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Brought from the Commons; read a first time, and ordered to be printed.
Brought from the Commons endorsed with the certificate of the Speaker that the Bill is a Money Bill, and read a first time.
Further consideration of amendments on Report resumed on Schedule 4.
Baroness Byford moved Amendment No. 118:
The noble Baroness said: My Lords, in moving the amendment I shall speak also to Amendment No. 121. The amendment is supported by the Liberal Democrat Benches. It asks that the consumer council for water should be included in Schedule 4.
Amendment No. 121 deals specifically with the codes and obligations that are to be placed on licensed water suppliers, affecting their conduct. I beg to move.
Baroness Miller of Chilthorne Domer: My Lords, as the noble Baroness said, we have put our names to the amendments so obviously we support them.
Baroness Farrington of Ribbleton: My Lords, Amendment No. 118 would require the Secretary of State or the Assembly to consult the council when proposing to alter the eligibility threshold for competition. The Secretary of State and the Assembly are committed to full consultation on most of the decisions they make. In this case, other than the authority, which has to operate the competition regime, important parties such as the Drinking Water Inspectorate and the Environment Agency, which will be consulted along with the council, are also not listed in the Bill. There is no reason to single out the consumer council for water, especially when the effects of the competition threshold can be just as significant to the interests of the other regulators.
Amendment No. 121 proposes amendments to the clause on standard conditions of water supply licenses. While we agree with the principle that the council should be consulted where appropriate, we do not think the amendment is necessary. If obligations are being imposed, the proposals are likely to be a modification of the standard conditions themselves. Amendment No. 122, which we will be debating next, will ensure that the council is consulted in such cases.
If there were codes to aid or govern the practice of licensed suppliers, we would expect appropriate consultation. In most cases that would involve consultation with the council, but there may be technical issues where consultation with the council would not be required. It would be an unnecessary burden on the council and the authority to insist on inappropriate consultation.
The second part of the amendment would require directors or representatives of the companies that are licensed water suppliers to attend council committee meetings. That is not necessary. The current obligation for undertakers to attend committee meetings is included in the standard appointment condition and is therefore not covered in primary legislation. We would expect a similar licence condition to be applied to licensed water suppliers. That will be consulted on. For those reasons I hope that the noble Baroness, Lady Byford, will not press the amendment.
Baroness O'Cathain: My Lords, before the Minister sits down, I want to tease out why the consumer council for water should not be mentioned in the Bill. The Bill is very technical, but water is a consumer issue. The consumer does not get much say in any of this. The consumer council for water is an important body. The current WaterVoice people are very helpful. They get deeply involved in all the issues of the organisation and they should be consulted.
I should also like an explanation from my noble friend Lady Byford of the use of the word "directors" in the second part of Amendment No. 121.
Baroness Farrington of Ribbleton: My Lords, I could not agree more that the consumer council for water is
Baroness Byford: My Lords, I am grateful to the noble Baroness, Lady Farrington, for that clarification. We continue to feel that the water council should be defined in the clause. She referred to the Drinking Water Inspectorate and the Environment Agency. If she feels that the consumer council, in having its name in the Bill, would take priority over those two bodies, perhaps the Government should consider adding all three names. In that way, all three bodies could be consulted. The noble Baroness suggested earlier that that was not necessary and that the bodies were already in the Bill.
Baroness Farrington of Ribbleton: My Lords, I believe that I indicated that those bodies were included as appropriate, rather than as a blanket inclusion on every occasion.
Baroness Byford: My Lords, I must reconsider the matter.
The Minister was unhappy about Amendment No. 121, especially paragraph (b), which deals with directors and other representatives. In answer to my noble friend Lady O'Cathain, when we drafted the amendment we had not specified whether the directors were executive or non-executive. That is something that I need to clarify.
