§
(" . After subsection (5) of section 150 of the Water Industry Act 1991 (charging for services provided with the help of an undertaker), there is inserted—
(6) An order under this section may—
§ The noble Lord said: My Lords, in this amendment we return to a subject which has been touched on earlier in our discussions on other amendments. It relates to the right to know exactly what one is being charged and why. It has particular reference to groups of people who have water resold to them. We had very interesting and lively discussion on this matter on the last occasion. I believe I described it as the most forceful probe imaginable made by the noble Lord, Lord Graham of Edmonton.
§ The argument is that people should know what they are being charged for the resale of water. That means that they should be given information. Opportunities are occurring for landlords: in particular, owners of 1396 temporary housing sites and mobile home sites are effectively ripping off people by overcharging them for water. The sums involved may not be very large, but one is being overcharged for a public amenity.
§ This Bill suggests that no longer will someone be denied basic water or at least enough of it to live in a civilised manner. A secondary individual—a person between the supplier and the user of the water—will be allowed to extract extra money by the simple process of not having to tell a person what they are being charged so that that person cannot take action.
§ This amendment would solve that problem. But we are at Report stage and it would be invidious to suggest that we have not had discussions already on this matter. Indeed, I have a copy of the letter which the noble Baroness, Lady Farrington, sent to the noble Lord, Lord Graham, saying that the Government were prepared to take action under regulations that a cap would be placed on what could be charged down to the normal household rate for the area.
§ That probably comes close to answering paragraph (b) of my amendment, but it does not refer to (a). Even in the spirit of moving forward, it does not answer the point of principle behind this amendment. It is a practical and possibly a short-term answer. The letter does not answer the whole of the question for the long term.
§ When replying, if the Minister can give me an answer which tells me when we can have the rest of the answer and find out what is going to be done long-term to deal with the problem, I would feel much happier. If it is not for this legislation, when will it occur? I beg to move.
§ Baroness Farrington of RibbletonMy Lords, Amendment No. 12 proposes an addition to the powers of the Director General of Water Services when making a water resale order. The amendment would allow the order to force the disclosure of information by the person reselling water to the purchaser. This is a subject slightly outside the scope of the Government's water charging review and the other measures in this Bill, in which we have concentrated on the charges paid to water undertakers.
The use of the powers in Section 150 is so far untried. The director has recently proposed to make an order to limit resale prices and this has been widely welcomed. I welcome this proposal too. But, as I explained at Committee, we do believe that it is premature to propose an extension of powers to make an order before the existing power has been used even once. The Government would prefer first of all to consider how the order works within the present available powers. These already enable the director to limit water resale prices to the fair recovery of the sums paid by the reseller to the water undertaker. Once the order was in operation, if we were confronted with evidence that it was not entirely effective, then we would consider legislation or some other measure. But I would prefer not to accept an 1397 amendment that assumes that the presently proposed order will not be effective in forcing water resellers to charge only reasonable prices.
The proposals for an order do move some of the way to meeting the concerns which have been expressed. For example, in Ofwat's consultation paper on water resale, it suggested that,
To provide a basic, transparent test which will address particularly high charges, it is proposed that annual charges for unmeasured resale purchasers should not exceed the average unmeasured household water and sewerage bill for the relevant supplier unless the landlord provides evidence that application of the principles below warrants a higher charge".This would provide a safety net of a simple price limit based on readily available information and would shift the onus of producing information to justify high charges to the reseller. If a purchaser feels that he is being overcharged but cannot obtain information from the reseller about the basis of the charge, it would be up to the reseller to demonstrate why a higher charge than the safety net charge should be paid.During debate in Committee, the noble Lord, Lord Addington, asked how the Government would obtain information on whether the proposed resale order proves effective or whether some strengthening of the director's powers might be needed. The proposed order will strengthen Ofwat's role in policing arrangements for water resale. I hope that this will raise awareness of water resale issues among those affected and raise the profile of Ofwat's role in this area. This should ensure that information is collected more systematically and problems identified more thoroughly.
I hope that the noble Lord, Lord Addington, will recognise that positive steps are being taken to assist those obtaining water services via resale arrangements, and that we shall continue to consider this subject in co-operation with Ofwat and through other bodies. On top of the fact that action is already being taken to improve the position of those subject to water resale and to provide greater fairness, it is also the case that this amendment is defective in that it relates only to water and not to sewerage services, which for many customers make up the greater proportion of the bill.
