AMENDMENTS RELATING TO METERS

HC Deb 08 March 1983 vol 38 cc715-20

'The enactments mentioned in Schedule (Electricity: amendments relating to meters) to this Act shall have effect subject to the amendments specified in that Schedule.'.—[Mr. John Moore.]

Brought up, and read the First time.

4 pm

The Under-Secretary of State for Energy (Mr. John Moore)

I beg to move, That the clause be read a Second time.

Mr. Speaker

With this it will be convenient to take Government amendments Nos. 11, 15, 22, 23, 24, 26 and 27.

Mr. Moore

In the new clause and schedule and seven consequential amendments, the Government propose three changes concerning meters that I said in Committee would be brought forward.

First, we are proposing that a meter measuring the supply to a customer of a private supplier, where that supplier uses an electricity board's distribution system and the customer takes the supply directly from the system, shall be certified and subject to the statutory procedure for the determination of disputes about meter accuracy. That change is being proposed at the specific request of the electricity supply industry. It is, naturally, concerned to ensure that where an electricity supply involving three parties—the customer, a board and a private supplier—is being measured the Board should continue to have some reassurance about the accuracy of that measurement. It is also especially important in those circumstances that if any dispute over meter accuracy were to arise an independent determination could be made by one of my Department's meter examiners which would be binding on all three parties. The Government accept that it is reasonable for the electricity supply industry to seek the protection of its interests and those of its consumers in these provisions, and are happy to commend them to the House.

The second change proposed by the amendments has been urged on the Government by both the meter manufacturers and the electricity supply industry. We are proposing that the Secretary of State should have the power to authorise manufacturers and repairers of meters themselves to certify the meters they produce or repair. Under the present statutes all meters, both new and reconditioned, must be offered for certification by an area electricity board. They are tested by the board and certified by one of my Department's meter examiners on the basis of tests carried out on a sample of meters selected from the batch offered for certification. In its report on the supply and export of electricity supply meters in August 1979, the Monopolies and Mergers Commission commented on the fact that new meters were tested both by manufacturers and area boards before being offered for certification. It criticised that unnecessary duplication of effort. The proposal for self-certification in the amendments will meet the MMC's criticism. It is possible for that change to be made now because of the considerable advances in recent years in the technology of meter design, manufacture and testing.

As a result, much greater confidence can now be placed in the control of quality during the manufacturing and repairing processes. Self-certification will thus provide a more flexible and efficient system for ensuring meter accuracy without in any way adversely affecting current safeguards for the consumer. Authorisations for self-certification will be subject to stringent conditions laid down by the Secretary of State governing the procedures to be used and regular control audits will be carried out by the Department's meter examiners. As I have said, that change has been requested by both manufacturers and area boards because both will benefit considerably. For example, manufacturers can offer sales of certified meters in crucial export markets and area boards will be relieved of the necessity of testing new meters and will be able better to utilise the capacity of their meter testing stations in improving their throughput of reconditioned meters to cope with the continuing increased demand.

I should emphasise that self-certification will be introduced gradually. It will obviously take time for manufacturers and boards to set up the necessary procedures and to have them audited and approved. The amendments therefore provide for the existing statutory certification procedures to continue and, even where it proves necessary, to be extended to manufacturers premises. Self-certification and the existing procedure will operate in parallel until such time as there is no longer any demand for certification by meter examiners.

The third and last change proposed in the amendments concerns the costs involved in determining disputes about meter accuracy. If a consumer considers that his meter is not accurately measuring his supply, his first course of action is to take it up with his electricity board. It applies a number of tests including, in some cases, the installation of a check meter. Should it find that, according to its measurements, the meter is operating within the statutorily permitted limits of accuracy, the consumer is not bound to accept that as final. He can as a last resort exercise his statutory right to have the meter checked by one of my Department's meter examiners. Though such disputes, at between 500 and 600 a year, are relatively few compared with the 20 million meters installed, they are costly to resolve.

The present statutes provide no specific power for those costs incurred by the meter examiner service to be recovered. Such a power is now proposed. We have also taken the opportunity to examine the most appropriate and equitable way for recovering these costs. We believe that the bulk of them should continue to fall on area boards, but we wish to be able, in appropriate circumstances, to ask others such as a private supplier or a consumer to contribute. We believe that there is a case for seeking at least a small nominal contribution from them towards this service. We are accordingly framing the power in this sense, though details as to how the regulations will be framed have yet to be settled. It is likely that if a nominal contribution were sought from consumers after determination of the dispute, it would be small in relation to the total cost involved and would be waived if the meter was found to be at fault.

The changes in the legislation concerning meters that the Government are proposing in the amendments will be beneficial to the electricity supply industry, the meter manufacturer and the electricity consumer. They are essentially non-controversial, and I accordingly commend them to the House.

