LAUNDERETTES (WATER EFFLUENT CHARGES) (Hansard, 10 January 1978)

§ Mr. David Mitchell (Basingstoke)
I welcome the opportunity to raise on the Adjournment the effect of double charges for water effluent upon laundrette customers and also upon launderettes. I do so because launderette members of the Small Businesses Bureau have raised this matter with us, because I find that an injustice is being done, since senior citizens, pensioners and those living alone are going to be hurt, and because another group of small businesses will be destroyed. This is one case where dirty washing should perhaps be done in public.
1629 The first point to be made is that the same type of dirty water is involved here, whether it be from the launderette or from the washing machine at home. It should be understood that the launderette does not do the washing in the same way as a laundry. The user hires the machine and does the washing himself. I ask the Minister to consider the case of two identical, semi-detached houses. In one there live a family of five who own a washing machine. In the other is an old-age pensioner living on his own. Both the pensioner and the family of five pay water rates for the disposal of their dirty water. But the pensioner pays twice, because, unlike the better-off family next door, he cannot afford a washing machine and goes to the launderette. It is this unfairness which strikes me as being something that ought not to be allowed to go unchecked.
I turn to the Minister's case, which is an interesting one but which, I believe lacks a certain logic and validity. I am grateful to the Minister for having spelt out his case in a Written Answer on 5th December. He said: Water authorities are required by the Water Act 1973 to relate charges to the cost of providing the services concerned and to work towards eliminating discrimination in favour of any class of persons." [Official Report, 5th December 1977; Vol. 940, c. 500.] I call on the Minister to eliminate discrimination against those who cannot afford to buy their own washing machines and has to use the water provided by the launderette.
Water from a washing machine can be disposed of only once. To justify an additional charge for the person who disposes of his dirty washing water at the launderette such a person would have to use a washing machine at home and then go round to the launderette and wash his clothes a second time. That is a wholly unlikely set of circumstances.
The Minister could argue that other commercial processes which are a substitute for services in the home can be taken as a precedent. Let me take some examples. If a person has tea in a cafe there will be a commercial service provided, which is also provided in the home. No additional rate is levied on the cafe. The same is true when a person eats in a restaurant and has his plates washed there, or drinks beer in a 1630 pub and has his beer glass washed there. There is no extra sewerage rate. Such an argument gives no comfort to the Minister.
The effect of this process will be to hit the old and the single in two ways. It will hit them because either the price at the launderette will rise or the launderette will close. Those who use the service will have to pay more or lose the service. A launderette is no use if it is five miles distant. A pensioner needs a launderette just around the corner.
I come to consider the effect not only on the consumer, the single person or the pensioner—and it is such people who overwhelmingly use launderettes—but on the launderette companies. This is an extra burden that they are called upon to bear, in addition to the gas, electricity, oil and all the other extra charges—increased by inflation—which they have suffered in recent years. The best estimate I can make is that 1,000 launderettes—small businesses—will close this year unless something is done to ease the burden.
Perhaps this is a mere nothing to a Government who have already closed a record number of small businesses, including 3,500 launderettes, with the loss of several thousand jobs. But even this Government are becoming alive to the fact that one cannot have employment without employers, and, small businesses though they may be, launderettes are an important part of the small business world. They provide employment, and should be encouraged.
This brings me to what is my final point, because I want to give the Minister adequate time to reply. The way in which the charges are being introduced gives a good illustration of the total failure of giant public bodies, such as water authorities, to understand the problems of small businesses and those who run them. I ask the North West Water Authority to step forward to receive the first prize of 1978 for lack of understanding. Above the signature of Mr. Chadwick, its divisional manager, it wrote to a middle-aged lady giving her consent to discharge trade effluent from her launderette, at a price.
The authority said that effluent must not exceed "5m³" every 24 hours without prior consent. I cannot explain that figure to the Minister, because I did not 1631 do modern mathematics at school. The effluent must not exceed 1m³/hour. It must not contain sulphides, hydrosulphides and polysulphides in excess of 5mg/1, separable grease and oil in excess of 50mg/1 and sulphates in excess of 1000mg/1 or toxic metals in excess of 10mg/1, either individually or in total, ranging from antimony to zinc. No effluent shall be discharged at a temperature higher than 43.3 deg. C. No effluent shall be discharged which has a pH of less than six or greater than 11. Does the authority expect the working proprietor of a small launderette to be a water engineer, chemist, biologist and metallurgist as well as a mathematician?
I showed that example to a water engineer and asked him to explain what it meant, and he told me that he did not understand it. This makes my point that the Minister should do something about the way in which the water boards are using their powers in this matter. I urge him to give me an assurance that he will review the method of the water boards' charges and introduce legislation to redefine launderettes as a service, so that they can continue to provide the service which undoubtedly they now provide for a very important section of our community, those who most often cannot afford to have their own washing machine at home.

