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Baroness Miller of Hendon: I will read carefully what the noble Lord said in respect of Amendment No. 6. I am concerned because the powers that the Secretary of State seeks are rather wide, but at this stage I shall not move my amendment.

Baroness Hamwee: I urged the noble Baroness to speak before me so that I could withdraw my amendment, which is part of the group. Before I do that, I believe that the Minister referred to Amendment No. 5 as being Amendment No. 6. After he had been speaking for a moment, I realised that he was addressing Amendment No. 5.

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We could discuss at some length--but I shall not encourage the Committee to do so--who, at the end of the day, bears costs and whether customers and taxpayers are the same people.

I, too, will carefully read what the Minister said and perhaps return to the subject. The one point I wish to make is that the DSS has information about those on benefits, one of the two groups to which the Minister referred. I take the point that there may not be a central record of those with medical conditions, but as regards eligibility arising from benefits, central government, through the DSS and the various agencies, has those records.

As for Amendment No. 4, the Minister said that the Government do not wish to end up with a patchwork of regulations, but we have perhaps not a patchwork but a quilt, with rather large sections of undertakers. So it is not as though we were dealing with only one undertaker. There may be an argument for some slight flexibility of approach. However, I take the point about being careful not to restrict the principles by starting to list them. I shall carefully read what the Minister said on that. For the moment, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 5 and 6 not moved.]

Baroness Miller of Hendon moved Amendment No. 7:


Page 3, line 44, at end insert--


    ("( ) The power to make regulations under this section shall only be exercised after consultation with such persons and bodies as the Secretary of State considers it appropriate to consult in relation to the proposed regulations."").

The noble Baroness said: As we have already discussed, Clauses 4 and 5 of the Bill allow the Secretary of Sate to make regulations which must be taken into account by the director when companies' charging schemes are approved by him. As the Minister said, the regulations will protect vulnerable groups such as those on low incomes or those who use higher than average volumes of water for such reasons as age, ill-health or disability.

I remind the noble Lord that during the Second Reading he gave the noble Lord, Lord Ahmed, an undertaking to pass on to the appropriate quarter the question of possible special provisions for those who need to use large quantities of water for religious purposes, especially the Moslem community. We have already made it clear that we fully support the protection of vulnerable groups and I understand that the water companies also do so.

Clauses 4 and 5 alter the whole ethos of the regulation of the water industry. Since privatisation in 1989, the regulator has been entirely free of short-term political pressures. Under the two clauses, some authority over the industry is to be taken back into the hands of government. I am not making any political point here, but it is right to note that under these clauses the regulator will be compelled to take into account guidance from the Secretary of State. It is, I submit, important that the regulations should not erode the

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independence of the regulator; nor should they lead to undue and short-term political or populist interference in the regulatory system or in the operation of the industry. It is essential that any regulations will be acceptable to all parties concerned, especially the vulnerable groups and groups who wish to be considered as such. The Moslem community mentioned by the noble Lord, Lord Ahmed, is an example of a group which should be enabled to make representations, irrespective of whether its claim is ultimately accepted.

Obviously, to avoid total anarchy, claims and representations will mostly be made by the organisations representing the interests of such claimants. It is essential, especially when the first set of regulations is published, that we do not find that a certain group has been left out or that one group has been included but a similar but slightly different one has been overlooked. It is no less essential that the regulation should be correct from the first, rather than that the Secretary of State should have to revise his guidance.

Finally, it is equally essential that the implications of the regulations are fully understood by everyone affected by them, whether it be the water companies, their customers, or the special interest groups that have been given protection or refused it. I suspect that decisions made after detailed consultation will protect the Secretary of State from potential proceedings for judicial review. Like the noble Baroness, Lady Hamwee, I believe consultations of that kind are absolutely essential.

In the debate on Clause 5 in Committee in the other place, the Minister for the Environment said:


    "We shall, of course, consult on the regulations in the draft".--[Official Report, Commons, Standing Committee A, 12/1/99; col.68.]

I unreservedly accept that the intention of the Government is that the regulations be practical, fair and agreed by all interested parties. The amendment I propose simply implements and goes no further than the promise made by the Minister which I have just quoted. I trust that the Government will accept it.

Amendment No. 8 is in the same group, and perhaps while I am on my feet I may speak to it. It is a short, simple amendment, to insert into this clause a common provision. But although it is short and simple, I must tell the noble Lord that it is absolutely necessary. Indeed, it is a type of provision which is recognised to be more and more necessary these days when so many of the statutes that we pass are simply enabling Acts which place increasing legislative power, in the form of secondary legislation, in the hands of Ministers--legislation which does not receive the full scrutiny of Parliament by passing through the three stages in both Houses.

