§ 3.17 p.m.
§ Lord BOYD-CARPENTERMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government on what principle water authorities are permitted to demand full payment of their charges for the supply of water to be made by a date half way through the period in which the supply to which the charges relate is effected.
§ The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Stedman)My Lords, water authorities and water companies demand payment of instalments of water rates and similar unmeasured charges for water services in advance in accordance with long standing principles established by Statute. Payment in advance was provided for by paragraph 55 of Schedule 3 to the Water Act 1945 and before that by section 70 of the Waterways Clauses Act 1847, and has been carried over by the transitional provisions of the Water Act 1973.
§ Lord BOYD-CARPENTERMy Lords, I express my deep gratitude to the noble Baroness for that most interesting historical survey. Does it not in fact suggest that 330 the reason for the state of affairs indicated in my Question is simply historical, in as much as the present water authorities have replaced the old bodies which supplied water in return for rate payments, which arc dealt with on a different basis? Does it not seem a little odd to that Department of Government which is concerned with consumer protection, that a consumer should be expected to pay for a commodity of which he has only received half, and which if either the water authorities fall down on the job, as perforce they have done recently in the North-West, or the consumer dies, he may never receive at all?
§ Baroness STEDMANMy Lords, the position is that the water undertakers need to raise the revenue in order to finance the services that they provide for the whole of the period in question. They have statutory backing as I explained in my original Answer. We think that if we transferred to a system where we charged, as it were, in arrears then it would create considerable practical problems, and it would require some transitional financing arrangements which of themselves would be bound to have an impact on charges. We cannot really see any worthwhile benefit to consumers in such a change, given the present pattern of charging methods.
The domestic water charge is payable in advance, but my understanding is that most of the authorities have a fairly long sequence before they actually get round to being really difficult about their money. In respect of a six months' bill, I understand that the Thames Water Authority makes its initial demand in October. In mid-December it gives the consumer a final demand and asks for payment by 1st January. In the middle of January it sends out yet another warning letter and indicates that there is a possibility of disconnection if the bill is not paid. Even later still the authority sends someone to visit the premises to see whether there is any reason why the supply should not be cut off, and later still it calls and disconnects it if the bill has not been paid. In March the matter is referred to the legal department to start proceedings for the recovery of the debt.
The water authorities are looking at this question of charging. The National 331 Water Council is looking at it. They have not yet submitted their findings to us. I am assured that all the water authorities are sympathetic. If people have difficulty in meeting their charges in one or two lump sums over the period, then if they go to see their water authority they can make the necessary arrangements to pay in more frequent instalments.
§ Lord BOYD-CARPENTERMy Lords, does not the prolonged procedure, which must cost a great deal in administration and adds to the overheads to the supply of water—which the noble Baroness has so conscientiously described—suggest that it would be much better to move to a system in which the suppliers of water were put in the position of every other supplier, of making a charge when they have made the supply?
§ Baroness STEDMANMy Lords, the water companies are in the same position as the gas, electricity and all the other people. They render their charges for people to pay sometimes part in advance and part in arrears, and sometimes completely in advance. The system has to go on and the money must be found to finance it. One way of doing this is by asking domestic consumers—where it is not a measured supply—to pay at the beginning of the period; and where the amount of water supplied is measured, as is generally the case in agricultural areas, payment is made on the recorded delivery at the end of the year.
§ Baroness WOOTTON of ABINGERMy Lords, can the noble Baroness assure us that consumers in those areas where water has been cut off during the present dispute will receive a rebate before they pay again?
§ Baroness STEDMANThat I cannot answer at the moment, my Lords; but it is certainly a point that I shall take up with the Department and thereafter write to the noble Baroness.
§ Lord HEWLETTMy Lords, does Her Majesty's Minister know that the North-West Water Authority has increased its charges this month for the use of water for fire-fighting precautions only by 2,781 per cent.? How does that stack up with the Prime Minister's 5 per 332 cent.? Does the noble Baroness think that the Price Commission could possibly be interested? Does she not think that Her Majesty's Minister might prevent this excessive attempt to place a tax on safety?
§ Baroness STEDMANMy Lords, I was not aware of the charges which the noble Lord has quoted, and I shall certainly look into them. I have a very personal sympathy with, and interest in, what is happening regarding fire precautions, having spent a considerable part of my life as a member of the Fire Service. Therefore, the noble Lord has my sympathy with what is being charged for fire precautions, and I shall look at that.
§ Lord AIREDALEMy Lords, did the noble Baroness say that the water authorities are in the same position as the other utilities, such as gas and electricity? Is it the case that the gas and electricity authorities can make advance demands for payment for gas and electricity not yet supplied?
§ Baroness STEDMANMy Lords, in the standing charges on gas and electricity, as with telephone charges, one is paying part in arrears and part in advance. Until the 1973 Act most water authorities were levying their charges as part of the rate demand. Now the majority of them are levying their charges separately. They are a statutory undertaking, and it is only fair that they should have the right to levy their charges as other statutory undertakers do, and not confuse them with part of the ordinary rate revenue.
§ Lord SHINWELLMy Lords, are not the water companies receiving an abundant, or more than adequate, supply of water at the present time because of the change in weather? Accordingly, ought there not to be a reduction in charges?
§ Baroness STEDMANI do not think that the position is quite so simple as that, my Lords; there are other technical problems.