§ Ms. QuinI beg to move amendment No. 1, in page 5, line 17, at end insert—
'(c) to whether the charging structure adopted for the purpose of the trial takes into account the imposition of value added tax on water according to EEC practice.'.
§ Mr. Deputy SpeakerWith this it will be convenient to take amendment No. 2, in page 5, line 17, at end insert—
'(c) to whether the charging structure adopted for the purpose of the trial meets the following criteria—
- (i) the charging structure must be easily understood by the consumer,
- (ii) the charging structure must be practical and able to be carried out with the available technology,
- (iii) the charging structure must be capable of wider application and use.'.
§ Ms. QuinThe amendments relate to the structure and type of charges to which the consumer will be subject during the trial periods. We believe that the issue of the charging structure to be used is important because we have consistently argued that consumers should know what they are paying for when they receive their water bill. That knowledge is particularly important during the trial periods because consumers in those areas, once they have asked the question, "Why us? Why were we chosen for the trial?", will go on to ask, "What will it cost us?". They have a right to know that and they have a right to have a detailed breakdown of the costs.
Paragraph (c)(i) of amendment No. 2 refers to the fact that we feel that:
the charging structure must be easily understood by the consumerWe believe that the consumer should know what part of the bill represents fixed costs, what part represents the new measures taken to improve the quality of water and what part represents the charges relating to the volume of 921 water consumed. Earlier on in the debate my hon. Friend the Member for Stoke-on-Trent, North (Ms. Walley) made the important point that a large part of gas and electricity bills relates to the volume of supply consumed—she mentioned the figure of 80 per cent. However, for the water industry an entirely different situation obtains. The figures that I have seen suggest that only 20 per cent. of the bill relates to the volume of water consumed. It is right that the customer in the trial areas should have the necessary information relating to the bill. It has been widely reported that metering will lead to an increase in costs. Therefore, the consumers in the trial areas have a right to know how much of the extra cost on their bill specifically relates to metering.Amendment No. 1 relates to the question of VAT on water charges. It is not clear whether VAT will be charged on the domestic consumer of water in the future. We certainly hope not and we would be delighted if the Government gave us a clear commitment on that tonight. We hope that the Government will resist any pressure to impose VAT. I understand that the court case that is still to be completed at the European Court of Justice relates to VAT being charged on industrial consumers only. However, I understand that the European Commission's proposals concerning harmonisation of VAT rates in the long term include water charges in their plans for the lower band of VAT. We are concerned about that and we believe that the consumer in the trial areas has a right to be told what is happening about VAT. Perhaps the Government will give us the assurance that we require and tell us that there will be no VAT charged on domestic users of water during the period of the trials and, we hope, thereafter. We wait to hear from the Minister in that regard.
Subparagraphs (ii) and (iii) of amendment No. 2 are common sense amendments. Subparagraph (ii) states that the charging structure should be practical and should be carried out "with the available technology". Subparagraph (iii) states that the:
charging structure must be capable of wider application and use".The purpose of subparagraph (ii) and (iii) is to prevent a person in the trial areas being any more of a guinea pig than he or she already is under the system. Certainly we do not want those people to be given an unworkable system or a system that will not be used again.We believe that the amendments are practical and common sense. By tabling them we believe that we are providing the Government with some practical advice that will help them conduct the trials in an easier and, perhaps, more acceptable way than would otherwise have been the case. That hope is despite our belief that the trials should not go ahead. However, the amendments are constructive and we have proposed changes that we believe will give extra protection to the households and consumers involved.
One of my hon. Friends has referred to the fact that all of our amendments amount to a consumer protection charter during the metering trials. Therefore, we hope that the Minister will accept the amendments in the spirit intended because we believe that they represent a constructive way forward.
§ Mr. O'BrienIt is not our intention to delay the House on the amendments. Suffice it to say that the real issue is 922 the charges to the consumers. Indeed, amendment No. 2 makes it clear that the charging structure that is adopted for the trial should follow certain criteria.
In the Yorkshire area we are advised that the rising block tariff will be the charging structure applied. Reference has already been made to the old lady living alone who pays the same water charges as the family next door and that is unjust. Unless the base of the charging structure takes that into account I believe that there will be disadvantages and the widow or the single person will suffer an unfairness. If the rising block tariff is not based on the single person or the old lady, but is based on a family of three or four, that old lady will lose out. The amount of water that she will pay for, at the base of the tariff, will be the same as a family of four. There will be great difficulties for single people living in large properties.
There is also the problem of standing charges. People in my area pay two standing charges to the water authority — one for water and one for sewerage. Unless information is given in the explanatory notes to consumers as to what charges will be, I can foresee immense problems for low-income families in my area.
