HL Deb 24 June 1999 vol 602 cc1067-75

3.33 p.m.

Lord Carter

My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Water Industry Bill, have consented to place their prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Read a third time.

Clause 6 [Right of consumer to elect for charging by reference to volume]:

Baroness Miller of Hendon moved Amendment No. 1:

Page 5, line 12, at end insert— ("(7A) In any case where—

  1. (a) the premises had been let for residential purposes for a term of six months or more but not for a term exceeding 5 years, whether commencing before or after the commencement of this Act,
  2. (b) the lessee for the time being had given a measured charges notice to the undertaker without the express written consent of the lessor for the time being,
  3. (c) the premises have reverted to the original lessor, whether on the expiry of the term, or upon forfeiture or abandonment or disclaimer or surrender of the lease or by any other means, and
  4. (d) the lessor to whom the premises have reverted intends to occupy them as his principal place of residence,

the consumer, (here meaning the lessor for the time being) may within 12 months of the premises reverting to him give a notice to the water undertaker revoking the measured charges notice.")

The noble Baroness said: My Lords, in moving this amendment I should like to speak also to Amendment No. 2. This is the substantive amendment, and Amendment No. 2 is merely the paving amendment.

I have mentioned the problem that these amendments seek to resolve many times in this House during the course of our debates on the Bill. I mentioned it first at Second Reading, again in Committee, and again on Report. I want to emphasise yet again that the amendments have nothing to do with water or water meters. They are concerned with landlords and tenants, and the right of landlords not to have their property changed by a tenant after the lease has expired.

Clause 6 provides that the customer has a right to elect to have a metered supply of water. Subsection (5) provides that he can change his mind within 12 months and revert to the previous method of payment. Under Clause 11, a landlord may not prohibit his tenant from exercising the option of a meter. If the tenant stays longer than a year, the landlord is committed forever. That cannot be right.

As well as having referred to the problem on numerous occasions in this House, I wrote to the Minister. He kindly answered in full detail, but did not address any of the points to my satisfaction. However, the Minister was extraordinarily courteous in allowing me to have a meeting with him yesterday which took up a great deal of his time. Considering that he and the noble Baroness, Lady Farrington of Ribbleton, had a long day before them on the Greater London Authority Bill, I should not like them to think that I was anything less than extremely grateful for that.

As a result of that meeting, I have made enormous concessions regarding my original points. I do not want to go through all those points again. The amendment that is before the House makes the matter clear. The period has now been reduced to five years. Originally I referred to "a short tenancy"—I understand that 21 years is considered a short tenancy in normal landlord and tenant proceedings. Now the reference is to "5 years".

I have also reduced the provision as follows. If a landlord grants a lease and the tenant, without the landlord's consent—as he is perfectly entitled to do—opts for a meter, the position would be amended. Within that period the landlord may return and want the premises for himself. If the premises have reverted to the original lessor and the lessor intends to occupy the premises as his principle place of residence—not to let them to anyone else—the present position seems incredible. Someone can have a tenancy, live in someone's property for up to a year, opt for a water meter and, after the year, decide to ask the water company to change that method of payment. Given that a tenant can do that, it seems extraordinary that the landlord of the property for which the method of payment was changed without his permission cannot revert to the former method of payment in the limited—I emphasise "limited"—conditions that this amendment suggests.

Perhaps I may repeat an example that I gave previously. Let us suppose that a landlord who has two young children works for a company and is suddenly posted to Saudi Arabia. His water charges are dealt with by means of the old rateable value. He lets his apartment to a tenant who has no children and decides that it would be cheaper to opt for a meter. The meter is installed, and the tenant leaves after a year. The landlord returns, wants to move back into his own home and finds that, no matter what, he cannot change the new position. The tenant himself, after the year, could, but the landlord, the owner of the property, cannot.

In no other way can a landlord lose his rights beyond the length of the lease as a result of his tenant changing the position.

