HC Deb 10 February 1999 vol 325 cc429-34
Mr. Burns

I beg to move amendment No. 28, in page 6, line 33, at end insert— '(5) Where a change in occupation of any premises occurs as a result of a change in ownership of those premises, a relevant undertaker may not begin to fix charges in respect of those premises by reference to volume in accordance with subsection 2(b) above unless the purchaser of the premises shall have been notified before the completion of the purchase of the undertaker's intention to begin charging by volume.'. I suspect that, given the time, the Minister for the Environment will probably regret an almost throw-away line that he uttered in Committee, which has prompted us to table amendment No. 28. I shall be frank with the House. Until the Minister kindly pointed me in the right direction in Committee, I was unaware—it was total ignorance on my part—that a provision in the Water Act 1989 currently allows water companies to determine, at the point when someone sells their house and moves to a house that is new to them but may not be a new house, whether to charge the individual or the household for water and sewerage on a rateable value basis, if that is the existing system, or to change the basis to a metered system of payment.

I understood from the Minister, in Committee, that that power is rarely used. I think that he said that it is used in about 1 or 2 per cent. of cases, if that. The figure was minuscule. It is a very underused power. However, the power is there. In future, there may be circumstances where water companies, for whatever reason, would like to use it to compel people, when they move house to their new home—it may not necessarily be a brand new home—to change the system of charging from rateable value to metering.

The majority of people who are buying a newly built house will understand that they will be charged for their water and sewage by meter. For those who place a high priority on water bills, that will be a factor that they will take into account when they decide whether they will make an offer on a new house and buy it. They will have that knowledge as they will know what council tax band the house is in. Like any wise purchaser of a property, before they take a decision on what is a substantial investment, they will have all the information and be able to assess to a reasonable degree of accuracy their household bills and outgoings during the course of a year. That will determine many things such as the size of their mortgage.

With the power that we are discussing, the problem is that there is no way in which someone who is moving to a home that is new to him or her will know whether a water company will exercise its right under the original Act and decide to change the basis of charging for water and sewage. I suspect that the vast majority of people, including the vast majority of right hon. and hon. Members in the Chamber tonight, were entirely unaware that there is such a power in the original Act. That is because it is so little used. However, as I have said, that does not mean that it will always be so.

This could come as a rude shock, especially to a young family with two, three or four children, who are moving to a new house. They will have seen the particulars, including the rateable value. They have ascertained roughly what their council tax bill will be. They will have a rough idea, as a result of the old rateable value system, of what the water and sewage demand will be. They will then take a decision.

The power could come as a rude shock to them on two counts. Let us suppose that they move into the house and the local water company has decided that it will not charge for water and sewage on the rateable value that the family assumed when they bought the house. They suddenly discover that they will have a water meter. With young children, I suspect—this depends on the rateable value of the house—that they could end up paying significantly more for their water than they ever imagined in a month of Sundays.

That is unfair. It is not the fault of the new owners of the house that they have been caught in that situation. Of course, the water companies are legally entitled to exercise their rights under the original Act and take that course of action. It will cause bitterness to those families who are so caught, and I think that basically it is unfair. I think that everyone would agree with the concept that when is someone is buying a house or making a substantial purchase, he should have as many facts as possible available to him before he reaches a decision so he can use that information as part of the formative process of taking a decision.

Mr. Steve McCabe (Birmingham, Hall Green)

I have a great deal of sympathy with the sentiment that the hon. Gentleman expresses, but I wonder why the amendment takes such a tortuous route. It requires water companies to notify potential purchasers before completion of the purchase. If the buyer decided to opt out at that stage, the exercise could be repeated ad infinitum. Why does not the hon. Gentleman accept the assurances that my right hon. Friend the Minister offered in Committee, when he said that he would consider requiring the water company to notify the householder before it levied the first charge? That would address the problem simply.

Mr. Burns

I know that the hon. Gentleman is relatively new to the House, but he is experienced enough to know that on Report, the House of Commons has the opportunity, as it does in Committee, to examine the Bill line by line and consider issues of importance to hon. Members and their constituents, and to ensure that the Bill is in the interests of those whom it is intended to serve.

We were not expecting to get on to the subject in Committee, and I can tell the Minister that it was rather by accident that we did so. Almost in a throw-away line, he unveiled the horror. I was totally unaware of it, I am not ashamed to admit. As the hon. Gentleman correctly reminds the House, the Minister said that he would consider the matter and return to it.

The right hon. Gentleman, very decently, said the same in response to our amendments to clause 1 with respect to other organisations and types of dwelling that should be included in the powers that apply to hospitals and schools, as we discussed earlier. I am grateful to him for keeping that pledge and drafting amendments for the House to consider tonight.

This is the last opportunity for us to discuss the Bill in the House, except for Lords amendments. The right hon. Gentleman will not be handling the Bill in the Lords, although obviously his Department will do so. As he did not table any amendments to meet the point raised by the hon. Member for Birmingham, Hall Green (Mr. McCabe), I hoped that our amendment would remind the Minister of what he had said in Committee.

Mr. Andrew Lansley (South Cambridgeshire)

I am following with interest what my hon. Friend says, as I was not a member of the Standing Committee and therefore come new to the argument. Does he agree that it might be a difficult process for a water company if it was opportunistically looking to change to metering on a change of ownership of premises, and therefore having to find out when a purchase was being made? That might drive a water company to the greatly preferable system of notifying owners of properties in advance that on a change of ownership of the property, the company proposed to introduce metering. That would tend to be disclosed in the course of inquiries made by a purchaser's solicitors before exchange of contracts, not just before completion.

