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23 May 2007 : Column 479WH—continued
3.45 pm
The Minister for Science and Innovation (Malcolm Wicks): This has been an important debate. With the exception of the last contribution, it has been based on a great deal of experience of the coal mining industry and a great deal of knowledge. It has been informative, not least for the opening remarks of my hon. Friend the Member for North Durham (Mr. Jones), who raised some important issues deserving further investigation.
Mr. David Anderson: Will the Minister give way?
Malcolm Wicks: I am trying to make a point first. Let me come to the end of my first paragraph, as it were—not one written for me, but one of my own.
It has been a passionate debate at times—rightly so, given the debt of gratitude, as many describe it, that we owe to the mining community and the terrible, debilitating health effects suffered by so many coal miners. I do understand that, but I also wish to put it on the record that I pay tribute to my officials, who do a remarkably good job. They have presided over a scheme that has already paid out some £3.5 billion and made a big economic impact on communities. Throughout a number of recent meetings—I shall make sure that the invitation list is revised; I apologise if there has been a problem—there has been a good relationship between my officials and Members of Parliament.
Mr. Anderson: The Minister said that my hon. Friend the Member for North Durham (Mr. Jones) made some informative points. If the debate had been longer, some of us might have challenged those points in much more detail than we could in interventions.
Malcolm Wicks: Yes, I got the impression that a debate had started rather than concluded. As a London MP, I shall leave it there.
Malcolm Wicks: I had better not give way now, as there are a number of points that I want to answer. If I do not answer them all—I suspect that I shall not have time—I will, of course, write to colleagues in the normal way.
Before I deal with the particular issue of double charging, I shall use this opportunity to put something on the record. Reference has been made to the High Court’s decision in April that a coal miners’ law firm should pay back about £99 million in legal costs to the Government. That sum is the difference between the tariff for claims for which medical examinations are being performed, which was applied pending resolution of our appeal, and the level set by the judge for handling respiratory disease fast-track cases.
Of that £99 million in cost savings, £74 million has been paid to solicitors and is to be recovered. The remaining £25 million is an anticipated amount that would have been paid on settlement of the outstanding fast-track claims. It has taken a long time to achieve, but it is a significant step in ensuring that solicitors’ costs are fair and relevant to work necessarily undertaken. Administrative arrangements for recovery have commenced, and a further discussion in court in July will resolve outstanding matters.
To return to the issues raised today, it is important that we continue our endeavours to ensure that claimants receive their full compensation as paid by my Department. I am confident that all Members will wish to join me in utterly condemning what can only be described as the shameful behaviour—we have heard about it already today—of that minority of solicitors involved in the delivery of the schemes. Solicitors who have made those deductions think that they are untouchable; indeed, many have an outstanding arrogance. Are they greedy? Yes. Are they untouchable? No. That is the view not only of Members of our Houses of Parliament. Peter Williamson, who has already been quoted, has said:
“Solicitors are supposed to put their clients’ interests first, and that is a fundamental, professional principle.”
My noble Friend Lord Lofthouse of Pontefract and Members of this House must be applauded for their determination to ensure that justice is done in respect of solicitors who double charge. The Department pays solicitors’ costs in full, some might argue quite generously, for advising and processing their clients’ vibration white finger and respiratory claims under the schemes. In our view, there is no need for such deductions by solicitors. We expected that the fees paid for successful claims would cover those that are ultimately unsuccessful.
I met Lord Lofthouse on 17 April, shortly before he published his recent report. At that meeting, I explained the actions that we have taken in the past five years in response to some solicitors who have charged miners in addition to the fees received by the Government, or who have deducted referral fees for trade unions or for claims farmers from coal miners’ compensation. Since then I have met the Under-Secretary of State for Justice, my hon. Friend the Member for Lewisham, East (Bridget Prentice), who is responsible for legal services, on 17 May to discuss the matter in some detail at the meeting of coalfield MPs. That meeting was helpful. There was much common ground between us. We were at one in acknowledging that the new Legal Complaints Service and the Solicitors Regulation Authority board have made good progress in seeking to tackle the issues. They have recovered £2.5 million so far, but much more needs to be done.
To address further the ongoing concerns, today I can announce two initiatives that we will take forward over the coming weeks. First, my hon. Friend and I will send a joint letter to all solicitors involved in handling claims under the schemes to remind them of their obligations to repay deductions, whether they be success fees for themselves or payments on behalf of a union or claims farmer. That will follow up a previous exercise undertaken by my predecessor, my hon. Friend the Member for Edinburgh, South (Nigel Griffiths), when he was responsible for the schemes.