Whether it be a right of way or other improvements that the tenant wishes to put in, he cannot alter the property in that way.

I believe it is a matter of natural justice. I have said that before and I say it again. I do not wish to take up too much of your Lordships' time. I think I have argued it well—I say that with the greatest modesty. I could read to your Lordships what I said at Second Reading and go through again my logical arguments at the Committee and Report stages. But the point I emphasise again is that this is not a matter of the water, the water meter and so on. It is the basic right of whether a tenant can alter the property in the end against the interests of the landlord when the landlord did not give permission. I beg to move.

Baroness Hamwee

My Lords, I congratulate the noble Baroness on her steadfastness in pursuing the point at every stage of the Bill. I said at the last stage that she had a point. Since then I have received copies of the correspondence from the Minister for which I am grateful. I regret that, while acknowledging that the noble Baroness has reined back her ambitions on the clause, I understand rather better than I did when listening to the debate why the Government are concerned about the amendment. The Minister will explain it himself.

During the course of the Bill I have had to accept the Government's position on switching between the two types of charging for water. We have had discussions about the position on switching or otherwise between measured and unmeasured charges when a property changes hands. I do not believe that the situation is substantially different.

I will not detain the House, but I understand the arguments that have been made throughout the Bill, some by myself, about the need for stability within the industry for the long-term protection of consumers generally. I look forward to hearing the Minister, but it is only fair to warn the noble Baroness that I am rather inclined to understand the Government's arguments through the correspondence. I congratulate the noble Baroness on her tenacity. She will go down as a hero, if she goes down.

Lord Elton

My Lords, before the noble Baroness sits down, will she share with us anything in the correspondence that effected the change in her mind, or will she rely on the Minister to reveal it and thus save time?

Baroness Hamwee

My Lords, I have checked with the Minister that the points made in the letter will be part of his reply.

Lord Elliott of Morpeth

My Lords, perhaps I may intervene as a past chairman of a water company. I am extremely interested in Clause 6 in that it addresses the difficult relationship between landlord and tenant. I wholly agree with my noble friend and with the amendment she put forward today. I believe it will strengthen Clause 6 and the whole Bill if it is accepted.

3.45 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)

My Lords, I join in the recognition that the noble Baroness has pursued her case effectively throughout the Bill and has stuck to her guns. I should also record my appreciation of our meeting because it was not only my noble friend and myself who had the GLA Bill following our meeting yesterday. I appreciated the way in which we discussed this matter and corresponded on it. As the noble Baroness, Lady Hamwee, said, the noble Baroness, Lady Miller, has taken on board some of my objections to her previous clause at the earlier stage by restricting the scope of the amendment before us. Nevertheless, the clause as it stands cuts across the central principles of the Bill and I shall take a little of your Lordships' time to explain what I mean by that.

The Bill is about consumers; it gives rights to all consumers. It also attempts to treat all consumers in the same way. That means that landlords who are consumers who pay the bill will gain substantially from the Bill. It also means that compared with the current situation, no landlord will lose rights. Those are the principles. There are also some practical and technical matters which the House should know about before considering pursuing the amendment.

The principle underlying the Bill is to increase the choice for all consumers. By "consumers" we mean the normal meaning of the word and the legal meaning in water legislation. It is the person who pays the bill, irrespective of tenure and irrespective of the way in which they are charged for their water. All have an equal choice on the form of charging in the initial stages and all have an equal right of reversion for 12 months after having had a meter installed, if that is their choice.

The noble Baroness argued that the Bill would give tenants the ability to grant property rights extending beyond the terms of their lease. That is not the case. The Bill does not take away any rights that landlords currently enjoy in relation to water charging. Under current legislation, landlords do not have any right to choose the basis on which they are charged for their water. The present situation is that if a water company wished to impose a meter on a property the landlord, whether or not returning to occupy the property and whether or not covered by the amendment, would have no right to prevent this, regardless of his own wishes, actions or specific provisions he may have made in the lease with his or her tenants.

