HC Deb 02 February 1988 vol 126 cc886-99

The requirements of paragraph 1 of Schedule 1 shall not apply until the completion of the metering trials and a report on the metering trials has been approved by Parliament.—[Mr. O'Brien.]

Brought up, and read the First time.

Mr. O'Brien

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

When the Bill was published, paragraph 1 of schedule 1 was not included. The Minister later decided to amend the schedule to include paras (1)(a) and (1)(b) to apply to the provisions relating to the installation of meters. Paragraph I contains a new power introduced by the Minister to allow the water undertakers to insist that the people responsible for building, adapting or altering premises should install a meter in the premises or that plumbing should be arranged to allow a meter to be installed later.

Paragraph 1 substantially alters the Bill as originally drafted. When amendments to schedule 1 were tabled in Committee, the Opposition raised certain issues. However, because there were no explanatory notes and because the information provided on this matter had been inadequate, we wanted to ensure that all the points were covered when the Bill was brought back to the House. That is why the Minister should consider the new clause carefully and seriously before any action is taken.

Paragraph 1(2) enables undertakers to insist on the requirements that I outlined earlier being met, even when there is no immediate intention of charging by measure. For example, some undertakers may want to wait for the results of the metering trials before deciding on a move to more widespread metering. That is the basis upon which we present our case. We believe that it would be in the interests of the contractors and of those people altering or adapting a building to wait until a decision has been taken about the metering trials before taking a further decision on widespread metering. Anything other than that would create the impression that decisions on universal metering and the systems that will be applied by the various water companies and authorities have already been made. The impression might also be created that metering trials were introduced to provide information that would be available if universal metering was applied.

I believe that decisions have already been taken about the application of universal metering, on how the meters will be installed in properties and how the law will apply to contractors building new properties. In other words, paragraph 1 means that all new properties will have a meter or facilities to enable a meter to be installed.

It was made clear to members of the Committee, to other hon. Members and to the public that some water authorities and water companies have no intention of putting meters in properties. It has been decided by some water companies — and, indeed, put into practice in some areas—that meters for measuring domestic water supplies in bulk should be situated on the footpath or in the curtilage of the dwelling, near the stop tap.

6 pm

An exhibition held in the House a few months ago demonstrated a meter designed to fit on a footpath which required no provision or alteration of any plumbing inside the dwelling, and hence no involvement on the part of the consumer outside whose property the meter was installed.

Surely, if such a metering system successfully meets the requirements of the water industry, and all the problems that can develop in metering trials—including weather and the type and flow of water being used — without disturbing the household, paragraph 1 is redundant. There is little useful purpose in telling contractors, and the people whose properties are to be adapted after a certain date, that they will have to make provision for the installation of a meter, or provide facilities in the property for a meter to be installed. If there is no cause for such an installation, we are surely being premature in accepting such a provision in the Bill.

I understand that two water authorities are now using the meters to which I referred, and that six private water companies, and the Welsh water authority, are also considering the possibility of their introduction. Meter trials are taking place in more ways than one. We feel that it would be in everyone's interest to wait until the trials have been carried out before considering whether provision should be made and expenses undertaken by contractors — and, indeed, by individuals who may be having their properties altered—for the installation of a meter. That might involve plumbing adaptation to enable the meter to be installed in a convenient place, which, under the Bill in its present form, would be at the discretion not of the consumer—the owner or tenant of the property — but of the water undertaking. Such arrangements could be expensive for consumers.

We would prefer a system of voluntary metering to continue. However, if metering is to be compulsory, we consider it unfair and unjust for people to have to go to the expense of providing for a meter when there is no evidence of the need for one.

A press release put out by the Water Companies Association on 29 September 1987 states: 'It is important', said the Associations"— that is, the Water Authorities and Water Companies Associations— 'that extensive trials of metering and assessment of their impact in demand take place before decisions are taken on the general use of water meters.' The Minister should consider those views carefully when he is asking his colleagues to reject new clause 2. Unless he can give an assurance that consumers will incur no additional expense as a result of the addition to schedule 1, I believe that to press for the rejection of the new clause would be against the best interests of consumers.

Page 2 of the press release states: The trials are likely to have a major influence on how we charge for water in the future. Metering could be the answer. Ministers will consider consumer interests before approving any trial scheme. Before there is any suggestion of major metering provisions, says the Water Companies Association, we should wait until the trials have taken place and we have evidence of the impact on those living in the trial areas. If we accept that view, paragraph I should not apply.

I have a considerable interest in the Yorkshire water authority, as the trial area is in my constituency. I know how people are thinking and what provisions they are requesting in the event of a meter trial taking place. A report of a meeting held on 20 October last year between officers of the Yorkshire water authority and members of Wakefield metropolitan district council states: It is important that Yorkshire Water learns how to deal effectively with the many problems which metering on this scale will raise, such as …The practical problems in installing meters—where do we put them—? What should we do about defect on the customers plumbing system? Before any universal metering is considered, the authority would like to study the results of the trials being held in the Normanton area. If we accept paragraph 1, the position described by the Yorkshire water authority will be superseded by the new clause. The authority's points are not being heard or heeded by the Minister.

The practical operators of the water system wish to obtain information, in line with the Government directive, based on the results obtained where meters were installed in a large geographical area involving different sections of a community. The water authorities want to know the practical problems involved with installing meters and where to put them. The water authority in Yorkshire needs that information to decide whether meters should be installed in properties. I believe that it is in the interest of future metering that we should wait until the trials have been considered so that there is evidence to substantiate whether meters should be situated in premises and what installation would mean.

The Water Companies Association believes that, before decisions are taken on the general use of water meters, careful consideration should be given to the impact on demand and to where the meters should be situated. If we accept the view of the Water Companies Association, we should accept new clause 2.

