Clause
31
Designation
of the Consumer Council for Water for
abolition
Lorely
Burt (Solihull) (LD): I beg to move amendment No. 56, in
clause 31, page 18, line 15, at
end add—
‘(5) No order under
subsection (1) above is to be madebefore
2011.’.
This
is quite an important clause, as it designates the Consumer Council for
Water for abolition. The amendment would insert a new subsection, which
says
that that should not take place before 2011. The CCW was created
recently, at quite considerable expense. I understand that it cost in
the region of £1 million. I question whether abolishing it
before it has even reached the crawling stage, let alone infancy, is
the wisest course of action. The council needs time to establish itself
if it is to transfer its skills, ability and expertise, and it should
not just be killed at birth. 1.30
pm
My
noble Friend, Baroness Miller of Chilthorne Domer, gave a very full
explanation of why the Liberal Democrats believe that 2011 should be
the earliest date. She referred to the time line of various framework
water directives and pricing rounds, and to the draft river basin
management plans, which are to be published for public consultation in
December 2008. The process will run until 2009, after which the revised
plans will be published and there will be a formal response. To
interfere with that and with the work of the CCW before then would be
unfortunate and disruptive.
The pricing round that my noble
Friend mentioned relates to 2009. In January 2010, companies will
decide whether they want to appeal to the Competition Commission on the
price limits that will have been set for them in 2009. The pricing
round will have almost but not quite finished. Until 2009, the
CCW’s input into that round will be very important
indeed.
The CCW has
undertaken work on the problems that have been experienced by all of us
recently in relation to the lack of water, hosepipe bans and the
difficulty of ensuring that people are treated fairly with regard to
water matters. That work indicates that it would be better to allow the
CCW to get off the ground.
The Government still need to
make a case for incorporating the CCW into the NCC. There will be a
hiatus in the way matters progress. Important plans and important
pricing considerations will come to fruition by 2011, with a hiatus
before the following round, so we believe that 2011 is the right date
for any amalgamation of the CCW into the
NCC.
Mr.
Prisk:
I suspect that the amendment will encourage us to
drift beyond its terms into the substance of the clause. We discussed
some of the issues on Second Reading, and the argument of the hon.
Member for Solihull has considerable merit. As I believe most people
would recognise, the CCW is in a slightly different situation from the
bodies that deal with gas and electricity. It has been around only
since 2005, whereas the other bodies have existed for five or so years.
There are also differences in the markets in which they operate: water
supply is perhaps more naturally the subject of a monopoly than postal
services, as we have heard in debates.
Given the price review that is
due in 2009, there will clearly be a problem with any merger that
happens at that time. I seek a coherent plan either to bring forward
the price review or to postpone the merger—we can do one or the
other. The Minister indicated on Second Reading that the Government
were willing to consider the form of the change. In fact, it might not
have been the Minister himself; it may have been his colleague. I am
not saying that they are interchangeable—they each have their
own merits.
Jim
Fitzpatrick:
There is a pay grade difference,
too.
Mr.
Prisk:
Indeed, and I feel that acutely
myself.
We
want clarity about whether the Government can demonstrate that there is
a clear path that makes sense and will be appropriate administratively
and for consumers in the marketplace. I am not personally wedded to the
date of 2011, and I got the impression that neither necessarily was the
hon. Member for Solihull. It is important to get the issues sorted out,
and I look forward to hearing what the Minister has to
say.
Susan
Kramer:
I very much appreciate the hon.
Gentleman’s giving way. I was present during the Second Reading
debate and thought that I heard something rather different. I thought
that we heard from the Secretary of State that he proposed to
accelerate the merger, so that it would take place ahead of the price
review and the implementation of the directive. I thought that I heard
from Conservative Front Benchers some warm words suggesting that that
might appeal to them as a strategy. That is rather different from
accelerating the price review. It is obviously impossible to accelerate
the EU directive timetable. I wonder whether my interpretation was
right. If not, I am somewhat befuddled about the position of either of
the other
parties.
