§ Order for Second Reading read.1.10 pm
§ Mr. Stanley Orme (Salford, East)
I beg to move, That the Bill be now read a Second time.
I begin by thanking the sponsors of my Bill, which has all-party support. I also thank the many outside organisations which support it, including the National Consumer Council, the British Medical Association, the Institution of Environmental Health Officers, the National Association of Citizens Advice Bureaux, Save the Children and Age Concern. That is a substantial list of organisations which support the principle behind the Bill.
The Bill seeks to ban the disconnection of water supplies to occupied residential homes for reason of non-payment of charges. The Bill relates to England and Wales only because the position in Scotland and Northern Ireland is different. There is no power to disconnect water in Scotland and Northern Ireland. The Government have not taken the opportunity in the Local Government etc. (Scotland) Bill to give the new Scottish water authorities such power.
My Bill will allow water companies to continue to disconnect business and empty premises. It will leave them free to use all the methods of debt collection that non-utility companies use to collect their debts. The Bill also seeks to ensure that pre-payment devices are installed only with the customer's consent.
I shall deal first with the need to ban domestic disconnections for non-payment of charges. The practice of water disconnection is inhuman and unacceptable in a civilised society. I believe that if disconnections continue, they will contribute to an increase in hygiene-related diseases such as dysentery. I always thought that we had banished such diseases from Britain for good.
The average bill across all 10 water and sewerage companies rose by 50 per cent. between April 1989 and April 1993. Inflation rose by 23 per cent. over the same period. So on average water bills have risen by significantly more than double the rate of inflation since privatisation. Unfortunately, in the five years since privatisation disconnections have also risen. On average, the rate of disconnections has tripled. In 1991–92 the number of disconnections reached more than 21,000. Last year there was a slight reduction, but figures were still unacceptably high: 18,636 households were disconnected. Everyone accepts that water bills will continue to rise, so the number of disconnections would also rise in the future.
I have been disappointed with the response to the Bill from the Ofwat customer committees. Nevertheless, the chairman of Ofwat's eastern customer service committee, who is not a supporter of the Bill, makes the point that his committee is concerned aboutthe rising level of disconnection which we may expect following the issue of new water bills in the months of March and April 1994.That quotation is from a letter to the chairman of the National Consumer Council on 8 February.
Even the Bill's opponents admit that there is a strong likelihood that the pressure of rising bills will increase disconnections. Faced with tax increases and the fuel tax that will come into effect in the autumn, it would be difficult to contradict that view. The recent fall in the number of disconnections was achieved only by a huge 606 effort and a campaign by the organisations representing vulnerable groups. By using media coverage, they shamed water companies into reducing the number of disconnections. My worry is that we cannot rely on such public pressure indefinitely. If the spotlight leaves the water companies, they may return to what they see as an easy option for debt recovery.
The water companies say that they disconnect only the "won't payers"—those who can afford to pay, but refuse to do so. I shall bring to the attention of the House some recent examples of people I know who have been disconnected: in Southampton a lady with seven children, one aged three who suffers from a heart condition; a family of five, in which the mother suffers from a medical condition which requires a constant supply of water and whose neighbours provided that water via a hose pipe; and a severely disabled elderly lady, whose neighbours brought her water in a variety of containers. In south Staffordshire, a single parent on unemployment benefit was threatened with disconnection for arrears of £60.73. When the local citizens advice bureau contacted the water company to say that there was a child in the house, the company said, "So what?—We'll still disconnect." A young mother with three children, aged two, five and eight, handed over £50—all her family credit for a week—when the company turned up to cut her water off. The water company got its money, but the family had nothing left for food for the following week. In mid-Kent, the water company refused to allow a family with two children under five and a baby on the way to repay £5 a week under an instalment plan and demanded the payment of more than £400 in full.
I do not call those people "won't payers", but "can't payers". Consumer and health groups are so concerned about the increase in disconnections and the way in which they indiscriminately affect both the weak and the strong that in growing numbers they are calling for a ban. The public health of the nation is at risk.
The most fundamental point is that water is not like any other commodity. It is essential and there is no substitute. If the electricity is cut off, people can use a Calor gas heater; if the gas supply is cut off, they can cook on a primus stove for a few days. It would be a hardship—there is no doubt about it—but it would be just about possible to find a substitute which would not necessarily endanger their health or anything else. If water supplies are cut off, there is no substitute. Water is unique because of its very nature and the health dangers that can result from its absence. The Government have recognised on other occasions that the absence of water poses special problems with which the law needs to deal. In the Environment Protection Act 1990, the Government ensured that a disconnected property had to be classed as a statutory nuisance, which local authorities had to do something about. In the Housing Act 1985, the Government gave local authorities the power to deem a disconnected house unfit for human habitation. Imagine how wasteful we would think it if a local authority had to make a family homeless because a water company had disconnected them.
The most worrying example of all is that under the Children Act 1989, children living in a household without running water are at risk of being taken into care, which is a very important point. Do we really think that it would be right for children living in a house that has been disconnected by a water company, which happens, to have to go through the trauma of being taken into care because 607 of the risk to their health? Is that what the Government mean when, in the international year of the family, they talk about keeping the family together?
At this time of deregulation, the Government should remove the burden from local authority social services and environmental health departments by banning disconnections. The three main local authority organisations—the Association of Metropolitan Authorities, the Association of District Councils and the Association of County Councils—support my Bill. Individual local councils of all political persuasions are voting in support of a ban on water disconnections.
