the past half hour, but the right hon. Gentleman has greatly helped me with these difficult clauses and his explanation of the mysticism surrounding types of drains and sewers, and types of facilities.

My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) was concerned to know what a sewer was, and sought a definition. I am equally concerned to discover the meaning of "facilities". Subsection (7)(a)(ii) speaks of facilities which drain to a sewer or drain so communicating".

Mr. Jim Marshall

I ask the hon. Gentleman to picture a group of lock-up shops which have communal instead of individual toilet facilities. I understand the essence of subsection (7)(a)(ii) to be to ensure that the people concerned pay sewerage charges. If the hon. Gentleman considers that, he will see that there is some sense behind the subsection—more sense than in the inclusion of "surface water" in subsection (7)(a)(i).

Mr. Crouch

The hon. Gentleman has again made the matter clear for me. The point of subsection (7)(a) is to be found in sub-paragraph (i), the wrapping together of all types of sewerage whether dealing with foul water or surface water or both". I can only assume that the Department has advised the Government that it must be so, because there are still places where it is necessary to provide for all these eventualities. Some years ago, before a new main sewerage system was installed, I was surprised to find that in my constituency we were on a single sewerage system coping with storm water, surface water and foul water. When we had a storm we had a flowback through the normal house system. That was put right. I am not saying that it happens now in my constituency, but the Department may know that it happens in other parts of the country. I think that the Department has included the provision to cover all eventualities, but the fact is that local authorities are very confused by it.

In a letter dated 10th February, the treasurer of the Canterbury City Council told me: The main point of concern arises in the definition in Clause 1(7)(a)(i) in that a property is to be deemed without sewerage if it is not drained by a sewer or drain connecting directly or indirectly with a public sewer provided for surface water. The inclusion of surface water as well as foul water sewerage would appear to present such practical difficulties as to render identification in many cases virtually impossible, as it may become necessary to trace each individual sewer or drain to its ultimate reception point. Disputes in such matters would seem to be likely to lead to further litigation with far-reaching consequences. I raise that matter because it is important that we should tell Ministers of the problems faced by another tier of government—an important tier of local government—as a result of what we decide, and it is at this stage that we must do so. I believe that Amendments Nos. 26 and 27 would help to improve the clause and remove some of the difficulties that would otherwise occur.

Mr. Speed

The Committee is indebted to the hon. Member for Leicester, South (Mr. Marshall), my hon. Friend the Member for Harborough (Mr. Farr), and all hon. Members who have spoken, for trying to weave a way through the matters covered by the subsection. I shall not repeat all the arguments, because other hon. Members have made the case admirably.

There is considerable concern among local authorities about the point that my hon. Friend the Member for Canterbury (Mr. Crouch) has just raised. My hon. Friend mentioned his city treasurer. Only two days ago the Association of District Councils sent me a letter pointing out the differences between the definition in the Water Authorities (Collection of Charges) Order 1975 and the definition in the Bill. The Association, which will have to deal with many of the problems, says: The Bill changes the latter part of that sentence to 'foul water, or surface water or both'. Under the latter definition, it is simply not true to say that 'local authorities know where most of them are at present'. The attached paper"— hon. Members will have received copies— gives ten possible variations (and these are not exhaustive)… It was produced by a district treasurer who tells me that although he and his colleagues have information on unconnected properties, under the old definition, the extended one will…give rise to grave difficulties and arguments with ratepayers. That is the burden of the argument today.

I very much agree with those hon. Members who have said that whatever marginal advantages there may be in changing the definition, they are more than outweighed by the advantages to local authorities in carrying the definition in the 1975 Order into the Bill.

There is an additional problem. If we are to create new difficulties in terms of knowing where the properties are, how will local authorities, and particularly water authorities, trace them? I understand that they do not have powers of entry under the Bill. The only powers of entry are those in connection with metering in earlier legislation. Amendments Nos. 27 and 28 try to meet this point and put the Bill on all fours with the 1975 Order.

Both my hon. Friend the Member for Harborough and my hon. Friend the Member for Canterbury mentioned the question of facilities, covered in Amendment No. 31. The hon. Member for Leicester, South gave his interpretation of the way in which facilities could be useful, but I am not sure that it is entirely right. I am not criticising the example he gave, but I think that it would still hold up if we deleted the words "facilities which drain to" by Amendment No. 31.

