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Baroness Hamwee: My Lords, in order to avoid bringing forward a further amendment at the next stage, can the Minister say whether it is proposed that the DSS will hand over directly information about those customers who are eligible through their entitlement to benefit?

The Minister referred to possible differences across the country. I am concerned that the water companies will be forced to reinvent a wheel--which would be a complete nonsense--in connection with those whose entitlement to benefit is relevant. I understand the distinction between those who may be on a list or on a data base because of that entitlement and those who are not on any sort of data base because their entitlement arises specifically from the provisions of the Bill. In order to avoid bringing forward at the next stage an amendment which is limited to those who would be passported through entitlement to benefit, can the Minister say any more about how the practical arrangements might work?

Lord Whitty: My Lords, if the noble Baroness means will the DSS hand over its lists of benefit recipients to the water companies, the answer is no. It would not be reasonable that that information should be provided to a private company, with all the data protection problems that it would raise. In most cases, if one is a benefit receiver, one will have documentation which is relatively straightforward to show to the water company. As we are defining the most vulnerable groups by size of family and so on, a simple list of people receiving a particular benefit will not be appropriate. In addition to data protection problems, it could be misleading to provide a full list.

To some extent there is a clear onus on the company to try and find out; there is a clear onus on the company to respond to claims from their customers that they are protected in this way; and there is a clear obligation on the public authorities, if consulted, to give the information. But there is not an automatic provision of lists irrespective of the wishes of the customers.

Baroness Hamwee: My Lords, I am grateful for that reply. Noble Lords will understand that I am not seeking to breach confidences but merely seeking the most practical approach. As to the first amendment and the point made about the extension of the powers of the Secretary of State, I shall say only touche!

I hope that the director general, in undertaking what the Minister described as normal consultation arrangements, will make sure that those arrangements

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are effective. I shall consider what has been said in response to these two amendments. I beg leave to withdraw Amendment No. 1.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

Baroness Miller of Hendon moved Amendment No. 3:

Page 3, line 44, at end insert--
("( ) The power to make regulations under this section shall only be exercised after consultation with all such bodies and persons as the Secretary of State considers it appropriate to consult in relation to the proposed regulations.
( ) No regulations shall be made under this section unless a draft of the regulations has been laid before, and approved by a resolution of, each House of Parliament."").

The noble Baroness said: My Lords, this amendment would add two subsections to Clause 5. Clause 3 gives the Secretary of State far-reaching powers to make regulations controlling the contents of the water companies' charging schemes which the director general is required to approve or disapprove, as the case may be.

In Committee, I pointed out that the director general is specifically required under subsection (7) of Clause 4 to have regard to the so-called guidance that he receives from the Secretary of State as to the manner in which he performs his duties.

Although the provisions of this clause actually diminish the discretion of the director general and diminish the independence from political interference that he has enjoyed since the industry was privatised in 1989, I shall certainly not quarrel with them at this late stage. However, it is absolutely right that the Secretary of State should, in the interests of open government, which the party opposite claims to espouse, be required to consult about any regulations that he proposes to make. Apart from anything else, that will relieve him from charges of playing politics with the industry.

The requirement to consult in the terms of the amendment is not unduly onerous. The amendment calls for the director general to consult only with such persons as he himself deems appropriate.

But there are vulnerable groups whose interests need to be considered at any stage of approving charging schemes: persons with a low income or those with a need to use exceptionally large quantities of water for medical reasons. The noble Lord, Lord Ahmed, reminded the Government at Second Reading that the Moslem community also had special needs.

In the debate on this clause in the other place, the Minister for the Environment specifically gave a pledge that,

    "We shall, of course, consult on the regulations in the draft".--[Official Report, Commons, Standing Committee A; 12/1/99; col. 68.] Consulting about regulations after the Secretary of State has committed himself to a draft will leave the interested parties pushing a very large rock up a very steep hill. Ideally, the Secretary of State should consult before his own ideas are committed to paper.

In turning down my amendment in Committee, the noble Lord, Lord Whitty, said that he did not believe that it would add to the commitment given in the other

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place by his colleague the Minister for the Environment if the obligation to consult were to be included on the face of the Bill.

I do not doubt the word of either the Minister in the other place or the Minister in this House. But Ministers change, and "new brooms" often have different ideas. A firm and binding obligation which can be changed only by subsequent primary legislation is required to ensure that the interests of vulnerable groups are fully taken into account before the Government commit themselves to a course of action.

The party opposite insists that it keeps its promises. I believe that it does. Ministers in both Houses insist that their word is their bond. On a personal basis I unreservedly accept that. However, as I have said, Ministers come and go. In this case, there can be no reason why Parliament should not have its bond in the form of a statutory obligation.