There is more evidence to suggest that at the time of privatisation the Government recognised that there were some special problems with water disconnections. They gave the Director General of Ofwat, the water regulator, special powers to insist that a company did not get a licence to supply water unless it had a code of practice, approved by Ofwat, on debt and disconnections. Section 7.3 of the licence conditions states that a company cannot disconnect if the customer applies to the social services for help and it asks the company to delay disconnection. The Government, therefore, must have wanted to provide some safeguard for the vulnerable—the elderly, the very young and the disabled—who need protection.
Unfortunately, no one, either in the Government or in Ofwat, insists that the water companies inform their customers about the help that can be offered from social services. They only thing that the director general requires companies to do is to write to customers the following sentence:you may wish to contact the Social Services Department. They are unlikely to give you money, but they may be able to help in other ways.I know that my constituents do not contact social services lightly. They have the pride and desire for independence about which the Government often talk approvingly, which means that they would be reluctant to go to social services unless, perhaps, it was spelt out that social services would be able to delay a disconnection. Because that help is not spelt out, the vast majority of people just suffer in silence and shame.
I have a most extreme example of someone who fell through the net and suffered in silence. He is a 50-year-old man living on his own, on invalidity benefit, with a serious hearing condition, mobility problems and a learning disability. By any definition he is a very vulnerable person. Last year, his neighbour complained to the environmental health department about the smell from the drains. That department found that that man's water had been disconnected for two and a half years. No one can convince me that he should be classified as a "won't payer" or that there was no risk to public health from his being without a water supply for two and a half years—clearly, both he and his neighbours were at risk.
Although the director general does not agree that his debt and disconnection guidelines are inadequate, he admits that he cannot get all the companies to follow them. In a press statement in November 1993 he said:There are still a few companies whose response … has been limited and does not match up to the guidelines.North West Water, which supplies my own constituency, has decided without any prompting from Ofwat—the body supposed to represent consumers—that it will voluntarily give customers more information. It writes to the customer that if he or she is on income support, has 608 children under five, has someone in the household on state pension, is a one-parent family or unemployed or has a kidney machine on the premises, those circumstances may influence the decision whether to disconnect. North West Water has reduced the number of disconnections, although I still believe that it should be reduced to zero.
While I applaud the initiatives of North West Water, all those half-measures are not enough. The safeguards built in at the time of privatisation have not worked and will not work. It is impossible to give companies the power to disconnect just the "won't pays". So long as the power to disconnect exists, thousands of "can't pays" will also be disconnected, and they will include the disabled, the elderly, the sick and the very young—all those who are most vulnerable.
On public health, the Government seem to be waiting for an epidemic of huge proportions before they accept that being unable to flush the toilet or wash one's hands will lead to the spread of disease. The British Medical Association, which should know how disease is spread, backs the Bill for precisely that reason. At my press conference, Dr. Taylor described the importance of hygiene. The Royal College of Physicians Public Health Faculty and other medical organisations, such as the Royal College of Midwives, also support the Bill. The Scottish medical officer, Dr. Robert Kendell, appears to disagree with the English medical officer, for he opposed the introduction of disconnections in Scotland because of the consequences of disease.
Although the Bill bans disconnections, it allows companies to continue to use all other means of debt collection. Companies should offer more flexible payment methods to pay off debts. It must be recognised that water bills have risen above the inflation rate since 1988 and that the water component of income support has not been increased by a comparable amount.
People on low incomes are more likely to be able to cope if they can pay bills and debts in many small instalments. I was amazed to find citizens advice bureaux and others still reporting that some companies refuse to offer instalments to customers, almost as though the companies prefer to cut people off.
The chairman of Ofwat South-West customer service committee wrote to the National Consumer Council on 29 October 1993 as follows:We have experienced difficulty in persuading South-West Water to make frequent payment options freely available.The director-general of Ofwat also outlined that problem in his press release in November 1993.
Why can one company reduce the number of disconnections while another cannot? According to Ofwat figures, in the first six months of this financial year Wessex Water made no disconnections while neighbouring Southern Water made 882. That is a classic example of the difference between two adjacent water companies. The companies could pursue "won't pays" through the courts to get deductions from benefit, attachment of earnings orders and administration orders. If companies are worried about the need for sanctions, I should have thought that those were enough.
Last year, in the middle of a recession, the water companies made profits of £1.7 billion. They are therefore paying record dividends, whereas they should be more concerned about their customers than their shareholders.
The Bill ensures that pre-payment devices are installed only with the customer's consent because the Water 609 Industry Act 1991 does not spell that out clearly enough. Pre-payment devices have caused a worrying increase in hidden self-disconnections, when customers have been without water for several days. That does not show up in official disconnection figures. I do not like pre-payment devices because of the danger of self-disconnection. It is a fundamental right that at least they should not be imposed on customers without their consent—a protection included in the Bill. I am amazed that even that proposal is opposed by Ofwat.
Anglian Water is ahead of Ofwat in customer protection. The company says in a letter to the National Consumer Council, dated 21 February 1994:We have never viewed prepayment meters as something to be imposed on particular groups of customers as a condition of supply. Section 3 of the Bill would therefore cause us little practical difficulty.In the interests of customer choice, the Government must give a commitment that if pre-payment devices become widely available, they will carry the safeguards included in the Bill.
Yesterday, I had a letter from a man who said:I am going to get my water supply cut off one day next week if I don't pay my bill. I am on invalidity benefit and suffer from angina, high blood pressure, and asthma.That is the sort of case that the Bill would prevent. I received a letter this morning from an East Sussex councillor who also runs a small plumbing business. He writes:I run a small plumbing business and I have been into dwellings where some cowboy builders have cut off water supplies and left people without water for days on end. The stench becomes appalling and the amount of flies do certainly help in the spread of people's ill health.He says that he wants me to make the best use of this information.