Secondly, my Department, in conjunction with the Ministry of Justice, is working with the Legal Complaints Service and the legal services ombudsman to help claimants better to understand their rights and the mechanism for investigating service complaints. I welcome the commitments that the Legal Complaints Service made in its recently launched service improvement agenda. To build on that, we will take forward a pilot exercise in the constituency of my right hon. Friend the Member for Rother Valley (Mr. Barron).
Mr. Djanogly: Will the hon. Gentleman give way?
Malcolm Wicks: No, I shall not. I mean no discourtesy, but I have to reply to the debate.
We will take forward our proposals carefully, in order not to panic elderly claimants who, in the main, will probably not have been affected by the issues raised. We will want carefully to assess the impact of the pilot before judging the merits of a wider roll-out. I hope that colleagues have already received my Department’s May 2007 edition of the “Compensation for Miners” newsletter, which contains helpful advice. I am sure that many Members will want to make use of the information in their own constituencies, to ensure that the full benefit of the compensation schemes goes to those for whom we intend it.
I shall now turn to other issues that have been raised, of which there is a large number. My hon. Friend the Member for North Durham started an important debate on his concerns about the Durham NUM. We all listened carefully to his speech—offshore bank account and all. As he knows, the union certification officer has powers to investigate the affairs of a trade union in certain circumstances. The officer has powers to appoint an inspector to investigate the financial affairs of a union, for example, but only in restricted circumstances and if there is evidence to suggest financial irregularities. I am sure that the officer might be approached about the matter that my hon. Friend raised.
We have rehearsed the important issue of knee injuries a number of times. Liability is not yet proven in respect of such injuries, and it is only right that the Government should follow the appropriate legal requirements to establish it. The DTI is taking the issue seriously and is doing everything that it can to follow the directions of the court in managing the issue. I am happy to provide colleagues with further details about that. We have discussed a number of times—rightly so—those who worked on the surface of mines. My right hon. Friend the Member for Islwyn (Mr. Touhig) spoke with a great deal of passion about them, and I listened to what he has said. The court has issued an
order with which the Department will comply and with which solicitors should be encouraged to comply to ensure that the position on such cases is advanced, as I want it to be. It is important that colleagues support the terms of the order to ensure that matters progress. Essentially, we need to ensure that we have a number of test cases in court. The financial onus to fund the cases should be on the solicitors who have done so well out of the scheme, and perhaps on some trade union branches. We will then see what the court says, reflect on the outcome of the cases, and try to take the matter forward as sensitively as possible. That is where we now stand.
There are many great champions of miners, of which my hon. Friend the Member for Bassetlaw (John Mann) is certainly one. He referred to access to Vendside files. On receipt of a file access request from a compensation claimant, the Department would decide whether to disclose it, taking account of its legal obligations. My hon. Friend and I have corresponded about that and I am happy to talk to him again. He also raised an important point about probate; we recognise that probate is a key challenge for the settlement of many claims in the scheme. Advice on such matters is clearly a matter for the claimant’s solicitor, but I shall consider my hon. Friend’s request and offer further advice to him in writing.
My hon. Friend the Member for Barnsley, East and Mexborough (Jeff Ennis) talked about the minimum payment scheme. I know that solicitors have implemented their own version of such a scheme, which he acknowledges. I note what he said about payments that have already been made; I can see the merits of his suggestion and my officials will ensure that it is brought to the attention of the co-ordinating group of solicitors at the most suitable opportunity.
I do not have time to go into detail on the issue of small mines, but in most cases, small mines claimants should be able to move from interim payment to full and final settlement. I take a good deal of interest in that issue, and I may write to the hon. Member for Brecon and Radnorshire (Mr. Williams) about it.
The hon. Member for Huntingdon (Mr. Djanogly) referred to an article in The Lawyer. I am advised that it was wrong about what we have spent on our legal fees, and we are seeking a correction.
Mr. Djanogly: Will the Minister give way?
Malcolm Wicks: No, I shall not.
Malcolm Wicks: There have been important contributions today; the hon. Gentleman’s was not one of them. I am replying to them.
Mr. Djanogly: Will the Minister give way?
Malcolm Wicks: No. [Interruption.]
Mr. Edward O'Hara (in the Chair): Order. The Minister will not give way.
Malcolm Wicks: I have only a few seconds left. On the implications for the future of the scheme, we set up an inquiry into the scheme under Mr. Boys Smith, which I am sure that the hon. Gentleman has read. It made some important points, and said that if we have such a compensation scheme again, it will be sensible not to pursue it through an individual, legal, court-based process, because of the sheer cost involved. As a former social security Minister, I understand the implications of that, should we have such a scheme again.
I failed to mention only canteen workers. That is not quite my province, but I can understand why my hon. Friend the Member for Barnsley, East and Mexborough raised the issue. I shall do my best to advise him in writing. It has been an important debate, Mr. O’Hara, and we are grateful for your chairmanship.