I can see again that people who like litigation may have a field-day, since this wording could be construed as some-think that it clearly is not. I am not clear what the word "facilities" adds to the subsection. I cannot see that its removal would weaken the clause. On the contrary, it might make it more litigation-proof, and that, surely, is our objective. I am sure that my hon. Friend the Member for Harwich (Mr. Ridsdale) will go along with the basic spirit of what we are trying to do in Amendment No. 31. I ask the Minister to consider all these amendments, since hon. Members have made a formidable case.

Mr. Denis Howell

The only person in the Committee who is not looking forward to my answer is myself, following a debate of such complexity, which has raised so many vitally important issues. Hon. Members have raised them in a very constructive way. I undertake to have everything that has been said, together with the illustrations given, looked at again.

I very much agree with the hon. Member for Bury St. Edmunds (Mr. Griffiths) and the hon. Member for Harborough (Mr. Farr) that we must get it right this time, that our definitions must be foolproof. That is why the wording in the Bill differs from the wording of the Order. We are trying to get the thing right and therefore we have found it necessary to have a difference in language.

I agree about many of the difficulties raised by my hon. Friend the Member for Leicester, South (Mr. Marshall). If every local authority as a result of the Bill were called upon to rush around its area and find out the properties where only surface water was involved, it would be an impossible position. I hope that I can reassure the Committee that that is not the case, however. We are dealing in this clause with refunds, and if people want a refund they will have to claim it if they come under the provision dealing with surface water.

Therefore, the test specified will be applied. As has been rightly pointed out, the work was done last year. The hon. hon. Member for Norfolk, South (Mr. MacGregor) has got it right. The local authorities were called upon, as a result of the 50 per cent. relief we gave last year, to identify the bulk of the properties which would be involved. It is not the properties which have already been identified that we are concerned about but the other properties where the question is whether they should be examined for surface water. If the people concerned in those want a refund, they will have to claim it, and at that point the test will be applied by the local authority. The test we are seeking to rely on in the drafting of the Bill is simple.

Mr. MacGregor

A letter I received from the Department of the Environment said: Some properties which qualified for a 50 per cent. remission last year will not be eligible for refunds. So there are some properties which the local authorities have identified about which we are not worried as the right hon. Gentleman says that they will not get the refund.

7.15 p.m.

Mr. Howell

I cannot deny a letter from my own Department. I think that the hon. Gentleman is right, but I will look into the point. I understand that if there is a difficulty in the basis of a claim, that claim will have to be investigated against the test we are trying to create in this clause. What is the test? There are difficulties about what is a drain or a sewer or a gully, where certain water goes to and where other water goes to. But the test is simple. Does the water find its way into the possession of the regional water authority? In other words, is the authority at the end of these drains or sewers or gullies called upon to provide a service in respect of that water?

It may be that we have not got the test right, but I cannot think that one could possibly apply another test. Once one started differentiating between gullies and drains and so on, one would come up against such problems as what happened to water which went into water butts, for example, which was subsequently used to clean a car. We should have to answer such questions as to where it goes to, whether it has detergent in it, and if it has, whether the regional water authority has to deal with it. It would be an impossible situation. The simple test is to decide where the water goes—does it get into the possession of the water authority? If so, there should be a charge because it has to deal with it and treat it.

Mr. Jim Marshallrose——

Mr. Hal Millerrose——

Mr. Howell

I am not quite sure who are my hon. Friends tonight, but I will give way first to my hon. Friend the Member for Leicester, South.

Mr. Jim Marshall

I assure my right hon. Friend that I am one of his hon. Friends. I realise from what he is saying that one could carry this to ridiculous extremes, but we must not forget that lawyers get paid to try to run a coach and horses through legislation, and I think that the gist of the points made in the debate is that the wording in the Bill at present will enable lawyers to do that very thing.

My right hon. Friend says that the test is whether the water finds itself in the hands, so to speak, of the regional water authority. I would have thought, on that basis, that all water finds its way into the possession of a regional water authority in a stream in the cases mentioned by my right hon. Friend. Are the water authorities responsible for streams and rivers? What about the case that even where water goes into private sewerage works it is discharged into a sewer, a recognised stream. Presumably, therefore, it ends up in the hands of the water authority.