In view of the evidence I have put before the House today, I urge the Government to accept the Bill as a positive contribution to solving the serious problems that afflict many people, especially the sick, the elderly and children. The Bill will play an important part in making life more acceptable and it will remove the threat and horror of water disconnection.
§ Mr. Roger Knapman (Stroud)
I congratulate the right hon. Member for Salford, East (Mr. Orme) on the way in which he introduced the Bill. I fear that, from that point, we must diverge slightly because I consider that, although the Bill is well meaning, it is somewhat impractical. I have read the Bill with some care and I am tempted to think that I understand it. Thankfully, in any case, we are provided with what I suppose we must now call a preamble in this day and age, but which is officially entitled, "Explanatory and financial memorandum". I tell my hon. Friend the Minister that it is the very first paragraph that concerns me most because it states clearly, as did the right hon. Gentleman, that the intention of the Bill is to removethe present power of companies … to disconnect residential premises for non-payment of charges.Despite the cases described by the right hon. Member for Salford, East—I have heard them before I served on the Committee that considered the Water Bill—I believe that the Bill is, in essence, a non-payers' charter and that it will badly affect the vast majority who do pay. The flaw in the right hon. Gentleman's argument was when he had 610 to admit that Ofwat and its director-general were not keen on the Bill. In the light of that advice, we need to consider more carefully how practical the Bill is.
§ Mr. Knapman
I am flattered to have a choice on a Friday. If my hon. Friend the Member for Bristol, North-West (Mr. Stern) will allow me, I shall give way first to the hon. Member for Dundee, East (Mr. McAllion) who is, like me, a member of the Committee considering the Local Government etc. (Scotland) Bill.
§ Mr. McAllion
Is the hon. Gentleman aware that in Scotland it is illegal to disconnect domestic consumers from the water supply? If we live in a unitary state, as Conservatives argue, why is such disconnection illegal in Scotland, but legal in England and Wales?
§ Mr. Knapman
I have no doubt that we shall discuss the position in Scotland at some length in the near future. The water supply system in Scotland currently requires £5 billion of new expenditure. One could argue that the figure might be slightly lower if everybody there paid their bills. We should look at the proportion of unpaid money there rather than just at whether it is legal to disconnect.
Some £5 billion worth of investment is needed in Scottish water and drainage undertakings. If that were to be shared among the 5 million people of Scotland, as the hon. Member for Dundee, East (Mr. McAllion) wants, the capital investment would be £1,000 per person.
§ Mr. Stern
Before the intervention of the hon. Member for Dundee, East (Mr. McAllion), my hon. Friend was discussing the general principle of the Bill. Can he reassure me on one matter? The Bill seems to ensure that goods or services will continue to be provided on credit whether or not the person can, or intends to, pay for them. There is no sanction to stop the continued provision of the specific goods or services—in this case, water. Like me, my hon. Friend is having difficulty finding another example in English law where the law is weighted so heavily in favour of the provision of goods on credit.
§ Mr. Knapman
I accept the argument of the right hon. Member for Salford, East that water and sewerage services are uniquely needed in particular households. However, the way forward is not to introduce a Bill that makes the position of companies impossible, but to ensure that the poacher-gamekeeper relationship established in the Water Act 1989 is effective and up to date. I am grateful to my hon. Friend the Member for Bristol, North-West for raising that issue. I fear that the Bill is a non-payers' charter that will not achieve its commendable objectives.
As a surveyor, it is not open to me to become a member of a Select Committee that considers the effect of bananas on Caribbean economies and to face the excitement of being arrested by warlords in Somalia. My outings tend to be to Willesden sewage station or similar places. I readily pay tribute to the staff at that sewage station. I had not been long in this place before I found myself on the Committee that discussed the privatisation of the water supply industry.
One example given by the right hon. Member for Salford, East of people being disconnected involved 611 residents in mid-Kent. I think that he will find that their water was provided by a private water company that had become a statutory company long before the privatisation of the industry. Therefore, his comments were not related to the privatisation of the water industry.
The Water Bill was steered through the House by my right hon. and learned Friend the present Home Secretary, who stressed, as my hon. Friend the Member for Bristol, North-West mentioned, the poacher-gamekeeper relationship. Until privatisation, it was, in essence, a Government Department that dealt with such matters. If a complaint was made about disconnection or anything else, we would merely be asking one Government Department to look into another, which was a recipe for bureaucracy, red tape and inaction.
We had a lengthy Committee stage on the Water Bill. I mention its length for the benefit of my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown), because I think that we are rehearsing the same arguments in the Committee considering the Local Government etc. (Scotland) Bill to which I was recently promoted. Ofwat is the gamekeeper and the companies, the poacher. One looks after the other—guaranteeing standards and ensuring that customers and companies are placed in a reasonable position in relation to each other.
The right hon. Member for Copeland (Dr. Cunningham) and the hon. Member for Dewsbury (Mrs. Taylor) confidently forecast the sort of tales that the right hon. Member for Salford, East recounted this morning. We heard lengthy descriptions of emaciated and dehydrated families up and down the land and pictures were painted of the greed of private companies. At that time the right hon. Member for Copeland and the hon. Member for Dewsbury were good socialists whose arguments were, "God gave us water and you have no right to privatise it." We would have to explain that, unfortunately, God did not give us the stopcocks, valves, pipes and the other bits necessary to that industry.