Household Water Charges
3.59 pm
Mr. Andrew Smith (Oxford, East) (Lab): I requested the debate because I think that it is wrong that many thousands of people, especially pensioners but also many residents of tower blocks and one-bedroom flats, are paying over the odds for their water in my constituency and across the country. That scandalous situation has been drawn to my attention by pensioners in housing association accommodation in Lucas place and Remy place in Iffley village, Oxford, and by residents of one of our tower blocks. In both cases, constituents felt that they had had poor service from Thames Water, and that—
4 pm
Sitting suspended for a Division in the House.
4.15 pm
Mr. Smith: I was saying that the constituents who drew to my attention the position on household water charges felt that they had received poor service from Thames Water, and that advice given to them was inaccurate and incomplete.
One of the residents whose case I took up applied for a meter in May 2005 and was refused in July 2005. It was not until I took up her case in March this year that she was put on the average household charge. Her own telephone calls to Thames Water did not result in her being given clear or accurate information. Now she is on the average household charge, which saves her a bit in comparison with the water rates, but she is still paying over the odds, because the average household charge operated by Thames Water is the average of all non-business metered users and does not reflect the lower consumption that is typical of someone in her circumstances.
My review of my constituent’s case and many others points to several things that need to be done. First, much clearer, more consistent rules on the operation of the water charging regime are required throughout the country; secondly, clear advice should be given to residents on the options that are open to them; and thirdly, for those who cannot have meters fitted, there is a need to have a charging regime as of right that takes account of their household type.
People who cannot have a water meter installed, whether because it is technically not possible or because their landlord will not agree to it, are eligible to choose to go on an average household charge. In most cases, that will save them money on their water charges compared with standard water rates. The savings can amount to a pound or two a week or, in some cases, more. The problem is that they have to apply for a water meter first, and then Thames Water tells them that they cannot have one but that they can go on to the average household charge.
The average household charge is badly publicised, so many people do not know about it. Water companies and landlords should be obliged to advise customers and tenants of their rights. People should be put on the household charge automatically if they cannot have a
meter but would be better off not paying standard water rates. Hundreds, if not thousands, of residents in Oxford are losing out, and there must be hundreds of thousands losing out across the country.
The water regulator has responsibilities as well. I looked on the internet for the Ofwat briefing sheet on Thames Water charges—I have a copy with me that I will gladly leave with the Minister afterwards. There is no reference in it whatsoever to people going on to the average household charging scheme if they cannot get a meter.
As the experience of my constituent illustrated, the situation is especially unfair to Thames valley water customers who are pensioners. Even if they get on to the average household charge, no account is taken of household size, so they still pay over the odds. The residents of Lucas place and Remy place in Iffley village whom I mentioned earlier do not have their own washing machines, for example, but they still pay the same average household charge as much larger families in bigger properties.
It is not just pensioners who lose out. A letter was written to The Guardian “money” page last year by someone living in a one-bedroom flat in London. Their water bill, which was based on rateable values, came to £246.68 for the year. They asked for a water meter to be installed and were told that that was not possible. They were put on the average household charge of £244.78—a grand saving of £1.90 a year. However, as they pointed out, the Thames Water website said at the time that the metered charge for a one-bedroom flat would be only £148 for low consumption or £175 on average, so the complainant reasonably felt that they were being done out of at least £70 and possibly £107 a year. When challenged by The Guardian adviser, Thames Water said that any change would be too bureaucratic and costly to administer. Some other water companies, for example Anglian Water, do adjust the charge according to the type of property. If some companies can do it, why cannot Thames Water?
The water regulator Ofwat approved the charging policies for the water companies, so it too has let down pensioners and people in small flats. To be fair to Thames Water, it obviously realised that its position was unsustainable and in an e-mail sent to me after I called this debate, it told me that it will introduce a tiered system of average household charges from 1 April next year. If that fairly addresses the situation of pensioners and others in small properties, it is to be welcomed. However, for many customers of Thames Water, the system will be qualified by the knowledge that it is an admission that they have been overcharged for years. The new charging regime must be approved by Ofwat, but given that it approved the previous manifestly unfair regime, it will need to make an extra effort to show that it is insisting on a fair system for low-consumption customers who cannot get meters.
Section 142 of the Water Industry Act 1991, a copy of which the Library has provided—I am sure that the Minister keeps a copy close by him at all times—states that, under the terms of their licences, water companies must ensure that
“in fixing or agreeing charges...no undue preference is shown to, and that there is no undue discrimination against, any class of customers or potential customers”.
I am not qualified to say whether the practices of Thames Water and the other four companies that operate a fixed assessed charge at the average metered level have breached the letter of the law, but they have infringed its spirit. Pensioners in shared blocks are the class of customers who have systematically lost out. Ofwat information note 20 explains the duty that section 142 of the 1991 Act refers to in these terms:
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