Mr. Hal Miller

I thought I heard the right hon. Gentleman say that people would be expected to claim for their refunds. I find no mention of that in the Bill, nor in any of the amendments so far. Presumably it is necessary to make some provision as to how much claims should be made, within what time, and so on. What the right hon. Gentleman has said seems to introduce a new concept.

Mr. Howell

I hope that that is not the case. Most people affected will not have to claim because they will automatically get their credits under the system we have agreed. But in so far as there has been a change of wording between the Order and the Bill, if people have not got their credits they will presumably claim, and it is at that point that the claim will be investigated. I only made the point to assure the Committee that our change of wording will not impose a massive additional burden on the local authorities. I was trying to give some comfort.

I come now to an aspect which is not at all humorous. As the House knows, I am advised that the cost of this matter to the industry is £60 million, and that if we eliminated the surface water claims the figure of £60 million would pale into insignificance compared with what the cost would then be.

Not only garages would be eliminated. Places such as ICI at Billingham and other very large parts of private industry would also be exempt. We have not had time to calculate the cost, but it would be astronomic and would have to be borne by domestic water users. I am sure no one in the House wishes to impose a further burden on them.

Amendment No. 25 seeks to leave out the words "or directly", but the phrasing of this part of the clause is designed to catch properties which drain directly into a private sewer which then goes into a local authority sewer. It is clearly right that a charge should be made here because a cost is incurred by the local authority. If we accepted the amendment, everyone else would have to pay more.

Mr. Keith Stainton (Sudbury and Woodbridge)

I accept the right hon. Gentleman's explanation and find it quite reasonable but the phrase "or indirectly" is open to other interpretations than the one with which he has dealt. They were expounded at some length by hon. Members and the Minister has not dealt with the looseness referred to by hon. Members.

Mr. Howell

I have told the House what we intended to cover. I will look again at the specific points made by hon. Members and if I am advised that there is any dubiety in this matter, we shall seek to put it right.

Amendment No. 31 seeks to leave out "facilities which drain to". This definition is designed to catch, for example, caravans with a central block of washing facilities and shops in precincts. The Migael case was referred to on Second Reading. A man had a lock-up shop in a precincts and, although his shop did not have water and sewerage facilities, the precinct as a whole did. He considered he should be exempt from charges, but the court held, rightly in my opinion, that, as the precinct was provided with a water supply and a drainage system, the man was getting some benefit from them and should therefore make a contribution.

The same argument applies to a caravan site where although individual caravans may not have a water supply or drainage, these are available to the site. In all equity, some contribution should be made in these cases. That is the reason for the phrase facilities which drain to".

Mr. Crouch

I am a little confused by what the Minister has been saying in the past five minutes. If a house has a cesspool for its foul sewage and has, for example, a facility for carrying storm water from the roof, down a drainpipe into a soakaway which falls into an open drain and then into a proper drain, is that house deemed to be connected to the main sewerage system? If so, it is an appalling definition.

Mr. Howell

I ask the hon. Member to think again. I do not think it is appalling. If that water has to be dealt with by a regional water authority, there should be some charge. Unfortunately, when the water goes to an authority in this way, it is not possible to distinguish it. Surface water becomes mixed up with more direct foul waste.

It is right that this test should be applied. I have conceded that it will create complications, but we cannot think of a better definition. With respect to the hon. Members who have spoken very lucidly and drawn attention to anomalies and difficulties, none of them has come up with a better definition.

I cannot accept the amendments, mainly because of the astronomic increase in costs they would involve. We have looked at this matter very carefully and I have taken the best advice available. I said earlier that the £60 million could pale into insignificance and I would not be surprised if it were doubled by eliminating these properties, mainly large industries, from charges. No one would want to impose such an additional burden on domestic water users.

I hope hon. Members will think about what I have said. If they still believe that I have not got it right and wish to come to see me before the Bill goes to another place, I will gladly look at the problems again. We shall look at all the points that have been made in this interesting and complicated debate. If we have missed a point of substance, I shall seek to put it right. I am anxious to get a degree of equity and a scheme which is reasonable to understand, defend and apply. That has been our aim and I hope that hon. Members will withdraw the amendment.