If the industry was in Government ownership and control, and the choice on Government expenditure was either an extra £1 billion for the national health service or the repair of a Victorian drain, we all know which would get the money, and probably rightly so. What was never explained, and has not been explained this morning, although the right hon. Gentleman could have done so, is why the Labour party is so much against those private water companies. What is the dogma behind all this, because we never found out at the time from the right hon. Member for Copeland? What we know is this. At that time, the people of France had a socialist Government—although they have seen the light since then—and despite its socialist Government, nearly all the water and sewerage undertakings were privately owned. In Britain, even at the time of privatisation, 25 per cent. of the country was supplied by private companies and statutory water undertakings, including, as I have said, one of the examples that was given by the right hon. Member for Salford, East.
§ Mr. Orme
We are not debating the renationalisation of the water industry. The Labour party has faced the reality that it is privatised. I want the hon. Gentleman and the House to face the facts of what happens now. Why does not Wessex Water cut anybody off, yet Southern Water does? 612 Why are not people cut off in Scotland and Northern Ireland? The hon. Gentleman should face the reality of the present situation, not fight old battles.
§ Mr. Knapman
I can understand why the right hon. Gentleman does not wish to fight old battles that he has lost. I must say, however, that he does not approve of Southern Water for cutting people off and Wessex Water because they have a prepayment scheme. That came out quite clearly in his speech. Anything that the companies do is, according to the Bill and the right hon. Gentleman, patently wrong. I see that the hon. Member for Dundee, East is in his place. No doubt we can continue, as the right hon. Gentleman said, these arguments in due course.
The right hon. Gentleman singularly failed to describe the pretty precise procedure that is laid down by Ofwat in agreement with the water companies. I find it rather extraordinary to read such a Bill at a time when we are hoping that the Deregulation and Contracting Out Bill will go through the House.
§ Mrs. Elizabeth Peacock (Batley and Spen)
I note that my hon. Friend keeps saying that Ofwat and the water companies are in complete agreement. Perhaps that is one of the problems. Ofwat is supposed to be there to look at what the water companies are doing. Recently, Diana Scott, the chairman of Yorkshire Water's customer services committee, who has done a superb job on behalf of consumers, was removed—because she rattled too many cages during her work—and somebody else appointed by Ofwat.
§ Mr. Knapman
What I was trying to say was that it was a matter for Ofwat and the companies—in some cases, for Ofwat as regulator to direct the companies. I am not saying that they should always be in agreement. It is patently clear that, frequently, they have not been. I do not shed many tears when I hear the companies screaming that Ofwat has been unfair to them. They have substantial resources. It is quite right that the public should be protected. Ofwat has been selected to do just that. It probably achieves a fair balance and has done so ever since the industry was privatised. I hope that that reassures my hon. Friend on my position. I will check Hansard in due course to see whether I said that that was my intention.
I was hoping that in this day and age we were deregulators. If I am ever fortunate—or perhaps unfortunate—enough to win the ballot for private Members' Bills, I think that I shall introduce the Roger Knapman Reduction of Legislation Bill. It would work something like this. Every time there were 10 Bills going through this place and ready for Royal Assent, I would introduce another one to decide which of them was good enough to receive Royal Assent. If there were a Labour Government, it would be one in a hundred. We need less legislation. The Bill is not necessary, because it does not take into account the facts relating to disconnection. I should have thought it patently obvious that the water companies use the power of disconnection reluctantly, because of the publicity that ensues. The right hon. Gentleman has not commented that only nine out of 10,000 customers have been disconnected and seven out of the nine have been reconnected within 48 hours. If the number of disconnections can be reduced further through negotiation between Ofwat and the companies, all well and good.
613 Despite what the right hon. Gentleman has said, I believe that the ultimate sanction is imposed not on those who cannot pay, but on those who will not. As my hon. Friend the Member for Bristol, North-West pointed out, the companies concerned would be placed in an impossible position if that ultimate sanction were removed from this service: it is unique in that regard.
§ Mr. Chris Smith (Islington, South and Finsbury)
The hon. Gentleman and the hon. Member for Bristol, North-West (Mr. Stern) suggest that a unique proposition is involved. Currently, someone who fails to pay his council tax is, quite properly, taken to court and procedures are undertaken to ensure that he pays it. That person's children, however, are not prohibited from going to school and using council services. I argue that that is a precise analogy with the proposals of my right hon. Friend the Member for Salford, East (Mr. Orme).
§ Mr. Knapman
I do not agree. That is precisely why Ofwat and the companies have agreed a very detailed procedure and why demands for payment continue for a full six months before the cases described by the right hon. Gentleman can arise. There are six months of negotiation about the bills involved. Like my hon. Friend the Member for Bristol, North-West, I consider that a reasonable period in which to determine whether it is a case of "can't pay" or a case of "won't pay". If it is "can't pay", no action will be taken: I am convinced of that. If it is "won't pay", in the final analysis—in certain very limited circumstances—it may be necessary to disconnect.
§ Mrs. Helen Jackson (Sheffield, Hillsborough)
Does the hon. Gentleman recognise that that does not apply to a customer who, because of difficult financial circumstances, has experienced problems in paying a water bill and has already reached an arrangement with the water company in regard to payment which then collapses? It will not be a case of six months then; the company will be entitled to disconnect much sooner.
§ Mr. Knapman
Has the hon. Lady any evidence that, in those circumstances, any company has failed to comply with requests from the Department of Social Security for specified customers not to be disconnected? If so, she may include that evidence in her own speech—if she catches your eye, Mr. Deputy Speaker. I suspect that, if the right hon. Member for Salford, East had had any such evidence, he would have included it in his speech; the fact that he did not shows that this is a dog that did not bark in the night. The hon. Lady's comments bring me to the way in which companies now approach such cases, through agreement with Ofwat.
§ Mr. Bernard Jenkin (Colchester, North)
I think that the uniqueness of the Bill stems from the fact that it restricts the ability of privately owned enterprise to withdraw its service in the event of wilful non-payment. All the examples cited by Opposition Members involve state services, which ultimately are under political control.