These amendments are important. The charging structure must be practical so that the authorities can implement it. There must be no preference whatsoever in the agreed structure. Some sections of the community will benefit from the introduction of meters, but others will be disadvantaged. I hope that no undue preference will be shown in the pricing structure to certain groups of people.
I ask the Minister to give assurances that people on low incomes will not lose out during metering trials. If there is to be universal metering during those trials, greater problems will arise that will have to be analysed.
My hon. Friend the Member for Gateshead, East (Ms. Quin) raised some important issues in moving these amendments and I hope that the Minister will answer the questions that have been posed.
§ Mr. MoynihanAlthough these amendments are unnecessary, for reasons that I shall mention in a moment, they cover some important issues. I am glad that Labour Members have raised them.
The reasons why the Government regard the amendments as unnecessary and, indeed, restrictive are as follows. Clause 4 sets out a special regime for metering trials schemes. Each water authority or company wishing to carry out a trial must submit proposals to my right hon. Friend the Secretary of State for his consideration and approval. In so doing, my right hon. Friend will be required, by clause 4(3), to have regard to the interests of those customers who are likely to be affected and to various other matters, including the methods and principles by which charges will be calculated and imposed. That is covered by clause 4(4). That will allow my right hon. Friend the Secretary of State ample scope to consider the structure of the charges proposed for each trial, including the rationale between the choice of a particular tariff structure and, most important, the implications for customers.
In addition, as a result of clause 4(5), in considering a scheme for approval he may also take into account whether the proposed charges are intended, within the constraints of the experimental nature of the trial, to be cost related and whether a charging system would result in undue discrimination against or undue preference for any class of customers. That point is critical, and it was 923 raised by the hon. Member for Normanton (Mr. O'Brien). With regard to the trial in his area, I take this opportunity to underline the fact that any charging system must not result in undue discrimination or undue preference. It will be critical to the Secretary of State's consideration of any proposed trial scheme that that criterion is adhered to.
Those latter requirements are, as hon. Members will have recognised, the cornerstone of the existing customer protection provisions in section 30 of the Water Act 1973, which are re-enacted in clause 3 of the Bill. Thus, the Bill as it stands would enable my right hon. Friend to consider all the matters in these amendments and many more aspects of proposed charging procedures.
With regard to the various detailed issues raised by these amendments, I should like to assure the House that it is quite true that the industry has tentatively drawn up a list of different types of tariff to be tested in this proposed joint programme—one large scale and 10 small scale trials. However, I emphasise that the final decision on the type and level of each tariff will be a matter for my right hon. Friend the Secretary of State. In considering each proposal, my right hon. Friend will take into account the need for a balanced programme of trials on a nationwide basis.
I should emphasise the importance that the Water Authorities Association has placed on ensuring that we consider a range of tariff structures. In putting forward a range of proposals to my right hon. Friend, it will have taken into consideration the nature of metering trials and the opportunity to try out a variety of charging structures and tariff bases. It will be incumbent on all water undertakers to make available full details of the proposed tariff structure to everyone in each of the metering trial areas before my right hon Friend the Secretary of State has before him the proposed trial areas for approval. It will be opportune at that stage for individual consumers or groups in a proposed trial area to make representations to the Secretary of State for him to take into account.
8.45 pm
Those points are critical, because they are part and parcel of the importance that we attach to consumer interests. It is one of our priorities to ensure that we carry with us those who live within the proposed trial areas. They are important criteria and are of particular concern to customers, and I can assure the House that they will be taken into account when my right hon. Friend considers each scheme.
The hon. Member for Gateshead, East (Ms. Quin) raised the important issue of VAT. Although the European Commission has been taking proceedings against the United Kingdom for having a zero VAT rating for the supply of various goods and services, including water and sewerage services to industry, the case does not concern domestic supplies. My right hon. Friend the Chancellor of the Exchequer will look at the ruling of the European Court when it is delivered. In the meantime, it is premature to speculate about what the outcome might be. However, I should re-emphasise that the Commission's action does not apply to domestic water supplies.
I repeat that these amendments are unnecessary and I urge hon. Members, following my explanation to the House, not to press them.
§ Mr. PendryI beg to move amendment No. 5, in page 5, line 40, at end insert—
'In considering the matters in paragraph (a) above, the Secretary of State shall have particular regard to implications for charitable institutions and voluntary sporting organisations.'.I wish to say immediately that this is a probing amendment. We wish to show our flexibility, and we hope that the Minister will show some as well. I am sure that it has not escaped the notice of Conservative Members that we are prepared to amend clause 4. Therefore, we hope that the Minister will be flexible.I hope that the Minister will not try to improve on his record of interventions. I do not know who Miss Allen is, but when she totted up his interventions, I am sure that she did not take their quality into account. The Minister often had to get up three or four times to make a simple point.
