New clause 11 - Liability of owners for charges

Water Bill [Lords] – in a Public Bill Committee at 4:15 pm on 21 October 2003.

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'(1) In section 144 of the WIA (relating to the liability of occupiers for charges), in subsection (1), after ''of this section'', there is inserted ''and of section 144AA below''.

(2) After section 144 of the WIA there is inserted—

''144AA Liability of owners etc. for charges in prescribed cases

(1) In respect of any premises of a class prescribed for the purposes of this section, section 144 above shall take effect as if for the references throughout that section to the occupier or the occupation of premises there were substituted references to the owner or ownership of such premises.

(2) Regulations made for the purposes of subsection (1) above may also modify or extend the application of that subsection in one or more of the following respects by providing that—

(a) in relation to any specified types of premises within the class of premises prescribed for the purposes of subsection (1) above, for the references to the owners and ownership of such specified premises, there shall be substituted references to such other categories of persons and to such rights as may be prescribed by the regulations;

(b) specified classes of persons who are—

(i) owners of classes of premises prescribed for the purposes of subsection (1) above, or

(ii) within those categories of persons prescribed for the purposes of subsection (2)(a) above,

shall be excluded from the application of the regulations;

(c) the owner or occupier of any premises of a class prescribed for the purposes of subsection (1) above which are provided with any service by a relevant undertaker in the course of carrying out its functions shall, when requested in writing to do so by the undertaker, provide the undertaker with such information as may be prescribed concerning the ownership or occupation of those premises;

(d) such statutory undertakers or public bodies as may be prescribed shall, when requested in writing to do so by a relevant undertaker, provide the undertaker with such information as may be prescribed concerning the current or former ownership or occupation of any premises of a class prescribed for the purposes of subsection (1) above which are or have been provided with any service by the undertaker in the course of carrying out its functions.''.'.—[Mr. Wiggin.]

Brought up, and read the First time.

Photo of Mr Bill O'Brien Mr Bill O'Brien Labour, Normanton

With this it will be convenient to discuss the following:

New clause 12—Liability of owners for charges (No. 2)—

'(1) In section 144 of the WIA (relating to the liability of occupiers for charges), in subsection (1), after ''Subject to'' insert ''section 144AA below and''.

(2) After section 144 of the WIA insert—

''144AA Liability of owners for charges

(1) Subject to the following provisions of this section, where—

(a) any premises are occupied by any person by virtue of any tenancy, licence, contract, enactment or implication of law for any period or term of less than one year, and

(b) those premises are provided with any services by a relevant undertaker in the course of carrying out its functions,

the undertaker may provide in any charges scheme which it makes under section 143 above for the owner of those premises (instead of the occupier) to be liable for the payment of the charges for the provision of those services and to be treated for the purposes of section 144 above as if he were the occupier of those premises.

(2) Subsection (1) above shall not apply to any owner which is a local authority, Government agency or publicly funded body which is prescribed by the Secretary of State for the purposes of this subsection.

(3) The owner or occupier of any premises which are provided with any services by a relevant undertaker in the course of carrying out its functions shall, when requested in writing to do so by the undertaker, provide the undertaker with all such information as the undertaker may reasonably require for determining whether this section applied to those premises.

(4) Subsection (3) shall be enforceable by the County Court.

(5) In this section, 'premises' shall include 'mobile home' as defined by section 9 of the Mobile Homes Act 1975.''.'.

New clause 15—Liability of owners, etc., to provide information—

After section 144 of the W1A there is inserted—

''144AA. Liability of owners etc to provide information

(1) The owner or occupier of any premises of a class prescribed for the purposes of this section which are provided with any service by a relevant undertaker in the course of carrying out its functions shall, when requested in writing to do so by the undertaker, provide the undertaker with such information as may be prescribed concerning the ownership or occupation of those premises.

(2) Such statutory undertakers or public bodies as may be prescribed shall, when requested in writing to do so by a relevant undertaker, provide the undertaker with such information as may be prescribed concerning the current or former ownership or occupation of any premises of a class prescribed for the purposes of this section which are or have been provided with any service by the undertaker in the course of carrying out its functions.

(3) Information which is required to be provided under either subsection (1) or (2) above shall be provided in such manner and within such time as may be prescribed.

(4) The Secretary of State shall by regulations make provisions for the purposes of subsection (1) to (3) above.''.'.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

New clauses 11 and 12 are a fairly technical pair of amendments and seek to clarify the role of the owner. New clause 11 relates to the liability of owners for charges in prescribed cases. It is a long and complicated group of measures with similar aims. We would like to insert the wording of the new clause into section 144 of the Water Industry Act 1991, which relates to the liability of occupiers for charges, and proposed new subsection (2)(d) seeks to clarify that liability.

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

New clauses 11 and 12 propose that owners, rather than occupiers, can be made responsible for water and sewerage charges. I understand the reasoning behind them, particularly if people skip off without paying their bills. However, it would have the effect of leaving the owner liable for

the bill. That is a bit on the hard side. It would mean that the occupier would have far less reason to limit water use if he knew that he could simply disappear and leave the owner with all the debts.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

The Minister has put his finger on the problem. The reason that this approach is popular with the water companies is that there is a problem with multiple occupancy, particularly in blocks of flats, where people jump ship just as the Minister described. One way of dealing with that in an unmetered block is to allow the water charges to be part of the rent. That does not seem to be the way that people do things at the moment, but it would get over the problem. The purpose here is to try to find a way to stop the continuing bad debts that are mounting up in the water industry and to enable a landlord rather than an occupier to be pursued. That would put the pressure on the landlord to include the water bill in the rent, and the rest of us, who do pay our water bills, would no longer have to pay for that bad debt.

