Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence

Examination of witnesses (Questions 440-461)



  440. You would assume that the company would absorb it?
  (Ms Reiter) Yes.

  441. Can I ask you about the resources you suggest are going to be necessary for the Consumer Council to do its job? Who is going to pay for that?
  (Ms Reiter) At the present moment the cost of the existing Consumer Council is part of Ofwat's cost and that is raised as a levy on the industry. That is the way for that to continue.

  442. But you are looking for a bigger role, are you not? What kind of information are you going to publish?
  (Ms Reiter) We would expect to publish information on a range of matters. We want to look at market research; we want to publish information on tariff structures; information on the development of competition; bad debt is a matter that is concerning us—a range of information, but we need a structure to gather the information.

  443. That is quite a detailed expansion, is it not? What you are saying is you want to become a vigorous body that will go across a number of different aspects of the problems?
  (Ms Reiter) If we do not become a vigorous body and we are not properly funded to do that then there is no point in making the change.

Mr Brake

  444. Our previous witnesses spoke at some length about the need to be able to access information. Is there anything that you, in your current form have not been able to obtain in terms of information that you would have liked?
  (Ms Reiter) Our relationship with Ofwat has been a good one. Bearing in mind the duty of the regulator to ensure that nothing which is commercially sensitive, shall I say, is made available to us, we have been able to gain a fair amount of information by working closely with the regulator. By moving outside that current structure, we would need to ensure that that would not be lost and, in fact, could be enhanced.

  445. So you would clearly like the same level of access to information to be retained as you currently have?
  (Ms Reiter) Yes. We agree with the Consumers Association, yes.

  446. Do you see any weaknesses in the Bill in terms of ensuring that that availability of information is retained?
  (Ms Reiter) Yes. There is a weakness in the Bill because we do not have the same powers as the regulator to gain information, and we think that is not in the best interests of customers.

  447. You think, therefore, the Bill should be amended so those powers are retained?
  (Ms Reiter) Yes.
  (Mr Terry) If you are going to try and improve the situation we have at the moment by making the Bill stronger we at least, I believe, need to maintain the same level of access which we have at the moment through Ofwat. That could disappear through the change in the Bill and we would want to make sure that it did not fall between the gaps in the two structures. We would want to have that right of access to that information. We think it would be essential. If the government wants, as it said, a strong consumer voice in terms of a one-stop shop, then we think access to that information would be absolutely key.

  448. In your dealings with Ofwat, is there anything that would lead you to believe that there is this larger gap between Ofwat and the Consumer Council and that there would be strong reservations about releasing that information?
  (Mr Terry) I cannot see any evidence on the way we operate at the moment, and most of that would be tackled or covered under the memorandum of understanding, which is again a provision in the Bill which we welcome. Having to go through a third party to get information is less effective than going directly to the company. We would like to have that equal access to the company. We would not expect the company to provide the same detailed information twice, and there are whole realms of sensibility about that. I think the key point would be, however, that we would have the right directly to go to a company for information which we needed in our advocacy role on behalf of consumers.

  449. And you would like that set out in the Bill?
  (Ms Reiter) Yes.

Mrs Dunwoody

  450. And you also want the arbiter's role to be clear?
  (Ms Reiter) Yes.

Christine Butler

  451. Just to be clear, you are saying what the Consumers Association are—that you should have direct access to the water companies by statute for any information which you require?
  (Ms Reiter) Yes.

  452. Taking it one stage further, you should perhaps have all the information that the regulator has. Then do you think the regulator might, through pressure from the water companies, be able ever to constrain you in what you offered as a public document?
  (Ms Reiter) I do not think we should be put in that position.

  453. Ever?
  (Ms Reiter) Well, I think we should have statutory powers such that we would seek information that it was fair and reasonable to expect to have on behalf of customers and, if there was any doubt by the companies that there was a risk in providing that to us, then they should have right of access to the information commissioner.

  454. And it looks as if you are definitely saying, therefore, that you want to be completely independent of what the regulator's role is, and that you would use the same sort of information to do your duties in your own way?
  (Ms Reiter) Correct.

  455. Can I ask you about costs? There is quite a variance in costs between water companies with regional differences and so on. What do you see as your role there in advising consumers in terms of the cost of different companies relative to competition?
  (Ms Reiter) You mean the cost of water?

  Christine Butler: No. The cost of water companies delivering water to their customers varies from company to company. Companies are going to be more and more involved in competition. How would you factor that in, and what do you see as your role?

Mrs Dunwoody

  456. Presumably you are not envisaging having a calculating role in the cost?
  (Ms Reiter) No, not at all. That is the regulator's role.

Mr Cummings

  457. Briefly, could you give the Committee a couple of examples of information you require to enable you to do your job efficiently and which you have been denied by the companies?
  (Ms Reiter) I think in the run-up to the periodic review all the chairmen would have liked additional information, and Maurice touched on some of that earlier.

  458. What sort of information?
  (Ms Reiter) For example, in my area, we have an exact situation that Maurice talked about which is the question of low flow rivers, where we suspected that a lower cost solution could have been achieved but we were not privy to that information at the time. We raised our objections and, as a result of that, a hold was put on that particular activity and has been re-investigated, and we do believe there is a much lower cost solution which has been arrived at, or is likely to be arrived at, and we feel that perhaps, if that information had been made available to us earlier in the process, then we would not have had this rather tortuous process to follow.
  (Mr Terry) In the current circumstances I cannot for my region recall any information that I required in order to do my job as an advocate of the customer in the region that I have not had. I have had access to that information through Ofwat. Sometimes, if I have had access to information through Ofwat which is perhaps commercially sensitive and, therefore, not in the public domain, what I am concerned about and what the Council is concerned about is, if you change the rules, then you take away that role and there is a disadvantage. We would like to make sure that access to that information is still core to the role and available to the new Consumer Council for Water.

  459. Were you ultimately consulted by the department before the draft Bill was prepared?
  (Ms Reiter) We made submissions on the previous Utilities Bill and, of course, water was removed from that. We were a little disappointed to find that, when we came to the new draft, some of our submissions and those of others did not appear to have been taken account of. We are also rather disappointed that, as yet, there is nothing in here about competition.

  460. In consultation are you saying to the committee that it is just a matter of sending in a piece of paper, or are you called into the department to discuss your paper?
  (Ms Reiter) We have had discussions with officials and with ministers.

Mrs Dunwoody

  461. Can we bring you on to complaints before I let you go? You say the government's proposes fall well short of what is required in terms of effective handling of complaints. What changes in the Bill would one need to deal with that?
  (Ms Reiter) We would like the power of complaint resolution to the extent that, in fact, if we found that a company was at fault, we could impose compensation of up to a *5,000 limit. We think that is a fair and reasonable amount and, if the company disputed that compensation amount, they would have the right of access to the director if they felt it was going to put their company in financial risk. I doubt if it would at *5,000 but that is a measure of how we felt it would be fair and reasonable.

  Mrs Dunwoody: That is very useful. Unless you have anything you want to add, can I say we are very grateful to you. Thank you very much.

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