Mr.
Prisk:
That was a fascinating intervention, not least
given the Minister’s expression. He clearly does not recognise
that interpretation of the debate that we all attended
either.
Coherence is
needed between the two events—the price review and the change in
the role of the CCW. We are reasonably open to suggestions on how that
should be done, but it is unclear in the Bill how the Government intend
to square the circle. We need to hear that from the
Minister.
Mr.
Ben Wallace (Lancaster and Wyre) (Con): I wish to ask the
Minister for one point of clarification on subsection (4). As a former
member of a devolved Parliament, I keep an eye on such matters from
time to time, to the boredom of most people. The subsection
states:
“An
order under this section may only be made with the consent of the Welsh
Ministers.”
I
understand the relationship between the Welsh Assembly and this place,
which is sovereign, but it is curious that the subsection says not that
the Government must consult Welsh Ministers but that they must have
their consent.
If the
Welsh Assembly chooses different parties in the election at the end of
the month but the Government decide to proceed with the abolition of
the council, we could be almost held hostage. Welsh Ministers could
say, “We don’t give you the consent. We just like it the
way it is, thank you very much.” We might find ourselves in a
long-winded process if we decided to go ahead with the abolition, which
we could eventually achieve. I should like the Minister to clarify why
we are tied into consent, rather than consultation or any other
option.
Jim
Fitzpatrick:
May I say to the hon. Member for Hertford and
Stortford that when I referred to pay grades, I was not making
reference to remuneration and the loss of it on his side or the little
of it on mine? It was said in the context of decision-making progress
way above my pay grade. That was why I did not recall making any such
statement, as the hon. Member for Richmond Park suggested. I do not
believe that I would have the authority to make a statement about such
changes, but my right hon. Friends the Minister of State and the
Secretary of State could certainly have done so.
On the timing of the
consultation on the inclusion of the CCW, I am advised that my right
hon. Friend Minister of State said that he was in contact with it about
the potential for bringing forward the consultation on its inclusion
from 2008 if that would be helpful. That is the essence of the issue of
timing.
The effect of
the amendment would be to prevent the Secretary of State from making an
order to designate the CCW for abolition before 2011. The Bill provides
that the Secretary of State must consult the CCW, the new council and
other persons as appropriate before making an order designating the CCW
for abolition and subsequently transferring its functions to the new
council. Any order to include the water sector within the new
arrangements will therefore be made only after public consultation. I
hope that that gives the hon. Ladies some confidence about the
proposal.
Assuming
that the results of the consultation suggest that there are significant
benefits to consumers from incorporating the water sector in the new
arrangements, any delay by the Secretary of State in making the order
merely delays extending those benefits to water consumers—the
same consumers as those in the energy and postal services sectors. If
the new arrangements are shown to benefit consumers in the water
sector, we ask why we would wish to delay. Any delay would also prolong
the period of uncertainty for existing staff and consumers and increase
the likelihood of staff retention problems, because, as I said in
respect of the other bodies, staff departures would probably
increase.
Delaying the
incorporation of the CCW will delay the benefits to consumers of having
a stronger voice to represent them and delay the extension of redress
schemes to the water sector to ensure that consumers benefit from
complaint resolution rather than simply complaint handling. Only
independent redress schemes, which can award redress such as an
explanation, apology or compensation as appropriate and whose decisions
are binding on regulated providers, can offer customers the certainty
of resolution.
We recognise
that there will always be significant events in any market sector, such
as the price review in the water sector in 2009, or ongoing work on the
water framework directive and the river basin management plans that
require the consumer interest to be represented effectively, but that
is exactly what the new council will be designed to do. It will be an
even stronger voice for consumers across all sectors, with the critical
mass to engage effectively with the Government, regulators and industry
sectors, and with the benefit of being able to draw on experience and
expertise from a number of sectors.