Mr. Speed

The House is concerned that this Bill is as legally watertight—I am sorry to have to use that phrase—as possible. We do not want more legislation. I accept the Minister's point about the increased costs. Would it be possible for us to get round that difficulty by con- fining the surface water aspect to directly connected properties rather than to directly and indirectly connected properties? This might meet the point from all sides.

There are clearly differences between the advice the Minister is getting and the advice hon. Members have received from local authorities. Before the Bill goes to another place, there should be consultations between the Minister's officials and the Association of District Councils and other local authority associations. Up to two days ago, they were very concerned about what the Minister was doing and were not satisfied with the explanations they had received.

Perhaps the Minister might also consider the problem of verification of claims. I understand that there are no rights of entry in this Bill or any other legislation. This is a problem to which he may wish to refer again.

Mr. Eldon Griffiths

I am anxious not to prolong the debate, but the Minister used an interesting phrase when he referred to making the Bill foolproof. I want to make it lawyer-proof. There may be some similarity in the aims. I am more worried about lawyers than about fools.

I have a number of questions which I hope he will take up with his officials and seek further advice. He referred to the test being applied by the Government on whether water had to be dealt with by regional water authorities, but I beg him to think most carefully before making that the whole criterion. I think he will find that all, or nearly all, water ends up in the drainage systems of this country. Some goes by way of aquifers at some depth. Some will sink into the ground in the territory of the regional water authority but, in spite of our care in drawing the boundaries, some may end up in the territory of another regional water authority. To make the Bill proof against the lawyers, I ask the Minister not to make that the exclusive test, because it can be more complex.

7.30 p.m.

Will there be some wretched people who end up by paying twice? According to the letter read out by my hon. Friend the Member for Norfolk, South (Mr. MacGregor), some people will have to pay the new, and sometimes fairly high, pumping costs for the tankers but will not be let off the charges from which the Bill seeks to relieve most people who have been caught. There will be a frightful row if some people are caught with two charges. I hope that the Minister will have consultations on this and will find a way of advising the House at an early stage how many people are likely to be in that situation.

The Minister expressed the surprising view—which of course I accept—that the cost would rise astronomically if the term "all surface water" were struck out. If he is right, it implies that before the matter arose, the ICIs of this world were not paying anything, that they were charged under the 1973 Act and, under the judge's ruling, are now to be let off. I find it hard to believe that at some stage the ICIs were not paying anything. My impression is that most companies, including the public sector companies, were paying a great deal. Is the Minister's argument well-founded?

Mr. Crouch

Speaking from my industrial experience, I know that an industrial company pays a high precept for using the sewerage system for large quantities for effluents.

Mr. Griffiths

I agree with my hon. Friend.

The Minister knows that there are certain parts of the country—some in my constituency—called the Fens. There, surface water is a question of the time of year. There are times when the surface water is running into the houses so that one cannot have a run-off. There are some properties in the Fens which will be relieved by the Bill. If the definition remains, they will be eligible for relief during the relatively dry parts of the year when water surface levels are low, but during the rest of the year when the Fens rise they are in the opposite position and will presumably fail to obtain relief. That is a minor technical point, but on the grounds that we want to make the Bill lawyer-proof, not foolproof, let us get these aspects right.

Mr. Hal Miller

I understood the Minister to say that if the 1975 Order definition were adopted, large firms like ICI would be outside the scope and the result would be a considerable addition to the burden. I find that hard to believe. I am not trying to tie down the Minister to an exact form of words, but I cannot believe that the position is as it has been understood by some hon. Members. I ask the Minister to re-examine this matter. It is another aspect of the indecent haste with which the Bill is being processed. The queries that have arisen tonight show that we have not had enough time to grapple with the problems.

Mr. MacGregor

It seems from the Minister's reply that, for reasons of cost, we are not wholly following the House of Lords decision based on the definition in the 1975 Order. We are all worried that some people will have to pay twice in the coming year both for the refund and the cesspool charges. Will the Minister consider introducing a further qualification by removing domestic ratepayers from the surface water definition? That would avoid the difficulty of people who cannot afford it having to pay twice, and it would be of advantage to local authorities in that these groups are difficult to trace.