We are conscious that the Minister wears a number of hats. I got into trouble in Committee when I said that he was in charge of aqua affairs and that I did not know how many other affairs he was in charge of. I did not make the point as clearly as I shall now — the Minister is responsible not only for sport but for the water industry, for environmental protection, for the Countryside Commission and a number of other areas of Government any one of which totals 9.10 per cent. of Ins responsibilities. We are lucky that we are receiving 18.20 per cent. of his responsibilities. I am sure that we shall have a much weightier contribution from him tonight that we have had to date.
The Minister prides himself on getting on well with the sporting fraternity. Alas, that is wearing a bit thin with water sporting groups. Unless he is more forthcoming, he can say goodbye to the good will that he has built up to date with the many charitable and voluntary sporting groups in this country, who so far have been impressed with his energy. I know from representations that I have received that many of' them feel that with this legislation that good will is disappearing fast. Many of the existing agreements that recreational and sporting groups have with the water authorities are clearly under threat and those groups look to the Minister to protect them. If the amendment is not carried, they will increase their opposition.
There are many obvious examples. As the Minister perhaps knows—it was referred to in Committee — the National Anglers Council has voiced its worries about the Bill. As the Minister also knows, there are 3.4 million anglers in this country, 1.2 million of whom have fishing licences. The specific price agreements of individual angling clubs are at risk. The Minister should accept the amendment and give clear guarantees to put the anglers and others out of their misery. In my constituency, there is a disabled persons' angling club in the Longendale valley which will be badly hit if prices are forced up. That club is not alone. Many groups in the areas chosen for the meter trials will suffer in the same way.
I said in Committee and reiterate now that, unless the Minister is clear and unequivocal on the issues worrying the clubs, many groups in the trial areas will suffer loss of amenity by having their running costs forced up, particularly when the main legislation is passed later. Characteristically, the Minister has underestimated the number of regular users of the water environment each year. He puts the figure at about 2 million, when the real figure is closer to 5 million.
925 It is not only those groups that worry us; the amendment addresses itself to a wider range of interested groups. The Minister has become relatively famous as a water sportsman. I discount his boxing prowess, because I have sparred with him and his reflexes are far too slow for him to have been any good at that sport. Is it not ironic that the water sportsmen are turning against him because when that substance is metered it will bring many of them close to extinction?
§ Mr. Barry Field (Isle of Wight)Will the hon. Gentleman give way?
§ Mr. PendryI am trying to hurry along. The hon. Gentleman has not taken much interest in this Bill; although he is not alone, so I do not wish to single him out from the rest of the breed.
As we said in Committee, water sports enthusiasts are not alone in feeling apprehensive about the consequences of the Bill. In trial areas, many other sports clubs will find that their premises and services will be hit by the Bill. That applies to football, cricket, tennis and golf clubs—to say nothing of bowling clubs where many of our elderly citizens pass their recreational time. There are many more. Is the Minister really prepared to throw away all the good will that he has generated with the sporting fraternity and impose metering charges on those groups?
I have received letters from groundsmen of football clubs who are worried about the implications of the Bill. They are worried about the price of sprinkling and of watering their pitches. My hon. Friend the Member for Stoke-on-Trent, North (Ms. Walley) is a great Port Vale supporter. Unfortunately, I heard someone say that, without a wet pitch, that club would not have beaten Spurs on Saturday.
§ Ms. WalleyI must put it on record that the abilities of Port Vale football club are second to none. With or without the conditions on the pitch, I have no doubt that they would have been the giant-killers and beaten Tottenham Hotspur on Saturday.
§ Mr. PendryI would have said exactly the same to the person who made that accusation.
On an equally light note, because cricket clubs have been affected I am tempted to think that the Minister is perhaps standing up for the dying breed of the English spin bowler. If cricket clubs are to economise with water, more and more dry and dusty pitches will play havoc with the batsman's technique. At the risk of destroying good wickets, it is no good the Minister saying on the one hand that he is prepared to put out the begging bowl to save the Oval while on the other putting the squeeze on a number of small cricket clubs which may go out of business altogether. Exorbitant water metering charges will add to the already crippling costs faced by sports clubs.
§ Mr. Barry FieldThe hon. Gentleman makes much of the effects of water metering on sporting clubs. As he knows, my constituency is the largest of the test areas to be metered. How does he explain the fact that I have not had one representation from any sporting user of water? I have received many from households but not one from a sporting user.
