Water Bill

HL Deb 15 May 1989 vol 507 cc990-1033

House again in Committee.

Clause 32 [Duty of undertakers to furnish information to the Secretary of State]:

The Earl of Balfour moved Amendment No. 268: Page 36, line 48, at end insert— ("( ) The information required to be furnished under this section to the Secretary of State shall also be furnished to the Director.").

The noble Earl said: I am intrigued as to why the director has not been included in this clause. Of the 25 clauses that make up Chapter I, this is about the only one from which he has been excluded. Furthermore, as my noble friend Lord Hesketh said at the beginning of today's proceedings, under Clause 20 the director is the enforcement authority. Clause 32(5) refers to Clause 20 but in this case makes the Secretary of State the enforcement authority.

To enable the director to carry out his functions it is essential that he be included in this clause, because he will need to have the information that the Secretary of State has the right to ask for under Clause 32. Equally, the director will need the power to require information in the following clause, Clause 33. Although my drafting may not be very good, with those few words I beg to move.

The Earl of Arran

With a few more words I hope to be of assistance to my noble friend.

The purpose of Clause 32 is to enable the Secretary of State to obtain certain information which he may need from water and sewerage undertakers. This amendment would require such information to be copied to the director general. In practice, the director general will be able to obtain all the information which he needs under Clause 33, where there is a potential enforcement issue, or under the various conditions of the licence. For example, under condition B of the licence the appointee must provide various information in relation to the director general's functions of price control. There are other information provisions in conditions D, E, I and K of the licence.

We are satisfied that such powers will enable the director general to obtain all the information that he needs for his functions. We do not think that we need to burden him by providing him automatically with copies of information which the Secretary of State might wish to obtain by using the powers in the clause for purposes of no interest to the director general.

I hope that those words will be sufficiently convincing to enable my noble friend to withdraw the amendment.

The Earl of Balfour

I thank my noble friend for that reply. I may say that have been a little surprised by it, and tomorrow I shall carefully read what he said in Hansard. With that assurance, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 32 agreed to.

Clause 33 [Power to require information etc. for enforcement purposes]:

[Amendments Nos. 269 to 275 had been withdrawn from the Marshalled List.]

Clause 33 agreed to.

Clause 34 [Publication of information and advice]:

Lord McIntosh of Haringey, moved Amendment No. 275A: Page 38, line 11, at end insert ("including information concerning the functions of any undertaker under section 8").

The noble Lord said: Clause 34 is a curious clause. It refers to the publication of information and advice. It provides that the Secretary of State may arrange for the publication, in such form and in such a manner as he considers appropriate, of information relating to any matter as may appear to him to be in the public interest to publish.

If we are going to have this amendment at all, it seems to us that the amendment ought to be a little less all-embracing and a little more precise about what should be included. We have no objection to publication. I think that is obvious. We do not think that the Secretary of State should not be empowered to arrange for the publication, although I have known very few Secretaries of State who have waited for statutory authority in order to publish such matters as they think appropriate. The present Secretary of State for the Environment has got himself into certain trouble with the courts for publishing information—or some might say misinformation—about the so-called poll tax. I have not been watching the tape to know what the courts have said about that matter, but the publication of information which the Secretary of State authorised did not require a clause in the Local Government Finance Bill to force him to say so. However, we have the clause and we have the provision for publication of information and advice. In so far as it is there, I suppose that we have to welcome it and look to improving it.

What is interesting therefore is that although it is all permissive and the Secretary of State can do what he likes—which is a theme of this Bill as of most legislation these days—what it does not do is to specify that the most important information so far as concerns most people in this country should be included in the information on environmental and recreational duties included in Clause 8. We take the view that it is in the public interest that environmental and recreational information should be included in the provisions of Clause 34, and that that should be spelt out in the clause. This would give the Secretary of State all the encouragement that he may need to be open with the public about the environmental and recreational effects of water privatisation. I beg to move.

Lord Ross of Newport

This amendment is well worth pursuing. It is wide open for the Secretary of State and the director general to do exactly as they like with regard to public information. Let us tie it down a bit more. We know that the Government are bringing forward an amendment at Report stage to deal with the concerns that have been expressed earlier about environmental problems, areas of outstanding natural beauty and national parks. Let us tie it down a bit more by accepting this amendment. It seems to me to make a great deal of sense and to put some vim into the Bill.

Lord Hesketh

The purpose of this amendment is to secure that the power of the Secretary of State in Clause 34 to arrange for the publication of information connected with the performance of the functions of water and sewerage undertakers covers information related to their duties under Clause 8.

I can assure the House that we believe that the amendment is not necessary. The power to secure publication of information about performance of Clause 8 duties is already there in Clause 34. The term "functions of the undertakers" refers to all those things which the companies are required by the Bill to carry out, and the duties in Clause 8 are included among them.

The noble Lord, Lord McIntosh of Haringey, said that in his opinion Clause 8 was the most important clause with regard to the functions. We are talking about a general provision in Clause 34 which covers all functions of the undertakers. It would be unfortunate to refer to one particular function, for we believe that the effect would be to cast doubt upon the generality of the provision. It is for those two reasons that we urge the noble Lord to consider withdrawing his amendment.

Lord McIntosh of Haringey

I am interested to hear what the Minister says; but he has not answered the question with which I introduced the discussion on this amendment. What is it that the Secretary of State could not do with regard to publication or advice which would not be available to him without the existence of this clause? What powers would he be denied if this clause were not to stand part of the Bill?

Lord Hesketh

As I said in the second part of my reply, it is a general provision and required as such in order to clarify for the purpose of the various undertakings.

Lord McIntosh of Haringey

The phrase "a general provision in order to clarify" has a sinister ring. It reminds me of an answer which the noble Earl, Lord Caithness, was obliged to give in a debate on an amendment last week. He said that the provision had no extra effect on the Bill and was only required for the purposes of clarification. Since clearly it did not clarify the Bill, it left the Government open to the charge that the provision that he was then talking about was a bit of waffle and not required at all.

I suspect that the whole of Clause 34 is waffle and that if we were to carry a Motion that Clause 34 should not stand part of the Bill, the Government would not turn a hair because there would not be a single piece of information or advice which the Secretary of State could not give without this clause. I accuse the Government in this case of unnecessarily prolonging the Bill and putting into it material which sounds good, because it seems to conform with ideas of freedom of information, but which has no effect whatsoever. I am reinforced in that view by the Government's earlier refusal to agree with our amendments to Clause 31, although I concede that the Minister gave a very valuable undertaking to see whether he could come up with any examples of what should not be published under Clause 31.

This clause has no real effect. In the circumstances, I suppose that amending it in this way to draw attention to the most important information which ought to be included is probably not of the first rank in importance in our amendments. Therefore I am prepared to ask leave to withdraw it. However, I ask the Government to look back at the clause to tell us what it says, whether it is necessary to the Bill and whether it brings anything to it other than "a general provision for clarification". That is not the way to produce legislation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 34 agreed to.

Clause 35 agreed to.

Lord Graham of Edmonton moved Amendment No. 279A: After Clause 35, insert the following new clause:

("Publication of reasons for application to change price formula. .—(1) Where any application is made lo the Director by a company holding an appointment under this Chapter, relating to a proposed variation in charges to consumers, the company shall publish a statement, and send a copy to the relevant customer services committee. (2) A Statement published under this section shall include reasons for the proposed variation, and ari assessment of the likely effect on—

1. (a) levels of consumption of water or other services; and
2. (b) charges to persons on low incomes.").

The noble Lord said: This amendment standing in the name of my noble friend Lord McIntosh of Haringey deals with the publication of reasons for applications to change the price formula. It would require any undertaker making an application to the director for a variation of the charges paid by consumers under the formula in the appointment to publish a statement of the reasons for the proposed variation and to send a copy to the relevant customer services committee. The statement should also include an estimate of the effect on levels of consumption of water or the other services affected by the charges and an estimate of the impact of the new charges on persons on low incomes.

The reason for the first requirement is simply that no statement has ever been forthcoming from the Government as to whether this Bill is intended or expected to increase, decrease or keep at the same level the current levels of consumption of water. This is not an idle question. Apart from the needs of the water supply industry to meet demand, the level of flow in the sewerage and flooding systems can have a significant effect on the efficiency of those systems. If flow diminishes, particularly with broken sewers, the effect can be increased blockages.

As regards subsection (2)(b) of the amendment relating to persons on low incomes, it is obvious that an increase in charges will impact most severely on those with the least ability to pay. The amendment is couched not only in terms of the financial effect on such persons but more seriously in terms of public health arising from the possible under-consumption of water by those least able to afford it in a metering situation. Some people might say that we are painting too black a picture and stretching the point that no one is going to deny himself water which is needed for domestic or personal use. If it is needed people will get it and pay for it.

The evidence is that that is not the case. There are people who should buy food of a certain kind in order to maintain their health and that of their children. But sometimes that does not happen. There are other illustrations. For example, a prudent person would not deny himself certain facilities because they are needed for health. I am not going to speak about poverty having been eradicated or say that there is no such thing. I shall not push the John Moore line on this subject except to say that genuinely and to my knowledge in the community in which I live I can go to a number of areas and a number of people who in my view will be hard put to decide whether the money required for an increased water charge should have the first call on their purse or whether it should go towards something else; for example, food, clothes, entertainment or transport.

I ask the Minister to accept the point that in order to ensure that people understand why the charges have been increased or varied we need some assessment of the impact of the increase or variation on the users of water. I beg to move.

Lord Hesketh

Amendment No. 279A would insert after Clause 35 a new clause requiring an appointed company to publish, and to send to the relevant customer services committee, a statement giving the reasons for any application to the director relating to proposed increases in charges. The statement would also have to include an assessment of the likely effect on the levels of consumption of water or other services and on charges to persons on low incomes. The intention of the amendment is referred to in the descriptive side-heading to the clause: Publication of reasons for application to change price formula". As drafted the clause does not refer to a price formula, so the clarification of intention is important.

Condition B of the model instrument of appointment of the water and sewerage undertakers, published last December, sets out details of the intended charging formula. Increases in a basket of charges will be limited annually to no more than an amount linked to the retail prices index.

As has been explained in earlier debates, the condition provides for the Director General of Water Services to adjust the limit to reflect changes in the obligations of the undertakers imposed; for example, by new regulations or a decision to impose tighter controls on discharges from sewage treatment works where there are such imposed obligations. It is reasonable that the cost of services to customers should reflect the change in the task of the companies. Similarly, if there are other substantial changes in external circumstances outside the control of the companies given that the appointed companies have no option but to continue to discharge their functions, it is reasonable for such changed circumstances to be reviewed by the director general with a view to adjusting the level of charges where necessary. The condition of appointment accordingly makes provision for applications to the director general to determine what change should be made to the charges limit.

The director general will check carefully what change there is in the circumstances affecting the company, the change in the costs they are required to meet, and assess the change to be made to the charges limit. In the case of imposed obligations this will be an essentially technical matter. In the case of other changes in circumstances the director will again face largely technical matters but he will also be guided by his duty in Clause 7 of the Bill (which we have discussed at some length in earlier debates) to ensure that companies are able to discharge their functions properly. His determination will be in the form of a change to K in the RPI plus K limit, not controls over specific tariffs. The ban on undue discrimination in condition D of the model instrument of appointment will ensure that individual tariffs are fair to the various types or classes of customer.

