Water Bill

Debate between Earl of Selborne and Baroness D'Souza

Tuesday 25th March 2014 Lords Chamber

[The Earl of Selborne]

My Lords, here we come to two much more specific and modest proposals to address the potential threat of de-averaging.

In Schedule 2 on page 141, in proposed new Section 66EA of the Water Industry Act 1991, there are rules set out which make provision about the reduction of charges. These provide for the circumstances in which discounts can be allowed. Amendment 30 would additionally allow a discount only where overall costs to the network are reduced. This should prevent a discount in price which discriminates against other participants on the network. Highly desirable discounts—for example, for direct debit, for advance payments or paperless billing—which are available to everyone would in no way be precluded. If, however, a discount is offered to a customer which effectively loads costs on to other users, then this must be unacceptable. The thrust of the amendment is an attempt to ensure that the charges are not slanted in favour of one customer at the expense of another. Likewise, Amendment 37 makes the same provision for discounts on sewerage services. The sewerage undertaker must be able to offer discounts to all on the network who are sharing the facility, or to none.

Amendments 59 and 60 propose a change to the proposed rules about charges schemes. As drafted at present, subsection (6) of proposed Section 143B of the 1991 Act says:

“The rules may make different provision for different cases, including different provision in relation to different, or different descriptions of, persons, circumstances or localities”.

I accept the case for different rules for persons and circumstances. However, I am very concerned that localities should also be a reason for different rules. That seems to be a hostage to fortune. It will hamper the ability of Ofwat to prevent geographic difference in charges, which could lead once more to charges for rural customers being higher than for urban ones. Amendments 59 and 60 would therefore explicitly rule out different rules for different localities. I beg to move.

[The Lord Speaker (Baroness D'Souza)]

Page 141, line 32, at the end insert the words as printed on the Marshalled List, with the proviso that the last word in that amendment is “reduced” rather than “recorded”.