The arrangements currently in that sense, therefore, already override the landlord-tenant leasing arrangement. All we are doing is to transfer that right from the water company to the consumer, the person who pays the bill. The Bill, therefore, does not in any sense reduce landlords' rights over their property.

We are not dealing with property rights. Rights to determine the basis of water charging are being taken away from the water company, not the landlord. In some cases, the consumer who will benefit will be the landlord; in other cases it will be the tenants. Those who are consumers and pay the bill gain substantial rights over the current situation.

What is more, the noble Baroness's amendments undermine the important principle that increased choice should apply equally to all consumers. Landlords who fulfil the criterion in her amendment—which I agree is a relatively narrow one—would have full reversion rights not once but for five years as compared with every other form of tenure which is only 12 months. They would have the rights not just once but theoretically at least after each tenant who opts to pay on a measured basis. Those premises and the occupants would thus be in an entirely different and privileged position in relation to all other consumers—tenants, owner-occupiers, other landlords or new landlords or new tenants of the same premises. There would even be differential treatment between different kinds of property and different kinds of landlords since those rights could not apply to public sector landlords or social rented housing or housing which was rented out by property companies. There the landlord could not occupy the property as his principal place of residence.

I accept that the noble Baroness's amendments are more specifically targeted than those we debated at earlier stages of the Bill. There are therefore a significantly smaller number of cases which might be caught by her amendments. Nevertheless, that narrowing raises a number of technical and practical issues which noble Lords should bear in mind when considering the amendment.

First, the amendment introduces a real prospect of indefinite switching between measured and unmeasured charges for a significant number of customers. If that were pursued, it would undermine the stability of the water company's charging regime and those charges would have to be passed on to other customers.

Secondly, to trigger reversion to an unmeasured charge the landlord would need only to state his intent to re-occupy the property as a principal place of residence. How would a water company go about proving that that was the case? It would also need to be clear to the water company that the landlord had evidently and provably not agreed to the installation of the meter in the first place.

In addition to these concerns about how the clause would be interpreted, there are a number of technical defects in the amendment in a legalistic sense. These amendments could not be accepted in their current form, even if we put aside our considerable policy concerns. For example, Amendment No. 1 does not define "lessor". It would appear to grant rights of reversion not just to the direct landlord but to any tenant who sublet a property. Perhaps more importantly, the amendments would significantly change the meaning of "consumer". The word "consumer" has been well established in water legislation at least since the Water Act 1989. They would also change the general proposition that rights and duties attach to the person who pays the bill.

Of course, landlords who are concerned about the possibility of this effect have a relatively easy answer. If this is their main concern they can decide themselves to become consumers before they let out a short lease. If the issue of water metering is of sufficient importance to the landlord, all he needs to do is to take on responsibility for paying the bill and, presumably, therefore to include a sum to cover the water charge in the tenant's rent. In those circumstances, no rights accrue to the tenant unless he is the consumer. Landlords are already aware of this. I have had drawn to my attention a copy of a newsletter from the Small Landlords Association which draws attention to this option.

The noble Baroness has argued that this is not a sufficient answer to her point of principle, but I believe that there is a bigger point of principle here. We are concerned about consumer protection, equality of access to choice and equality of treatment for consumers across all housing tenures. Having said all that, the fear of the noble Baroness that we are taking rights away from landlords does not stand up. At the moment, the tenant-landlord arrangement can be overridden by the water company. All we are doing is transferring that to the consumer. Therefore, the position of the landlord does not materially change.

We believe that the policy package that we are implementing through this Bill introduces a major element of increased choice. It may not be as great a choice as the noble Baroness, Lady Hamwee, wants, but it is nevertheless very significant and one that is given equally to all consumers as that word is normally understood. It neither favours nor disadvantages groups of consumers relative to each other. The amendment tabled by the noble Baroness would undermine those important principles and also introduce a new level of complexity which in practice would be extremely difficult to enforce.