Mr. Burns

I am extremely grateful to my hon. Friend for that cogent and sensible point. He has to some extent anticipated what I was about to say. I want to make it clear to Ministers and to the House that it is not the purpose of this probing amendment to introduce some massive, bureaucratic, interfering system with the power of the law behind it, to oblige water companies to notify estate agents or anyone else. That would be impractical and probably impossible to operate, however clever a parliamentary draftsman was.

11.15 pm

I repeat that briefly so that no misunderstanding can arise. I am not suggesting, nor would I want in a month of Sundays, some horrendously bureaucratic system backed up by law. This is a probing amendment and I shall not unveil a master plan to the House tonight. But I should like to see—the Minister has woken up, which is encouraging—a system which becomes part of the ethos of buying and selling houses.

Estate agents always draw up details of properties, which invariably include the appropriate council tax banding, ground rents where relevant, and so on. I should like to see some informal system whereby an estate agent, when approached by a householder to sell his house, can discover from a water company whether a property will continue to be charged on its rateable value, or whether the system will be changed once it is sold.

Obtaining such information will become part of the natural functions of estate agents when selling a house, and water companies will be expected in a reasonable but short period to supply the information, so that it can go on the house details. Prospective buyers will then know the exact situation.

The water industry may require some code of practice to ensure that, once a water company gives such an assurance, it cannot go back on it. A system which was not a burden on businesses and not onerous to estate agents could be worked out which would then become part of the ethos of house buying.

I shall not seek to divide the House on the amendment. I seek only to put forward an idea to remind the Minister of his comments in Committee; and to discover whether he has been able to come up with any ideas in the intervening time—whether such a scheme is not feasible, which would explain the absence before us tonight of a specific amendment, or whether he will use another place to come up with some idea.

Mr. Meacher

That was a fairly long-winded reminder. However, I congratulate the hon. Member for West Chelmsford (Mr. Burns) on picking up a comment which I made in Committee—that a water undertaker has a right to impose a measured charge on a new owner-occupier. He has focused on a serious issue. I also pay credit to my hon. Friends, the Members for Birmingham, Hall Green (Mr. McCabe) and for Waveney (Mr. Blizzard), both of whom pressed me on the matter in Committee. I am sympathetic to it.

The hon. Member for West Chelmsford said that he did not want a bureaucratic solution which would be complicated and difficult. His amendment states: a relevant undertaker may not begin to fix charges in respect of those premises by reference to volume in accordance with subsection 2(b) above unless the purchaser of the premises shall have been notified before the completion of the purchase of the undertaker's intention to begin charging by volume. That will be quite a bureaucratic process.

I appreciate that this is a probing amendment. The Opposition cannot be expected to come up with a desirable process; they simply raise the issue.

I say again that we are in sympathy with the underlying purpose of the amendment, even though we do not believe that it—or any other provision made by the Bill—is a necessary or appropriate means of tackling the problem. I shall explain why. Clause 7 would enable a water undertaker to begin charging a new occupier on a measured basis. That is fair enough, provided that the new occupier has the opportunity to find out the water charging regime that he or she will face in that new property.

The real problem is one of information rather than powers. Rather than prohibit the undertaker from charging on the new basis, we need to tackle the information gap. That is part of the much wider issue of information for house buyers. We have issued a consultation paper on proposals for making the process of house buying and selling much easier. The consultation period finishes at the end of next month and it will provide another type of information, which we will consider before we introduce our proposals.

In our view, it would be premature to legislate now, in isolation, on the responsibility for a single piece of information available for home buyers. I assure the hon. Member for West Chelmsford that the Government will be discussing information for purchasers with interested parties, including the Law Society, water companies and local authorities.

I share the hon. Gentleman's wish that arrangements should exist to protect home buyers from having metering sprung on them—we are at one on that—but I hope that he will withdraw the amendment, as it is simply not the best way of ensuring that information is made available to home buyers. I assure him that we intend to identify and promote a better way. I hope that he will accept that.

Mr. Brake

I will not detain the House for more than a couple of minutes. [Interruption.] I have been issued a challenge.

I have some sympathy with the amendment, the need for which did not emerge by accident, as the hon. Member for West Chelmsford (Mr. Burns) said, but because the Liberal Democrats asked the Minister about that need in Committee. It is regrettable that the Government have done nothing to address creeping metering, which is one of the key concerns in the Bill that have been highlighted by a number of reputable organisations.

The amendment could slow that trend, but it is not the most effective way of achieving that. Surely the exchange date would be better than the completion date, if we wanted to go down that route, but the most effective way of stopping creeping metering must be to give people genuine choice-to allow them to choose to have a meter and to choose to have it removed, at any point in the future. If the hon. Member for West Chelmsford had tabled such an amendment, we would have been happy to support it, but we could not support this amendment.

Mr. Burns

I am extremely grateful to the Minister for his comments. The amendment was clearly tabled to give the House an opportunity to discuss the matter and I certainly will not be pressing it to a vote.

Like the Under-Secretary of State for the Environment, Transport and the Regions, I was particularly puzzled by the latter-day claim by the hon. Member for Carshalton and Wallington (Mr. Brake) that, once again, "It was all the Liberal Democrats' doing." It was not.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Back to
Forward to