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Lord Whitty: The intention of the section is to provide customers with an interim supply while arrangements are made for an alternative supply, or a reversion to a permanent supply, when the supply from a licensee ceases. It could happen at very short notice or with no warning to anyone. The minute that

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supply from the licensee ceases, the duty automatically applies to the undertaker, and continues for at least three months.

The amendments we are discussing would require customers to notify undertakers before the interim supply duty applies. That could lead to a hiatus. Until the customer notifies the undertaker, the undertaker will not be able to charge for the supply and might therefore cut off the supply as it is not supplying to a customer at that point. As drafted, the Bill offers the prospect of continuity for the customer and allows the undertaker to recover charges for making the supply. There could be a hiatus on both counts were the amendments to be accepted.

1 p.m.

Lord Dixon-Smith: I hear the noble Lord's explanation with a degree of fascination. It seems to me that what he says flies in the face of what was said about the charges that a water undertaker might levy for passing water through his pipes. If the water undertaker has to maintain the whole system so that, literally at the drop of a hat, he can start to supply water without notice, he will never gain any benefit as a result of having a water supplier pumping water through his pipes and out to the customer. The water undertaker must maintain the whole system on the basis that he can carry out the obligations of the water supplier instantaneously should the water supplier fail. That issue is slightly separate from that addressed by the amendments we are discussing. I hear what the Minister says and I shall study it but we shall need to consider further the consequences that arise from this section of the Bill. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 168LD and 168LE not moved.]

Lord Whitty moved Amendment No. 168M:

    Page 187, line 41, at end insert—

"( ) Where a duty is imposed by this section in respect of any premises, any breach of the duty which causes the owner or occupier of the premises to sustain loss or damage shall be actionable at the suit of that owner or occupier; but, in any proceedings brought against a water undertaker in pursuance of this subsection, it shall be a defence for the undertaker to show that it took all reasonable steps and exercised all due diligence to avoid the breach."

On Question, amendment agreed to.

Baroness Byford moved Amendment No. 168MA:

    Page 188, line 13, leave out sub-paragraph (3).

The noble Baroness said: In moving Amendment No. l68MA, I wish to speak also to Amendments Nos. 168MB and 168RA.

I turn first to Amendment No. 168MA. In the proposed new subsection (3A) in the Bill the licensed water supplier has a specific duty in relation to the supply of water for domestic or food production purposes.

In new Section 17A of Chapter 1A on page 131 of the Bill household premises are made off limits for licensed water suppliers. New Section 17B defines the

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water undertakers' supply system as the mains and other pipes used to convey water from a treatment works to customers' premises and any water mains and pipes used for conveying non-domestic water. Non-domestic water is defined on page 133 of the Bill as,

    "water supplied other than for domestic or food production purposes".

My next point may relate to an earlier discussion but will the Minister clarify whether the wording in new Sections 17A and 17B is or is not intended to ensure that licensed water suppliers do not supply domestic quality water to domestic or food premises? In briefings from various interested parties before this process began, the message was quite clearly that the major customers interested in leaving water undertakers would do so precisely because they do not need domestic quality water.

I turn to Amendment No. 168MB. This is a probing amendment. The proposed alteration to Section 69 of the WIA would mean that a water undertaker forced to give a licensed water supplier access to his system to supply one of his ex-customers, perhaps with water from another undertaker, would have to test that imported water and publish the results. In the circumstances we believe that that might be an imposition too far. It is a bit like losing the front of one's garden to compulsory purchase for a footpath and then finding that one has the duty to sweep the said footpath. As the licensed water supplier appears also to have a duty to test and publish, will the Minister explain why the undertaker should be required to do so too?

I turn to Amendment. No. 168RA. Subsection (1) of Section 75 of the WIA gives the water undertaker powers to act in response to any of the four scenarios listed as paragraphs (a) to (d). It surely therefore makes more sense to extend the powers to licensed water suppliers. Will the Minister explain the thinking behind that subsection as it stands and clarify whether it is the Government's intention that the water undertaker should act on the suspicions of a licensed water supplier? I beg to move.

Lord Whitty: Amendment No. 168MA seeks to relieve licensed water suppliers of an obligation to supply wholesome water and to ensure that the quality of water they supply does not deteriorate. That is a central obligation. It may not be the intention of the amendment to do what I have outlined. The maintenance of the present standards of the quality of water in the public supply networks is of fundamental importance. Ensuring that licensed water suppliers are responsible for water quality is central to maintaining that quality.

Section 68(1A), which this amendment seeks to remove, makes those who supply water through the public supply system responsible for its quality. Together with amendments to Section 18, it requires the Drinking Water Inspectorate to take enforcement action against any licensed water supplier should they be responsible for a failure to meet the water quality standards.

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Section 69 of the Water Industry Act contains provisions for the Secretary of State to make regulations to impose obligations on the use of processes, substances and products that are used in the treatment and supply of water. These regulations protect the quality from potential contamination from the use of unsuitable substances and products. Those safeguards are needed.

Amendment No. 168MB would restrict the requirement to water undertakers to conform to any standards prescribed for processes, substances and products. The Government consider it essential that there are safeguards to protect the quality of drinking water. Water undertakers and licensed suppliers should be subject to the same provisions to ensure that only appropriate processes, substances and products are used in water supply.

Section 75 of the Water Industry Act deals with powers to prevent damage, contamination and waste. Water undertakers have powers to disconnect water supplies or serve notices on consumers requiring steps to be taken to prevent damage and waste.

The last amendment in this group would give the responsibility of disconnection or the serving of notices to licensed water suppliers. Licensed water suppliers do not have the necessary powers to undertake these functions. The Government believe that water undertakers are best placed to ensure the integrity of the water supply system because through their monitoring and inspections they are likely to detect any waste or contamination. The responsibility to prevent damage, contamination and waste, and the powers to enforce that, should therefore remain with them.

As regards Amendment No. 168MA and the distinction between potable and other water, where licensees supply potable water for domestic purposes the water must meet drinking water quality standards. The import of the measure that the amendment seeks to remove is to place an obligation on licensees as well as on undertakers in that regard.

Baroness O'Cathain: Before the Minister sits down, I seek a point of clarification. The water undertakers have the duty to make sure that the water is not contaminated and is tested. Is the Minister saying that the water suppliers do not have that duty? Or I am wrong in that?

Lord Whitty: The first two amendments in the group we are discussing deal with giving water suppliers the same responsibilities for ensuring water quality as the water undertakers. The duty in the third amendment in the group, however, which relates to disconnection or the serving of notices—and, therefore, enforcement in the light of contamination or damage—must rest with the water undertakers. There is not an equivalent power to the water suppliers in that regard.

Baroness Byford: I thank my noble friend for her intervention which was helpful. The Minister said that the water suppliers are not responsible for a certain duty. I do not understand why that is so. After all, they

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supply water. We all agree that we want high standards as regards water quality. There is no difference between us on that. Let us establish that before we start. But the question is where the responsibility starts, middles and ends. If a water supplier is taking water from a water undertaker, at the moment the undertaker has to guarantee a certain standard for the water that goes to the water supplier. I shall need to consider the matter in greater detail as I am getting confused. It appears that the same responsibility is not expected as regards those who supply the incoming water.

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