By this Bill we have no intention of making life more difficult for landlords. A very large swathe of landlords will benefit considerably from the additional rights and choices that we give them. But I do not believe that the elaborate provisions in this amendment, even given the relatively small number of people to whom it might in practice apply as compared with amendments moved at an earlier stage, justify altering the central principles of this Bill: choice, equality and equal treatment between all forms of tenure. I urge the House to reject this amendment if the noble Baroness is not at this stage convinced of my arguments.

Baroness Miller of Hendon

My Lords, I am extremely disappointed, although grateful to the noble Lord for the lengthy and detailed answer that he has courteously provided. I am also very disappointed that the noble Baroness, Lady Hamwee, does not feel able to support this very limited amendment which is much narrower than the one she believed had some merit. I note that she was convinced by the letter sent to her by the Minister. It is a pity that I did not have the opportunity to speak to her before we came into the Chamber so that I could point out what I consider to be the defects in the answer provided by the Minister.

The Minister made two points that I should like to deal with. First, he said that the water company could in any event impose a water meter on a landlord so that it would not make any difference. That is true. However, equally he can impose it on a tenant who cannot change it back. Whether or not it is imposed, we are talking about an altogether different idea. I am referring to a case in which a tenant under a tenancy decides to put in a water meter, and that is nothing to do with the landlord. After a year the tenant may decide to take it out because it does not suit him, but if the landlord comes back after a year he cannot do so. I regard that as a most unfortunate matter.

The second point relates to a matter referred to by the Minister in reply and on the previous occasion. The landlord can save himself by deciding to pay the water charges, and therefore he is the consumer, not the tenant, and can do as he wishes. I believe that to be a flaw in the Bill, and it is not appropriate for such matters to be dealt with by telling the landlord that he can get round it by paying the charges himself.

I am disappointed. Following the lengthy meeting yesterday, at which we took on board all of the points then made, I hoped that the Minister would find it possible to accept this amendment. If he does not, I conclude that there was no intention of accepting anything. I and the noble Baroness on the neighbouring Benches have raised several matters, but nothing has been accepted. That is a great pity. I believe that this amendment would strengthen the Bill.

Frankly, I did not realise, perhaps until an hour and a half ago, that this matter would be resisted. I thought that it would please the Minister. We have always tried to improve matters. I wish to test the opinion of the House.

3.57 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 90; Not-Contents, 116.

