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New Clause 24 - Consumer redress

Water Bill – in a Public Bill Committee at 10:00 am on 17th December 2013.

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‘(1) The Water Services Regulation Authority may modify the conditions of—

(a) a pre-commencement appointment of a water or sewerage undertaker, or

(b) a pre-commencement water supply licence,

so as to include conditions relating to the provision of a consumer redress scheme.

(2) In subsection (1)—

(a) “pre-commencement appointment of a water or sewerage undertaker” means an appointment of a company under Chapter 1 of Part 2 of the Water Industry Act 1991 to be a water or sewerage undertaker which is made before the day on which this section comes into force, and

(b) “pre-commencement water supply licence” means a licence under Chapter 1A of Part 2 of the Water Industry Act 1991 granted before that day.

(3) In this section, “consumer redress scheme” means a scheme or other arrangements for unresolved complaints to be investigated and determined by an independent person.

(4) The conditions that may under subsection (1) be included in an appointment or licence include in particular conditions requiring the company holding the appointment or the person holding the licence—

(a) to secure the provision of a consumer redress scheme, or

(b) to secure the provision of a consumer redress scheme which is of a description specified in the conditions or which meets requirements so specified.

(5) Where under subsection (1) the Authority modifies conditions of an appointment or licence, it may make such incidental or consequential modifications of other conditions of the appointment or, as the case may be, other conditions of the licence as it considers necessary or expedient.

(6) The power of the Authority under subsection (1) to modify the conditions of an appointment or licence may not be exercised after the end of the period of two years beginning with the day on which this section comes into force.

(7) Before making a modification under this section the Authority must consult—

(a) the company holding the appointment or the person holding the licence;

(b) the Secretary of State;

(c) the Welsh Ministers;

(d) the Consumer Council for Water;

(e) such other persons as the Authority thinks it appropriate to consult.

(8) The Minister may direct the Authority not to make a modification that it proposes to make under this section; and the Authority must comply with such a direction.

(9) In subsection (8) “the Minister” means—

(a) the Secretary of State, in relation to—

(i) a water or sewerage undertaker whose area is wholly or mainly in England;

(ii) a person who holds a licence under Chapter 1A of Part 2 of the Water Industry Act 1991;

(b) the Welsh Ministers, in relation to a water or sewerage undertaker whose area is wholly or mainly in Wales.’.—(Dan Rogerson.)

Brought up, and read the First time.

Photo of James Gray James Gray Conservative, North Wiltshire

With this it will be convenient to discuss new clause 34—Consumer redress—

‘(1) Section 29 of the Water Industry Act 1991 (Consumer complaints) is amended as follows.

(2) After subsection (11) there is inserted—

“(11A) Following the production of a report under subsection (10), the Council will have the right to—

(a) be consulted on a water company’s charging scheme, and any changes to it, and

(b) investigate and resolve matters as it sees fit.”.’.

Enables the Consumer Council for Water to be consulted on the charging schemes of water companies and, if necessary, to investigate and resolve customer complaints.

Photo of Dan Rogerson Dan Rogerson The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

New clauses 24 and 34 both relate to consumer redress. Action is being taken in that area, and the Government’s role should be to facilitate rather than to regulate. The industry is already working with Ofwat and the Consumer Council for Water to improve its approach to consumer redress.

A new independent dispute resolution scheme is being established to give all customers an independent route to resolve their complaints without having to go to court. The new scheme will provide a transparent mechanism for resolving complaints that have reached a deadlock under the current arrangements. Work on the scheme is already well advanced, with all the incumbent water companies having signalled their support. That is why new clause 34, tabled by the hon. Member for Dunfermline and West Fife, is not necessary.

The Consumer Council for Water has a central role in the new scheme. It will continue to negotiate with companies on behalf of customers and will be responsible for identifying when complaints cannot be resolved and need to be directed to the independent third party.

To support the speedy resolution of disputes, the Bill already includes powers that will enable the Secretary of State to appoint an independent adjudicator to undertake Ofwat’s more routine adjudication functions, freeing the regulator to concentrate on cases that will have the most benefit to customers.

Government new clause 24 will allow Ofwat to make changes to water company licences to include conditions relating to the provisions of such a consumer redress scheme. Together, the changes will enable the creation of an improved statutory framework for complaints and consumer redress.

On new clause 34, I can confirm that the Consumer Council for Water is already routinely consulted by water companies on their charging schemes. I am happy to make a commitment to the Committee that the charging guidance produced by the Government will ensure that consumer groups continue to be properly consulted on charging schemes in the future.

Photo of Thomas Docherty Thomas Docherty Shadow Minister (Environment, Food and Rural Affairs)

To speed things up, will the Minister set out why he does not think consumer groups should be a statutory consultee?

Photo of Dan Rogerson Dan Rogerson The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

In our previous debate about sustainable development, I was seeking to say that things have moved on since the case cited by the hon. Gentleman. As I have set out, the work is now being undertaken, and we are making progress on it. The charging guidance produced by the Government will ensure that consumer groups continue to be properly consulted on company charges. We will do that through guidance, which has been our approach to a number of other issues, rather than including it in the Bill.

Hon. Members will note that new clause 24 includes the Consumer Council for Water as a statutory consultee. I am pleased to note that complaints to water companies have gone down again this year; we all want to see complaints handled swiftly and effectively by the companies themselves. Their focus should always be on getting it right first time. For the most difficult cases, we want customers to have access to high-quality independent arbitration. The work already being undertaken by the industry in partnership with Ofwat and the Consumer Council for Water will ensure that that is the case.

I hope that I have been able to reassure the hon. Gentleman and that he will not press his new clause to a Division.

Photo of Thomas Docherty Thomas Docherty Shadow Minister (Environment, Food and Rural Affairs)

I will not keep the Committee long, given the slightly longer than anticipated debate that we have just had. First, I thank the Minister for circulating electronically the consultation document that we mentioned some moments ago. I know that hard copies will be on the way because I see that not every Member has an electronic device, and I welcome those copies arriving in the near future.

The issue underlying the debate is that of statutory versus voluntary consultation. We note what the Minister has said, but although I have some sympathy with his remarks, he will understand that we want to put our concerns on the record by pressing our new clause to a vote. I suspect that we will come back to the issue as the Bill proceeds through this place and another place.

Question put and agreed to.

New clause 24 accordingly read a Second time, and added to the Bill.