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New Clause 46 - Provision of information to water companies: landlords

Part of Water Bill – in a Public Bill Committee at 2:15 pm on 17th December 2013.

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Photo of Thomas Docherty Thomas Docherty Shadow Minister (Environment, Food and Rural Affairs) 2:15 pm, 17th December 2013

I beg to move, That the clause be read a Second time.

Good afternoon, Mrs Riordan, it is a pleasure to serve under your chairmanship. We have just had an interesting, productive and useful debate. One thing that struck me in the Minister’s thoughtful remarks—the Christmas spirit is overtaking me—is that he cited the need for a proportionate and evidence-based response.  New clauses 46 and 47 are a proportionate and evidence-based response to a problem in many areas of England and Wales: the problem of bad debt.

I think the Minister would concur with the following figures. On average, £15 is added to everyone’s bill as a result of other people not paying their water bills. Water supply differs from other utilities, in that someone cannot be cut off if they do not pay the bill—that recourse is not available. I think the Minister shares my view that we should not consider going down that path—I suspect that one or two members of the Committee do not share that view, based on previous Select Committee discussions. However, if we do not disconnect people, that will regrettably add a cost burden on to those who do pay their bills. As I have said, the average in England and Wales is £15, but it should be noted that in Scotland, as ever, it is significantly lower. We will perhaps come to that when we discuss new clause 47.

Thames Water representatives gave evidence to the Select Committee when it was examining the White Paper and the draft Bill. It will probably be easier for the Committee if I do not go through the whole process, but they said that those who can but do not pay their bills are, in effect, stealing from honest householders. This is not a new problem that has suddenly crept up on the coalition; it was recognised by the previous Government. In the Flood and Water Management Act 2010, provision was made to try to tackle it. The evidence from Ofwat is that 80%—four out of five—bad debtors are in the rented household sector. There are various reasons for that. One reason, of course, is that that is the group of people who move around most often and who tend not to make a long-term commitment to a property. There are obvious exceptions to that, particularly those in local authority and housing association properties, but private lets tend to have a much shorter occupancy period. It is much easier for such people to move on.

This is one of those genuinely bipartisan debates—there is nothing political about the issue, and I do not think we could get a wedge between the two sides. There is no clear blue water—pardon the pun—between the two sides of the House on this problem. The Labour Government at the time made provision in the 2010 Act such that landlords could be required to hand over a list of their tenants to the water companies, so that they could check whether a customer had moved, track them down and recover the non-payment. An unusual coalition of people supports that provision—I will come to that in a second. The trigger was not pulled in 2010, as the Minister will recall—I think he supported the decision at the time—because it was hoped that a voluntary scheme might encourage greater take-up. I will address that more thoroughly later in our proceedings, but although there has been some progress, it is fair to say that it has been unsatisfactory.

We now find an unlikely coalition of organisations and individuals calling for the implementation of new clause 46—it is unlikely in the sense that anyone who has listened to our deliberations over the past few days will be surprised by some of the names of those I am about to cite as being on our side on the issue. Some names will not surprise Government Members: the Consumer Council for Water, Ofwat, the Environment, Food and Rural Affairs Committee and the Opposition  parties all support the implementation of new clause 46. However, it is also supported by a number of the water companies, not least Thames Water, as well as Water UK.

The Committee will probably be aware that I will not always go along with something just because Water UK has suggested it, but the Opposition feel that there is compelling evidence that, after three and a half years, insufficient progress has been made. That is not just our conclusion, but the conclusion of the Select Committee of which the Minister was a member, along with the hon. Member for Tiverton and Honiton, when it published both of the relevant reports.

The water White Paper from 20 June 2012 states:

“It is simply unacceptable that, at a time when so many are struggling to afford their water bills, customers face the additional burden of subsidising those who refuse to pay what they owe. Legislation already exists that would make it easier for water companies to recover bad debt and the Minister”— at that time—

“acknowledged that money recovered from debtors would be ‘money in the pocket’ for those who do pay their bills. We urge the Department to implement the relevant provisions of the Flood and Water Management Act without further delay.”

If we go forward about six or seven months from June 2012 to the start of this year—my, how has the year flown in—the Select Committee stated:

“We remain of the view that it is unacceptable for honest customers to be forced to subsidise those who refuse to pay their water bills. We reiterate our previous recommendation that Defra should implement the provisions of the Flood and Water Management Act 2010 on bad debt without further delay.”

We fully concur with the Select Committee. We agree with the industry, with the regulator and with consumer bodies: enough is enough. After three and a half years, we are not making enough progress. It is time to help those hard-pressed, honest customers.