§ Mr. Knapman
My hon. Friend is exactly right. Despite the denial issued by the right hon. Member for Salford, East, that is what the debate and the Bill are all 614 about—sheer hatred of private profit-making companies. The Opposition have not got over that and I suspect that some of them never will.
§ Mrs. Peacock
It is nothing to do with a hatred of privatisation. I support the Bill, but I do not remember standing up in the House and shrieking my opposition to privatisation. As my hon. Friend develops his argument, however—if I catch your eye, Mr. Deputy Speaker—I may make such a statement.
§ Mr. Knapman
I would not dream of writing my hon. Friend's speech for her; but I know that she, like me, supports the privatisation of the industry. What we seek is fair and substantial regulation of it, because it provides a vital commodity: on that we can agree. I look forward to hearing what my hon. Friend has to say—and she will say it soon, provided that I do not give way too many more times.
This is how the companies deal with these matters. First, a bill is issued. We have all studied our water bills and seen, on the back of them, instructions on what to do if one cannot pay, but that is not the end of it. One does not suddenly turn on the tap and find that there is no water.
First, there is a reminder. After a further period there is a pre-summons notice. That warns the customer that if there is no compliance at that stage costs may be incurred. Later there is a visit and/or a solicitor's letter, and at that stage the company will try to negotiate payment arrangements.
Notification is given to the customer that the company has received a judgment order and that the payment arrangements must then be made to avoid disconnection. Even after that, a notice of disconnection is delivered by hand and at that stage the company attempts to make face-to-face contact with the customer to seek some type of payment arrangement—not payment of the bill, just payment of even part of the bill. Then a final visit will be made before disconnection and even at that stage the company will negotiate a payment arrangement.
That sequence of events takes about six months to achieve. The number of disconnections is very small. As an ultimate sanction, disconnections are necessary to the water companies and they are aimed at those people who will not pay, not at those who cannot pay. I hope, therefore, that my hon. Friend the Member for Batley and Spen (Mrs. Peacock) will not be tempted to support the Bill.
§ Mrs. Helen Jackson (Sheffield, Hillsborough)
I congratulate my right hon. Friend the Member for Salford, East (Mr. Orme) on achieving a Second Reading debate on this excellent Bill, which has such widespread support in the country. There is no doubt that the Bill originated in the alarming figures that were published in November 1992, which showed an increase in water disconnections during the years since privatisation from about 3,000 disconnections a year to more than 21,000. It was that startling increase that led so many organisations throughout the country to come together at a meeting in February 1993 with the Institute of Environmental Health Officers, housing organisations and community groups, who were pulled together by the Campaign for Water Justice, to urge a number of Members of Parliament to introduce a Bill that would outlaw the disconnection of water from domestic properties that are lived in.
615 Those arguments were obviously based on assumptions that arose from other pieces of legislation. When I first recognised the increase that had taken place, I was reminded of the Health and Safety at Work, etc. Act 1974. It is illegal for a workplace to be without a constant supply of clean running water. If that is the law of the land for workplaces, how many of us—I say "us" for obvious reasons—spend many, many years of our lives with the home as our main place of work, often in a caring capacity with children or with elderly people? The Children Act 1989 and the community care regulations would render it out of the question for a residential establishment to continue to stay open if there were not a constant supply of clean and adequate running water.
Similarly, we were minded in February 1993, at the time of the housing legislation, that for years local authorities and environmental health officers have been under a duty, under the housing legislation, to declare unfit for human habitation houses that did not have a constant supply of clean and running water.
There were, therefore, many reasons why people backed the call in England, Scotland and Northern Ireland to make the disconnection of water to domestic property illegal.
§ Mrs. Jackson
That is a red herring. We are discussing property—homes—in which people are living legitimately and for which they pay their council tax.
§ Mr. Jenkin
Will the hon. Lady point out the part of the Bill that excludes squatted premises from the general disconnection power?
§ Mrs. Jackson
It is clear that the Bill refers to houses that are lived in and are recognised as such.
Because of pressure from various organisations across the country, we introduced a ten-minute Bill on 13 May last year. It was supported by many hon. Members and received widespread publicity, partly because of research emerging at that time which showed a sharp increase in cases of dysentery. It sharpened focus on the potential for a worsening of the standards of public health if there was an increase in the number of families living in homes without an adequate clean water supply.
It was, therefore, natural that organisations such as those representing health visitors and midwives and, more recently, the British Medical Association itself and the Institute of Public Health Officers came on board. Although the health bodies are not saying that there is a direct correlation between water disconnections and the increase in dysentery, they are saying—rightly—that it should not be necessary to have to argue again and again that a home without clean water is a health hazard to the family living in it and to the people living nearby. As a representative of the BMA said on Tuesday, it is matter of basic hygiene that we wash our hands after going to the 616 toilet. If such basic hygiene cannot be complied with, there is a risk of infection in the dwelling and, for that reason, if for no other, the Bill should be supported.
I am sure that hon. Members are aware of the fact—although we should remind ourselves of it—that 80 per cent. of the world's disease is attributable in one way or another to the lack of water or to unclean, impure water. There is not an acute shortage of water in this country; by and large, we have adequate plumbing.
Therefore, it is extremely important that we, among United Nations countries, should take the lead in emphasising that this key commodity to public health and civilised living is something to which we are proud that every house in the country will have access.
My right hon. Friend the Member for Salford, East said that access to education is not denied to people who have problems paying their council tax. In this context, the commodity of water is so crucial to healthy living that it must be seen alongside services such as the fire service, the police and the health service. We do not query someone's income tax record of payment before we say that he can be connected on a 999 call.