§ Mr. PendryI am glad that I gave way to the hon. Gentleman. He should have been making lots of loud 926 noises in support of the Government. If his constituents find it as difficult to find him as we have, I am not surprised that he has received nothing.
The Minister knows that I have a high regard for him. He has done much work for sport, but he has so many hats to wear that he cannot possibly come to grips with his portfolio as he might like to. He must stand up to his boss, the Secretary of State—who was here for five minutes to support him but has just left again—and to his bigger boss, the Prime Minister. Both are known to be sporting philistines. If he does not stand up to them, he will find himself alienated and distanced from his erstwhile supporters. The other day, I asked him to stand tall for sport. I am asking him to stand tall again. In the friendliest possible way, I would say to him that he must place on record tonight his determination to protect the best interests of charitable and sporting organisations from this squalid Bill, and he must say so loud and clear.
§ Mr. MoynihanI know that life in their Lordships' House has been unexpectedly diverse and, on occasions, colourful this evening, but the contribution of the hon. Member for Stalybridge and Hyde (Mr. Pendry) stretched even my imagination to incredulity. The only way that the Bill can affect anglers is if they use a lot of water in their club houses. I do not think that anyone has the intention of even considering the possibility of metering water as it goes past them in the river.
§ Mr. PendryThe Minister was not listening. I was talking about a club in my constituency and other angling clubs. We are talking about clubs.
§ Mr. MoynihanI do not quite see how an angling club in the hon. Gentleman's constituency will be affected by the Bill, as there is no proposed metering trial scheme there. It defies the imagination to raise the issue of sporting clubs. As the hon. Gentleman, as a keen follower of sport, well knows, a large number of sporting clubs, particularly those with large acreages, are already metered. Like industry, they see the benefits and are already metered. One reason why my hon. Friend the Member for the Isle of Wight (Mr. Field) has not received any letters on the subject is that many of the clubs are already metered and see the benefits of it.
Some of the points raised by the hon. Member for Stalybridge and Hyde would be better directed at the substantive legislation. I am aware that fishing, sporting and recreational interests must be well protected and enhanced, as they will be when the National Rivers Authority is established, but that has nothing to do with this Bill.
Clause 4(3) requires my right hon. Friend the Secretary of State, when considering proposals, to have regard to the interests of those customers charged by trial schemes and to various other matters. This amendment requires my right hon. Friend, when considering a scheme, to have particular regard to implications for charitable institutions and voluntary sporting organisations. These are, of course, very important groups, and no one takes a keener interest in their activities than I. That is why I hope that hon. Members will accept my advice that the requirement is unnecessary. I explained when we discussed amendments Nos. 1 and 2 that, as part of the special charges scheme regime for the trials, my right hon. Friend the Secretary of State is required to have regard to the interest of customers made subject to charges by each scheme, and 927 that, in doing so, he may take into account whether the trial would result in undue discrimination or undue preference to any classes of customer. These requirements should ensure that all classes of consumers, including voluntary sporting organisations and charitable institutions, are treated fairly.
I therefore urge that the amendment should be withdrawn. Nobody could he more committed to protecting and promoting the interests of sport and recreation than myself. I give a clear undertaking that they will not be affected by the provisions in the Bill.
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§ Mr. BoyesThe Minister's reply was disappointing and well below his usual standard of excellence. On this occasion, it is a 3 out of 10 job.
The Minister said that he would ensure that charitable bodies were treated fairly, but what does that mean? Many people are dependent on charitable bodies, especially when Government cuts occur. Many people live in poverty and are abused in different ways. The proliferation of physical and sexual abuse of children is of great concern to us all. Regrettably, more and more people are having to rely on charities for assistance and guidance. When the Minister said that he hoped to treat charities fairly, did he mean that he would do something special for charities? Surely, when their bills increase substantially as a result of water metering, they will be treated extremely unfairly. I had hoped that the Minister would recognise that point.
The Minister did not mention that fishing is an important aspect of leisure, whether one watches, plays or referees, especially in constituencies such as mine where there is massive unemployment. I had hoped that the Minister would make some helpful comments so that recreational clubs would not be disadvantaged by water metering.
My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) argued the case well, but the Minister has not given us a glimmer of hope. Charitable bodies will be treated like everybody else: if, as a consequence of metering, they find themselves in reduced financial circumstances, or have to go out of existence, so be it. That is a callous approach from a Minister whom we know to be caring, but who has not shown his concern on this occasion.
Amendment negatived.