Mr. Denis Howell

I am obliged to the hon. Gentlemen who have raised interesting points. To deal with the last one first, I assure the Committee that the Bill does nothing that is contrary to the principle laid down by the House of Lords, which was that we should charge only the people who had a service. Part of our case in respect of surface water is that a service is being performed and therefore it is reasonable that the people for whom the service is being performed should be charged.

I am told that there is some substance in what the hon. Member for Bury St. Edmunds (Mr. Griffiths) said. It is conceivable that some people might pay twice. We shall do our best to avoid that, and to put it right if it occurs. When water authorities move to direct billing no one can be charged twice, but that is another matter. We have not gone too far down that road, because we are doing what the hon. Gentleman wants us to do and consulting the local authority associations. There is a difference of view. Some local authority associations wanted to go to direct billing until they found that what they were being paid by the water authorities for the administrative convenience of collecting the money was worth something to their ratepayers, so they are now becoming rather hesitant.

Reference was made to the great increase in charges made by local authorities for emptying septic tanks, and so on. That question will be dealt with later when we consider the first amendment on Clause 2. That is a local authority matter for which regional water authorities cannot be held responsible. It is a matter about which the hon. Member for Ashford (Mr. Speed) and I have talked. We realise that, although water authorities have one set of responsibilities and local authorities another and in law each is completely separate, in equity and practice one cannot be entirely divorced from the other. When we come to deal with that I shall be anxious to get the view of the Committee on what can or cannot be done at another stage. It is a complicated matter.

I assure the hon. Member for Bromsgrove and Redditch (Mr. Miller) that I am right about the sums. I have had the matter looked at three times this week.

I know that hon. Gentlemen are raising some points which occur to them and some which have been drawn to their attention. I want them to consider what I have said in relation to the advice which they have been given and to discuss it with the people who are advising them. If, as a result of that process, they would like to take up with me any questions I shall be pleased to do so. If they convince me that I do not have it right. I assure them that I shall seek to put it right.

However, we have had a very interesting discussion on an extremely involved and technical matter. I hope that we might now be able to make some progress. I hope that these amendments will be withdrawn in the light of my assurances and undertakings and in the knowledge that we can return to them if it proves necessary.

Mr. Ridsdale

I hope that the Minister at all stages will see that the domestic ratepayer is treated fairly. In view of what he has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 29, in page 2, line 30, leave out 'occupier' and insert: 'person liable to be rated in respect'.

No. 30, in page 2, line 31, leave out 'in respect' and insert 'for the benefit'.—[Mr. Denis Howell.]

Mr. Newton

I beg to move Amendment No. 32, in page 2, line 33, leave out paragraph (b).

The First Deputy Chairman of Ways and Means (Sir Myer Galpern)

With this we may take Government Amendment No. 33 and Amendment No. 34, in page 2, line 43, leave out paragraph (ccb).

Mr. Newton

The purpose of the amendment is partly to probe the question, but in so far as I understand its purport it is also to ensure that there is no possibility of arbitrary and excessively favourable treatment being given to the nationalised industries, which form a very important part of this calculation.

Some reference has already been made to the financial size of the sums that are going to nationalised industries. One major water authority informs me that it estimates that about 60 per cent. of its refunds will be going to nationalised industries. I have also obtained some information from the Anglian Water Authority, which covers my area, to the effect that nearly £2 million of its refunds, out of a total of nearly £11 million, will be going to the nationalised industries. That is obviously a good deal less than 60 per cent., but it is still a very sizeable sum of money.

Amendment No. 32, and Amendment No. 34, which is consequential upon it, would leave out paragraph (b) of subsection (7). I want to comment on the reason why I have tabled the amendment in this form. If one looks at subsection (7) and translates it out of legal jargon into plain English, one finds that what it actually says is that for purposes of this refund a hereditament is without sewerage if (a) it does not actually have any sewerage, or (b) the Minister defines it as not having any sewerage. That seems to me to be a very odd situation indeed in relation to the question whether a hereditament has sewerage. Even though, perhaps, a difficult matter of fact, in the light of our previous discussion, it is none the less a matter of fact.

I cannot understand why we need subsection (7)(b), which gives the Minister these very wide powers. In my mystification I have traced through, in a rather hasty fashion—which is all that we have time for in these circumstances—the powers of the Minister under Section 254 of the Local Government Act 1972 and the various other powers that are referred to in the Bill. Essentially they appear to give the Minister power to do more or less anything that he decides he wants to do, and they do not help one very much in deciding what he is likely to do under this special discretion.