The proposed new clause does not match up well to this process. The director's considerations will rightly be focused on costs and the ability of companies to continue proper discharge of their functions. However, these will not usually be matters on which he can be helped by expressions of views. It will be for the director to ensure that he does take account of customers' interests and he can publish material or undertake consultations in appropriate cases.

As regards those on low incomes, no government, including the last Labour Government, have ever accepted that a system of rebates, for example, should be available to help low-income households to pay their water charges. If rebates were available the cost would have to be recovered from customers as a whole. Water undertakers operate budget payment plans to help customers pay their bills and the revised disconnection codes of practice give additional emphasis to this. Those on low incomes can also apply for income support. When the income support levels were set in April 1988 the total amount spent in supplementary benefit for water charges, uprated to 1988–89 estimated expenditure, was included in the money available. Therefore, income support does take account of water charges although the amount to cover water charges in each personal allowance is not separately identifiable. For those reasons I hope that the noble Lord, Lord Graham, will see fit to withdraw the amendment.

Lord McIntosh of Haringey

When the Minister says that our amendment does not match up well with the procedure under the RPI plus K formula, I take that as a compliment because that formula is so patently flawed (as we have seen in discussions in Committee) that anything that matched up well with it would itself be flawed. What astonishes me is that the Minister sees fit to describe this as a technical matter. It is far from that. We have a price-setting regime under privatisation which in effect allows the water company undertakers to appeal to the director general and the Secretary of State for increases in water prices almost without let or hindrance and at any time they see fit. There is to be no appeal against increases in water prices on behalf of the consumers.

It is suggested in this amendment—and it is a modest proposal—that those who are applying to take more money from their captive customers (that is what these monopolies are doing) should give their reasons for doing so. In reply to that, the Minister read out a rigmarole of objections even to that simple proposal. It beggars belief that the Government can seriously object to an amendment of this kind.

8.30 p.m.

Lord Graham of Edmonton

I have listened very carefully to the Minister and I do not dispute for a moment that the director will be very careful in discussions with the companies to examine and make sure that the charges they wish to revise are reasonable, prudent and careful. All I am asking is for the noble Lord to show as much concern for the interests and welfare of the lowly paid and the poor as he will be showing for the companies. The companies will be coming to the director from time to time to put the case for increasing the charges. The director quite properly will have to examine it. The case will be made; I imagine that the director will accept it. He will make sure that the welfare and wellbeing of the company is protected when it is detrimentally affected. The amendment asks for the reasons to be published and for the impact of the increases on the lower paid to be borne in mind.

The noble Lord has failed to deal with a point. We honestly believe that the cost of water will increase. The Minister sought to allude to the fact that action had not been taken by a previous administration in the way of rebates. The cost of water then was infinitely lower than it is now and infinitely lower than it will be next year and the year after. The impact of the Bill on costs and on services will be great. It would be terrible if people were to wash less frequently or if things such as street cleansing were to happen less frequently. That will be the case when the cost of the service increases.

I do not dispute that there will be reasons for the cost increases, not least because of the burdens placed upon the companies to meet obligations imposed by the Government and by the EC. We are asking for the reasons to be published so that people can understand. The Minister is a little squeamish. He wants to protect the companies from having to justify to the public what he will ensure they justify to him. That is not the way to get the public to understand. Does the noble Lord believe that if the public knew exactly why the increases had been made they might think they had been conned? However, that is not the case we are making.We say that the public who pay ultimately should know precisely what and why they are paying. The noble Lord has certainly not satisfied me. I shall read carefully what he said and perhaps at a later stage we shall come back with another amendment. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 36 [Reports by customer service committees]:

[Amendments Nos. 280 to 282 hadbeen withdrawn from the Marshalled List.]

Baroness Strange moved Amendment No. 283: Page 39, line 20, leave out ("The Director may") and insert ("Subject to subsection (4) below, the customer service committee may require the Director to").

The noble Baroness said: In moving Amendment No. 283 I should like also to speak to Amendments Nos. 285 and 286. The object of these amendments is to give the customer service committees the power to publish their reports. The clause as it stands gives the director complete editorial control over the publication of CSC reports, allowing him to decide whether or how to publish them. We are back to the daisy petals again.

My honourable friend the Minister for Water and Planning said in December 1988 at the National Consumer Council's conference on regulation of the public utilities: The director general's task will be to hold the balance between consumers, the licensed water companies and their shareholders".

Clearly, this will be a difficult balance to strike. But it is important that all these interests should be taken into account when fixing ceilings to company charges and monitoring the quality of operational performance and long-term asset planning. From time to time he may be balancing the interests of the shareholders rather more than those of the customers. There could be occasions when interests conflict. I am proposing these amendments in case at any time, this should occur. My noble friend the Minister, who is sadly not here, has told me that we are pre-supposing disagreements between the director and the CSCs. I can only say that this is an imperfect world and I have not yet met anyone who never disagreed occasionally. The amendments mean that the CSCs would not be left muzzled and unable to publish their reports. This would be as effective as employing a doberman to warn off intruders and then muzzling him so that he could not bark.

It may be of interest to the Committee to compare the independent Gas Consumers Council, which regularly publishes disconnection figures, reports and press releases on matters of concern to gas customers, with the telecommunications advisory committees, which have amazing names like ENACT—the English national advisory committee on telecommunications—and DL, relating to disabled and elderly people, which hardly publish anything at all. Customers of water and sewerage services need to be certain that their interest in important and indeed vital issues such as charges, metering, water quality standards, compensation, sewerage and the control of disconnection will not only be promoted but will be seen to be promoted. It is no use feeding the geese on the Capitol with sherry-soaked raisins. They must have their own voice which they can use. I beg to move.

Lord McIntosh of Haringey

I should like briefly to express my support not only for the content of the amendment but for the way in which the noble Baroness moved it. She was both concise and poetic, as is her wont.

The whole issue of the customer service committees, their powers and responsibilities, is one we have addressed on a number of occasions as we have been dealing with the Bill. I am far from satisfied that we have dealt with it adequately yet. We have approached it on several separate occasions but we have not reached the heart of the matter. Whatever the noble Baroness may decide after listening to the Minister it is appropriate that I say now that we on these Benches will certainly want to return at a later stage to the powers of the customer service committees.

Lord Addington

I wish to add my support to the noble Baroness's amendment. In doing so I should like to reiterate much of the sentiment contained in her speech. The customer service committees are the effective redress between a monopolistic supplier and the consumer. Water is a natural monopoly. There must be some redress for the consumer. The voice of the consumer should be as independent as possible and should have as much access to the public as possible. I wholeheartedly agree with the amendment.

Lord Renton

I should like to support my noble friend Lady Strange. I join noble Lords opposite in congratulating her on the way she moved the amendment. A customer service committee is somewhat analogous to the users' consultative committees that were set up under the nationalised industries' legislation. Each of those committees used to publish an annual report. There was never any question about it. They were required to publish an annual report.

I do not know quite what incidence these reports will have. Clause 36(1) says: A customer service committee shall prepare a report on any such matter as the Director may require". That indicates that there will be reports on specific and perhaps quite detailed matters. Under subsection (2) there will be an annual report which must be prepared and sent to the director—a copy of it, at any rate—and it would be very surprising if that annual report could not be published. However, it may be of great importance to local consumers of water to know that any complaints which they have referred, either to the director or the customer service committee, are being properly dealt with and with what result.

Therefore, although it may be that my noble friend on the Front Bench is not in a position simply to say, "Yes, we agree with these amendments", I hope that he will not give a negative reply. I also hope that he will undertake, in any event, to have the matter considered between now and the Report stage. I say that because to me it is unthinkable that if the customer service committee considers that a report should be published, that should be prevented by statute.

Lord Hesketh

It may be helpful if I first explain the nature of these reports. They will be of three main types: first, a report on any matter on which the director requires advice of a customer service committee; secondly, a report on any matter which appears to a committee to affect the interests of customers of a company allocated to it; and, thirdly, the annual report of a customer service committee on its activities. All three types of report will be of considerable assistance to the director, providing him with the advice he needs in order to protect customer interests and in helping him to ensure that those committees are properly carrying out their functions.

I fully appreciate the strong feeling all round the Committee this evening as regards these three amendments. As my noble friend Lord Renton is fully aware, I am limited to what I can commit myself to. However, I am willing to say that I should like to take the matter away and consider it, though not necessarily all three amendments. I should like to read what noble Lords have said and to consider the matter without commitment. I hope that that is acceptable to my noble friend Lady Strange.

Baroness Strange

I thank the Minister very much for his unexpectedly encouraging reply. I am indeed glad that I shall not have to divide the Committee at this late hour because otherwise I should certainly have done so. However, if we do not receive a satisfactory reply I shall certainly return to the matter on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 284 had been withdrawn from the Marshalled List.]

[Amendments Nos. 285 and 286 not moved.]

[Amendment No. 287 had been withdrawn from the Marshalled List.]

Clause 36 agreed to.

8.45 p.m.

Clause 37 [General duty with respect to water supply]:

Lord McIntosh of Haringey moved Amendment No. 287A: Page 39, line 32, after ("of") insert ("wholesome").

The noble Lord said: In moving Amendment No. 287A I should like to speak also to Amendments Nos. 287B and 288B.This is the occasion when we return to the question of the European directive on drinking water quality which was debated earlier this afternoon and on which the Minister made such an important statement about compliance therewith. Without quoting directly from what he said, I note his claim—which I do not doubt—that it is agreed that the legislative framework for compliance with the EC directive has been established by amendments to the Bill. If there are subsequent opinions which lead me to doubt that claim, I have no doubt that we can return to the matter at a later stage of the Bill's proceedings. However, at the moment I have no reason to suppose that that is wrong.

I should, however, remind the Committee about the declaration of the reasoned opinion, which, by the way, the Secretary of State wanted to keep hushed up. Indeed, he said in a Written Answer at col. 414 of the House of Commons Official Report on 24th April: The deposit in the Library of the recent reasoned opinion would be a breach of … confidentiality".

The reasoned opinion was by that time winging its way round the country. However, leaving that to one side, the conclusion of the reasoned opinion—I assure the Committee I shall not read the whole document—is that the United Kingdom has failed to adopt within the permitted time the laws and regulations necessary to comply with Council Directive 80/778/EEC, and has not respected the maximum permissible concentrations with respect to nitrates and lead. The opinion states: the United Kingdom has failed to fulfil its obligations under the Treaty. Pursuant to the second paragraph of Article 169 of the EEC Treaty the Commission requests the United Kingdom to take the necessary measures to comply with the reasoned opinion within two months".

Let us agree, for the sake of this amendment, that the Government have now adopted the laws and regulations necessary to comply with the Council directive, or that they will do so when this Bill receives Royal Assent. However, what the Government are consistently refusing to do is comply with the second part of the requirement in respecting the maximum permissible concentrations as regards nitrates and lead.

I turn back to the Written Answer given by the Secretary of State when he was responding to questions about the Commission's reasoned opinion. He said: The Water Bill and the regulations to be made under it will incorporate the provisions of the directive directly into domestic law".

That is agreed, so let us move on from there. He continued: We are fully committed to compliance with the EC directive as soon as practicable. Those supplies which regularly fail to meet a standard are being improved and should comply in the next year or two".

