My Lords, Amendment 120 relates to a different issue, that of debt—I think I am on the right one. I am on the right one but I do not have the right notes. However, I know what I am talking about.
Uncollected debt is a serious problem in the water industry. Every water company has a problem with uncollected debt. This arises from two groups: families such as those we were just talking about, who really cannot afford to pay their bills; and individuals and families—and sometimes businesses—who, frankly, will not pay their bills, or cannot be found and made to pay their bills. Both these issues need to be tackled. My previous amendment relates to the former; Amendments 120 and 122 relate to the latter, and the lack of activity on the part of some companies to rectify this position.
There is a disproportionate number of unpaid bills in the private rented sector. Even so, it is noticeable that there is a differential performance by water companies in collecting that debt which is not directly correlated to the level of private rented accommodation in their areas of operation; in other words, some are much better at it than others.
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The 2010 Bill allowed for secondary legislation to be brought forward which would require landlords to inform water companies who was actually responsible for the debt in their premises. There is a turnover of private rented tenants, obviously, but at the end of the day those premises are using water, whether it is on a metered or unmetered basis. That secondary legislation has not been brought forward by this Government. The reason given for the lack of action on this front is that it would be a burden on private landlords. I suspect it would be slightly less of a burden, as somebody pointed out in one of the briefing meetings, than asking landlords to provide details of the immigration and nationality status of their tenants—but, nevertheless, all they have to say is who was responsible for the bill and who used the water.
If they do not provide that information, the default position is that it is the responsibility of the owner of the premises—and a similar arrangement would arise in the commercial sector. In default of the Government bringing forward secondary legislation, which they could have done and still could do, the amendments proposed here in primary legislation would provide the ability to introduce that directly.
A second issue is covered in Amendment 122, which would give Ofwat the power to deal with the failure by some companies to collect their debt. It could, for example, penalise companies with bad performance through the price review. I will not name names as it would probably be prejudicial to do so at this point, but if a company has a debt record that is 100% worse than the average, Ofwat must take account of that in the price review. What would otherwise be the settlement for the company’s prices must be docked in terms of the impact that their higher level of non-recovery of debt has on their income. This would be a discretionary power for Ofwat but a useful power and a useful spur to companies to take debt recovery much more seriously than one or two of them do at present. At the end of the day, it is the other consumers who pay off this debt. A national average of £15—some would put a higher figure on it in those areas where debt is least efficiently recovered—is added to everybody else’s bill as a result of non-recovery of debt.
On the one hand, more information provided to the company by the owners of premises would help that recovery; on the other, Amendment 122 would create greater powers for Ofwat to prod the companies to recover their debt and so also help the cash flow of those companies. Therefore the problem of debt would be diminished. I beg to move.