What is clear, though, is that this paragraph applies especially to the limiting amendments that the Minister himself has tabled, and only to four possible types of undertaking—namely, the statutory water undertakings, the gas boards, the electricity boards, and the railway and canal undertakings. I think I am right in saying that it may include the mines as well. Perhaps one of my hon. Friends will correct me if I am wrong. Essentially, however, this paragraph refers only to the nationalised industries, and it appears to give the Minister power to define them as not having sewerage, whether or not they have sewerage. At any rate, that is as much sense as I can make of it.

I hope that this amendment will give the Minister an opportunity to tell us precisely what this paragraph is intended to mean, to assure us that there will not be unduly favourable treatment for the nationalised industries in view of the burden, in any event, falling on other ratepayers, and to indicate precisely how he intends to use these powers. Unless I can get more satisfaction from the Minister than from reading the Bill and attendant legislation, I can see no purpose in this provision, which I regard as rather undesirable.

7.45 p.m.

Mr. Alec Jones

The objective of the amendments would seem to be to deny what the hon. Member for Braintree (Mr. Newton) seems to think is special treatment being meted out to the formula rated nationalised industries. I should indicate now that we are not talking of five. The four that the hon. Gentleman mentioned—the Post Office, the electricity boards, the gas boards and the water authorities—are the only four that need this special treatment—if I may use that phrase. I shall explain the reason for that shortly.

First, we are certainly not giving these industries any special favours or preferential treatment. It is simply a fact that where these four industries pay rates and water and sewerage charges, against a total rateable value—I understand that the jargon in rating circles refers to that as a "cumulo"—there is no way of knowing how much of the charge relates to unconnected property and how much to sewered property. I suppose that it is true that whether it is unconnected or connected is a fact, but there is no way of knowing that fact.

What we intend to do, therefore, and what these wide powers—as the hon. Gentleman described them—seek to do, is to give these four industries a percentage refund. It cannot be exact. By its very nature there must be an element of rough justice in it.

There is certainly no intention whatsoever of giving a refund of nearly 100 per cent. I assure the hon. Gentleman of that. These properties are not easily assessable. Some have underground pipes, and pylons, and so on. It is therefore a complicated process to find the facts—as the hon. Gentleman said. What we are now doing is discussing with the industries what sort of percentage the refund ought to be to provide a measure of justice, even though it be somewhat rough justice. The amount of refund will be laid down in the Statutory Instrument, so the hon. Gentleman will see the figures after the discussions have taken place.

It is not a question of giving preferential treatment; it is a matter of trying to deal with the very practical problem of not being able to assess with any degree of certainty in this matter. In fact, I am advised that the effect of the hon. Gentleman's amendments would be to make these industries liable to the same test of connection as other properties—that seems fair on the face of it—but quite possibly it would be to give them more refunds than they are likely to get under the special arrangements.

I hope that that assurance and explanation justifies the point I make—that it is not a question of the Secretary of State or anyone else exercising wide powers; it is a question of exercising the powers which are necessary because of the special circumstances which prevail in these four industries.

Amendment 33 is purely a drafting amendment. It seeks to bring the wording of this subsection in line with subsection (1)(a).

Mr. Speed

We are grateful to the Minister for his explanation. Under the "cumulo" arrangements it certainly seems that one has to have paragraph (b) in the Bill. I take it that it would be under sub-paragraph (ccd) in paragraph 14 of Schedule 7 of the Local Government Act 1974 that the statutory instrument would be made.

There is one matter that slightly disturbs me. My hon. Friend the Member for Braintree (Mr. Newton) gave some fairly substantial figures concerning the Anglian Water Authority. From other water authorities one has heard figures such as 60 per cent. I understood the Minister to say that discussions are still taking place with the industry and that nothing is yet determined. It might be helpful if, when the Bill is enacted, we could have some indication of when we shall be seeing the Statutory Instrument and when the House will be able to form a view.