When we ask the Government to put a timetable to compliance with the EC directive—in other words, when we ask for the protection of the people of this country, or parts of this country, from excessive concentration of nitrates and lead in our water—we are not given any direct answer. We are given answers comparable to those which the Minister gave the Committee this afternoon. He said that there were all sorts of practical difficulties about the timetable; that a number of factors may limit the speed of carrying out the necessary improvements; that there is a requirement to plan and design projects; to obtain approval, such as planning permission; and that we must order priorities according to the seriousness of the deficiencies which need rectifying.

Whatever we may think about those words, the conclusion that the consumers of water must come to is that the Government are not prepared to commit themselves to a timetable for putting matters right. It is not as if this is a new issue; it is an issue which has been around since 1980. The directive was agreed in 1980 and was to be incorporated into law by 1982. Well, we are there, presumably, only seven years late. Compliance was to be achieved by 1985. Is it too much then to demand that Parliament should take the lead in the matter now; and, as the Government have not done a good enough job, that Parliament should lay down what the timetable should be in order to ensure that our people are protected from an inadequate drinking water quality?

It is not as if such matters are not already under discussion. Indeed, in his Written Answer the Secretary of State said that the United Kingdom has already submitted the water authorities' programmes on nitrate and lead. Therefore the discussion is already under way. However, he then went on to say that the compliance programmes will be in the prospectuses for the new water companies. That is the worst sticking point; so far as I am concerned. We are being told that Parliament is not good enough to know what the timetable will be and that people do not deserve to know what the timetable will be. It is only in the interests of shareholders, after the Bill has received Royal Assent, that we shall be told what the timetable will be for bringing our drinking water up to standard. That is what sticks in my throat and what I find totally unacceptable.

Therefore in the amendments we propose that there should be a time, between now and the end of the year—that is more than six months—when the Government will have an opportunity to agree with the European Commission a timetable for the improvement of water quality. They should be able to do that. The negotiations are in progress. The Secretary of State has told us so. I cannot believe that it can be difficult for them to do that and to reach agreement before 31st December. If they fail to do that we propose that there should be a generous period of four years—I confess that we thought of making it a shorter period—before compliance must be achieved, with or without agreement with the European Commission. I do not for a moment believe that it will be satisfied with what is proposed in the Bill.

As the Bill reaches a late stage in its passage through Parliament, the people of this country are entitled to the straight answer which they have not had in the past. Compliance should have been completed in 1985. Is it unreasonable now to demand that there should be a timetable (agreed if possible and imposed if not possible) for the period during which compliance should be obtained? I beg to move.

Lord Addington

I shall refer to Amendment No. 288B. I cannot see any objection to having the timetable. We are trying to bring ourselves up to a standard. We are setting ourselves a timescale within which to reach a standard. It is a generous timescale, as the noble Lord, Lord McIntosh, said. The point that strikes me is that if we are part of the EC, we should surely take every opportunity to bring ourselves up to EC standards. In order to ensure that we must have a timescale in which to do it. We from these Benches are keen about the EC, and thus we believe that this measure is wholly commendable and we give it our full support.

Lord Trafford

I sympathise with what the noble Lord, Lord McIntosh, said about compliance with the EC directives with regard to water supplies and what he said about lead and nitrates. Those are two examples only. I declare an interest because I am more interested in the effect of aluminium. It so happens that when in water aluminium causes dementia, serious bone disease and so forth in patients with whom I am connected. That is neither here nor there. It happens to be but a small interest compared with this major measure.

I should have been concerned, and might well have given much more support to the noble Lord and his amendments, until a few months ago. My reason for that is, first, as I understand it—I am subject to correction—the Government have moved considerably towards meeting the necessary requirements with regard to the EC directives on the quality of water. In other words, for whatever reason—the noble Lord is entitled to draw what conclusions he likes about that—the Government have done that. The second fact is that a programme has now been put forward. We do not know whether total agreement will be reached with the EC. The noble Lord, Lord McIntosh, said that he did not believe that it would be because the timescale being offered by the Government would not be satisfactory to the Commission. He is better informed than I am, because I have no idea whether the timescale will be satifactory to the Commission. I too hope that within two or three years something considerable will have happened.

However, I am aware, mainly I must confess through my connections in this field, that it is not an easy matter. There needs to be considerable investment to change the quality, standards and so forth of water. There is not a Member of this place—perhaps with the exception of those from the Liberal Benches—who can claim to be free of all blame in this matter. Investment in the water industry in previous years was not that high and it has not been so during the time of what we call the nationalised water industry. I remember that we received almost no notice of the various changes that it had made which caused us serious problems with regard to the quality and so forth of water.

As the noble Lord, Lord McIntosh, said, it stuck in his throat that the Government are going to put this information in the prospectus and not before Parliament. If the Government are moving in that direction and if the timescale is being worked out, unless they publish the information separately, I cannot see how they will produce it, if the negotiations are not complete before the Bill goes through this place, it having been through the other place. It seems to be not unreasonable. I do not see why that fact should stick in the noble Lord's throat. It is not, let me hasten to add, that I am against the fact that we should have standards of water as high as anything requested in the EC directive. It is not that we should not produce a proper programme. It is that we should not be forced by any ill-advised manoeuvre to take what might be, in a technical field, the wrong steps.

It is most likely that during the course of the next weeks or months the Government will come to a reasonable arrangement with the EC, satisfactory to the Commission and the Government, practical for the water industry and satisfactory therefore ultimately to the consumers of this country.

Lord Ross of Newport

The noble Lord, Lord Trafford, pleads eloquently for us not to set firm dates, but the directive goes back to 1980. Surely our job in this place is to look after the interests of consumers and to be honest with investors who may wish to take shares when the authorities are privatised. It is more honest to put the dates into the flotation documents. If the dates are considered by the Government, the Director General of Water Services and the authorities not to be reasonable, because they cannot abide by them, let us have some alternative dates from the Government. At the moment they are prevaricating. It is our job to get something firm set down in the Bill so that we all know where we stand.

Lord Renton

Of course we all want to ensure that we get water supplies of improved quality in the years to come, but I must confess that I drink tap water all over the United Kingdom, and have done so for years, without so far any visible ill effects. This is important, and it is dealt with in Clauses 52 and 53. The side note to Clause 52 states: Duties of water undertakers with respect to water quality and the side note to Clause 53 states: Regulations for preserving water quality". Therefore I should have thought that if there were to be an attempt made—these amendments are such an attempt—to strengthen the Bill with regard to the question of wholesome water, the right place for it to be done would be in Clauses 52 and 53. There is nothing in those clauses to prevent the noble Lord, when we reach them, from referring to the matter in some way or other, or by means of a question asking what the Secretary of State proposes to do about the EC directive mentioned in Amendment No. 288B.

I hope that I have got the technical position right, but the noble Lord is moving an amendment to Clause 37 which deals in general terms with the general duties with respect to water supply, and to try to introduce prematurely the question of quality at that stage seems to me to be likely to lead to repetition in the Bill.

9 p.m.

Lord Hesketh

The effect of these amendments would be to make the EC drinking water directive standards a standard of performance, contravention of which would entitle customers to a payment whenever the standard was contravened. The contravention would not apply immediately but after a date specified by the Secretary of State which has either been agreed with the European Commission or is no later than Ist September 1993.

Perhaps I may first refer Members of the Committee back to the statement I made earlier today during the course of our discussion on the amendments to Clause 20 tabled by the Government. I was very interested that the noble Lord, Lord McIntosh, addressing me for the first time during the passage of the Bill in your Lordships' House, went to some lengths to say that this was a major statement by the Government. He then proceeded to rubbish it a few hours later. I am not quite sure where one stands on that. I then made it quite clear——

Lord McIntosh of Haringey

Perhaps the noble Lord will forgive me for intervening. I then had the opportunity to read the statement, for which I am grateful to somebody, which enabled me to be more critical about it than I was at the beginning.

Lord Hesketh

Members of the Committee have also had a chance to listen to it. I then made it quite clear that the Government were committed to complying with the drinking water directive and that a timescale for the programmes would be presented to the European Commission in due course. I am sure that the same proposal is supported by all Members of the Committee. The programmes are now being assessed, and their timescales will be made known when the assessments have been completed later this year.

Water undertakers will need to convince the Secretary of State that they are doing all that they can to comply speedily with the directive. They will have to give formal undertakings which are acceptable to him and keep those undertakings, otherwise the Secretary of State will be obliged to take enforcement action. We must also convince the European Commission that these programmes are acceptable because of its role in ensuring that European legislation is properly implemented.

Contrary to what the noble Lord, Lord McIntosh, said earlier on this amendment, we believe that the programmes will be acceptable. However, we immediately run into problems if we start trying to incorporate a compliance date in the legislation, as Amendment No. 288B proposes. That would contradict the date in the EC drinking water directive. It might also signal a much longer timescale for compliance in some cases than was really necessary.

The amendments are also inconsistent with other aims. The basis of the guaranteed standards scheme is that it should be simple to operate, easy for the customer to understand and provide a no-nonsense form of redress. If the scheme were to be extended to include a breach, however small or insignificant, of any of the EC directive standards, that would immediately introduce a major subject for dispute and lead to serious practical implementation difficulties. For example, if the lead standard were exceeded, the customer could argue that this was due to the undertaker's lead pipe. The undertaker could argue that it was due to the customer's lead pipe which in most circumstances is longer. As no sample can be taken at the point where ownership of the pipe changes, there is no obvious resolution. Another example is the unexpectedly heavy use of water from a particular main because of a serious fire in the area. That could stir up deposits temporarily and breach the standard for the colour of the water.

Furthermore, the noble Lord, Lord McIntosh, happily stated that the Government had made no effort to comply with the EC standards. Of course we complied with the standards and for five years the EC said that they were perfectly all right. Then the EC decided to change the method of measuring the standards. So to say that we have made no effort is just not true.

Planning permission is a subject which is often hotly discussed from the Benches opposite. Now it appears to be gaily thrown away—any works, large or small, will be erected without worrying about planning permission because we must get the job done. There seems to be no interest in improving the technology, even if there are medical implications. There is an assumption which we strongly criticise and with which we disagree that the European Community will not be satisfied with the statement which the noble Lord, Lord McIntosh, described earlier today as "major and important". I very strongly hope that the Committee will resist the temptation to accept these amendments.

Lord McIntosh of Haringey

I am afraid that the Minister has totally failed to convince me that the fears which I expressed at the beginning are not real fears. He talked about the history of efforts to improve the situation and to secure compliance. I did not say that there had been no efforts; I said that compliance had not been achieved. It is not a matter of making efforts. Even if efforts had been made—which I beg leave to doubt—it is already four years since the date by which compliance should have been achieved. I agree with the noble Lord, Lord Trafford, that the legislation should go wider than nitrates and lead. We have nowhere near reached the stage where the Government are even willing to set a time on compliance.

Parliament has greater rights than that. We are told by the Secretary of State that the compliance programmes, together with costing and timetables, will be included in the prospectuses to be published later this year. That is still possible under our amendments. Parliament must say that agreement must rapidly be reached by the Government and the European Community before the end of this year, even though it is at least four years—indeed it is seven years—since agreement ought to have been reached.

Failing that, there should be a definite period which everybody knows is the end. After that no failure to reach the required standard of drinking water will be permitted; otherwise we will be subject to all the penalties which may be imposed. As the matter stands, the Government are not only resting on their laurels, having secured the legislative requirement; they are going further and refusing to implement the second and the most important part of the EC directive. The people of this country will not be satisfied with legislative compliance; they want to see drinking water made better. Only by this amendment can we force the Government towards a realistic timetable for compliance. I commend the amendment to the Committee.