§ Mr. Knapman
What sanction would the hon. Lady suggest for those who will not pay, although they can afford to do so?
§ Mrs. Jackson
There are clear sanctions for debt collection through the courts for those who do not pay their income tax or local taxes and they should be brought into play, as they are in Scotland and Northern Ireland, for people who do not pay other debts. [Interruption.] I am conscious of the time and I want to ensure that other hon. Members can get in.
I challenge head on the concept that 1,456 homes—30 a week—were disconnected in Yorkshire last year. It is simply not the case that all those disconnections related to non-payers. If they were analysed, one would find that they related to people in severe financial hardship but not necessarily on income support. Many families in this country are in severe financial hardship and in low-paid occupations but not necessarily on income support, so the Department of Social Security does not always have a chance even to intervene in such cases.
Now is the time for the Government to allow the Bill to go forward because the water industry is preparing its new form of charging systems to follow on from the present system of rateable value charging. It would be to the credit of this Parliament, the House and even the Government to take on board and include in the new regulations and the new considerations of charging for water the requirement that disconnections should be made illegal. That is what we are asking for in the Bill. I compliment my right hon. Friend the Member for Salford, East on bringing the Bill to the House and I hope that it makes progress.
§ 2.2 pm
§ Mrs. Elizabeth Peacock (Batley and Spen)
We have already heard that water is essential to life and therefore is always essential to all residential properties. There is no substitute for it. Therefore, I believe that disconnections of household water supplies should be made illegal. They do not take place in Scotland and Northern Ireland and, as we are part of the United Kingdom, I am sure that water companies in England could follow exactly the same procedure.
617 Any household that does not have running and clean water runs health and welfare risks. In such households, people cannot even wash vegetables to cook. They have no means of bathing and no means of flushing toilets. It is not only my belief that any property that does not have that supply is considered unfit for human habitation; I understand that that is the law. As far as I can remember, we have spent the past 50 years clearing properties that did not have that service piped in. If we have spent time, money and effort over the years on doing that, I do not think that we should give water companies the ability and the legal right to disconnect those supplies.
It is true that Ofwat and the water companies often agree. I suggest to my hon. Friend the Minister that they agree far too often. Perhaps we want a director of Ofwat rather like Sir James McKinnon of British Gas. He made great achievements and perhaps should be reappointed, but only to be in charge of water.
It is said that disconnections do not last more than a few days. I wonder how many of us have tried to survive in any household or establishment without water even for a few days. Of course, Ofwat and the water companies say that people then pay their bills. Yes, they do, and I am quite sure that, as my hon. Friend the Member for Stroud (Mr. Knapman) suggested, many of those who won't pay do pay.
It is also true that many of those who can't pay eventually pay, because they are desperate for water supplies. How do they pay? They must go out and borrow money, often from a loan shark because that is the only place where they can get it. That puts them deeper into debt, so they will be worse off the next time they get a water bill.
I believe that water companies have systems for helping people, but I could give the House a list of the times when those systems have fallen down and because of that we have seen a huge increase in water disconnections. Although the number has decreased during the past 18 months, that has been only because the water companies have been aware of the campaign to do something about their charges and they have taken more care. I shall be interested to see whether the number stays reduced, or whether it goes up.
The Royal College of Nursing has said:A clean water supply is essential for human life. Cleaning up water supplies in the nineteenth century was one of the key improvements in public health that transformed the epidemiological situation in Britain.Much of the disease which occurred in the back streets in houses not fit for human habitation was cut out. The college also said:In 1992 there were over 22,000 disconnections, which represents a three-fold increase over the previous year".I admit that since then the numbers have decreased, which I believe is due partly to the interest that Parliament is taking. The college went on to say:There is some evidence to show that many disconnections are not notified to the local authority despite the attendant health risks … This is despite the legal obligation of the water company to do so.My hon. Friend the Under-Secretary of State for Health said in a parliamentary answer:The rise in notification of dysentery in 1992 was seen in all major conurbations other than London. Trends in dysentery also exhibit a periodicity, with peaks every seven to eight years, 618 although the peak in 1992 was higher than other peaks in the previous two decades."—[Official Report, 10 December 1993; Vol. 234, c. 395.]That obviously comes from official figures and tells us a little about the problem. I believe that if disconnections are banned in Scotland and in Northern Ireland, water companies in England should not have the power to disconnect water to residential premises, even in cases of non-payment. I believe that, in such cases, they have and should use other means of recovering that debt.
§ 2.8 pm
§ Mr. Chris Smith (Islington, South and Finsbury)
I shall be deliberately brief because I am hopeful that the Bill will receive a Second Reading and move into Committee. I hope and trust that there will be no attempt from Conservative Members deliberately to talk it out.
I begin by paying a warm tribute to my right hon. Friend the Member for Salford, East (Mr. Orme) for taking up the issue and for introducing the Bill in such a splendid fashion this afternoon. I also pay a special tribute to my hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson), who has pursued the issue so ably and consistently for more than two years.
I note in passing that not one Liberal Democrat Member has been present for any of the debate. It is clearly something in which that party is totally uninterested, and I trust that that point will be made strongly elsewhere.
§ Mr. Peter Bottomley (Eltham)
It is a point that I have made on occasional Fridays. It is possible that Liberal Democrat Members did not know that the Bill would be reached. Other than that, I am with the hon. Gentleman.
§ Mr. Smith
Water is an essential commodity for life, health and hygiene. That is why I would put water in a completely different category from the normal run of goods and services of which people might well be deprived if they could not pay for them. As water is such an essential commodity, we really must make sure that it continues to be available to everyone. It is not acceptable in a civilised society to disconnect water simply to recover debt.