I apologise to the House for being somewhat unprepared at the restart. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Farrington of Ribbleton moved Amendment No. 119:
The noble Baroness said: My Lords, noble Lords from the Opposition Benches have tabled amendments that are broadly similar to Government amendments. We said in Committee that we would consider such amendments alongside the intention to extend the council's remit to monitoring licensed water suppliers. We have considered the matter further and agree that the council needs to be kept informed of new and amended licences.
The government amendments differ from the otherwise identical amendments tabled by both opposition parties, in that we have used the term "Council", which is the shortened name of the consumer council for water throughout the Bill. Given that we all have the same objectives, I hope that noble
Baroness Byford: My Lords, I thank the Minister for responding to the long discussions that we had in Committee. Brevity is always an advantage and, although I hate giving way, on this occasion the Government have the edge on us. We are quite happy to accept their amendments referring to the "Council", which obviously means the consumer council for water.
Baroness Miller of Chilthorne Domer: My Lords, we thank the Government for accepting our points.
On Question, amendment agreed to.
[Amendments Nos. 120 and 121 not moved.]
Baroness Farrington of Ribbleton moved Amendment No. 122:
On Question, amendment agreed to.
[Amendment No. 123 not moved.]
Baroness Farrington of Ribbleton moved Amendment No. 124:
On Question, amendment agreed to.
[Amendment No. 125 not moved.]
Baroness Farrington of Ribbleton moved Amendment No. 126:
On Question, amendment agreed to.
[Amendment No. 127 not moved.]
Baroness Farrington of Ribbleton moved Amendments Nos. 128 and 129:
On Question, amendments agreed to.
[Amendment No. 130 not moved.]
Baroness Farrington of Ribbleton moved Amendment No. 131:
On Question, amendment agreed to.
[Amendments Nos. 132 to 134 not moved.]
Lord Dixon-Smith moved Amendment No. 135:
The noble Lord said: My Lords, Amendment No. 135 seeks to insert the word "quantifiable" into the question of costs, which is what this particular part of the Bill deals withcosts as between water suppliers and water companies.
This is a slightly obscure but very important argument. I wish that I could abbreviate it but I regret that I cannot. A water undertakerthat is a major water companyloses a customer to a licensed water supplier who requests the undertaker to lay some pipes through which he will supply the undertaker's water to the undertaker's former customer. The undertaker is obliged to do so and charges the supplier accordingly. He is entitled to do so and that seems absolutely right.
But at that point the supplier can put up an argument to the effect that the charge is not payable as there are balancing items as follows. The customer is planning to expand his operation and the undertaker would have had to lay an additional pipe in any event. Moreover, there would have had to be an increase in water treatment capacity as the undertaker's pipes are all for domestic quality whereas the supplier, because of the nature of the customer, can use pipes of a lower quality and a lower standard because the customer does not need drinking water quality but he has had to have it because that was the only supply he could get.
This may sound like creative accounting gone mad but what we are dealing with is how we assess the nature of real costs. It is a complex question and the water undertaker could be obliged to pay costs which the water supplier could legitimately argue he would have had to undertake anyway. What we have sought to do is to insert a word which might help if one ever finds that kind of an argument arising between a water supplier and a water undertaker.
I am sorry that the matter is so complex; I wish that it were not. But unfortunately I see no way round the matter. I see immense scope for fruitful argument employing all kinds of experts for a long time at some point in the future. I hope very much that the Minister in his response will be able to clarify what is otherwise a very unclear situation. I beg to move.
"( ) the Consumer Council for Water;"
Page 136, line 19, at end insert
"( ) on the Council;"
Page 140, line 7, at end insert
"( ) the Council;"
Page 140, line 46, at end insert
"( ) the Council;"
Page 143, line 21, at end insert
"( ) the Council;"
Page 146, line 33, at end insert
"( ) the Council;"
Page 148, line 23, at end insert
"( ) the Council;"
Page 150, line 23, at end insert
"( ) the Council;"
Page 160, line 21, after "any" insert "quantifiable"
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