§ The Under-Secretary of State for the Environment (Mr. Kenneth Marks)
I am grateful to the hon. Member for Basingstoke (Mr. Mitchell) for raising this subject. This is yet another example of the legislation, pushed through by the last Conservative Government, coming home to roost. The Conservatives' Social Security Act of 1973 was another. As small businesses have been mentioned, I would point out that that Act provided for considerably increased national insurance contributions for the self-employed to cone into effect in 1975. Conservative Members, including the hon. Gentleman, supported it and then complained bitterly when the charges came into effect.
This is a similar case. The Conservative Government's Water Act of 1973, opposed by the Labour Opposition, took from local authorities their function of dealing with sewage treatment and dis- 1632 posal. It took away from laundries and launderettes their exemption from trade effluent control and charging which they had had under the Public Health Act of 1937. It set up the regional water authorities of which the hon. Member complains. It placed on those authorities an obligation to meet their costs from charges, to relate those charges to the cost of providing the service. These are now being phased in the period up to 1981, the date written into the Act.
So the charges under discussion tonight are a direct result of the Act which the hon. Member voted for at every stage in 1973, as indeed did the hon. Member for Macclesfield (Mr. Winterton), who presented the petition in November, and as, indeed, did all the Conservative Party.
I know that the question of charges made to launderettes for the effluent they discharge is a matter of considerable concern to many people in all constituencies. The owners of the launderettes see it as yet another cost increase imposed on their industry at a time when it is already under considerable strain. The hon. Member talks about 1,000 launderettes going out of business next year, but this is not because of the increased water effluent charges. These are equally unwelcome to the housewife or the flat-dweller who uses the launderette and who in the end has to meet the extra costs involved.
The extent of the concern felt about these charges was amply demonstrated by the petition, and the representations from many hon. Members. I therefore welcome the opportunity given by this debate to ensure that all the issues involved are thoroughly ventilated.
I think that it would help the general understanding of these issues if I sketched in the background to the charges in some detail.
The charges concerned are for the reception and treatment of trade effluent, and arise as a result of the Public Health (Drainage of Trade Premises) Act 1937. This Act provided for trade effluents to be subject to control as regards the character and the volume of discharges to sewers, and one of the conditions of consent provided for charges to be made for the reception and treatment of the effluent. However, Section 4 of that Act listed certain exemptions from control, 1633 and hence from charging. These included liquids produced by laundering.
However, in 1970, the Working Party on Sewage Disposal produced its report, and one of its recommendations was that laundries should cease to be exempt from trade effluent control and charging. The working party considered that other industrial processes which are a substitute for domestic work, not simply restaurants but food processing generally were subject to trade effluent charges, and the argument for the continued exemption of laundries could not be sustained. It pointed out that many of them were also in the dry cleaning business.
This recommendation was accepted by the Government of the day and the exemption was removed by the Water Act 1973. I do not think that anyone will want to argue that launderettes are not trade premises within the terms of the 1937 Act. From 1973 the water authorities were empowered to make such charges. The extent to which charges for launderette effluent have been introduced varies from authority to authority, as they progress towards an overall rationalisation of all their charges. The authorities fully appreciate that these charges represent an additional burden, and are therefore phasing their introduction gradually.
Some authorities are now levying the full charge—for example, Thames Water Authority—while others are still in the early stages. It is true that part of the hon. Member's constituency is in the Southern Water Region and another part is in the Thames Water Authority, which would account for the difference in speed in the operation of the Act.
I realise that over recent years, in common with other industries, launderette owners have had to meet increasing costs for electricity, gas, and oil. That these increases have been unavoidable, and widespread, is probably scant consolation. I have spoken to launderette owners, who regard these latest additional charges for their effluent as the last straw. I have even had it represented to me in many cases that they will make the difference between survival and closure. I do not think that we should get this out of perspective. In the area of the Thames Water Authority, where the full charges have been introduced after two phasing- 1634 in steps, these have been set up at about 27p per 1,000 gallons, which is equivalent to about 2p a wash for a full 70-gallon cycle of wash and rinse. The size of this increase—and this is the biggest in the country—therefore seems neither swingeing nor excessive.
The way in which these charges are calculated is not a hit-and-miss affair. They are worked out by means of a complex formula which relates the charge to the volume and the character of the effluent in terms of the demands that it makes on the reception and treatment processes. The formula itself has been drawn up as a result of consultations between the water industry and the CBI. A number of other industries are also concerned here. It is therefore a carefully considered and rational basis for the charges that are being made.
It is true that the trade effluent charges are not the only water charges levied on launderettes. They will also be charged for the water they consume, and if they discharge domestic sewage they will also be subject to a sewerage charge which is currently based on rateable value. But none of these further charges is in any way unusual for a trading concern, or peculiar to the launderette industry.
I have noted the complaints that have been made about the lack of consistency in the trade effluent charging policies of the various water authorities. Instances have been quoted of similar processes to launderettes being carried on in hotels, flats and old people's homes but which are not subject to trade effluent charges. I must make quite plain that the responsibility for charging policies in individual areas rests with the water authority concerned and not with the Government.