I can assure the noble Lord, Lord Addington, that this issue will be kept under close review. We will act immediately should there be evidence that such action is necessary. In the light of that reassurance, I hope the noble Lord will feel able to withdraw his amendment.
§ Lord AddingtonMy Lords, at Report stage that is about as much of an answer as one can expect. When the Government say that they are looking at the situation and will act if necessary, we know that we are starting a process which can take a considerable amount of time. But on the principle that the first step in any journey is always the most difficult, we have started well. On those grounds I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
1398§ Clause 10 [Extension of power to carry my works in connection with metering]:
§ Baroness Miller of Hendon moved Amendment No. 13:
§
Page 7, line 28, at end insert—
("( ) After subsection (9) there is inserted—
(10) In this section, references to "premises", "building.' or "house" shall he taken as also being references to—
§ The noble Baroness said: My Lords, in moving Amendment No. 13, I shall speak also to Amendments Nos. 15 and 16. All three amendments revolve around the same point, which has not been clarified in the Bill, even though it is essential that it should be.
§ The amendments relate to mixed premises; that is, premises which are used both for commercial purposes and as a residence. At Committee stage I gave as a possible example public houses where the manager lived in; the common situation of a shop or restaurant with a flat above; even possibly the caretaker's flat in commercial premises.
§ Amendment No. 13 to Clause 10 has the effect of ensuring that a metered supply can be installed in the business premises even if the residential part is not metered. It also means that once the business premises are separately metered, the residential part of the premises are protected from disconnection. That protection is something that I would riot have thought the Government would want obstructed in any way or for any reason. It will ensure that if for some reason the supply of water to the commercial premises has to be disconnected, the residential premises could not be used as a shield protecting the defaulting business premises from disconnection.
§ Amendments Nos. 15 and 16 deal with different aspects of the same situation where mixed-use premises are involved. Amendment No. 15 ensures that where there are mixed premises, the supply company can insist on separate supply pipes to the commercial and the residential parts of the building. Amendment No. 16 follows from that and reinforces what I said about Amendment No. 13 to Clause 10. It makes it clear that the ban on disconnections of residential premises, which we all support, does not extend to mixed-use premises where the water supply is used by the business; for example, a public house where the water supply is almost totally used by the business. But, on the contrary, where premises are treated as one unit—a shop with a flat over it—then the flat itself cannot be cut off when the shop uses no water at all.
§
In responding to the amendments at Committee stage, the noble Baroness, Lady Farrington of Ribbleton, argued against extending the powers of the water companies to enter peoples' houses in order to separate supply pipes. The noble Baroness also suggested that suppliers might even charge the householder for doing
1399
so. That latter is something that can be covered by the intended regulations. Lastly, she said that the work might be something,
that the customer neither wants, nor needs doing".—[Official Report, 22/5/99: col. 1283.]
§ These amendments aim to strengthen the rights of the householder and to protect him against getting mixed up in the financial problems of the business. True, they also strengthen the hand of the water supply company by removing an obstruction to its ability to recover their debts. We have the Late Payment of Commercial Debts (Interest) Act, so I am sure that the Government agree with this.
§ The noble Lord, Lord Whitty, was concerned that the water company should not be put to expense by people switching backwards and forwards between being metered and not being metered, as I reminded your Lordships when we discussed the amendments to Clause 6. Surely then the Government should be no less concerned that they should not be inhibited from recovering their debts by the presence of residential premises. The gas suppliers, the electricity suppliers and the telephone companies have no problem in distinguishing between the commercial and residential occupiers of the same building and in supplying them separately. The water companies feel that they too would have no difficulty in dealing with both parts of the same building separately if they were given the appropriate powers to do so by this Bill.
§ The noble Baroness, at the conclusion of the debate, very kindly offered to consider the matter further if I wrote to her. As I have already mentioned, I did; and the noble Lord, Lord Whitty, also sent me a detailed reply, for which I have already thanked him and for which I thank him again now. He made two main points. He said in effect that the problem dealt with by Amendment No. 13 will be covered by the regulations to be published in due course. I just feel that, this matter having been raised twice before today, it should have been possible to include the requisite clause as part of the primary legislation, because it is such a matter of concern to the water companies and it is something that the Government themselves say they recognise as a problem.