Presumably it is on the basis of discussions that are now taking place that the estimates referred to by my hon. Friend the Member for Braintree, which have been advanced earlier today, have been arrived at. There is a problem here. In trying to look ahead, it would be better if we could put this type of industry upon a more logical charging basis and put it on all fours with private industry. I am not saying that in any sense antinationalisation. I am thinking of the regional water authorities. Water and sewage are vital and fundamental to industry. It is therefore unfortunate that we cannot get away from this "cumulo" basis. I understand the reasons. We are dealing with pylons, railway works, and so on, for which it is difficult to get a specific rateable value.

If the Minister assures us that under the provisions of paragraph (b) this is the only effective way of dealing with the problem, that we shall have a chance to look at the Order which clearly must come under the appropriate Act in sub-paragraph (ccd), and that there is no question of nationalised or other industries being treated more fairly or generously than the domestic ratepayer—whether the domestic ratepayer is connected or unconnected—we should not necessarily wish to press the amendment.

Mr. Graham Page

I should like to refer to Amendment No. 33, which gives power to specify these undertakings by an Order under Section 254 of the Local Government Act 1972. That is a wide power, to state not only what undertakings but what areas of those undertakings shall receive refunds by being treated as premises without sewage for the purpose of that section. That is a form of Order by Statutory Instrument, subject to the annulment procedure in this House. I am sure that the Minister has heard me say on more occasions than he wishes to remember that the annulment procedure in this House has almost gone by the board. The Secretary of State will be giving away someone else's money, because he is giving back refunds, for which the general ratepayer will be paying, by an Order which is unlikely to come before this House.

Mr. Stainton

I am sorry to interrupt this interesting theme. Is it clear to my right hon. Friend that under the Bill as it stands these Orders do not already exist?

Mr. Graham Page

I am not sure to what my hon. Friend refers. It is the Minister is aware of the way in which these Orders are to be made and what will be contained in them, I hope that he will let hon. Members know. No doubt there are consultation documents going round the industries concerned. As usual, those outside the House probably know more of the Government's intentions than do hon. Members. If consultation documents are going round, I hope that they will be placed in the Library for us to read.

My point is that this type of Order deals with money and that the House will be rubber-stamping it because it will not be able to debate it. Such an Order will enable the Secretary of State to give away ratepayers' money by way of refunds to certain undertakings based on properties belonging to them.

I hope that the matter will be dealt with by way of affirmative Order. When the Secretary of State makes these Orders he should bring them before us in draft so that we may consider them, whether on the Floor of the House or by the convenient method of Standing Committee upstairs. I believe that we should use the affirmative, not the negative, procedure when dealing with someone else's money in this way.

Mr. Newton

I take it from the way in which the Minister put this matter that he accepts it is unsatisfactory for an arbitrary calculation to be made regarding the refund to which the industries covered by this proposal are entitled. We are thrown back on the good will and genuineness of the hon. Gentleman's assurances, which I do not doubt, but which it will be difficult for anybody to be sure have been fulfilled or not.

One point puzzles me. I understand that difficult calculations have to be gone through to decide how much is to be refunded. How was the charge assessed in the first place? How was the total which the nationalised industries have been paying determined? By definition, we are asked to believe that the sum involved included an element for sewerage. However, we are now told that a calculation has to be made to discover what that element is. I do not understand the basis on which the rating has been taking place. I hope that the Minister has something more convincing to say in reply to that point.

I suggest that the easiest way would be to ignore this complex, rather abstract concept for the purpose of the refunds and simply leave the nationalised industries out. That would reduce the burden on other ratepayers and leave us with an easier problem.

In any case, I should like to know how the rates which they have already paid were calculated. Nobody appears to know.

Mr. Alec Jones

Subsection (7) makes special provision for a hereditament subject to special rating under Sections 26 to 36 of the General Rate Act 1967. Therefore, the question of rating is covered. We are seeking to establish, where these four industries are entitled to refunds, how best to assess the percentage of refund they should get. It seems reasonable to use Section 254 of the Local Government Act 1972 for each of these industries and to make the appropriate order.

We do not know how much of the rateable value of these four industries related to their unconnected properties. They pay their charges as a rate poundage on the total rateable value. The assessment of rates is easy. We are trying to work out how much of the refund they are entitled to received for properties which are unconnected. That is the difficulty. If we were in an ideal situation we would try to find something else. Unfortunately, we are not in that situation. For example, to visit each installation owned by the electricity industry would make the task almost a non-starter.

I agree with the hon. Member for Ashford (Mr. Speed) that the statutory instrument to which he referred would come under paragraph (ccd).

