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5.27 pm

Mr. Simon Burns (West Chelmsford): The Minister for the Environment ended his speech by saying that his was a small Bill. In that regard I agree with him, but I also believe that it represents a missed opportunity for the Government.

Following the hyperbole of last year's water summit and the rhetoric of Ministers since, the Government have ducked some of the most important issues affecting both the industry and its customers. No part of the Bill deals with the issue of enhancing competition, which would benefit the industry and its customers alike. Nor does the Bill say much about improving the environmental impact of water use or, indeed, provide any strategic overview for the industry.

Instead of tackling those difficult but important issues, the Government have, in most instances, simply gone for the soft, populist options involving metering and disconnections--throwing in for good measure some rather nasty, neanderthal Labour-type powers for the Secretary of State and the regulator in clauses 4 and 5. That is probably rather appropriate. Even in this day and age, the Minister is renowned for being old Labour, so it is nice that a new-Labour Bill should still contain some old-Labour measures.

Sadly, though, the Government cannot resist ducking the important issues. Given the choice, they will always go for the soft options, in the hope that that will please their focus groups. I believe that, in time, they will regret their timidity in the Bill.

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I appreciate the need for a water Bill at this time. The immediate urgency is plainly dictated by the need to extend the use of the old rateable-value system beyond 31 March 2000 as a basis for charging those without a meter, which is dealt with in clause 8. I do not object to that. The last Conservative Administration--apparently, the Minister is not aware of this--recognised that such a policy would have to be introduced, and the law amended, if we were returned to office after the general election.

Helen Jackson (Sheffield, Hillsborough) rose--

Mr. Bob Blizzard (Waveney) rose--

Mr. Burns: I will give way to the hon. Member for Waveney.

Mr. Blizzard: Why, then, was the original arrangement introduced in the Water Industry Act 1991? Does that not show that the then Government's real agenda was to impose water meters on the whole country, and that only the groundswell of public opinion knocked them off their course?

Mr. Burns: May I first point out that the 1991 Bill is a consolidation measure? The provision was in the original Water Act 1989, which brought privatisation. Secondly, the hon. Gentleman may not be aware, because he was not in the House at the time, that all the provisions emanated from the introduction of the community charge in 1988-89.

Helen Jackson rose--

Mr. Burns: Will the hon. Lady just contain herself for a minute?

It was expected that, in the ensuing 10 years, a system would be devised to cope with the problems that resulted from a rateable value that was based on valuations dating back to 1973. As everyone knows--it is now history--what happened was that the council tax replaced the community charge in the early 1990s and, rightly or wrongly, the previous Administration did not get around to working out--[Laughter.] It is a self-evident fact. Before the 1997 general election, they did not get around to addressing the problem, but for the Minister for the Environment, in a typical Millbank smear, to suggest that that meant that the previous Government were planning to force meters on to every household is patent nonsense.

Before the last election, we were on record as recognising that we would have to amend the law because we were not prepared, as a Government, to force water meters on to every household. That is why I have just said that we do not object to clause 8; it does something that we, too, would have done if we had been returned after the last general election.

Dr. Peter Brand (Isle of Wight): Will the hon. Gentleman give way?

Helen Jackson: Will the hon. Gentleman give way?

Mr. Burns: I give way to the hon. Lady because she has been asking more often.

Helen Jackson: I am grateful to the Minister--

Mr. Burns: Thank you.

Helen Jackson: I am grateful to the shadow Minister for setting the record straight that the privatisation of the

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water industry was based on the same philosophy as the introduction of the poll tax. Why does he think that the former Secretary of State for the Environment, the right hon. Member for Suffolk, Coastal (Mr. Gummer), who is not in the House today, and whom I asked many parliamentary questions on the very issue of water rates, did not once respond to any of those parliamentary questions and say that he recognised the need to extend the use of rateable value beyond 2000? Was it because he simply could not bring himself to recognise that the poll tax--and the philosophy that led to it--was such a total failure?

Mr. Burns: The straightforward answer to the last part of the hon. Lady's question is no. The answer to the first part--which I think the Minister would be reasonable enough to accept because he alluded to it--is that, to start with, after the introduction of the council tax, what we were going to do after 2000 was looked into. As the Minister is finding out and mentioned in his speech, it is highly complicated and difficult to ensure that it is a fair system. I will refer later to that aspect of the problem.

Given the electoral cycle, we then ran out of time and were unable to come up with a viable alternative. In the same way, the Government--this comment is not a criticism--have not so far been able to come up with an alternative, hence clause 8, although I know that they are consulting the industry to try to find out whether there is a viable alternative.

Mr. Richard Burden (Birmingham, Northfield): Will the hon. Gentleman give way?

Mr. Burns: If the hon. Gentleman will forgive me, I am going to make some progress.

I should like to press the Minister on that issue because Conservative Members would like to know a little more about his thoughts. Possibly the Under-Secretary of State for Scotland, the hon. Member for Western Isles (Mr. Macdonald), who is winding up the debate, could give us some answers on how and when he expects the rateable value system to be changed.

I understand that some water companies would like to transfer from the rateable value system to a link with the council tax banding system. As the Minister for the Environment mentioned, it is well known that the Government are not convinced of the merits of doing that because they fear that that would lead to a high-incidence effect, whereby customers on the lowest council tax--band A--would possibly, or almost certainly, pay more, and those at the top in band H would pay less.

Are the Government considering ways to deal with the problem within the council tax system, or will they entirely rule out using the council tax band system? If so, do Ministers have any thoughts on what system--it may be a totally new one--they might use if they do not use the rateable value system? I am sure that both Opposition Members and Government Members would be interested and grateful to hear the Minister's thoughts on the issue.

I accept that disconnection for non-payment of charges is a highly emotive subject. I should, therefore, like to put current practice into context before dealing with the proposals in detail.

Water companies currently have the power to disconnect customers who have not paid their bills. Under the Office of Water Services code of practice, in virtually

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all cases in which domestic customers have fallen into arrears, a water company will be able to disconnect only after it has obtained a court judgment in its favour. There is also a special provision in the licence that the supply of water to domestic premises should not be disconnected if the person liable for the charges informs the company that he or she is applying for help from the Department of Social Security or from local authority social services, and for as long as those bodies ask the company to delay disconnection.

If one compares that practice with that of other privatised companies supplying essential services--gas and electricity--one discovers that their legal requirements on disconnection are broadly similar, as they have a legal right to disconnect for non-payment. However, it is necessary for the other services to obtain a court order only if the customer does not consent to disconnection and utility staff need access to the premises to perform the disconnection.

As I said in an earlier intervention, it will undoubtedly come as the supreme irony to those opposed to water privatisation that, since water privatisation, water disconnections have fallen dramatically. Pre-privatisation, in 1988-89, there were 15,255 disconnections.

Mr. Steve McCabe (Birmingham, Hall Green): I should like simply to clarify the point being made by the hon. Gentleman, who is talking about officially recorded disconnections. If disconnections forming part of the court case on budget payment units involving Birmingham city council and other local authorities were added to the figures, surely he would accept that a disguised and substantial number of disconnections are being hidden in that very process.

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