Price reviews
are not peculiar to the water sector. Europe now has an influence over
most sectors of our economy and the environment has never had a higher
place on the agenda. These issues should not be considered in
isolation, sector by sector. Experience and expertise can be taken from
one sector and applied to others, resulting in a more beneficial
outcome for consumers.
We accept the need to retain a
degree of sector expertise, which is an integral part of our reforms.
The new council will be in an ideal position to benefit from the
sectoral expertise of the existing consumer bodies and from the lessons
learned in each sector, and to apply best practice across the
sectors.
The hon. Member for Lancaster
and Wyre asked whether the Welsh Assembly Government could veto the
proposals. That is not our assessment; we believe that, during
consultation, we could identify and solve any problem that arises as a
result of
representations.
Mr.
Wallace:
I am grateful to the Minister for his optimism,
but the proposal is specific. Consent is needed; it is not about
representation. It states that without consent the CCW cannot be
abolished. If Welsh Ministers choose not to give their consent, it
cannot be abolished.
Jim
Fitzpatrick:
It is our assessment that
we do not anticipate an unreasonable reaction from the Welsh Assembly
Government. It is accurate to say that it has to consent to the issue,
but on the basis of the consultations that will take place next year on
the problems that may be identified and the ability to resolve them, we
do not think that the veto would apply to this
issue.
Mr.
Prisk:
My hon. Friend the Member for Lancaster and Wyre
has made an excellent point and I offer an olive branch. If the
Minister wishes to reflect on the issue and feels that he may need to
make an adjustment, we would be willing to consider such a proposal
sensibly, because it is important to strike a balance on the
matter.
I share my
hon. Friend’s concern that an error may have been made, although
I appreciate that the Minister has to deal with it as he finds it. If
he finds that the language so ably spotted by my hon. Friend would be a
potential prohibition or restriction, we would be willing to consider
an amendment to it. I hope that the Minister will bear that in
mind.
Jim
Fitzpatrick:
I am grateful to the hon. Gentleman for his
generosity in making that offer and I am happy to reassure him that I
will return to it later in the passage of the
Bill.
Stephen
Pound:
Just for clarity, could my hon. Friend define
“Welsh Ministers”? I read that as meaning the Secretary
of State for Wales, who would by and large tend to support the
Government—well, usually anyway. Do the words in the Bill refer
to Ministers of the Assembly in Cardiff or to the Secretary of State
for Wales in this
place?
Jim
Fitzpatrick:
My understanding is that
the Bill refers to the Welsh Assembly Government, not the Secretary of
State, in this regard. The offer from Opposition Members is generous.
If I may, I shall take it up and return to the issue later in the
passage of the
Bill.
1.45
pm
Lorely
Burt:
I am delighted that the Minister
has such confidence in the consultation system and believes that all
will be resolved in a way that ensures that this fledgling, which has
hardly managed to get off the ground yet, will be able to deal with the
turmoil of the price reviews and the other matters to which I have
referred. I am still quite concerned, but perhaps now is not the most
appropriate time to press the amendment to a vote. I beg to ask leave
to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Clause
31 ordered to stand part of the
Bill.
Clause
32
Transfer
orders and abolition
orders
Question
proposed, That the clause stand part of the
Bill.
Mr.
Prisk:
I notice that a similar problem to that in clause
31(4) could arise with subsection (5) of this clause. If I may, I shall
repeat the point about clause 31. If there is a problem, the House
should deal with it in a responsible and balanced way. If the Minister
felt that he wanted to amend the provision at a later stage, perhaps on
Report, I would certainly be prepared on my party’s behalf to
listen to him with
care.
Jim
Fitzpatrick:
I will be happy to respond to that point
later in the course of proceedings on the
Bill.
Question put
and agreed
to.
Clause 32
ordered to stand part of the
Bill.
Clauses
33 to 35 ordered to stand part of the
Bill.
Schedule
4 agreed
to.
Clause 36
ordered to stand part of the
Bill.
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