We know what happened. After privatisation, the figures for disconnections soared. In the past year or so they have started to inch their way down, largely as a result of pressure from Members of Parliament. Even so, on average more than 300 families every week face disconnection of their water supply. That is not acceptable. I hope that the Government will ensure that the Bill goes forward today and reaches the statute book. I give a commitment that if, for some dastardly reason, the Government do not permit the Bill to go forward, a Labour Government will certainly legislate to put it on the statute book.
§ Mr. Bernard Jenkin (Colchester, North)
I follow the hon. Member for Islington, South and Finsbury (Mr. Smith) with some trepidation. He made an excellent and moving speech earlier this week. It is ironic that we find ourselves clashing so soon on another issue.
I accept the hon. Gentleman's suggestion that water is one of the fundamental human rights in a civilised society. I do not resent the fact that my hon. Friend the Member for Batley and Spen (Mrs. Peacock) feels that the purpose of a Bill such as this is in a typically high Tory tradition. Throughout the 19th century and well into the 20th, the 619 Conservative party introduced much socially desirable legislation motivated by the same high ideals to create a civilised and humane society.
However, the question is whether that purpose could not be achieved by other and perhaps fairer means. The main objection to the Bill, which would prevent water companies legitimately applying pressure to collect their debts, is that it enfranchises the "won't pay" customer to the detriment of other customers. Other customers would have to pay for the services for which wilful non-payers refused to pay their share.
There is surely a limit to which we can go in a civilised society to insulate people from what they wilfully do to the detriment of society as a whole. If they wilfully refuse to pay debts that they are capable of paying, it does not seem sensible to give them yet more power and leverage to exploit the system.
§ Mrs. Helen Jackson
Does the hon. Gentleman agree that his argument would break down if it could be shown convincingly that the vast majority of people who do not pay are short of money and do not pay because they cannot pay or they have not managed to make arrangements to pay in small instalments?
§ Mr. Jenkin
I would accept that if it could be proved. The onus is on the hon. Lady and her right hon. and hon. Friends to prove it. They have not done so and I shall cite examples in my constituency that paint a strong alternative picture.
This debate does no harm and I congratulate the right hon. Member for Salford, East (Mr. Orme) on the fact that we are having it and on introducing the Bill. I do not dispute the fact that it is legitimate to apply public pressure to make the water companies behave responsibly. I have no doubt that their employees may have applied the sanction of disconnection in a way that is not entirely as we might wish. However, that does not mean that there is a case for passing legislation which will affect all customers, to the detriment of the majority, in order to deal with the problem.
One question asked during the debate is why Wessex Water has made no disconnections during the past six months, although other companies have done so. Water companies may well be able to work for some time without disconnecting anyone, but that does not necessarily mean that they have not benefited from the availability of that sanction. If we take it away it would not necessarily mean that we would be leaving Wessex Water in the position that it is in now, because its customers know that it is legal to disconnect the water of a wilful non-payer and so they behave accordingly and pay their bills.
My hon. Friend the Member for Batley and Spen mentioned public health problems at length. There is no solid evidence to connect the recent peak in the incidence of dysentery with water disconnections. I have here a brief from the House of Commons Library which refers to several claims in the newspapers during the past few months. It states:However, there is no evidence in any of these reports of a direct causal link between the disconnections and dysentery or hepatitis outbreaks.The Library official continues:I have spoken to officials at Sandwell Health Authority, who are conducting a study into the issue … They said that in their study, they found a strong correlation between the postcodes of homes which had been disconnected and the postcodes of people who had been infected with dysentery or hepatitis. However, they 620 said that this correlation does not necessarily mean there was a direct link between the two issues, but that it could just reflect the poverty in the areas covered by the postcodes.The real issue is not that a few people are being disconnected by the water industry for not paying their bills, but the level of water bills. There are a number of methods that the Government could use to reduce water bills. Perhaps we could require Ofwat to consider a higher gearing level in the privatised water companies. They are safe investments and have an incredibly secure cash flow. Why cannot they borrow more and charge less? Ofwat and the water companies should consider that. Perhaps it needs public pressure, but it is not something that we should necessarily legislate for.
I shall now examine the way in which Anglian Water treats its customers in the North Colchester constituency. If it sends out a bill in March, with a pay-by date at the end of April, the reminder—with an advance notice of legal action—would not go out until early May. That would be followed up, in most cases, with a pre-summons visit and at that point a pro-active opportunity is generated by the water company to get involved with the customer's difficulties and understand the issues. It might refer to social services to find out whether the customer is on income support or in difficulties. It will gain a county court summons only if it is constantly beset by obstructions and wilful non-payment. That is followed by the first of two pre-cut-off visits. I would describe that as exemplary behaviour and perhaps Ofwat should require it of all water companies.
§ Mrs. Peacock
I have made a note of how that water company operates. Undoubtedly, many follow those procedures, but occasionally the system falls down because the companies know that they have the ultimate disconnection procedure. Those companies may not always be careful to go through the various stages.
§ Mr. Jenkin
There are two types of regulation. There is regulation which requires a ban or offers a blanket assertion. It is that type of regulation that is getting our industry and our competitiveness into all kinds of difficulties. The kind of regulation that is far more preferable is that which assesses the cost benefit of a particular action or guideline.
It is that type of regulation that means that airlines stay airborne, because we could overregulate aircraft to the extent that they would be totally uneconomic to fly. We do not do that, but make hard decisions about how many millions of dollars a life is worth. If it costs more than a certain amount, a particular safety feature does not end up on an aeroplane. We need to consider disconnections in the same way. I am merely arguing that the objectives that the right hon. Gentleman is seeking are desirable, but that the Bill is the wrong way to go about it.