There may well be variations from area to area, depending on the progress made by each authority in rationalising its charges, but I understand that in general the water authorities do not make trade effluent charges for communal washing facilities in old people's homes and flats. This is mainly because no additional charge is made for them and they are not trade. Effluents from laundering on the premises are likely to be mixed with considerable quantities of other wastes, and the costs covered by the normal sewerage charge based on rateable value.
1635 A point made by both launderette owners and users is that the housewife who does not own a washing machine and uses the launderette instead has, as it were, to pay twice over. This is because she pays fixed water and sewerage charges in her home but also pays the trade effluent charge for the waste washing water when she goes to the launderette. As a fairly frequent launderette user over many years, I can understand this reaction, and I accept that there is some element of what may be called "double-charging". I hope that the NWC will look into this with the industry. It can also happen when, for instance, rather than using home-grown food, a family uses frozen food, the cost of which will reflect all processing charges, including trade effluents.
I have also listened carefully to the arguments that these trade effluent charges are in effect penalising the poorer section of the population, since these are generally the people who cannot afford their own washing machine and therefore have to use launderettes. The additional charges, it is suggested, will thus bear most heavily on those most in need and least able to pay. I accept that many who cannot afford a washing machine will instead use a launderette, but the element of convenience provided by the launderette also influences the individual consumer's decision.
The hon. Gentleman mentioned single people who often do not want to be bothered with washing machines in their homes. It is no reflection on their income. I have not seen any figures to support the argument that it is the poor who predominantly use launderettes, though I admit that I used them more when I was poorer than I am now. In the 1975 Family Expenditure Survey it was shown that expenditure at launderettes tended to rise with income. Households at the lower end of the earnings scale contributed only a relatively small part of launderettes' income. However, as a Minister at the Ministry of Transport, having had experiences of surveys that were supposed to prove that only the rich use the railways, I accept that it could be argued that the well-off use more of everything.
I have, however, been left in no doubt about the anxieties of the launderette owners and their customers about the 1636 effect of these charges. My right hon. Friend and I have received many representations from hon. Members on both sides of the House conveying the concern of their constituents. So in November I met representatives of the National Assocation of the Lauderette Industry and the Launderette Owners (London) Association, and we had a very useful discussion.
I explained to the owners' representatives, and I must repeat this now, that I see no prospect of early legislation to introduce a special exemption for launderettes from these charges. I am not convinced that there is adequate justification for overturning this systematic basis of charging by making an exception for one particular service trade. I have not heard it suggested that launderettes are not trading organisations. It is generally accepted that they are. It is therefore right that they should be subject to the appropriate charges. If exceptions were to be made for launderettes, I have no doubt that other trading concerns would follow with similar claims for exemption, and the entire basis for making trade effluent charges would be thrown into confusion.
As I have already said, the responsibility for the scale of charges levied on launderettes rests with the water industry. I therefore suggested to the owners' representatives at our meeting that they should seek to discuss the matter with the National Water Council and that I, for my part, would write to Lord Nugent, the chairman of the council, to suggest that he met them. It seemed to me that there was much merit in looking at the problem on a national basis.
There seems to be some disagreement about the "strength" of the effluent, which is judged by the treatment that it gets at the sewerage works for it to be put out for disposal. I was pleased to learn that the National Water Council has offered to set up a joint study involving representatives of the launderette owners and the water authorities. I do not suggest that this will provide the complete and immediate answer to the launderette owners' problems, but it will be an invaluable forum to discuss and explore such matters as the way in which the levies are calculated, the reasons for possible regional differences, and the relationship between the various charges for water and sewerage services which are 1637 currently made on launderettes. I include their domestic rating. It would give launderette owners the oportunity to set out their case and the reasons for their concern in detail and ensure that their arguments were given full and careful consideration by the water industry.
I understand that the representatives of the launderette industry have yet to indicate formally their acceptance of the offer that has been made by the National Water Council, although preliminary arrangements are being made for a meeting of those involved early next month. I would wish to commend to launderette owners the offer by the National Water Council, and I would hope to see whole-hearted purposeful and constructive participation in the proposed study by all concerned. I am sure that this represents the best way of making progress on a matter that has been the cause of so much concern.

§ Mr. David Mitchell
I am grateful to the hon. Gentleman for indicating the way that he thinks the matter may develop. He began by being critical of 1638 the Act that he has to administer. Do I take it that he has no intention of making any amendments to the legislation of which he has been so critical?

§ Mr. Marks
As the hon. Gentleman may know, a Water Bill was in course of preparation, but we were unable to bring it forward in this Session because of lack of support from both sides of the House. There will not be time for a Government-sponsored Water Bill. Indeed, I doubt whether there would be general support for the view expressed by the hon. Gentleman.
The hon. Gentleman referred to the North West Water Authority and the detailed letter that I shall raise with the authority. However, I should point out that anybody who is engaged in an industry, small though it may be, should know something about the amount of effluent that it will produce and the difficulties that it will cause.