The Committee knows well that there is a vast difference between statutory instruments subject to negative resolutions and those which require positive or affirmative resolutions, which at least ensure that there is an opportunity in each House to discuss the proposed order just once in place of the three times for a full Act of Parliament. To do them credit, in the last Bill with which I was extensively involved, the National

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Minimum Wage Act 1998, the Government accepted the principle of positive resolution procedures for orders that were made under that Act. In this case, we simply ask for that same procedure to apply to the orders made by the Secretary of State under this vital, indeed key, clause of the Bill. When this point was discussed in Committee in the other place, the Minister for the Environment rejected the amendment on the grounds that,


    "the Water Industries Act 1991 contains a number of regulation-making powers that are subject to negative rather than affirmative resolution".--[Official Report, Commons, Standing Committee A; 12/1/99, col. 69.]

Indeed it does. But the regulations referred to relate to highly technical matters such as preventing contamination of water supplies and safeguarding the water supply itself. This section and the amendments to be made under it deal with the highly personalised matters of protecting the interests of vulnerable groups. To give an entirely fictitious example, perhaps persons with one type of skin complaint are treated no more or no less favourably than those with a different one and neither is treated differently from those undergoing dialysis at home. There will be Members of both Houses who will want to advocate or even oppose the case of one or other group or to question Ministers about the proposals. From a practical point of view, those are matters which should be subject to the scrutiny of Parliament and adequate debate, if necessary.

The Minister in the other place also claimed that the regulation-making power is already constrained by Clause 5(4). I invite the Committee to glance at that subsection. It merely prevents the Secretary of State limiting the total revenue of the water companies. That has nothing at all to do with deciding whether a person suffering from weeping skin diseases, incontinence or intestinal diseases, should receive special consideration. Restricting the power of the Secretary of State to limit the revenue of water undertakings has nothing to do with what protection should be given to large families or those in receipt of various benefits.

When the Secretary of State produces his draft regulations, it is right and proper that Parliament should scrutinise them in a positive way rather than letting them slip through more or less by default as a result of the negative procedure. There can be absolutely no reason why the Secretary of State should resist this requirement that regulations to be made under this clause, which will affect so many people in a highly personalised way, should not receive the benefit of proper debate on a proper resolution. I trust that he will now accept this request for open government. I beg to move.

4.30 p.m.

Lord Whitty: As regards the first of this group of amendments proposed by the noble Baroness, we have, as she indicated, made a number of commitments to consultation on the regulations. We have made it clear that we would be prepared to consider proposals for targeted protection where there is a real risk of hardship and with regard to any other related issues. That is a clear indication of the Government's desire to engage in constructive dialogue with all those involved in the

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system of water charging. I can assure the Committee that we shall, of course, continue this consultative approach in preparing the regulations made under this Bill. We attach considerable importance to consultation so that those most in need of assistance can be properly identified and so that we can also identify the best means to deliver assistance and protection. That consultation will be a key part in ensuring that we get the regulations right.

However, we already have clear assurances from my colleague, Alan Meale, in the other place, to consult on any regulations made under this Bill. I do not believe that we add particularly to that commitment if we put consultation on the face of the Bill.

Amendment No. 8 deals with the affirmative or negative resolution. We have explained why the powers for the Secretary of State are needed and why they are perfectly proper in terms of the role of the Minister in the regulation of the water utilities. We have spelt out in some detail what we intend to put into the regulations and how we will consult on them.

The power referred to by the noble Baroness in Clause 5(4), which circumscribes the powers of the Secretary of State, relates to the distinction between the powers of the director general and those of the Secretary of State. The director general is the economic regulator. The limitation on the Secretary of State's power makes it quite clear that, in using regulations, he should not tread on the toes of the director general in his function as the economic regulator.

We have also given a clear indication that the scope of the use of the regulations will be within the Government's legitimate social and environmental concerns, including those for the protection of vulnerable groups. That seems to us to be a normal function of regulations. After their initial use, it is extremely unlikely that any subsequent changes would be more than minor and technical updatings of the scope and nature of the protection offered for which the use of the affirmative resolution would not normally be considered proportionate.

Before making the initial regulations and in making any subsequent ones, we have clearly undertaken to consult publicly. As the noble Baroness said, but did not seem to accept, the use of the negative procedure is very much in line with the other regulation-making powers covering the water industry and in particular Section 213 of the 1991 Act, which I believe the noble Baroness referred to as being mainly technical matters exercisable under a negative resolution. They include much wider issues than merely technical matters, such as measures to ensure the delivery of water quality and that there is no contamination of the supply. There are also some technical matters relating to water fittings and so forth. A whole range of regulatory--making powers in the water industry, introduced by the previous government, are dealt with by the negative procedure.

It is also worth noting that the Delegated Powers Scrutiny Committee of your Lordships' House has examined the proposals for delegated powers in this Bill. It has concluded that there is nothing in it which the Committee wishes to draw to the attention of the

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House. Therefore, there is no recommendation that we upgrade the regulatory-making powers under this clause so that they are taken by affirmative resolution. I do not believe that in this area the affirmative resolution procedure would be appropriate and I hope that the noble Baroness will withdraw her amendment.


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