I take the point always made by the right hon. Member for Crosby (Mr. Page) about preferring the affirmative procedure. When I sat on the Opposition Benches, I probably said much the same thing. Even now I am not sure why we do not use the affirmative procedure more. It seems fairer.

The hon. Member for Ashford asked about the percentage of refunds on figures which have been mentioned in the debate. We are still in the process of discussing the matter with the industries concerned. There can be no final figure. I cannot help the hon. Gentleman any further because we are not in a position to give any worthwhile assessment of where these discusions will lead. However, they are taking place and as soon as possible we shall make this information known.

We cannot make the Order until the Bill is passed. Affirmative procedure would not leave time before the start of the financial year—which is one of our problems—because most of the Order is technical. We hope to announce the percentage of the refund in time for consideration in the debate in another place. I hope that I have answered the specific points raised by hon. Gentlemen.

8.0 p.m.

The First Deputy Chairman

Does the hon. Member for Braintree (Mr. Newton) wish to comment?

Mr. Newton

Thank you, Sir Myer. Were any 50 per cent, remissions made to these industries last year? If so, how were they calculated?

The First Deputy Chairman

Order. The hon. Gentleman has misinterpreted my invitation. I thought that he was about to act in a gentlemanly fashion and withdraw his amendment.

Mr. Newton

I apologise, Sir Myer. I had forgotten that it was my amendment. I shall seek leave to withdraw it shortly. I should be grateful if the Minister could answer my question.

Mr. Alec Jones

There was no 50 per cent. remission to nationalised industries.

Mr. Newton

I cannot digest the implications of that at the moment. I shall not pursue it further. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 33, in page 2, line 33, leave out from 'and' to end of line 35 and insert 'is of a description specified for the purposes of this section by an order under section 254 of the Local Government Act 1972A—[Mr. Denis Howell.]

Question proposed, That the clause, as amended, stand part of the Bill.

Mr. Stainton

We have now dealt with 11 Government amendments. That is astounding. I am not being critical, but this underlines the extraordinary complexity of the situation. The House is well advised to be on its guard.

I re-emphasise that I am disturbed about Clause 1(7)(a)(i), on which there have been a number of exchanges. The Minister has expressed his sensitivity to the comments of those hon. Members who spoke on this clause. These are matters of concern which I am sure my right hon. Friend the Member for Crosby (Mr. Page) intends to pursue relentlessly between now and when the Bill is discussed in another place.

I wish to ask the Minister one question. Perhaps the answer is straightforward, and it may be that I am too dim to realise its implications. Clause 1 begins by placing a duty on water authorities. It says: On 1st April 1976 it shall become the duty of every water authority to refund". We have established that duty on the part of every water authority. Layman that I am, I can find nothing in the clause that lays down how that duty is to be discharged. Although it may be a simple administrative matter that would flow automatically from the duty having been imposed, it is not a comprehensive or sensible way of drafting. In my view we have done only half the job by imposing the duty. We have not completed our task by describing how that duty will be discharged. I hope that the clause will have a reasonably fair wind.

Mr. Graham Page

Throughout the debate we have discussed administrative matters. Some points of substance against the Bill have been raised, but to a great extent administrative matters have had priority. It is possible that the Secretary of State wants a power to make Regulations, if necessary, to direct the way in which the clause should be administered. By reading into the Bill the 1973 Water Act there may be an indirect power to make Regulations by Statutory Instrument to right any administrative difficulties that may appear. It would be a reserve power, which I believe the Secretary of State would welcome, to smooth over the difficulties and give a certain amount of flexibility to the administration which would otherwise be so rigid under the clause.

Mr. Denis Howell

Possibly the reason why the hon. Member for Sudbury and Woodbridge (Mr. Stainton) felt that we have not given enough attention to the mechanics of how the duty would be carried out is that it arises in subsection (8). We have spent a lot of time on other subsections, but we have not spent much time on subsection (8).

The right hon. Member for Crosby (Mr. Page) raised the same point in more precise terms. The Bill imposes a duty and lays down the basic rules. The Order will provide the mechanics to discharge that duty. I hope that with that explanation the House will believe that we have got it right.

Question put and agreed to.

Clause 1, as amended, ordered to stand part of the Bill.