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Mr. Burns: The hon. Gentleman is absolutely right: I am talking about official disconnection figures, and not the figures as they may apply to budget payment units.
In 1997-98, the most recent full year, there were 1,807 disconnections. As the Minister said in his speech, in the first six months of this year, there were 640 disconnections.
Mrs. Teresa Gorman (Billericay):
I hope that my hon. Friend will point out also to the Government that--in addition to the Ofwat recommendations, which arevery closely adhered to--regional customer service commissions are brought in to investigate each and every threat of domestic disconnection, to ensure that those who are in vulnerable circumstances are not involved. Therefore, those who are cut off are not the "can't pays" but the "won't pays".
Mr. Burns:
I am extremely grateful to my hon. Friend, who--with her customary perspicacity--has anticipated a matter that I shall deal with a little later in my speech.
As I said, in the last full year--1997-98--there were 1,807 disconnections and, as the Minister said, there were 640 disconnections in the first six months of 1998. It should be noted that two--not nine, as I think the Minister said at the beginning of his speech--of the 27 water companies currently operate a non-cut-off policy. Nine have carried out no disconnections this year, which is not quite the same as a deliberate no-cut-off policy, although I fully accept that the result is the same.
Mr. Gray:
My hon. Friend will have noticed that, in an earlier intervention, the Minister apparently was not
Mr. Burns:
I am extremely grateful to my hon. Friend. In many ways he has hit the nail on the head with a hammer.
In my region, Anglian Water--
Mr. Meacher:
In view of what the hon. Member for North Wiltshire (Mr. Gray) has said, may I give the disconnection figures to the House? They show that he was not quite right. There were none for schools, none for hospitals--
Mr. Burns:
Surprise, surprise.
Mr. Meacher:
Exactly, but that is the point that the hon. Member for North Wiltshire made.
There were about 20 disconnections of empty properties, and 47 per cent. of disconnections were for under 48 hours. In other words, 53 per cent. of disconnections were for more than 48 hours, and more than a third were for more than 28 days. Think what being disconnected for more than four weeks means.
Mr. Burns:
I am pleased to have given the Minister the opportunity to put those figures before the House and on the record.
In my region, Anglian Water's disconnections have fallen from 978 five years ago to 56 last year. This year it has disconnected only 16 households in an area with 2.4 million properties. To give another example, North West Water--
Dr. Starkey:
Will the hon. Gentleman give way?
Mr. Burns:
Would the hon. Lady please wait?
Last year, North West Water disconnected 93 homes out of 2.6 million. Those figures simply put into context the current situation compared with that 10 or 15 years ago, when disconnections were a far more significant and serious problem. I in no way underestimate the problems facing people who are disconnected.
Mr. Burns:
I should like to make a little more progress.
Those figures show that the water companies are reluctant to cut people's water off. As my hon. Friend the Member for Billericay (Mrs. Gorman) said, they prefer to work with individuals who are in difficulty and use their legal powers only as a last resort. I believe, and I hope that the House would agree, that that approach is responsible and realistic.
In some ways, the Government's disconnection proposals are a quick-fix, populist measure. Although disconnection of domestic supply will be illegal, the water companies will, as the Minister rightly said, still be able to use the civil courts to pursue non-payers who persistently refuse help and do not pay. In effect, although the water companies will not be able to disconnect, they will still be able to use the courts to retrieve money owed to them. It may be argued--[Interruption.] I am glad that the Minister agrees. I am trying to be reasonable and realistic.
Given that a majority of disconnections--or, in the light of the figures for the first six months of this year and those that the Minister has just given to the House, a large minority of disconnections--were restored within 48 hours, it could be argued that the threat of an individual losing personal belongings such as compact discs, televisions or videos for non-payment would be a greater incentive to pay than disconnection. Some people may not agree, but I believe that if an individual is given the choice between having his water cut off for up to 48 hours and losing some of his belongings to the bailiffs--and not getting them back--the latter will be a great incentive to pay the bill.
Mr. Burns:
I find this extraordinary. I am slightly uncomfortable when Labour Members agree with me, but when one is talking common sense, it should not come as a great surprise.
Mr. Burden:
Will the hon. Gentleman give way?
Mr. Burns:
No, please do not spoil it.
Similarly, I am not convinced by the argument made by some that, with the withdrawal of the power of disconnection, the cost of recovering money from customers will significantly increase bad debt and costs to the water companies. My scepticism of that argument is twofold. First, the threat of the bailiffs is a powerful disincentive to the "won't pay" brigade. Secondly, at present, water companies have to go to court for an order to disconnect, which involves costs for them. As the Minister said, when the companies apply for a court order for an attachment of earnings or to send in the bailiffs, they will have the right to pass on the legal costs to those whom they are taking to court. Getting an order to send in the bailiffs is a direct reflection of present practice, except that it will be to recover costs or for an attachment of earnings rather than to disconnect the supply.
I have some questions for the Minister on the issue. Have the Government carried out a full and, as far as possible, accurate business impact assessment of the effects of the clause on the water companies? Have the Government estimated whether there will be a noticeable increase in the number of "won't pays", or do they share my analysis that, after possible initial problems caused by a new system, there will not be a noticeable change? If the Minister has any figures or assessments, I should appreciate it if he could let us see them.
Why does clause 1(1) and (2) seemingly--I am choosing my words carefully--apply only to domestic properties that are main homes rather than second residences, hospitals and schools? What is the rationale for limiting the provision to such premises? Are not
private residential and nursing homes equally important--or universities, colleges of higher education, children's homes or companies that supply medical needs to hospitals or to the country? The list could be endless. I am puzzled about why hospitals and schools have been singled out. No one would argue that a residential nursing home or a children's home was less important than a hospital or a school.
Mr. Leigh:
Does my hon. Friend agree that there is a problem with sending in the bailiffs, because it may be difficult to prove ownership? Although rarely used, disconnection is a useful threat. Does my hon. Friend believe that the number who do not pay their bills will increase? The measure may be considered populist, but it may be less popular among those on low incomes who pay their bills.
Mr. Burns:
Some people from the "won't pay" brigade will do all that they can to avoid having their personal belongings taken by bailiffs. However, that is not the only weapon in the armoury. Water companies can go to court to seek an attachment of earnings or of benefits such as income support, as well as using the other measures that the Minister mentioned. I suspect--although it will be difficult to prove until we have firm evidence of it--that initially, there may well be an increase in people seeking to avoid paying because the penalties appear lighter, but when the system starts working and people are faced with bailiffs or attachments of earnings, they will realise that they risk losing their videos and compact disc players, and that will be a powerful incentive. Personally, I would rather have my water cut off for 48 hours than lose my television and video and never get them back.
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