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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 Dan Rogerson Dan Rogerson The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs 2:15 pm, 17th December 2013

I thank the hon. Gentleman for tabling his new clause. He is obviously aware that the provision to do what he set out already exists on the statute book. Having said that, following extensive consultation with the industry and landlords’ organisations, the Government took the decision that a voluntary approach is the most suitable one. More regulation is not always the answer, especially when that regulation has the greatest impact on small businesses that are not themselves the cause of the problem. Requiring landlords to provide information on request creates the same problems. The Government are always mindful of the burden that additional regulation could place on business. In this case, we have particular concerns about the imposition of additional costs on small businesses and micro-businesses, the category to which the vast majority of landlords belong.

We are strongly committed to driving change in the water industry so that companies improve their customer service and become much more sharply focused on the needs of their customers. Although there is some excellent debt collection practice among water companies, which the hon. Gentleman has already mentioned, that good practice is not applied consistently across the sector. That is demonstrated by the significant regional variations in performance on bad debt. We expect the industry to up its game and ensure that all companies match the performance of the best.

The Committee has had a number of discussions on affordability. We should remember that, as the hon. Gentleman said, debt problems can be linked to customers’ ability to pay. Support for struggling households, such as social tariffs, may help to reduce levels of bad debt. I welcome the tariffs that companies have introduced, in addition to the tariffs that are already in place. Ofwat has changed its methodology for the 2014 price review to place a much stronger emphasis on the companies’ responsibility to manage debt effectively. The price review sets a much more stringent benchmark against which the companies must demonstrate that bad debt has accrued for reasons “beyond their control” before seeking to increase the bills of paying customers.

We have decided not to regulate to require landlords to provide information to water companies. We remain committed, however, to the voluntary approach that is being advanced by Water UK, in partnership with a number of landlords’ organisations. Together, they have developed a new database that will make it easier for landlords to provide information about their tenants to water companies. In fact, the voluntary approach will go further than the new clause would, with landlords automatically updating the information on their tenants rather than waiting to be asked by the water company. The new database will launch in March 2014.