Mr. Palmer

When we discussed the clause dealing with meters in Committee, I viewed it not exactly with suspicion but with great care. It appeared to give additional safeguards to the electricity boards. The Minister will remember that I asked how it would affect the working of the almost famous piece of legislation, the Electricity Supply (Meters) Act 1936. That was 11 years before nationalisation. Before that date, metering of electricity supplies was somewhat confused. If a customer had a dispute with the authorised undertaking—whether municipal or a company—he negotiated about the accuracy of the meter. The meter was often sent to the National Physical Laboratory. If it was found to be accurate, the consumer was charged for the cost of testing. The authorised undertaking could tell the consumer that if he did not like the meter he could supply his own, but that if he did not do so it would charge him rent. That is how meter rents came about.

As I said in Committee, this is a part of the general evolution of the electricity supply industry. Meters are important because from the dawn of civilisation—certainly since we began to live as human beings in ordinary communities—the transmission of value from one individual to another has always been a serious matter for Governments. Hence, we have a coinage that is supposed to retain its value, and weights and measures with legislation governing them. The electricity meter is a means of judging the value of a supply—the transmission of value from one individual or corporate body to another. Accuracy is of tremendous importance. We must remember the amount of electricity that is generated and consumed in Britain every day, because that reinforces the importance of accurate metering.

The matter was of great importance before 1936. The position was so confused that in 1935 or 1936, despite previous enactments, the then Government introduced special legislation. The system of meter examiners was established. The Minister was good enough to write to me on that point. He gave me the information that there are altogether 23 meter testing examiners.

Mr. John Moore

Twenty-four.

Mr. Palmer

I am obliged. There are 24 meter examiners, including the boss meter examiner, who is known as the chief meter examiner for the nation.

This is a very serious matter. As we all know, in any Member of Parliament's constituency, if a consumer gets a large electricity bill he often decides that the meter is the culprit and that it is not accurate. This kind of thing, with bills increasing and perhaps more and more people unable to pay them, means that the accuracy of meters is being challenged. Therefore, the importance of the office of chief meter examiner to the country cannot be overestimated. He is a most important functionary.

I am glad that the intention of the Government's proposals is to protect the consumer. The object of the changes, as I understand from the hon. Member for Croydon, Central (Mr. Moore), is to extend the system of meter examiners to private suppliers of energy into the grid under the special circumstances envisaged by the legislation and to do the complicated metering of supplies when the national grid is being used as a common carrier. That can be quite a complicated metering matter. This is all to the good, and we are using a procedure which has been tested since the 1936 Act.

What I think is more doubtful is the new provision that meter manufacturers are to be entrusted with the statutory obligation to ensure the accuracy of meters; the electricity boards will not alone certify the accuracy of meters but those who make the meters are to do the certification. I suppose that, subject to proper checks, that is a practicable proposition, but it is certainly a break with the past. It may well be argued that manufacturers have less material interest in correcting the inaccuracy of metering, provided it favours the supplier, than the boards, because they are perhaps neutral in this matter.

The House needs to satisfy itself that the meter examiners will have as much power in relation to the factories of the makers of meters as they have at the moment in relation to the premises of area boards. In future, batches of meters—as the hon. Member for Croydon, Central, said, they are now being batch tested to a great extent—may arrive from the manufacturers and be sent straight out to the consumers for use on the system, with the electricity boards not intervening with an intermediate check.

In these circumstances, it is important that we should have an assurance that the testing stations—meter makers test meters all the time; they are bound to do so as part of their job—and their testing facilities will be as open to the meter examiners as the meter testing stations of the electricity boards are at present.

From the point of view of the employees, this is a matter of transferring work in many cases from the boards to the manufacturers. The trade unions have put this point to me, as they no doubt have to others who were members of the Standing Committee. The unions are interested to know whether this will mean a reduction in the meter staff employed by the electricity boards. The hon. Member for Croydon, Central seemed to say that they would be able to deploy their staff resources differently, but, as I say, the transfer of testing to the manufacturers is now to be allowed and batch testing is certainly on the increase.

Therefore, as the House will appreciate, the unions have a real interest in obtaining some facts on the effect: of this change. Electricity supply metering is a great science, and I have known a few men who have devoted their lives to ensuring the accuracy of meters. They discuss jewels, not in the way that we discuss the crown jewels, but from the point of view of the friction on meter bearings in order to ensure accuracy and—this is a very important: point—to prevent fraud. It is possible, of course, to slow meters by various devices and meters have to be designed to avoid that.

I apologise for taking the time of the House, but this is fundamentally a very important question. I should be glad to have the observations of the Under-Secretary.