Division No. 1
Ailsa, M. Elton, L.
Alexander of Tunis, E. Foley, L.
Annaly, L. Freeman, L.
Astor of Hever, L. Gainford, L.
Attlee, E. Glentoran, L.
Berners, B. Halsbury, E.
Biffen, L. Hamilton of Dalzell, L.
Blaker, L. Hanningfield, L.
Blyth, L. Harding of Petherton, L.
Bowness, L. Hemphill, L.
Brougham and Vaux, L. Henley, L. [Teller.]
Burnham, L. [Teller.] Higgins, L.
Buscombe, B. Hogg, B.
Butterworth, L. HolmPatrick, L.
Caithness, E. Hooper, B.
Campbell of Croy, L. Iveagh, E.
Carnock, L. Jenkin of Roding, L.
Chadlington, L. Knollys, V.
Clark of Kempston, L. Liverpool, E.
Cochrane of Cults, L. Long, V.
Crathorne, L. Lucas of Chilworth, L.
Crickhowell, L. Luke, L.
Cuckney, L. McColl of Dulwich, L.
Davidson, V. McConnell, L.
Dixon-Smith, L. Mackay of Ardbrecknish, L
Dundee, E. Marlesford, L.
Elliott of Morpeth, L. Merrivale, L.
Mersey, V. Renton, L.
Miller of Hendon, B. Renwick, L.
Milverton, L. Rotherwick, L.
Mountevans, L. Sandys, L.
Moyne, L. Seccombe, B.
Munster, E. Simon of Glaisdale, L.
Murton of Lindisfarne, L. Skelmersdale, L.
Napier of Magdãla, L. Slim, V.
Norrie, L. Strathcarron, L.
Northbrook, L. Swinfen, L.
Munburnholme, L. Teviot, L.
O'Cathain, B. Thomas of Gwydir, L.
Onslow of Woking, L. Trefgame, L.
Pender, L. Walker of Worcester, L.
Pilkington of Oxenford, L. Westbury, L.
Quinton, L. Wharton, B.
Rathcavan, L. Windlesham, L.
Rees, L. Young, B.
Acton, L. Ilchester, E.
Addington, L. Irvine of Lairg, L. [Lord Chancellor.]
Ahmed, L.
Allen of Abbeydale, L. Jay of Paddington, B. [Lord Privy Seal.]
Allenby of Megiddo, V.
Alli, L. Jeger, B.
Amos, B. Jenkins of Hillhead, L.
Archer of Sandwell, L. Jenkins of Putney, L.
Avebury, L. Kennet, L.
Bach, L. Lovell-Davis, L.
Bassam of Brighton, L. Macdonald of Tradeston, L.
Borrie, L. McIntosh of Haringey, L.[Teller]
Bristol, Bp.
Brooke of Alverthorpe, L. Mackenzie of Framwellgute, L.
Bruce of Donington, L. Maddock, B.
Burlison, L. Mallalieu, B.
Carter, L. [Teller.] Merlyn-Rees, L.
Castle of Blackburn, B. Methuen, L.
Charteris of Amisfield, L. Milner of Leeds, L.
Christopher, L. Mishcon, L.
Clarke of Hampstead, L. Molloy, L.
Cledwyn of Penrhos, L. Monkswell, L.
Clinton-Davis, L. Morris of Castle Morris, L.
Cocks of Hartcliffe, L. Morris of Manchester, L.
Crawley, B. Nicol, B.
Currie of Marylebone, L. Palmer, L.
David, B. Paul, L.
Desai, L. Peston, L.
Donoughue, L. Pitkeathley, B.
Dormand of Easington, L. Ponsonby of Shulbrede, L.
Evans of Parkside, L. Prys-Davies, L.
Ezra, L. Ramsay of Cartvale, B.
Farrington of Ribbleton, B. Razzall, L.
Fitt, L. Rea, L.
Gladwin of Clee, L. Redesdale, L.
Glanusk, L. Rendell of Babergh, B.
Goodhart, L. Rodgers of Quarry Bank, L
Goudie, B. Russell, E.
Gould of Potternewton, B. Sawyer, L.
Grey, E. Scotland of Asthal, B.
Hacking, L. Serota, B.
Hamwee, B. Sewel, L.
Hardy of Wath, L. Shepherd, L.
Harris of Greenwich, L. Simon, V.
Harris of Haringey, L. Stallard, L..
Haskel, L. Stoddart of Swindon, L.
Hayman, B. Strabolgi, L.
Hilton of Eggardon, B. Strafford, E.
Hogg of Cumbernauld, L. Strange, B.
Hollis of Heigham, B. Symons of Vernham Dean, B.
Holme of Cheltenham, L. Tenby, V.
Howie of Troon, L. Thomson of Monifieth, L.
Hughes of Woodside, L. Thornton, B.
Hunt of Kings Heath, L. Tomlinson, L.
Hylton-Foster, B. Tordoff, L.
Turner of Camden, B. Weatherill, L.
Uddin, B. Whitty, L.
Wigoder, L.
Warner, L. Williams of Mostyn, L.
Warnock, B. Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendment No. 2 not moved.]

Lord Whitty

My Lords, I beg to move that the Bill do now pass.

Moved, That the Bill do now pass.—(Lord Whitty.)

On Question, Bill passed.