| Water Bill [Lords]
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Mr. Swire: Referring back to an earlier discussion, when we talked about people who default on their water bills, would the Minister explain what penalties defaulters will be encouraged to pay in terms of interest when they are chased up by the Government, as he promised earlier? Mr. Morley: At present, it is open to the companies to take court action against their defaulters. If the court thinks that there is no good reason why people have not paid, it could apply penalties, including interest. That is a matter for the courts, and the provision is there. However, that is not an excuse, because if people are deliberately withholding payment it is reasonable to impose some penalty. I do not disagree with that, but one cannot then argue that we should remove the similar provision in relation to companies. If they have to pay a penalty, they should pay it on time. If they do not there is a charge of interest. It is also established practice that an appropriate rate of interest should apply in the event of late payment of a penalty or fine imposed on a corporate body, which is covered in the Utilities Act 2000. The provision is in line with existing legislation and practice. Norman Baker: The question of interest is not controversial, at least to my hon. Friends and me. In his introduction, the hon. Member for Leominster made the point that the provision is unduly harsh. I do not know whether that is true, because I am not familiar with section 17 of the Judgments Act 1838. Is that true or is the provision a standard condition of the 1838 Act? Column Number: 255 I should point out in passing that there is an ambiguity in the third line. Does the wording need to be clarified? Mr. Morley: Until the hon. Gentleman raised the matter, it seemed clear to me. The current rate is 8 per cent., which is in line with the calculation and application of rates in the Utilities Act 2000. There is nothing exceptionally different about the provision. One can, as the hon. Gentleman has done, argue about whether interest should be applied, but it is not unreasonable to include an incentive to pay on time. Mr. Wiggin: I agree with the Minister that it is not unreasonable to have an incentive to pay on time. He will find that 8 per cent. is 4 per cent. over the base rate, which is particularly high for an area such as water payments, where defaulters sometimes do not have to pay their bills and the item is essential. We will not make any progress because the debate is about the amendment rather than the Judgments Act 1838. My amendment has done everything that I had hoped that it would by allowing me to make my points and by instigating the debate. I have no problem with withdrawing it, so I beg to ask leave to withdraw the amendment. Amendment, but leave, withdrawn. Mr. Wiggin: I beg to move amendment No. 100, in
'(ab) that the imposition of the penalty was based on an error of law or fact; (ac) that the amount of the penalty was unreasonable;'.
The nature of this amendment is different because it attempts to clarify and to tidy up the wording. When a mistake has been made, the amendment would ensure that it was rectified speedily. Mr. Morley: The amendment would expand the grounds of an appeal against the imposition of an unreasonable penalty or an error of law or fact. That is perfectly reasonable, but the Bill already covers those grounds for appeal. An error of law means the authority going beyond its powers or non-compliance with the notice procedure. The clause contains detailed procedures on errors of fact, including consultation with a company. That means that errors of fact can be pointed out, and it would be unreasonable for the regulator not to take them into account. If the error of fact were such that it took the matter outside the provisions on financial penalties, it would also be outside the powers of the enforcement authority. With regard to reasonableness, proposed new section 22A requires the penalty to be reasonable—unless, of course, we had accepted amendment No. 84. In opposing an unreasonable penalty, the authority would also be going beyond its powers. The Bill contains those safeguards, and I hope that that reassures the hon. Gentleman. Mr. Wiggin: I am relieved that those matters have been addressed in other parts of the Bill. If the authority imposes a penalty, I wonder whether the interest will also be paid at the rate that we discussed earlier. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Column Number: 256 Mr. Wiggin: I beg to move amendment No. 86, in
'or any portion of it'.
This is a probing amendment. If it is unreasonable for the enforcement authority to require the penalty imposed to be paid, why should it unreasonably require any portion of it to be paid? I am seeking clarity on the phrasing. Mr. Morley: I can explain that. As drafted, the clause allows a company to appeal against not only the date for full payment of the penalty but the instalment dates. A company may opt to spread the cost—that is not unusual. The effect of the amendment would be that companies would not be able to appeal against the terms set out for the payment of a penalty by instalments—the length of the repayment or the number and frequency of instalments. In other words, the circumstances in which the company could appeal the spreading of cost would be reduced. The Bill includes a provision for payment by instalments. Mr. Wiggin: Again, I am grateful for that answer. The Minister's extremely helpful comments satisfy me, so I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Question proposed, That the clause stand part of the Bill. Mr. Simon Thomas: I have listened to the past few minutes of discussion about whether reasonableness is implicit in the Bill. We had one amendment that took it out of the Bill and another that put it back in. My general point is that, for simpletons like me, it is better that everything is stated in the Bill. Mr. Morley: It is important that a Bill states as much as it needs to in order to be clear about the intentions and circumstances, but it is a difficult problem. If we tried to put in a Bill every single circumstance, exemption and issue for consideration, we would be walking around with volumes the size of the Encyclopaedia Britannica. There must be a balance. A Bill has to be drafted in a way that is clear and not open to misinterpretation, but there must also be an element of flexibility to deal with issues that are difficult to predict. I do not disagree with the hon. Gentleman's general point, but we must be realistic about the way in which legislation is formulated. Question put and agreed to. Clause 51 ordered to stand part of the Bill.
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| ©Parliamentary copyright 2003 | Prepared 16 October 2003 |