The noble Lord, Lord Whitty, suggested in his reply to me that the Secretary of State's power to make regulations is constrained by Clause 5(4). That constraint only prevents the Secretary of State from limiting water undertakers' total income. It does not prevent him from interfering in how the total charges are to be split up among different categories of consumers or about whether specially disadvantaged groups are to receive special consideration.

This amendment does not impose any obligation on the Secretary of State in that regard. All it does is oblige him to consult. As the Ministers in both Houses pledged that they would consult, I cannot see why they are reluctant to put that commitment into writing in the Bill.

The second part of the amendment follows on from the one to which I have just spoken. Apart from the consultations about the regulations that the Secretary of State will make directing the director general as to how he is to perform his duties, it is right that those regulations should be scrutinised by Parliament. He would then have to answer for his decisions if he failed to take into account the representations that he received during those consultations. The right and proper way to scrutinise those regulations is by the affirmative resolution process.

The Minister told me that the Delegated Powers and Deregulation Committee had not made any recommendations regarding the regulation-making powers under this clause. That is a very powerful argument. But there is nothing to prevent the government going for the entirely transparent process of allowing the Secretary of State's decisions to be subjected to positive vetting, rather than risk their being allowed to slip through almost unnoticed by the alternative method.

There will be no risk to the Government's timetable. If there are no problems with the regulations, they will go through on the nod. I urge the Government to demonstrate their sensitivity to the opinions of special interest groups by assuring them that their views have been positively considered, even if not acted upon by Parliament. I beg to move.

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7.45 p.m.

Lord Whitty: My Lords, the noble Baroness's amendment deals with two separate issues, consultation and parliamentary procedure. I note the confidence that she has in myself and my current colleagues but that she has a fear for the future.

It would be unreasonable to expect that any future government would issue regulations without a reasonable degree of consultation. It is in everyone's interest, particularly the Government's, that the regulations are fair and practical and take into account everyone's view. This Government have given their commitment clearly in a consultation document and the consultation based on that document, and we are continuing to refine proposals in consultation now on which there will be further consultation when we produce the draft regulations. So the process is full of consultation.

I believe that it is unnecessarily suspicious of the noble Baroness to say, in relation to future Secretaries of State of whatever party, that the implication of providing draft regulations does not imply that substantial consultation would be needed. Therefore, I do not believe that the first part of the noble Baroness's amendment is necessary.

However, I feel more strongly in regard to the second part of the amendment. A key reason for adopting the approach set out in the Bill is the openness of our policy to date. In Committee, the noble Baroness herself said that it was important for a statutory instrument to be subject to proper scrutiny. But we have already set out our intentions clearly. We have invited comments on how to ensure that targeted protection is available to those who need it. It is not therefore the case that the tabling of the regulations will be the first indication of the Government's proposals in this area.

In Committee, I pointed out that the use of negative resolution procedures in this sector is entirely in line with other equivalent regulation-making powers under the Water Industry Act 1991. It would, therefore, be bizarre to moved to a changed basis from one which was accepted when the current structure of the water industry was first introduced. At the time, the noble Baroness noted that but suggested that other regulations under the Act referred to highly technical matters and were not of the same order of concern as the regulations referred to under Clause 5. I cannot agree. To take an example, Section 67 of the Water Industry Act 1991 allows the Secretary of State to make regulations governing the standards of wholesomeness of water supplied to customers. Such regulations have wide-ranging public health and welfare consequences and implications. They can have a significant effect on the costs of water, the way in which the companies operate and the income they receive from customers.

For example, if additional treatment or replacement of infrastructure is needed to meet particular standards, the director general would need to take into account such matters in setting price limits for water companies. That is the constraint which we have built into the Bill under Clause 5(4) to which the noble Baroness referred. That subsection also ensures that the Secretary of State's

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regulation powers do not tread on the toes of the director general's function as economic regulator. We have given a clear indication of the scope of the regulations' intended use, consistent with the Government's legitimate social and environmental concerns, for example, for vulnerable groups, and consistent with the way in which previous water legislation has dealt with these issues.

After the initial use of these regulations it is very likely that at least some of the subsequent uses would be minor and mainly technical updatings of the scope and nature of the protections offered, for which use of the affirmative resolution procedure would be quite disproportionate. As for initial use, the House already knows our intentions. Like the noble Baroness, I also said that the Delegated Powers and Deregulation Committee has seen nothing in the clause that requires it to be drawn to the attention of the House. In other words, by implication, the committee is happy with the negative procedure.

Therefore, I do not think that the amendment is necessary and hope that the commitments we have given on consultation deal with the first part of the amendment. Procedurally, I do not believe that the second part of the amendment is appropriate and I ask the noble Baroness to withdraw it.

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