4.15 pm

Mr. John Moore

I know the House will not mind if I start by saying that all of us on the Committee benefited throughout, as the House already has tonight, from the remarks of the hon. Member for Bristol, North-East (Mr. Palmer). We learnt a great deal of the electricity industry's history from him in seminars in the Committee, and I do not think that he need apologise for giving us the benefit of his wisdom and information on the subject. I should not encourage hon. Members to read the Committee Hansards in detail because the hon. Gentleman gave one or two examples—vicariously, I trust, as an observer—of what happened in the past with regard to meters, and I certainly would not encourage the general public to read them with any care.

I should like to take up the points that were made, quite legitimately, by the hon. Gentleman. As far as numbers are concerned, I apologise for intervening from a sedentary position. I thought that the hon. Gentleman was talking about the number of meter testing stations as opposed to examiners. The number of meter examiners in my Department, as opposed to the head man, is 21—not 23 or 24. There are 24 meter testing stations for the area board.

As far as the involvement of the meter manufacturers is concerned, I should stress again that the decision to allow self-certification was taken at the request not just of the meter manufacturers but of the electricy supply industry. That change was heralded by the 1979 Monopolies and Mergers Commission report. Also, of course, as the hon. Gentleman will know better than most of us, it was taken because of the welcome major technical advances that have taken place in this area.

There will be no restraint on the meter examiners' access to the manufacturers. They obviously need the same access and relationship as they have with the area testing stations. I certainly give that assurance. It is essential if they are to do their job properly.

The hon. Gentleman also legitimately raised a point that has been raised at meetings with my right hon. Friend the Minister of State about the implications for jobs. In the last analysis this is a matter for debate between the industry and the unions concerned. However, the hon. Gentleman is right to bring to the attention of the House the legitimate concerns expressed at meetings with my right hon. Friend and at what I gather was a further meeting with the electricity supply industry on the implications involved. Perhaps it would help if I put on record the specific position so that the background is clear.

There are 24 area board testing stations, including that in Scotland. They employ about 1,200 staff and test about 1.5 million reconditioned meters and 760,000 new meters per year. Although new meters represent a large proportion of the number tested, they account for only 4 to 5 per cent. of the work load, the vast bulk of which relates not to testing but to reconditioning. The reconditioning work will be unimpaired by the change. I gather that as the boards will be released over a period from the task of testing new meters, the stations will be able to increase their output of reconditioned meters. Clearly, the implications of self-certification must be a subject for discussion between the industry and the unions, but I think that the facts that I have given put the matter into better perspective. Certainly we in no way wish to deprive the consumer of the excellence of service in the crucial area of self-certification.

Mr. John Home Robertson (Berwick and East Lothian)

The Minister referred to the large numbers of meters that are tested. As a docile, law-abiding citizen who simply pays the electricity bill when it arrives, I have always tended to assume that it is right. How many of the meters tested are found to be inaccurate?

Mr. Moore

My excellent brief contains statistics about those which have already gone through a considerable process of queries. This may give a better idea of the situation. In the 539 disputes determined by Department examinations, 8 per cent. of the meters were found to be faulty. I emphasise that that is 8 per cent. not of all meters but only of those subject to dispute. As there are 20 million meters at large, that shows what a tiny proportion of them are faulty and proves the excellence of manufacture and of the certification process. The number is very small indeed, and so it should be.

Mr. John Smith

I agree wholeheartedly with the Minister's generous reference to the work of my hon. Friend the Member for Bristol, North-East (Mr. Palmer) in the Standing Committee. For many years, my hon. Friend has been the doyen of electricity supply industry debates. I wish publicly to express the gratitude of the Opposition to him for the great contribution that he has made to this Bill and the close attention that he pays to all electricity matters. I know that his own trade union values that highly. It is a classic example of constructive trade unionism in action—watching the development of legislation on behalf of the crucial trade union with which he is proud to be associated.

I understand that the Electricity Council has told the trade unions that it does not expect any adverse effects on employment to result from the new arrangement. If the Minister can now assure us that the Government also do not expect there to be any adverse effects on employment, fears about the possible transfer of work may be laid to rest. If the Minister can help on that, considerable progress will be made.

Mr. Moore

I appreciate the right hon. Gentleman's concern, but I must revert to my remarks about perspective. We are dealing with 24 stations and 1,200 employees. I recognise the importance of all those jobs, but in some areas a significant increase in work load is expected over a period while the expected reduction as a result of the new system will be only 4 to 5 per cent. I am not in the business of trying to manage the industry, and as a Minister I think that I would be wise to stick to the remarks that I made earlier. Clearly the implications of self-certification for staff at area board meter testing stations is a matter for the trade unions and the industry. Nevertheless, I think that I have said enough to show the very minor nature of the change compared with the potential increase in work load.

Question put and agreed to.

Clause read a Second time, and added to the Bill.