From April last year until now, Anglian Water, which supplies part of my constituency, disconnected a mere 29 customers. Twenty five of them have been reconnected; three paid their bill in full, 18 made arrangements to pay in monthly instalments—in one or two cases those payments are as little as £1 a week—and two made direct arrangements with the Department of Social Security. Of the 25 who were reconnected, 19 were reconnected within a mere two days. That is the kind of practice which we need to promote and which can be promoted without the right hon. Gentleman's Bill.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry)
It may be helpful if I set out the Government's approach to the Bill.
Water is a precious commodity. It is essential to life, health and hygiene. We all want high standards of drinking water quality, clean beaches, safe bathing waters and effective systems of sewage disposal. Continuously raising such water standards involves continuing investment of further money.
At the privatisation of the water industry we invested £1,572 million in a green dowry for water services. Since privatisation, the water companies have invested a further £3 billion, on average, each year in improving water quality and striving to meet tough environmental targets. Such investment is massive. It works out at approximately £8 million each day, £5,000 every minute and £960 per household in the five years to 1995.
North West Water alone, which supplies water to the constituency of the right hon. Member for Salford, East (Mr. Orme), the promoter of the Bill, invested almost £500 million in improvements last year and, on average, £189 was spent on each customer's property. It is planning to spend £150 million on the Fleetwood Marsh waste water treatment plant, which will clean up the Blackpool and Fylde coasts, and £400 million on improving the bathing waters of the north-west, again including Blackpool. Those are substantial sums of money.
That essential investment in improving water standards is unparalleled in our history, and what a contrast it is with the previous Labour Government, who cut their spending on the water industry generally by 30 per cent. and specifically cut their capital investment on sewage treatment by 50 per cent.
Such investment must be paid for and it is fair and reasonable that water customers overall should meet such costs. We have ensured that a regulator, the Director General of Water Services—Ofwat—is in place to help ensure a proper balance between continued and further environmental improvement, and manageable bills.
It is important to get water bills into perspective. Those who seek to be alarmist tend to quote percentage increases without referring to actual costs. That happened this morning when the right hon. Member for Salford, East referred to percentage increases without mentioning the actual cost of water. It is important to make that clear. The average cost of water to the average household in England is about 51p a day—less than the cost of a bottle of fizzy water. That is a reasonable sum to enable the water companies to ensure high standards.
§ Mr. Mike Hall (Warrington, South)
How much of that 51p a day goes into the water companies' profits?
§ Mr. Baldry
The hon. Gentleman has obviously not been listening. I made it clear that the water companies have been investing substantial sums in water infrastructure. It would be impossible for them to make that investment if they were losing money. We all know what happened to the water industry when it was a nationalised industry and at the behest of Treasury external financing limits. In 1976, all investment in capital spending in the water industry was cut overnight.
Whatever the level of water charges to customers, some people will have difficulty in meeting the bill and some simply will not pay. The Bill deals with the treatment of 622 such customers. We consider it right that customers should be expected to pay their bills. That is not a new concept. To hear some hon. Members speak today, one would think that the concept was either new or had been introduced since privatisation.
The framework for regulating the water industry in terms of disconnections is exactly the same as it has been since the Water Act 1945, which came into effect under a Labour Government. Under that legislation, water undertakers in England and Wales had access to provisions to disconnect a water supply for non-payment. As there seems to be some misunderstanding about that, I quote from the relevant legislation. It states:where a person fails to pay within seven days after a demand therefor any instalment of a water rate payable by him in respect of any premises, the undertaker may cut off the supply of water to the premises and recover the expenses reasonably incurred by them in so doing".So the provisions for the disconnection of water are not new. They go back almost half a century. Such a power is still necessary as an ultimate sanction against those who can but will not pay. Equally, those who have difficulty in paying should be given every assistance to enable them to do so.
To hear Opposition Members speak, one would think that disconnection was instant upon non-payment following receipt of a bill. That is far from the truth. The procedures involved are quite protracted, involving written communication with the customer and lasting, on avergae, some six months. Typically, customers receive a bill with details of what to do if they cannot pay. They then receive a reminder that the bill has not been paid and, subsequently, a notice of the company's intention to issue a summons and warning of the additional costs that the customer will thus incur. That is followed by a visit and/or a solicitor's letter, an attempt to negotiate payment arrangements and, where no arrangement is entered into, the subsequent issue of a summons.
If payment is still not received, an application is made to the court for a judgment order. The customer is then notified that the company has received an order and that payment must be made to avoid disconnection. Finally, if all else has failed, a disconnection notice is delivered by hand and, after further attempts to seek agreement over payment arrangements, a visit is made to disconnect the water supply. Even at this late stage, the company will still negotiate a payment arrangement if the customer is willing. All of that takes a very considerable period—on average, about six months.
The Water Act 1989 built on the statutory framework of the 1945 Act and strengthened safeguards for customers. A number of the provisions introduced then were specifically designed to meet the concerns voiced at the time by consumer representative bodies. The result was a much more demanding legislative regime on disconnection for non-payment and a more comprehensive code of practice, enforceable by the Director General of Water Services, as part of water companies' licences. That was far more demanding than anything previously experienced or enjoyed by the water consumer or required—
§ It being half past Two o'clock, the debate stood adjourned.
§ Mr. Chris Smith (Islington, South and Finsbury)
On a point of order, Mr. Deputy Speaker. Can you confirm that if the Minister had terminated his remarks after seven and a half minutes and then sat down, there being no other hon. 623 Members wishing to contribute to the debate and rising in their places, we could have proceeded to a decision on Second Reading?
§ Debate to be resumed on Friday 4 March.