To ask Her Majesty’s Government what discussions they have had with Ofwat as to the charges levied by water companies on non-household users which are not businesses.

My Lords, a range of discussions has taken place between my department and Ofwat, at official and ministerial levels, regarding water charges for non-business and non-domestic customers.

My Lords, I am grateful to the Minister for that response and I should be even more grateful if I saw anything much happening as a result of the conversations which have taken place. The changes in the ways that water companies charge for the drainage of surface water and highways would cost churchgoers and the Church of England some £15 million a year, and the total effect for community groups would be very much higher. It seems to be one of those situations where everyone is agreed on what should happen, but no one can do anything. Will the Minister undertake to end the buck-passing by revising and reissuing the guidance to Ofwat and the water companies to make it absolutely clear that community halls and church buildings should not be charged for surface water drainage on the same basis as businesses?

My Lords, I can certainly give some assurance on the last point, but the guidance is unexceptionable—that properties should pay for the clearance of surface water. The basis has changed since 2000, after consultation, and has met broad approval. What has gone wrong is the way in which individual companies have implemented the guidance; in particular, nearly all complaints revolve around United Utilities whose charges have increased by several hundred per cent in a number of cases. The Government have made it clear that this is unacceptable; Ofwat has made that clear to the company involved; and the company has apologised for its actions and is taking remedial steps.

My Lords, is not the basis on which this is determined at fault? I had a garage which was considered separate from my house and the water rates charged on it were attached to an old rateable value totally out of touch with the present metering and new ways of providing water. Eventually, when it was agreed that it would become part of my house, it all came in under my meter. It did seem to me that anyone who had property in the category that the right reverend Prelate has spoken about, is at a disadvantage. Are they still using a rateable value as the basis of assessment? All these other changes in water charges have been to the benefit of the customer.

My Lords, the complaints are the other way round. The movement has been from the old rateable value to the new surface water drainage charges. That is what has caused the consternation. The principle is unexceptionable; namely, that properties should pay for the clearance of surface water on the simple grounds that the community has to pay if the property owner does not pay, because we need to have this water removed. The question is about fairness and the treatment of particular categories. What is clear, as the right reverend Prelate was indicating, is that the churches deserve special consideration, as do some other organisations like charities and sports clubs. Those issues are being looked into to make a separate arrangement for them. The issue about the general principle I think is not contestable.

My Lords, what is to stop another rogue water company taking similar action on a one-off basis against all the advice of the Government as the Minister has indicated, and against everything that Ofwat has assured consumers will happen?

My Lords, water companies are expected to act responsibly. Where they do not there is a fair amount of public furore. That is why I have identified the particular company which has caused the greatest problems. Other companies have implemented the new charges without this degree of controversy and concern. How do we prevent the issue arising in the future? I think it is hugely unlikely that any other water company would follow the course which United Utilities has been obliged to do, which is to revise its position with regard to charges to take account of public criticism and to apologise for the actions it has recently taken.

My Lords, can the Minister help the House with numbers and tell us how many non-business, non-domestic users there are and how many of these will be paying more than the 9 per cent average increase in charges as a result?

My Lords, I do not have a breakdown of figures, but I have categories in terms of the concern that we should have exemptions for reductions for faith buildings, community amateur sports clubs—their definition is a subject of further consultation—and scout huts. However, the position is clear as regards other properties; they are charged on the surface water that accumulates. If they do not pay, if we create exemptions, the ordinary householder has to make up the deficit. As a consequence, it will be clear that we have to look at reductions and exemptions very carefully. I am merely indicating that the furore has broken out—and I can give numbers on this— because certain charges for which United Utilities has been responsible are 16 or 17 times larger than those for comparable buildings in other water authorities.

My Lords, in addition to the apology, is the water company likely to make a refund?

My Lords, the company has said it is reverting to the old style charges in the interim; in other words, it is going back three years in the charging mechanism. However, refunding is a different matter. The company is clearly aware that the practice it has followed is not acceptable.

My Lords, does the Minister wish he had at his disposal the £68.3 billion which according to the Government we have so far spent on EU water purification directives which have done nothing for our infrastructure, supply or clearance of surface water, or indeed served any useful purpose at all?

My Lords, I am not sure that the European Community is responsible for the water that accumulates on the properties in Britain. What is clear within that framework is that we have always produced the resources to manage our water properly. We do need to consider the interests of the environment, and the principle behind that is that the polluter pays. In a very obvious sense, surface water which is not drained away becomes a potential pollutant, and that is why it has to be cleared. That is a British matter with which the British are fully able to deal.