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

The new clause might have that effect, but if one accepts the argument for water, why not apply it to other utility bills? Why not put the liability for everything, including satellite TV, on to the owner rather than the occupier? I understand the reasoning behind the new clause. Indeed we have discussed the problem of deliberate non-payment before, but I am not sure that this is the best way to deal with it. It would greatly alter the balance against the owner.

New clause 15 also proposes that property owners and occupiers be required to give water companies information concerning the ownership or occupation of the premises. It would also require statutory undertakers and prescribed statutory bodies to provide such information. However, it does not propose that owners take any responsibility for their tenants' bills—just for information on their tenants. I appreciate that there are some real issues here. Companies often have to keep track of customers who live in shared occupancy households or who rent on short leases, but I can see a few problems with this.

Placing such a burden on the landlord would seem to me to be asking landlords to take responsibility for something that is not their duty, and it would, in any case, go against the principles of data protection. It is not for landlords to take such a role in facilitating payment to utility companies, and I would be uncomfortable with such a move, not least because one is back to the same problem that if one applies it to water, there are other services to which it could equally be applied. I understand what the hon. Member for Lewes is trying to do and I am not unsympathetic to his approach, but I am not convinced that this would work. It throws out the balance between the landlord and the tenant.

Photo of Ms Sue Doughty Ms Sue Doughty Liberal Democrat, Guildford

I should like to talk about new clause 15 because there are further points that need to be made. We have talked about the high amount of water debt in houses in multiple occupation. In this case we are talking about the ''won't pays'', rather than the ''can't pays''. We are talking about people who share houses transiently; they may be young, upwardly

mobile professionals who are not in long-term poverty. That is a problem: multiple occupancy dwellings account for a disproportionate share of the burden of debt.

Water undertakers need a clearer definition of what an occupier is, because it is difficult to collect debt from people who move in and then move out. For satellite TV a bank account is required and an agreement signed, but it is difficult for water companies to identify who was in a house at any one time and who was responsible for the debt. Water UK has been considering this for some time because, as we would all agree, it is unreasonable that those who pay their water bills are in effect subsidising those who choose not to. It is far more desirable that those who incur the debt, pay it. Water UK sought legal opinion on the matter and was advised by Queen's Counsel that a definition of the term ''occupier'' in cases of multiple occupation could be secured only by further legislation. Water UK cannot just go to the landlord and ask who the occupier was.

The new clause would require the owner or the occupier of a class of dwelling to be prescribed by regulation and, typically with houses in multiple occupation, the owner would have to provide the statutory undertaker—the water company—with information concerning the ownership and the occupation of the dwellings. The measure does not necessarily say that the landlord should pay the debt—not at all—but it would allow the undertaker to discover who was living in a property when the debt was incurred.

The new clause would allow various statutory bodies, such as local authorities, to give information concerning the current or former owner of multiple occupation dwellings so that water companies could inquire about the occupancy. That would allow water companies to trace tenants who have moved, leaving an unpaid water bill. On the face of it, that would be entirely reasonable. It is not a prescriptive amendment; the rights of any water companies to obtain such information would need careful consideration, due to implications for privacy and liberty.

What might the Government do to consult on the issue so that they could introduce regulations, so helping to bring down the level of water debt among those who choose not to pay, in an area where debt is particularly high? The new clause has the support not only of Water UK—the suppliers—but Water Voice, which represents the consumers, who believe that honest consumers carry the burden of those who choose not to pay their debts.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

What the hon. Lady just said is right. This is an important issue. The Government should address bad debts in the water industry and—although I accept that the Minister took that on board—we have not done enough to address the matter. It is the sort of issue to which we may have to return later, so I shall not press the motion to a vote. I am grateful to the Minister for his reply. I think that we all have to keep our eye on the quantity of bad debt in the water sector. If it continues to rise as it is doing at present, we may have to do more to address it.

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

I repeat that the issue of bad debt is important, particularly for those who could pay but will not. Water Voice and the other consumer organisations are right to raise concerns about that. I am still not altogether convinced by the new clause, which would require landlords to provide information on their tenants, not least because providing water companies with such information is one thing; the companies will still have to track down the customers involved and get the money from them, and that is a different thing.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

Does the Minister accept that the comparison that he drew between water and satellite television is not a fair one? It is possible for someone to move into an HMO and then to move out without the water company ever knowing that he had been there. That is not the case with satellite television, for which an agreement is signed. I understand and share to a degree the Minister's reluctance with regard to the relative powers of landlords and tenants but, if he is not happy with this new clause, what measures will he introduce to ensure that those who pay their bills are not subsidising those who do not?

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

I have mentioned in previous debates that there are measures that water companies can take. There is a disparity in the success of some companies in recovering debts compared with others. It is a matter of how they use the provisions that are available to them. I am happy to discuss with the water companies how we can jointly address the problem and whether there are further steps that need to be taken.

There are some comparisons to be drawn between water supply and satellite television, although a better comparison would be with gas and electricity supply. If there is to be such a provision in relation to tenants, logically it should apply to a range of services where people may want information for quite valid reasons.

The problem with the new clause is that it strays into areas of freedom of information and data protection which have been debated in Parliament, and may well be debated again, but go far wider than the provisions that we can have in the Bill. Although there may be issues that the hon. Member for Guildford wants to raise, and there may be merit in some of her arguments, we are entering the realms of data protection, individual freedoms, rights and checks and balances that go beyond the Bill.

Photo of Ms Sue Doughty Ms Sue Doughty Liberal Democrat, Guildford 4:30, 21 October 2003

I have heard what the Minister said. We all have concerns about privacy and freedom of information, but I still feel very unhappy that we have no remedies to the problem of the level of debt. We will not pursue the matter at this stage, but we may return to it on Report.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.