9.6 p.m.

On Question, Whether the said amendment (No. 287A) shall be agreed to?

Their Lordships divided: Contents, 81; Not-Contents,47.

DIVISION NO. 3
CONTENTS
Addington, L. [Teller.]	Blease, L.
Airedale, L.	Bonham-Carter, L.
Ampthill, L.	Boston of Faversham, L.
Ardwick, L.	Briginshaw, L.
Attlee, E.	Brooks of Tremorfa, L.
Birk, B.	Bruce of Donington, L.
Blackstone, B.	Callaghanof Cardiff, L.

On Question, amendment agreed to.

Campbell of Eskan, L.	McGregor of Durris, L.
Carmichael of Kelvingrove, L.	McIntosh of Haringey, L.
	McNair, L.
Cledwyn of Penrhos, L.	Mason of Barnsley, L.
Cobbold, L.	Mayhew, L.
Cocks of Hartcliffe, L.	Meston, L.
David, B.	Milner of Leeds, L.
Davies of Penrhys, L	Molloy, L.
Dean of Beswick, L.	Monkswell, L.
Dormand of Easington, L.	Murray of Epping Forest, L.
Elwyn-Jones, L.	Nicol, B.
Ennals, L.	Northfield, L.
Ewart-Biggs, B.	Ogmore, L.
Falkender, B.	Phillips, B.
Falkland, V.	Pitt of Hampstead, L.
Galpern, L.	Ponsonby of Shulbrede, L. [Teller.]
Graham of Edmonton, L.
Harris of Greenwich, L.	Prys-Davies, L.
Hatch of Lusby, L.	Rea, L.
Hooson, L.	Rochester, L.
Houghton of Sowerby, L.	Ross of Newport, L.
Hughes, L.	Russell, E.
Irvine of Lairg, L.	Scanlon, L.
Irving of Dartford, L.	Stallard, L.
Jenkins of Hillhead, L.	Stoddart of Swindon, L.
Jenkins of Putney, L.	Strabolgi, L.
John-Mackie, L.	Taylor of Blackburn, L.
Kilbracken, L.	Tordoff, L.
Kirkhill, L.	Turner of Camden, B.
Llewelyn-Davies of Hastoe, B.	Underhill, L.
	Wedderburn of Charlton, L.
Lloyd of Kilgerran, L	Whaddon, L.
Lockwood, B.	White, B.
Longford, E.	Williams of Elvel, L.
Macaulay of Bragar, L.	Wilson of Rievaulx, L.
NOT-CONTENTS
Ailesbury, M.	Hives, L.
Arran, E.	Hooper, B.
Balfour, E.	Jenkin of Roding, L.
Belstead, L.	Johnston of Rockport, L.
Blatch, B.	Killearn, L.
Blyth, L.	Kinloss, Ly.
Brabazon of Tara, L.	Long, V. [Teller.]
Brougham and Vaux, L.	Lucas of Chilworth, L.
Butterworth, L.	Lyell, L.
Carnock, L.	Macleod of Borve, B.
Clinton, L.	Mersey, V.
Cranbrook, E.	Renton, L.
Davidson, V.[Teller.]	Rodney, L.
Dundee, E.	Saltoun of Abernethy, Ly.
Eden of Winton, L.	Sanderson of Bowden, L.
Elliot of Harwood, B.	Skelmersdale, L.
Elliott of Morpeth, L.	Stanley of Alderley, L.
Ferrers, E.	Strathclyde, L.
Fraser of Carmyllie, L.	Thomas of Gwydir, L.
Grantchester, L.	Trafford, L.
Greenway, L.	Trefgarne, L.
Harvington, L.	Trumpington, B.
Henley, L.	Wynford, L.
Hesketh, L.

Resolved in the affirmative, and amendment agreed to accordingly.

9.14 p.m.

Lord McIntosh of Haringey moved Amendment No. 287B: Page 39. line 33, at end insert— ("(aa) for providing water of a standard of wholesomeness prescribed under section 38(2A) or (2B) below").

[Amendment No. 288 had been withdrawn from the Marshalled List.]

Clause 37, as amended, agreed to.

9.15 p.m.

Clause 38 [Standards of performance in connection with water supply]:

Lord McIntosh of Haringey moved Amendment No. 288ZA: Page 40, line 8, leave out ("may") and insert ("shall").

The noble Lord said: With this amendment we return to the familiar issue of "may"or "shall". In this case we are concerned with the regulations which the Secretary of State may make under Clause31 which will be pivotal in determining the application of the duty to supply requirements of Clause 37.

The regulations which the Secretary of State may make concern, first, the extent to which breaches of detailed duties to supply as set out in Chapter 11 are breaches of the general duty to supply contained in Clause 37; and, secondly, whether that duty needs to be supplemented by establishing overall standards of performance. As the matter stands, the Secretary of State has a discretion in these matters. That does not seem to us to be very satisfactory.If Parliament is legislating then Parliament surely has a duty to ensure that it has an opportunity to be clear about the effect of the legislation which is produced. If the remaining proposals of this chapter are to have any clear connection with the general duty in Clause 37, it is essential that we should understand whether the regulations will be made or whether they may be made.

In their own amendments moved earlier this afternoon the Government have accepted that it is proper to say in legislation that the Secretary of State "shall" make regulations. They have done so at the behest of the European Community rather than at the behest of the Opposition. So be it, we accept our defeat in that matter with a good grace, as I hope that we all do under such circumstances. We accept that in the past the Government have put forward a powerful case against the substitution of the word "shall" for the word "may". In this case there is no such excuse. The Government having delegated to regulation the clear duty which is required of them in the whole of Chapter II and in particular in Clause 31, surely it is the duty of Parliament to secure that the effect of this legislation is produced and that the Government introduce the regulations which are specified.

I hope that the Minister will feel that it is prudent as well as right to agree to the amendment. I beg to move.

Lord Hesketh

Amendment No.288ZA would replace the power of the Secretary of State to make regulations under Clause 38(1) with a duty to make such regulations.

Clause 37 sets out the general duty of a water undertaker to develop and maintain a system of water supply, and to ensure that such arrangements as are necessary to meet its specific obligations under Chapter II of Part II of the Bill have been made. Clause 38(1) enables the Secretary of State, on the application of the director under subsection (4), to make regulations setting out requirements which, if breached, are to be treated as breaches of the general duty in Clause 37.

That power, and a similar power in Clause 68 relating to sewerage duties, are intended to back up the powers which the director will have under conditions of appointment of the undertakers. Conditions I and K in the model instrument of appointment of the water and sewerage undertakers, published in December 1988, provide models for those powers. The director will, under the powers, obtain the information he needs about the overall quality of service and investment in the underground assets in order to judge what is necessary to protect customers' interests in the quality of the undertakers' services. Where he takes the view that those interests cannot be protected without specific enforceable requirements being imposed upon the undertakers he will apply to the Secretary of State to make regulations under Clause 38(1).

The Secretary of State will be responsible for judging whether such obligations should be imposed. As new obligations may impose additional costs and ultimately higher charges for services the Government take the view that the Secretary of State should be accountable to Parliament for his decision, through the making of regulations as provided for in Clause 38. To convert the Secretary of State's power to make regulations into a duty to do so would cut across his general duties under Clause 7 of the Bill. Under those duties, he would be able to balance, in particular, the interests of customers in higher quality services and lower charges in deciding whether to make regulations as proposed by the director. The amendment should be rejected because it would remove that important discretion. For those reasons, I hope that the noble Lord, Lord McIntosh of Haringey, will consider withdrawing the amendment.

Lord McIntosh of Haringey

I am sorry that we have returned so quickly to the repetition of what I still consider to be quite inadequate reasons for retaining the powers of the Secretary of State to do what he likes in regulation, rather than placing matters, as they should be, on the face of the Bill. I feel strongly that, when we consider legislation of this kind, we should have a clearer idea than we do from the Bill as drafted of what the effect of the legislation will be. However, I understand the last point that the Minister made about the discretion of the Secretary of State. It is a matter that I want to look at more fully. Without prejudice to any undertaking not to bring it back at a later stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringeymoved Amendment No. 288ZB: Page 40, line11, leave out ("may") and insert ("shall").

The noble Lord said: This is a very similar amendment. I move it in the hope that the Minister may find that it has more virtue in his mind than the previous one. It seems that this is a clearer case, where the standards of performance in connection with the provision of supplies of water is something that everyone can understand and which is desirable. It is necessary for those standards to be prescribed and for water undertakers to pay compensation if the prescribed standard is not achieved. I should have thought that this was without doubt a case where the Minister would be able to tell us that the Secretary of State would prescribe standards of performance. I rather think that he will have to do so if he is to continue to keep the law in accordance with European Community directions. If the Minister is to tell us that the Secretary of State will do that, he may feel inclined to accept the amendment and accept "shall" instead of "may" on the face of the Bill. I beg to move.

Lord Hesketh

Amendment No. 288ZB would replace the power of the Secretary of State to make regulations under Clause 38(2) with a duty to make such regulations. Subsection (2) enables the Secretary of State, on the application of the director under subsection (4), to make regulations which will prescribe standards in day-to-day relations between the water undertakers and individual customers. If those are not met, then these will entitle the persons affected to payment by the undertaker.

The draft regulations which are to be made under subsection (2) are already out for public consultation. These are known as the guaranteed standards scheme and provide for automatic entitlement of domestic customers to the £5 cash payment of credit from the appointed company for each day or event that certain standards are not achieved. Copies of the draft regulations were placed in the Library on 26th April. We therefore believe that it is not necessary to make it a requirement that such a scheme shall be produced. For those reasons, as the noble Lord, Lord McIntosh of Haringey, again correctly surmised, we do not believe that the amendments are necessary.

Lord McIntosh of Haringey

The Minister tempts me! I was well arare that the draft regulations were published in April. That was why I wanted the Minister to say, as I believe he has done, that the Secretary of State will introduce regulations to that effect. Is there then any conceivable reason why, faced with the possibility of defeat, he might not agree to "shall" instead of "may"? Is there anything whatsoever to be lost by agreeing to the amendment?

Lord Hesketh

If the noble Lord, Lord McIntosh, is right in his assumption, and he very well may be, one could equally argue that there is no reason for it to appear on the face of the Bill.

Lord McIntosh of Haringey

I think it is called a stand-up. It is clear that the Government will do the right thing. I do not think that the Committee would appreciate our pursuing the matter to a Division at this stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Graham of Edmonton moved Amendment No. 288ZC: Page 40,line 15, after second ("prescribed") insert ("for the purpose of providing full compensation").

The noble Lord said: This amendment relates to Clause 38. For the benefit of the Committee it may be helpful if I read out the subsection that we are seeking to amend: The Secretary of State may by regulations prescribe such standards of performance in connection with the provision of supplies of water as, in his opinion, ought to be achieved in individual cases; and such regulations may provide that if a water undertaker fails to meet a prescribed standard, it shall pay such amount as may be prescribed".

This amendment simply seeks that a sum may not be prescribed unless, in being prescribed, it is: for the purpose of providing full compensation".