§ Turning to Amendments Nos. 15 and 16, connected to Amendment No. 13, there is a reason why a clear and express definition of what constitutes a dwellinghouse is vital. The reason is that, when a private dwellinghouse forms part of a mixed use property, it must be possible clearly to differentiate between the parts that are used exclusively as a dwellinghouse and the parts that are used for other purposes. Furthermore, the reason why the water companies, who have briefed me on this point, are concerned to see the definition inserted as I have proposed, into Section 219(1) of the Water Industry Act 1991, is that, in addition to the point about disconnections, (a) will also apply to Section 162 of that Act, which relates to metering, and (b) will apply to Section 64, which relates to service pipes.
§ Although it is felt, with the greatest of respect, that the noble Lord's criticism of the form and effect of the amendment as previously proposed are not entirely 1400 justified, I have modified the amendment slightly so it now appears in its present form. I hope this makes it more acceptable.
§ The amendments simply make it clear that, when premises are occupied for mixed purposes, those parts can be separately charged for the water that they consume. The water companies do not believe that this objective can be achieved without an exact qualification of the Water Industry Act 1991, which is why this amendment puts the matter beyond doubt. I am sorry to engage in such technicalities at such a late stage of the Bill, but the point has been before the Minister right from the outset. Doubtless his officials and advisers are clearer about the issues than I was on the day that this Bill landed on my cluttered desk. I repeat that all I am asking for is that the Minister should put on the face of the Bill the clarification that is needed. I beg to move.
§ 9.15 p.m.
§ Lord WhittyMy Lords, as the noble Baroness said, we discussed similar amendments at the Committee stage. Although slight changes have since been made, I regret that I cannot regard these amendments as necessary, and in some respects they are actually undesirable. For example, the effect of Amendment No. 16 would be to disqualify from protection any dwelling in which business activity was carried out, regardless of what sort, or how much. In practice that would disqualify, or could be said to disqualify, many homes from protection: for instance, if you take work home or if you operate from your home any degree of business activity, it would mean that all of it would then have to be counted as a business premise.
There has been widespread support across the community for protection against disconnection and we would not want to have a loophole whereby a minor amount of private business activity in a home would remove the protection against disconnection.
Amendments Nos. 13 and 15 would extend the power the water companies already have to carry out work on customers' supply pipes. It is still not entirely clear to me that the amendments would actually add more than a very little in practice. At the moment, companies do have the power to separate supply lines where they have given notice that they intend to install a meter in the relevant properties. In Clause 10 of the Bill we are extending those powers to enable companies to carry out the necessary work in order to fit a meter.
Clause 7 of the Bill constrains the water companies' ability to impose charging on household customers. Under the proposed Section 144B of the Water Industry Act 1991, water companies will be able to meter properties where conditions are met. We have indicated that we are permitting companies to impose charges where customers are using water for commercial purposes or, as I said earlier, for such devices as garden sprinklers, swimming pools and so forth. We therefore expect that this provision will enable water companies to install meters where water, as such, is used in connection with a business, without the need for such a complex amendment as Amendment No. 13.
1401 If Amendments Nos. 13 and 16 are not accepted—and I would urge the House not to accept them—Amendment No. 15, as it stands, would serve no useful purpose and we would not support such an amendment, for the reasons that my noble friend spelt out at an earlier stage. It would allow water companies to go into anyone's home whether or not a meter had been requested, and to carry out work to separate supply pipes. Under the amendment, companies could even charge the householder for the work involved in this, although the only purpose would be to make it easier for the water companies to disconnect the supply at a later date.
I do not believe that such a degree of intrusion is desirable or that it is the probable objective that the noble Baroness has in mind, but that would be the effect of the amendment. I cannot really accept that it is right to allow companies freedom to impose on their customers in this way and then to charge them for doing so. Similarly, I do not accept that companies need the powers proposed in the amendments for any effective carrying on of their business.
I must state, once again, that one of the principles of this Bill is to provide a protection against disconnection. There are limited exceptions, but this would not only greatly widen the number of exceptions; it would also give powers of intrusion to water companies going well beyond what the companies themselves would, if they thought about it, really want. In the circumstances, I hope that the noble Baroness will not press her amendments.
§ Baroness Miller of HendonMy Lords, I thank the Minister for his remarks. I have to say that the water companies themselves asked me to table these amendments. Although the Minister said that he feels sure that if the water companies thought about it they would not think it such a good idea, I believe that they have thought about it time and again. They are very much concerned about the position, for example, of public houses, as I mentioned. However, I note what the Minister said. I thank him for his comments and beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 14 to 16 not moved.]