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The protection that we require for residents can be delivered effectively through the mechanism--which we propose to introduce by clause 4--for the director general to approve companies' charges schemes. Moreover, by contrast with the arrangements detailed in the amendment,

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the use of clause 4 would give water companies flexibility to consider arrangements for assessing charges that meet their customers' concerns.

I appreciate the offer that the hon. Member for West Chelmsford made when he suggested that the Government should be open to on-going ways in which we can try to help establish better systems for people caught in this way. We would also expect the regulator and the water companies to use that clause to enable satisfactory solutions to be found to the problem. We therefore believe that it would be unnecessarily prescriptive to set out procedures for calculating assessed charges on the face of the Bill. In the light of the assurances and help that I believe that I have given the hon. Gentleman, I hope that he will withdraw his amendment.

Mr. Burns: I am grateful to the Minister. May I seek clarification? At present, water bills are paid either according to a meter or on the basis of the rateable value system. Given those two systems of payment, would it be legal, at present or after the Bill becomes an Act, for a water company to start charging people for their water on a hybrid version of either scheme? What I--

Mr. Deputy Speaker: Order. Mr. Meale.

Mr. Meale: As I tried to explain to the hon. Gentleman, there are ways in which assessed charges can be introduced now. The water industry Acts enable that, and it is for the water companies to achieve that. In the specific case that the hon. Gentleman mentioned, the water company, Thames Water, chose not to do so. I believe that that effectively means that, yes, it could place its own charges that are found to be acceptable, and which, like all other charges, may be open to challenge by the customer to the director general. I believe that the hon. Gentleman is correct in that assumption.

Mr. Burns: I am grateful to the Minister for his comments and his clarification of the role of the regulator in this area. I said that amendment No. 30 was very much a probing amendment. I believe that I have probed enough, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7

Restriction on change in basis of charging.

Mr. Burns: I beg to move amendment No. 28, in page 6, line 33, at end insert--

'(5) Where a change in occupation of any premises occurs as a result of a change in ownership of those premises, a relevant undertaker may not begin to fix charges in respect of those premises by reference to volume in accordance with subsection 2(b) above unless the purchaser of the premises shall have been notified before the completion of the purchase of the undertaker's intention to begin charging by volume.'.

I suspect that, given the time, the Minister for the Environment will probably regret an almost throw-away line that he uttered in Committee, which has prompted us to table amendment No. 28. I shall be frank with the House. Until the Minister kindly pointed me in the right direction in Committee, I was unaware--it was total

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ignorance on my part--that a provision in the Water Act 1989 currently allows water companies to determine, at the point when someone sells their house and moves to a house that is new to them but may not be a new house, whether to charge the individual or the household for water and sewerage on a rateable value basis, if that is the existing system, or to change the basis to a metered system of payment.

I understood from the Minister, in Committee, that that power is rarely used. I think that he said that it is used in about 1 or 2 per cent. of cases, if that. The figure was minuscule. It is a very underused power. However, the power is there. In future, there may be circumstances where water companies, for whatever reason, would like to use it to compel people, when they move house to their new home--it may not necessarily be a brand new home--to change the system of charging from rateable value to metering.

The majority of people who are buying a newly built house will understand that they will be charged for their water and sewage by meter. For those who place a high priority on water bills, that will be a factor that they will take into account when they decide whether they will make an offer on a new house and buy it. They will have that knowledge as they will know what council tax band the house is in. Like any wise purchaser of a property, before they take a decision on what is a substantial investment, they will have all the information and be able to assess to a reasonable degree of accuracy their household bills and outgoings during the course of a year. That will determine many things such as the size of their mortgage.

With the power that we are discussing, the problem is that there is no way in which someone who is moving to a home that is new to him or her will know whether a water company will exercise its right under the original Act and decide to change the basis of charging for water and sewage. I suspect that the vast majority of people, including the vast majority of right hon. and hon. Members in the Chamber tonight, were entirely unaware that there is such a power in the original Act. That is because it is so little used. However, as I have said, that does not mean that it will always be so.

This could come as a rude shock, especially to a young family with two, three or four children, who are moving to a new house. They will have seen the particulars, including the rateable value. They have ascertained roughly what their council tax bill will be. They will have a rough idea, as a result of the old rateable value system, of what the water and sewage demand will be. They will then take a decision.

The power could come as a rude shock to them on two counts. Let us suppose that they move into the house and the local water company has decided that it will not charge for water and sewage on the rateable value that the family assumed when they bought the house. They suddenly discover that they will have a water meter. With young children, I suspect--this depends on the rateable value of the house--that they could end up paying significantly more for their water than they ever imagined in a month of Sundays.

That is unfair. It is not the fault of the new owners of the house that they have been caught in that situation. Of course, the water companies are legally entitled to exercise their rights under the original Act and take that

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course of action. It will cause bitterness to those families who are so caught, and I think that basically it is unfair. I think that everyone would agree with the concept that when is someone is buying a house or making a substantial purchase, he should have as many facts as possible available to him before he reaches a decision so he can use that information as part of the formative process of taking a decision.

Mr. Steve McCabe (Birmingham, Hall Green): I have a great deal of sympathy with the sentiment that the hon. Gentleman expresses, but I wonder why the amendment takes such a tortuous route. It requires water companies to notify potential purchasers before completion of the purchase. If the buyer decided to opt out at that stage, the exercise could be repeated ad infinitum. Why does not the hon. Gentleman accept the assurances that my right hon. Friend the Minister offered in Committee, when he said that he would consider requiring the water company to notify the householder before it levied the first charge? That would address the problem simply.

Mr. Burns: I know that the hon. Gentleman is relatively new to the House, but he is experienced enough to know that on Report, the House of Commons has the opportunity, as it does in Committee, to examine the Bill line by line and consider issues of importance to hon. Members and their constituents, and to ensure that the Bill is in the interests of those whom it is intended to serve.

We were not expecting to get on to the subject in Committee, and I can tell the Minister that it was rather by accident that we did so. Almost in a throw-away line, he unveiled the horror. I was totally unaware of it, I am not ashamed to admit. As the hon. Gentleman correctly reminds the House, the Minister said that he would consider the matter and return to it.

The right hon. Gentleman, very decently, said the same in response to our amendments to clause 1 with respect to other organisations and types of dwelling that should be included in the powers that apply to hospitals and schools, as we discussed earlier. I am grateful to him for keeping that pledge and drafting amendments for the House to consider tonight.

This is the last opportunity for us to discuss the Bill in the House, except for Lords amendments. The right hon. Gentleman will not be handling the Bill in the Lords, although obviously his Department will do so. As he did not table any amendments to meet the point raised by the hon. Member for Birmingham, Hall Green (Mr. McCabe), I hoped that our amendment would remind the Minister of what he had said in Committee.

Mr. Andrew Lansley (South Cambridgeshire): I am following with interest what my hon. Friend says, as I was not a member of the Standing Committee and therefore come new to the argument. Does he agree that it might be a difficult process for a water company if it was opportunistically looking to change to metering on a change of ownership of premises, and therefore having to find out when a purchase was being made? That might drive a water company to the greatly preferable system of notifying owners of properties in advance that on a change of ownership of the property, the company proposed to

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introduce metering. That would tend to be disclosed in the course of inquiries made by a purchaser's solicitors before exchange of contracts, not just before completion.

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