The Minister and others who closely follow these matters, and certainly the Committee, will be aware that there can be an aggravating difference between the prescribed sum and the total hurt which needs to be compensated. I should like to hear the Minister explain why the Government have not put on the face of the Bill words which would allow the full cost. We know the meaning of the word "prescribed" in these matters, but what do the Government have in mind as likely to be the prescribed amount? Why in fact is it prescribed at all?

We do not want a gimmick. We do not want to be told, as one has been told, for instance, that the Government in general have been talking of about £5 a day for a compensation scheme. We do not want that. We do not want any razzmatazz or ballyhoo about this payment. We simply want people who have suffered hurt to be recompensed in full for that hurt. Why should someone have to meet part of the cost of an injury which has occurred through no fault of their own? Why should the undertaker not bear the whole of the cost? Why should he be let off? The undertaker should be expected to pay the full cost of any loss or loss of enjoyment suffered by a consumer whose supply has failed to meet the prescribed standards. I beg to move.

Lord Hesketh

Amendment No. 288ZC would provide that under the regulations made under subsection (2) there would be payments for the purposes of providing full compensation for failure to meet a prescribed standard.

In putting forward this amendment, I feared that the noble Lord may have misunderstood the purpose and scope of the guaranteed standards scheme. This scheme is there necessarily to apply where it is feasible to guarantee a clearly defined standard to achieve which, if not met, will automatically entitle the customer to a cash payment or credit. The scheme focuses on those aspects of day-to-day relations between companies and customers where at present the customer is not entitled to any compensation for the inconvenience caused as a result of service standards not being met.

The scheme is in addition to existing and new individual statutory rights to civil redress provided under the Bill. Any customer is free to pursue civil redress for loss or damage sustained as a result of breach of the specific water supply and sewerage duties owed to the individual customer under the Bill. It is right and proper that the courts should determine the size of "full compensation". The guaranteed standards scheme is clearly inappropriate on that score.

I suggest that the difficulty which the noble Lord, Lord Graham, is concerned with is the cost of taking civil action. I should reiterate that a new raft of offences will be available. There is also the guaranteed scheme.

On the cost of taking civil action, the noble Lord, Lord Graham of Edmonton, is essentially raising a much more general issue which should be addressed to my noble and learned friend the Lord Chancellor rather than to myself on an amendment to the Water Bill. For that reason I hope that he will be able to withdraw his amendment.

9.30 p.m.

Lord Renton

Before the noble Lord replies, I wonder whether it would help if I point out that it is clear from the terms of the subsection, made even clearer by the statement of my noble friend Lord Hesketh, that the regulations will not prescribe compensation. In other words, damage does not have to be proved before the entitlement—and I must call it this, because it looks as though it will be so—to a contribution by way of penalty arises. If the noble Lord introduces the concept of compensation into the scheme that is in the subsection, he may sometimes be depriving people of a contribution by way of penalty that they would receive if there were no reference to compensation.

As my noble friend has said, compensation is something that the courts will decide. Damage or injury will have to be proved before the compensation can be paid. If the courts find it proved, they will then award full compensation in damages. However, on reflection, I think that the noble Lord will find that his amendment is self-defeating.

Lord Graham of Edmonton

If the noble Lord, Lord Renton, is inviting me to save myself from my own logic, I am certainly willing to reflect on the issue. However, can the Minister answer the point that I raised? The Bill provides that if a water undertaker fails to meet a prescribed standard it shall pay such amount as may be prescribed. Can the Minister inform us what kind of matters would be included and in what amount? Are we talking of, for instance, £10 or £100? Is there a scale? I should like to know more about what the words on the face of the Bill mean.

Lord Hesketh

The condition of an automatic scheme is that the payment must be prescribed. That is why we fixed it at the £5 level for the guaranteed standard scheme.

Lord Graham of Edmonton

The figure is £5. The idea of such amount being prescribed means that it can be changed by order. The £5, for instance, could become £3 or £10. I think that the Minister must agree that £5 is a nominal sum. It is not a derisory sum. However, in the context, can the Minister tell us a little more about what the £5 compensation would cover? What is worthy of just £5 compensation?

Lord Hesketh

The scheme covers delays beyond the period notified by the company for restoring water supplies following a planned interruption of supply; delays of more than 24 hours in restoring water supply following an unplanned interruption which has been notified to the company and 72 hours in the case of a burst strategic main; appointments which are not kept on the day specified by the company to the customer; failure to provide the answer to written inquiries about bills or requests for alternative methods of payment within 20 and 10 working days; and failure to respond to written complaints about water supply or sewerage services by providing an answer within 10 working days and a substantive answer within 20 working days if the matter requires a site inspection or further investigations.

The key is that the fine is £5 per day. I am sure that many Members of the Committee would be very grateful if they were able to receive a similar form of compensation in respect of various other services.

Lord Graham of Edmonton

I am most grateful to the Minister. He has refreshed our memory, not that he has given any new information. I can recall having heard that information. I am saying that as a consequence of any of those derelictions the cost to the consumer can be measured not just as £5 but in terms of hundreds of pounds. As a consequence of delay or of waiting for someone to call, one may give up a day's work or lose a day's pay and so on. The Minister is telling us that this is a global basic minimum figure of £5.I say that it is a gimmick and part of the sales package that the public is being asked to buy. I do not deny what the Minister has said. His colleagues behind him agree. This has not happened before. It is a new element in the way in which the consumer will get some redress.

I shall read what the Minister has said. I reserve my right to come back at a later stage and in the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lloyd of Kilgerran moved Amendment No.288A: Page 40, line 16, at end insert ("Provided that nothing in regulations made under this section shall derogate from any right of action or other remedy (whether civil or criminal) in proceedings instituted in respect of a failure to meet a prescribed standard.").

The noble Lord said: The amendment is concerned with the subsection of Clause 38 which has been described so fully by the noble Lord, Lord Graham of Edmonton. I have listened carefully to what the Minister has said about the previous amendment. I now understand that in the regulations prescribed under the clause—the word "prescribed" is defined in Clause 182—there is the compensation sum of £5 a day. The Minister is nodding his head in agreement.

I strongly support what the noble Lord, Lord Graham of Edmonton, said, that in some circumstances such compensation will be totally inadequate as a result of the failure of an undertaker to comply with the regulations. There is an old case which I hope the Committee will allow me to mention. It is the case of Atkinson v Newcastle and Gateshead Waterworks Company of 1877. Under the Waterworks Clauses Act 1847 compensation of £10 was laid down as a kind of penalty. As a result of a breach of the Waterworks Clauses Act a fire caused considerable damage, but the court said that as the sum prescribed was £ 10 that was all that the person concerned was entitled to.

The facts of that case are irrelevant—except for the penalty—to the submission that I am making because other clauses of the Bill deal with undertakers having to supply water to put out fires. That is dealt with in later clauses.

The Government have prescribed the small sum of £5 a day and in some circumstances that compensation might be much higher. The Minister said that, without citing them, some clauses in the Bill preserve the civil rights of persons who have been injured or damaged as a result of the breach of regulations. I have been unable to find clauses which are sufficiently general to cover the position that I am adumbrating. My amendment reads simply: Provided that nothing in regulations made under this section shall derogate from any right of action or other remedy (whether civil or criminal) in proceedings instituted in respect of a failure to meet a prescribed standard.

The noble Lord gave the general indication that the present Bill contains clauses to meet civil rights arising from damage caused to a person as a result of the failure to meet prescribed standards where that damage was more than £5 a day. I believe therefore that it is simpler and clearer to introduce into the Bill at this stage the general addition to Clause 38(2). It is that although the sum is prescribed in the Bill under the regulations there may be cases where the compensation should be much higher. Therefore the terms of my amendment cover that position and reserve the rights for the person concerned which arise from the failure to meet prescribed standards. I beg to move.

Lord Renton

Whatever else may be said in the Bill about preserving the rights of compensation and so forth in the courts, I feel bound to remind the noble Lord—and he made a most interesting speech from his experience as a lawyer—of the rule of interpretation. It is a very ancient and constant rule. It is that you cannot take away people's rights under the common law or their rights of action without express words in an Act of Parliament.

The noble Lord is trying to put right something that does not need to be put right because his amendment states that: Provided that nothing in the regulations made under this section shall derogate from any right of action or other remedy (whether civil or criminal)". I have always thought of civil remedies and criminal penalties. However, that is a small point.

There is no suggestion that the regulations to be made give to the Secretary of State a power—an express or implied power even—to derogate from any right of action or other remedy. Unless the statute were absolutely plain and express in giving him a power to do so, the amendment would be unnecessary. I hope that my noble friend will not agree to these unnecessary words being introduced.

Lord Hesketh

Amendment No. 288A seeks to ensure that nothing in the regulations provided for under Clause 38 should prevent the customer from taking legal proceedings in respect of a failure to meet a prescribed standard. This would cover both breaches of standards to be achieved in individual cases under subsection (2) and breaches of the overall standards of performance under subsection (1).

The amendment is defective since breaches of these prescribed standards are not subject to legal proceedings. Under the Bill, however, there are specific water supply obligations which are owed to the individual customer and which are subject to civil liability. An example would be for breach of the duty to supply water for domestic purposes. I assume therefore that the intention of the amendment is to avoid such proceedings for breach of these obligations being qualified in any way by regulations made under this clause.

We have already provided for this in subsection (6). This makes clear that the obligations imposed on a water undertaker in the following provisions of Chapter II of Part II and any remedies for contravention of those obligations are not affected by any obligation or remedy available by virtue of Clauses 37 and 38.

I should add that the draft regulations under subsection (2) of Clauses 38 and 68, the guaranteed standards scheme, make clear that payments under the scheme do not affect the other legal rights or liabilities of the undertaker or of the customer. With those words, I hope that the noble Lord, Lord Lloyd of Kilgerran, will feel able to withdraw his amendment.

Lord Lloyd of Kilgerran

Perhaps I may say how obliged I am to the noble Lord, Lord Renton, for giving me a very interesting and well-known indication of the law concerning the safeguards for individuals on the taking away of rights.

I now find myself rather confused because in his reply the Minister said that these safeguards of civil rights are in this Bill so that under the arguments of the noble Lord, Lord Renton, certain parts of the Bill are totally unnecessary. Whether or not that is the case, I am not in a position to give any views at present because the Minister referred to regulations which I do not have before me—and I apologise for that. I did not quite gather the relevance of the clause which he mentioned on a quick look at the matter; but as it is getting rather late, I shall read what the Minister said. I shall again read what the noble Lord, Lord Renton, has so kindly introduced into this debate, and I may raise the matter on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.45 p.m.

Lord McIntosh of Haringey moved Amendment No. 288B: Page 40, line 16, at end insert— ("(2A) Without prejudice to the generality of the duty conferred by subsection (2) above, regulations under that subsection shall include in any standard of performance a requirement for an undertaker to achieve the levels of drinking water quality specified in EEC Directive 80/778 by a date not later than the date specified by the Secretary of State under subsection (2B) below in respect of each undertaker. (2B) The date or dates to be specified by the Secretary of State by order under this subsection shall be that or those which either—

1. (a) Not later than 31st December 1989, have been agreed by the Secretary of State and the European Commission; or
2. (b) Where no such agreement has been reached by the date referred to in paragraph (a) above, 1st September 1993.

(2C) Where, before the date specified in an order under subsection (2B) above, any further terms of a Directive by the European Commission relating to drinking water quality are introduced, the Secretary of State shall, in consultation with the Commission, by regulations establish the shortest timetable for compliance by each water and sewerage undertaker as he considers to be reasonably practicable.").

[Amendments Nos. 289 and 290 had been withdrawn from the Marshalled List.]

Lord Graham of Edmonton moved Amendment No. 290A: Page 40, line 28, leave out paragraph (d).

The noble Lord said: The amendment probes the Government as to why subsection (3)(d) enables performance standards regulations for water supply to include circumstances in which a water undertaker is to be exempt from such requirements.

Throughout this Bill and on this issue it is essential for the Government to explain to the Committee where it seems that their broad statements of intent are heavily qualified; this is certainly one of them. Amendment No. 290A is all of a piece with other amendments.

Paragraph (d) states: prescribe circumstances in which a water undertaker is to be exempted from requirements of the regulations".

The Minister has already tried to persuade the Committee that matters contrary to the commercial interests of some directors of the companies should be free from publicity without the public knowing precisely what they are. Of course, the Government do not idly put matters like this into a Bill but I believe that the Committee is entitled to an explanation as to the circumstances in which those prescribed circumstances would be considered. Perhaps the Minister can help the Committee in that respect. I beg to move.

Lord Hesketh

By providing for an automatic entitlement it would be unreasonable on the undertaker if there were not certain exceptions provided when circumstances outside his reasonable control prevented the service standard being met. That is the main set of exemptions set out in the draft regulations. There are also a number of other exemptions to assist the practical operation of the scheme. For example, where a customer informs the undertaker that he no longer wishes to pursue a complaint, the undertaker will be exempt from having to pay the £5 where he failed to respond to the complaint within a specified standard time.

Without such exemptions, we should be imposing an unreasonable burden on the undertaker which would increase the cost to all water and sewerage customers. However, I believe that it would probably be helpful to the Committee if I explained the sort of exemptions which we are talking about. They are of a similar nature to those rights under the guaranteed scheme—that the undertaker has cancelled the appointment giving the customer not less than 24 hours' notice of cancellation; that the undertaker holds a record signed by a representative who was instructed to make the visit; that the visit was made on the appointed day and the customer has not established that the record is incorrect; or that the customer has cancelled the appointment.

I suspect that we are not talking about particularly onerous duties. We are referring to reasonable conditions which, when not met, provide a rational reason for having an exemption.

Lord Graham of Edmonton

I am grateful to the Minister. I understood, as he did, that if there are minor and major matters, these are minor. Again, I am satisfied that the director who will be closely watching such things will not lay himself open to a charge that there are matters that would allow an undertaker to escape great responsibilities. I shall read very carefully what the Minister has said and I may return to the matter later, but in the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 38,as amended, agreed to.

Clause 39 agreed to.

Clause 40 [Requisitioning of water mains]:

The Earl of Balfour moved Amendment No. 298: Page 42, line 7, leave out ("or parts of buildings").

The noble Earl said: I was very concerned about "or parts of buildings" because of the risk of frost. I am in favour of a mains pipe being inside a building that is reasonably draught proof, but the words "or parts of buildings" mademe think that the undertaker was being asked to put a main through a building where it could get frozen. Although the words "parts of buildings" appear elsewhere, I feel that they are misleading.

Perhaps I may draw the Committee's attention to page 79, Clause 70(1)(b), which is the corresponding passage of Clause 40 which we are considering. That clause states:

1. "(i) premises on which there are buildings; or
2. (ii) premises on which there will be buildings when proposals made by any person for the erection of any buildings are carried out".

Those are better words than the words in Clause 40. This is a drafting point. One must be aware of frost, which can do immense damage to people's supply of water if pipes burst. That is.why I dislike the expression "or parts of buildings". I beg to move.

The Earl of Arran

The effect of my noble friend's amendment would be to prevent the owners or occupiers of parts of existing buildings from requisitioning a mains supply of water. This could adversely affect, for example, the owners or occupiers of flats where a house has been converted, or of rooms above a shop or office adapted for residential use.

It is our intention that all owners and occupiers within a water undertaker's area should be able to requisition a mains supply of water. My noble friend Lord Balfour is, as he has just mentioned, concerned that the provision will require a water undertaker to connect parts of buildings directly to a mains supply and that there may be attendant risks of frost damage. Presumably he has in mind supplies to outhouses and suchlike. I can assure him that that will not be the case.

The purpose of this clause is to enable water mains to be requisitioned to provide a general mains supply of water to a particular locality. The provisions in Clauses 42 to 44 set out the quite separate requirements on undertakers and owners and occupiers for connecting individual premises to the mains.

For completeness, I might add that an undertaker will quite properly be required to take reasonable precautions against frost damage by, for example, ensuring that its pipes are laid at a sufficient depth. Equally, where an unusually severe frost may cause pipes to burst and lead to a supply failure, an undertaker has the defence in any subsequent proceedings brought against it for breach of duty that it took all reasonable steps and exercised all due diligence to avoid the breach. I think that this meets the noble Earl's underlying concern.

This amendment would deprive certain owners and occupiers of an important right. We do not believe that that is the noble Earl's intention, and I hope that he will be persuaded not to pursue the amendment.

The Earl of Balfour

I am most grateful to my noble friend for his explanation that the risk of frost is not as serious as I had thought. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 40 agreed to.

Clause 41 agreed to.

Clause 42 [Duty to make connections to water mains]:

The Earl of Arran moved Amendment No. 303A: Page 46, line 20, leave out ("in question") and insert ("consisting in the building or part of a building in question together with any land occupied with it").

The noble Earl said: In moving Amendment No. 303A, I should like to speak to Amendments Nos. 303B, 304A and 305.

Clause 42 places a duty on a water undertaker to connect a service pipe to any premises with one of the undertaker's mains for the purpose of providing a supply of water for domestic purposes.

Amendments Nos. 303A, 303B and 304A are technical amendments to clarify the provisions of subsections (3) and (4) which deal with the work that an undertaker is required to carry out in particular circumstances. Amendment No. 305 is a further technical amendment to clarify that in cases where a water undertaker is required to connect a service pipe to a water main, he cannot be required to make that connection by means of a connection to somebody else's service pipe. I beg to move.

The Earl of Arran moved Amendment No. 303B: Page 46, line 21, leave out ("it") and insert ("the main").

The Earl of Balfour moved Amendment No. 304: Page 46, line 25, leave out ("in") and insert ("outside").

The noble Earl said: I should like to explain what I mean by a stopcock. A stopcock is the means of turning water off with a key. Usually a 90 degree turn will turn the water off. It is usually buried well into the ground and fixed on to the service pipe. That stopcock should, in my opinion, be outside the building and not inside. There should be a hand valve inside the building which the house owner can turn off to carry out repairs or maintenance etc.

I realise that there is a general recommendation that from the main any lead-off should have a stopcock at that point. In theory, that sounds very nice, but in many cases the mains pipe runs down the middle of a street and, because of heavy traffic, the street is often being repaired so that any stopcock in the roadway will be covered up very quickly. It is much better to have it on the pavement, particularly if it is paved like most of the London streets. Pavements can be there for a very long time. This is an important point.

Another point that I wish to raise at this stage concerns any person who takes advantage of the Government grant that is available to replace lead pipes with other material, which may be pvc or something else. The person who lays the pipes usually lays them just through the wall of the house. The grant is paid for the replacement from the main to the first tap in the house. At the moment the work done outside is exempted from VAT and it is zero rated. Any work done inside the house should be done by a qualified plumber. That work is done using a different material and is subject to VAT. That is part of my reason for this amendment.

If there is a burst pipe inside the house and the stopcock is inside, in order to be able to turn off the water the undertaker has to gain entry to the house and he will need a warrant in order to do so. It will also probably mean smashing in a door. I can assure the Committee that even a half-inch pipe bursting inside a house can dramatically affect the pressure of water to a great many of the surrounding houses. There may be technical reasons for the wording. I ask my noble friend to ensure that stopcocks are placed outside and not inside the house. Equally, I wish to see hand valves inside the house which the housewife can turn off. I beg to move.

The Earl of Arran

If my noble friend's amendment is passed it will negate the desired effect, and I shall take a short time explaining why. An undertaker's stopcock will normally be located in the street. This provision addresses the particular case where a water undertaker is required by the owner or occupier to connect premises which abut on a street with a main running through the street. The service pipe enters the building other than through an outer wall of a building abutting on the street and the stopcock on the service pipe is to be located in the garden. The Committee will be aware that the provision has now been amended to clarify that the term "premises" as used here is to be taken to include a building and the land occupied with a building, normally the garden. The undertaker is to be empowered to lay as much of the service pipe as is necessary in the garden between the boundary of the street and the stopcock in the garden. If accepted, this amendment would effectively remove this power. Where the stopcock is situated in the street outside the premises the undertaker is already empowered to carry out works by virtue of Clause 42(3)(a).

My noble friend is, I understand, concerned that a water undertaker should not be able to fit a stopcock inside a building. I hope he will accept my assurance that this is not the effect of this provision as now clarified in its amended form. I am grateful to him for raising the point which I hope he will now accept need be moved no further.

The Earl of Balfour

Once again I am very grateful to my noble friend. For my own peace of mind I am glad that I raised this point. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Arran moved Amendments Nos. 304A and 305: Page 46, line 47, at end insert ("or in any land occupied with those premises"). Page 46, line 51, at end insert ("; or—

1. (b) to connect a service pipe to any premises with a service pipe to other premises.").

Clause 42, as amended, agreed to.

Clause 43 [Conditions of connection to water main]:

Lord Hesketh moved Amendments Nos. 306 and 306A: Page 47, line 22, leave out from ("disconnection") to end of line 26 and insert ("made by reason of any person's failure to pay any charges, that the person serving the notice has paid any amount owed by him to the undertaker in respect of a supply of water to those premises or in respect of expenses incurred in the making of the disconnection;"). Page 47, line 46, after ("fittings") insert ("used or to be used in connection with the supply of water to those premises, or with the use of water").

The noble Lord said: Clause 43 sets out the conditions that a water undertaker may impose before complying with the duty to make a connection to a water main. Amendments Nos. 306 and 306A are technical amendments to clarify the effect of the provisions. I beg to move.

[Amendments Nos. 307 to 309 hadbeen withdrawn from the Marshalled List.]

The Earl of Balfour moved Amendment No. 310: Page 48, line 43, leave out subsection (8) and insert— ("(8) In this section "meter" means any apparatus for measuring or showing the volume of water supplied to, or of effluent discharged from, any premises.").

The noble Earl said: This amendment should be taken with Amendment No. 350. Perhaps I may briefly explain why. Clause 77(4) gives the definition of "meter" as it is set out in my amendment. At present we are on Chapter II of the Bill, which deals with water only. Chapter III, which starts with Clause 67, deals with sewerage only. Chapter IV, which starts with Clause 74, deals with water and sewerage. In the Bill as drafted there is a full definition in Clause 43(8). The last but one line of the subsection refers to, the volume of effluent discharged from those premises".

I believe that this long definition should be in Clause 77 and that the short definition in Clause 77 should become subsection (8) of this clause. It would make the Bill a little easier to understand and would be an improvement. There should not be such an elaborate definition in regard to charges dealing with effluent going out from a house when we are dealing with water only. The amendment seeks to make the Bill clearer for those who have to read it. I beg to move.

Lord Hesketh

The effect of this amendment would be to remove the definition of fixing of charges in relation to any premises by reference to volume in subsection (8) of Clause 43. We believe that it is a probing amendment.

Clause 43 sets out the conditions of connecting new water supplies to the main. Subsections (1)(c) and (1)(d) enable water undertakers to require, as a condition of connecting a new supply of water for domestic purposes, a meter to be installed or the plumbing to be such that it would be reasonably practical to install one at a later date. Subsection (4) enables these conditions to be applied even if the undertaker has no immediate intention to charge on a measured basis. This is to enable a smooth transition to metering for those water undertakers who decide to move to widespread metering at a later date. It would also reduce the cost and inconvenience of such a move.

Subsections (1)(c) and (4) both refer to the fixing of charges in relation to volume. This is defined in subsection (8) as being the volume of water supplied to or the volume of effluent discharged from premises, or a combination of both these factors or one of them taken in conjunction with another factor such as a standing charge. It would cover the situation where, for instance, the water supply was not charged by volume but the sewerage services were. Given this explanation, I invite my noble friend to withdraw his amendment.

The Earl of Balfour

I am grateful to my noble friend for drawing that to my attention. I should like to add two more comments. It would be a good thing if water could be metered for two reasons. The first is that the householder—I am thinking mainly of houses—would then pay only for what he used. Secondly, if water is metered it is one of the few ways in which the water undertaker can find out if it is being wasted, because there is suddenly a fantastic reading. Unfortunately—and this is one of the facts of life—if people are paying a fixed charge for water they tend to waste it appallingly badly; indeed, they very often do not bother to repair ball-cocks or other such appliances. That is one of the reasons I think metering is definitely an advantage.

How one can successfully meter sewage, which one wants to flow as freely from a house as possible, is very much another matter. After all, under the metering systems which we have at present water comes in under pressure, as does gas. Moreover, electricity comes in under pressure in a way with a voltage. However, I feel that to attempt to meter sewage would be rather complicated and I think that one could end up with more trouble than the exercise was worth. Accordingly, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 43, as amended, agreed to.

Clause 44 agreed to.

Clause 45 [Duty to supply water for domestic purposes]:

Lord Hesketh moved Amendments Nos. 311 and 311A: Page 51, leave out lines 37 to 41 and insert ("supply having been cut off by reason of any person's failure to pay any charges, that the person serving the notice has paid any amount owed by him to the undertaker in respect of a supply of water to those premises or in respect of expenses incurred in cutting off any such supply;"). Page 51, line 47, after ("fittings") insert ("used or to be used in connection with the supply of water to those premises, or with the use of water").

The noble Lord said: Clause 45 defines the circumstances in which a water undertaker owes a domestic supply duty to a customer. Amendments Nos.311 and 311A are technical amendments to clarify the effects of the provisions. With the leave of the Committee I should like to move the amendments en bloc.

Clause 45, as amended, agreed to.

Clause 46 [Supply of water for non-domestic purposes]:

The Earl of Balfour moved Amendment No. 312: Page 52, line 31, after ("new") insert ("or increased").

The noble Earl said: We are now dealing with the supply of water for non-domestic purposes. I feel it is important to ensure that the interests of other people living in the surrounding area are taken into consideration under the provisions of this clause. If you double the diameter of the pipe, you will get four times the volume of water through it. That is why I feel that the wording of this subsection should read: A water undertaker shall not be required by virtue of this section to provide a new or increased supply".

It is as simple as that. I propose the addition of those words because the provision, as it stands, could be detrimental to the person's neighbours. I beg to move.

Baroness Blatch

I should like to support the amendment. I shall give three brief examples as to why I wish to do so. For example, a warehouse alongside a brewery could at present be used as garages and have very low water consumption. The brewery owners could subsequently decide to use that warehouse for bottle washing. As garages, the daily consumption of water in the warehouse could have been, say, 100 gallons per day, but, as a bottle-washing plant, the consumption of water could rise to perhaps 10,000 gallons a day.

A second example is that of a chemist's shop which has no photo-processing unit. It could decide to open such a unit and, again, there would be an increase in water consumption. The third example is this. There could be a cattle trough in a field with very low water consumption. However, the farmer could decide to develop a broiler house for intensive turkey farming and, again, there would be a vast increase in water consumption.

In all those examples if the Bill were to be enacted in its present format the water undertaker would be required to supply this increased, not new, water supply, even if giving that increased non-domestic supply would prejudice its existing obligations or require it to incur unreasonable expenditure in constructing new water works. Could not the wider proviso contained in Section 27 of the 1945 Water Act be repeated in Clause 46? The same criteria should apply to the provision of an increased supply for non-domestic purposes as apply to a new supply.

10.15 p.m.

The Earl of Arran

The purpose of my noble friend's amendment is to extend the circumstances in which a water undertaker would not be required to provide a supply of water for non-domestic purposes. Water is supplied for non-domestic purposes on terms agreed between the person requiring the supply and the undertaker or, where agreement cannot be reached, on terms determined by the director.

The clause currently sets out the case where an undertaker is not required to provide a new supply of water for non-domestic purposes. Those are where it would incur unreasonable expenditure in constructing works or otherwise put at risk its ability to meet its existing obligations to supply water for domestic or other purposes and its probable future obligations to supply water for domestic purposes.

In addition, an undertaker is not required to provide such a supply to property where the water fittings do not meet the required standard. The amendment would extend the circumstances when an undertaker is not required to provide a supply for non-domestic purposes to cover instances where a person already receiving a supply wishes to obtain an increased supply.

The amendment is unnecessary. If the undertaker is concerned that non-domestic supplies could put at risk its ability to meet its obligations, it is open to the undertaker to include in the terms of supply a limit on the amount of water that is to be provided. Indeed, that would seem to be sound management practice. In that way a request for an increased supply would require the terms of the supply to be renegotiated. That would be tantamount to a new supply.

I am grateful to my noble friend Lord Balfour for raising the point. I can assure him that the amendment he seeks is unnecessary as its purpose is already fulfilled in the clause as drafted. I therefore hope that he will agree to withdraw the amendment.

The Earl of Cranbrook

Before my noble friend considers whether to withdraw the amendment, will my noble friend the Minister say how many existing non-domestic supplies have such terms already written into them?

The Earl of Arran

I cannot answer that question at the moment. I hope that, with the leave of the Committee, my noble friend will allow me to write to him on that technical point.

The Earl of Cranbrook

It is more than a technical point. The argument put forward by my noble friend depends upon the fact that such terms would exist. I understood him to say that unless such terms exist the provisions that my noble friend Lord Balfour is trying to arrange cannot be met.

The Earl of Arran

I have already said to my noble friend that I shall write to him. In the circumstances I ask him to allow that to happen.

The Earl of Balfour

I am grateful to my noble friends who have supported the amendment. I am equally grateful to my noble friend the Minister for his reply. I am sure that we should all like carefully to read what he said. I am reasonably satisfied and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Arran moved Amendment No.312A: Page 52, line 44, after ("fittings") insert ("used or to be used in connection with the supply of water to those premises, or with the use of water").

The noble Earl said: Clause 46 defines the duty of a water undertaker to provide a supply of water for non-domestic purposes. The amendment is technical and clarifies the effect of the provisions. I beg to move.

Baroness Blatch moved Amendment No.312B: Page 52, line 47, at end insert ("or

1. (c) the supply would be a supply provided by means of a direct connection with any trunk main of the undertaker.").

The noble Baroness said: The amendment provides the third condition under which a water undertaker shall not be required to provide a new water supply to any non-domestic premises. Clause 45 contains a provision relating to the supply of water for domestic purposes. Clause 45 (5) (a) provides that nothing in that clause shall impose a duty on a water undertaker to provide a water supply for domestic purposes directly from a trunk main. In the Bill as drafted there is no provision to the effect that a water undertaker shall not be under any duty to give a supply of water for non-domestic purposes from a trunk main.

Therefore the amendment is intended to bring domestic and non-domestic provision into line. One difference between Clause 45 and Clause 46 is that the latter provides under subsections (2) and (4) that a supply for non-domestic purposes shall be in accordance with the terms and conditions agreed between the water undertaker and the person to be supplied. If the water undertaker and the person to be supplied fail to agree, then the dispute goes to the director for determination.

My noble friend the Minister may argue that the amendment is not needed as the water undertaker could make it a condition of supply that the connection should not be made to a trunk main. If the person to be supplied did not agree with the condition, the dispute could then be referred to the director.

Is it unreasonble that disgreementas to whether a supply should be given from a trunk main should be referred to the director? The undertaker itself should decide whether it is reasonable for a supply to be given from a trunk main for non-domestic purposes, in the same way as the water undertaker makes the decision whether to supply from a trunk main in respect of domestic provision. What is being asked here is that the water undertaker should not be under a duty to supply water from a trunk main. The water undertaker should be free to supply from a trunk main if it feels it is appropriate to do so. Therefore the purpose of the amendment is to amend the Bill to make it clear that a water undertaker is under no duty to supply water for non-domestic purposes directly from a trunk main. The purpose of a trunk main is to move large quantities of water from one place to another; for example, from one service reservoir to another service reservoir or from one borehole to a service reservoir.

I can illustrate the problem which would be caused to one water undertaker if the amendment were not accepted by reference to a situation in Anglian Water's region. Water circulates between three largereservoirs—Pitsford, Rutland Water and Grafham—via a trunk main network. The volume of water in these trunk mains fluctuates depending on the time of year and the availability of water. At certain times of the year the water in these trunk mains may be at a low pressure and thus incapable of giving a water supply to a non-domestic user.

Another example is that there could be a cluster of boreholes from which trunk mains run to reservoirs. The flow of water from any of these boreholes to the reservoirs may not be constant and could be taken out of action by the water undertakers. Again, these trunk mains are not suitable for supplying water for non-domestic or any other purposes.

The important point is that the water undertaker alone has detailed knowledge as to whether it is appropriate for a direct connection to be made to any of its trunk mains. It seems to be inappropriate for a person proposed to be supplied and the director to have a say in the decision as to whether it is appropriate to make a direct connection to a trunk main. In any event, it is not best practice to make direct connections to trunk mains because the flow of water in trunk mains may not be continuous and may from time to time be at a low pressure. Therefore, water undertakers should not be under a duty to supply water for any purpose from trunk mains.

If this amendment were not to be accepted, is there not a risk that disputes between water undertakers and people asking for a water supply for non-domestic purposes would be referred to the director unnecessarily under Clause 46(4)? I beg to move.

Lord Hesketh

Amendment No.312B would enable a water undertaker to refuse to provide a supply of water for non-domestic purposes where the supply would be provided by means of a direct connection with any bulk supply mains.

Clause 46 sets out the cases where an undertaker is not required to provide a supply of water for non-domestic purposes. These are where it would incur unreasonable expenditure in constructing works, or otherwise put at risk its ability to meet its existing obligations to supply water for domestic or other purposes and its probable future obligations to supply water for domestic purposes. In addition, an undertaker is not required to provide such a supply to a property where the water fittings do not meet the required standard.

These are the important considerations an undertaker needs to bear in mind in considering the provision of a non-domestic supply. The question of the source of supply is secondary. There is no overriding reason why a non-domestic supply should not be provided directly from a bulk supply main. If the water in the bulk supply main is not at the right pressure or of the right quality to meet the requirement of the non-domestic customer, or the provision of such a supply from that main would cause particular problems, it is open to the undertaker to seek to impose conditions in the terms of the supply or to suggest that the supply should be provided from other mains. If none is available, the undertaker may be able to refuse to supply under subsection (3). Any disputes over suitability of particular pipes for providing the supply are best resolved by reference to the director who can consider each case on its merits. If any particular technical questions are raised, the director may refer the matter to a suitably qualified arbitrator. Therefore, the amendment proposed is, we believe, not necessary. I hope that my noble friend Lady Blatch will not pursue it.

The Earl of Cranbrook

Before my noble friend makes that decision, I wish to ask the Minister a question. I believe there has been a misunderstanding between the terms "trunk main" as used by the noble Baroness, and the term "bulk supply mains", which I believe was the phrase used by my noble friend.

A "trunk main", which the noble Baroness referred to, is used not only for transporting water under pressure; it also serves as a connection between major supplies. The water in it is not permanently under a predictable pressure; the pressure fluctuates., That makes it highly unsuitable to be drawn upon for immediate supplies. I suspect that this matter needs to be taken away to be looked at because I think there is a misunderstanding between the Front Bench and the mover of the amendment.

Lord Hesketh

I am not entirely sure that that is correct. There may be a misunderstanding, but I do not think that the principle changes.

Baroness Blatch

Before my noble friend the Minister gives some thought to this amendment between now and the next stage of the Bill, I think my noble friend Lord Cranbrook has reinforced the point that there is a misunderstanding about the two types of mains. I do not intend to press this amendment tonight, but I am concerned that by not accepting this amendment we are allowing unnecessary and cumbersome references to the director which could be avoided by not placing a duty on the water undertakers. I ask my noble friend the Minister just once more whether he will give some thought to this amendment before the next stage.

Lord Hesketh

I can go no further than to say that I shall read carefully what my noble friend Lady Blatch has said.

Baroness Blatch

I am grateful for that reply from my noble friend. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos.313 to 317 had been withdrawn from the Marshalled List.]

Clause 46, as amended, agreed to.

Clause 47 [Duty to provide a supply of water etc. for firefighting]:

Lord McIntosh of Haringey moved Amendment No.317A: Page 54, line 20, after ("order") insert ("to a standard and in a manner to be approved by the fire authority").

The noble Lord said: In moving Amendment No. 317A I wish to speak also to Amendment No.317B. Clause 47 deals with the duty to provide a supply of water for fire-fighting. It will come as no surprise to the Committee to learn that the Association of Chief Fire Officers and the fire authorities themselves have expressed some concern at some aspects of the Bill. They are not concerned with the basic provision which is that water required for fighting fires shall be provided free of charge. I believe that is accepted as being a reasonable and proper provision. However, those bodies are concerned at some of the secondary provisions, if I may refer to them in that way.

Amendment No.317A concerns Clause 47(4). That subsection refers to the duty of water undertakers to keep fire hydrants fixed to the water mains or other pipes in good working order and to replace them when necessary. The present position does not sound very satisfactory to me. I am told that water authorities tend, when something goes wrong with a fire hydrant, to replace the whole thing rather than to replace the part which is affected. Those of us who have had dealings with motor garages are familiar with that tendency. It is utterly deplorable and shows a lack of British craftsmanship and all of that, and costs us a great deal more money, but we can see that garages sometimes follow that tendency.

However, we are now talking about private water undertakers and public fire authorities. The amendment seeks to provide that instead of an undertaking having the ability to replace hydrants when it feels like it, or when something is wrong—I should have stressed at the beginning that this is done at the expense of the fire authority, and not at the expense of the water undertaking—the fire authority whose money is being spent should have the right to specify that the repair is carried out to a standard and manner approved by the fire authority. In other words, it should be repaired and not replaced.

That seems to us to be a proper amendment, designed to conserve the money of public fire authorities. Since the fire authorities will pay, it will not cost the water undertakings any more and should not cause any difficulty to them. I hope that the Government will feel that this concession to the fire authorities will not cost anything, either in terms of the purpose of the Bill or the ability of the water undertakers to fulfil their primary objective, which is to satisfy their shareholders' demand for profit.

Amendment No.317B amends subsection (6) of Clause 47 and refers to the case in which fire hydrants are required for fire-fighting purposes other than on a trunkmain. The most common example is a new housing or commercial development. In such a case the law at present requires that the fire authority should provide fire hydrants for emergency purposes at the expense of the fire authority rather than at the expense of the developer.

I am told that this is an anomaly which goes back to an Act of1945, Schedule 3, Part VIII, paragraph 32 of which deals with the provision of fire hydrants. What Parliament was doing in 1945 passing fire Acts I cannot imagine. I should have thought that it had better things to do fighting and winning a war and dealing with the aftermath of that war. I suppose that large-scale fires were of more recent memory than perhaps they are now.

The result is that although private developers in, say, a new housing development, have to pay the cost of all other services, including electricity and gas services, to the properties on the development, for some anomalous reason the fire authority has to pay the cost of the fire hydrants. The amendment would provide that the person requisitioning it—namely the developer or the undertaker (if the undertaker is responsible for the development)—should pay the cost of providing the emergency fire hydrant. That would rectify an error in legislation which goes back more than 40 years. I hope that it will meet with the approval of the Committee. I beg to move.

10.30 p.m.

The Earl of Balfour

Before my noble friend replies to the amendment, I should like to say that I believe there is a need within this legislation for a requirement at least for consultation between the chief fire officer of the area concerned and the water undertaker of the area concerned, for example, fittings, connections, and valves change over a period of time. They are both responsible people, but it would do no harm if the need for consultation were written into the legislation so that they meet and nobody bulldozes somebody else. I am grateful that the amendment has been brought to our attention.

Lord Hesketh

Clause 47 sets out a water undertaker's obligations with regard to water for fire-fighting. An undertaker is required to allow water to be taken for extinguishing fires from any of its pipes to which a fire hydrant is fixed. An undertaker is required to fix fire hydrants on its pipes at places most convenient for firefighting at the request of the fire authority, to maintain the hydrants in good working order and to supply the fire authority with all such keys as it may require.

The effect of Amendment No.317A would be to require a water undertaker to maintain every fire hydrant fixed to its mains to a standard and in a manner to be approved by the fire authority. The Bill currently re-enacts provisions in the Water Act 1945, requiring a water undertaker to keep the fire hydrants in good working order and to replace them when necessary. The obligation is enforceable by the Secretary of State under Clause 20 and additionally breaches of the duty are subject to a criminal sanction.

I am grateful to the noble Lord for raising this issue, and I appreciate, and share, his concern with the essential public safety aspects involved here. I wonder, however, whether the amendment is entirely necessary. The obligation to keep fire hydrants in good working order implies they must be acceptable to the fire authorities, as the noble Lord, Lord McIntosh of Haringey, and my noble friend Lord Balfour pointed out. After all, it will be the fire brigades that ultimately will test that the hydrants operate satisfactorily. Fire hydrants are now designed to a formal British Standard specification—BS750—which I understand is adopted by all water authorities and acceptable to the fire authorities. Moreover, there are provisions in the Fire Services Act 1947 enabling my right honourable friend the Home Secretary, who is responsible for firefighting matters, to make regulations—after consulting the fire authorities—providing for uniformity in fire hydrants provided by the water authorities.

We believe that it has never been necessary to make such regulations and we are not aware of any significant problems being experienced by the fire authorities in relation to the maintenance of fire hydrants by the water authorities. I am not persuaded that there is a need for this amendment. However, if the noble Lord has evidence to the contrary, I shall of course be happy to take up this matter with the Home Office.

I should now like to turn to Amendment No. 317B. The Bill provides for the expenses incurred in providing water for extinguishing fires to be met by the undertaker by virtue of Clause 79. The costs of fixing and maintaining the hydrants and supplying keys fall to the fire authorities to bear, except in the case of fire hydrants which can be provided at the request of owners or occupiers of factories or places of business who then pay maintenance costs.

The effect of Amendment No.317B would be to completely change the basis for the allocation of costs between an undertaker and the fire authority. The maintenance and the other associated costs of all new hydrants would fall to be met by a water undertaker's customers or by requisitioners rather than centrally through the block grant system under which the fire authorities operate.

We believe that such a change to a well established system is not justified. The costs incurred by a water undertaker are directly related to the fire authorities' functions and incurred solely at the instigation of those authorities. These are not charges that we believe it is appropriate to recover from water undertakers' customers or from owners and occupiers of premises who may have a requisition to a water main on which the fire authority has chosen to have a fire hydrant located. A fire hydrant serves a public purpose and not one limited to the needs of a particular water undertaker's customers or the requisitioner. Firefighting is a public service which it is right should be supported centrally from public funds, not least in accountability terms. We believe that it is clearly better for fire authorities to continue to be responsible for the costs incurred at their request.

For those reasons that I have outlined, we believe that the amendments are not necessary. I therefore ask the noble Lord, Lord McIntosh of Haringey, whether he will consider withdrawing them.

Lord McIntosh of Haringey

There are two separate issues here. The first is the question of the payment for keeping the fire hydrants in good working order and replacing them when necessary, and the second is the question of development. The first is perhaps the simplest one with which I can deal more quickly.

I am advised by the Association of County Councils that there has been a growing tendency on the part of water authorities which undertake minor repairs to replace a hydrant completely and charge authorities accordingly, rather than undertake the minor work involved. I am grateful for the indication from the Minister that he would listen to any evidence that is brought forward before the next stage to see whether there is any abuse of that kind. I believe that he will agree that it would be an abuse if that happened when, after all, the fire authority pays for the repair.

I shall ensure that the Association of County Councils writes to the Minister in good time before the next stage and that any evidence that it may have is put before him. I hope that the result will be that he will feel able to agree to this or a similar amendment at a later stage.

The issue on Amendment No. 317B is more complicated because I do not think that the Minister has adequately addressed the concerns that we have about this matter. As between water authorities and fire authorities, it is perhaps a matter which could be thought of as not particularly important between two public authorities. However, in natural justice it seems that those who are making money out of new developments, whether they are residential or non-residential developments, should pay for all the costs of providing the services, which include not only the electricity and gas which they are providing anyway but also the cost of emergency services, such as the fire hydrants and the mains to the fire hydrants which are necessary.

Otherwise it simply becomes the case that the ratepayers who support the fire authority, or as it will be from 1990 the community charge payers who support the fire authority, will be paying for this commercial development and contributing to the profits of those developers. Those are the people who would be requisitioning the main and requisitioning the hydrants. That does not seem to be a very satisfactory state of affairs, even as between two public authorities.

But of course the position after privatisation will be that much different because we shall be talking about a conflict of interest as between a public authority, the fire authority, financed by the community charge payers, and a private body, the water undertakers, or the customers of the water undertakers. I very much regret that the Minister in his reply should have felt it possible to neglect an opportunity to correct an anomaly which has existed for a very long time and not been important but which, without this amendment, would continue to exist and would be important.

I wonder whether, before I finally make up my mind, there is any further indication that he can give which would help me? No, it does not seem so. Therefore, with regret but with slightly less regret in respect of Amendment No.317A, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No.317B not moved.]

Clause 47 agreed to.

Clause 48 [Duty to supply water for other public purposes]:

[Amendment No.318 had been withdrawn from the Marshalled List.]

Clause 48 agreed to.

The Earl of Arran

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

House adjourned at sixteen minutes before eleven o'clock.