On 27 October there was a second meeting between officials of the Yorkshire water authority and members of the Wakefield district council. It was reported that: the Yorkshire Water Board accepted that metering at best would be marginally economic and in submitting the various suggested areas had drawn the Secretary of State's attention to the problems they envisaged. In the end, however, it would have to prove to be an economic proposition for the Board to pursue universal metering throughout its area. In other words, the Yorkshire water authority has doubts about the economic viability of the scheme that it wishes to apply in the Normanton area. It believes that it could be "marginally economic". It has submitted suggestions to the Secretary of State regarding the areas involved and it requires proof that the proposition is economic. It believes that that assurance should be forthcoming from the evidence that is obtained from the trial meter area. Such information is required before the Yorkshire water authority can proceed with universal metering throughout its area. The message from the Yorkshire water authority to the Government is, "Please do not extend the area of compulsory metering until we have had the opportunity to see what the tests will reveal".

In Committee we were informed that the trial areas would be studied for three years. We were also informed that if a scheme, as suggested to the Secretary of State by the water undertakers, was not working as had been thought, it could be amended and then submitted to the Secretary of State for further consideration. Therefore, a scheme could continue for between three years and five years depending on what information was received from the trial area.

Before the Government insist that additional expense should be incurred by contractors and people involved with the alteration of premises where meters may be installed or provision made to provide a meter, the evidence obtained from the trial areas should be submitted for consideration. Obviously this matter is giving rise to concern not just to Labour Members, but to people outside the House who are following these matters most carefully, including the Water Companies Association. The Water Companies Association is anxious to have all the information before considering the general use of water meters.

On 17 December the Minister said in Committee: There is nothing to stop consumers in a trial area from putting forward a request to the water undertaker to try some new technology. Consumers may say to their water authority, `We believe that it will assist you in formulating more precise answers to a number of the imponderables if we volunteer ourselves for further trial work.' That would be a matter for the undertaker, but he may decide that it would be helpful." —[Official Report, Standing Committee B, 17 December 1987; c. 598.] 6.15 pm

Therefore, within the trial area, a suggestion may be made that there should be an amendment to the scheme that has been installed by the water undertakers. If new technology means that a meter could be changed in a few years, there is little purpose in saying to contractors and people who are having a dwelling built or altered that they must make provision for that meter or adapt the plumbing to take it. Such expense could be wasted after two or three years as a result of new technology. We believe that the Bill will lead to such a situation. For that reason, the Minister must pay careful consideration to the new clause.

On 19 January I asked the Minister in Committee: Who will carry out the inspection to decide that the pipes are inadequate and who will pay for that inspection? The pipes are not visible for inspection so some excavation will be required. Therefore, there are likely to be problems. Who will be responsible for making that decision and who will bear the cost of any inspections? Such inspections will apply to all properties that are being adapted or improved after the date that has been suggested in the Bill. There remain questions as to who will be responsible for certain charges and costs. In Committee the Minister replied: The latter question is significant, but I should like to answer it a little later as I am in some doubt and wish to clarify the matter with my officials. I am not sure whether the matter would be dealt with by charging a connection fee or whether a separate cost would be levied directly by the water inspectors who would inspect the work. The Committee will have noted that there is a shift in emphasis in this legislation, as compared with previous legislation, in regard to who pays. Whereas, in general, there was an onus on the owner of a property to pay under the 1945 and 1951 Acts, in regard to metering, the shift is now towards the undertaker paying". —[Official Report, Standing Committee B, 19 January 1988; c. 672.] If we are to accept that argument — I have no reason not to accept it — it poses great questions as to the benefit and the reason for schedule 1, paragraph 1, as introduced at a later stage in Committee. Perhaps the Minister could develop his reply of 19 January as it applies to schedule 1.

If there are excavations and reasons for extra costs when a property is adapted to meet the requirements laid down in schedule 1, paragraph 1, there will be further problems, as we outlined in Committee, unless we are given the necessary information and assurances. Obviously there are a number of issues that must be considered before we can accept schedule 1, paragraph 1 as presented. "The water briefing", which is a bulletin produced by the Water Authorities Association, refers to charges. The question of charges is very important. People want to know what this measure will cost and are asking, "How much extra will I have to pay? What benefit will I receive? Will it end the question of spiralling charges?" The same questions have been posed to the Water Authorities Association, and I shall quote from the July 1987 issue of "The water briefing". Paragraph 4.1 says: Pricing policies and controls are a key component of the whole regulatory package. Water authorities have made clear that the uniform pricing formula suggested in Professor Littlechild's report, with no compensating factor to allow for the differing circumstances and obligations of different authorities, is unlikely to provide the solution. They will wish to discuss pricing mechanisms and their effects in greater detail with the Government. It is important that all the concerns in this regard, including the proposals to make provision to install a meter in new properties, and all the proposals are discussed in depth. Consideration will have to be given to all the issues that arise before any legal administration is set up.

The Minister must pay heed to what the water companies are saying. The Minister should give careful attention to new clause 2 because it must be decided whether the people involved will have to meet the necessary expenditure or whether it will be met by the Government.

I should like to remind the Minister of the notes on clauses and schedules that were given to members of the Committee. They say that clause 4 establishes a special charging regime designed to protect consumer interests .…. Page 12 of the explanatory notes says: … The Secretary of State will himself ensure that the interests of customers whose premises are included in the trials are protected. We are saying that it is not only the customers in trial areas whose interests should be protected by everyone who could be a victim of these meter trials.

Before the meter trials have finished and before evidence about them is submitted to the Secretary of State and before we know whether the consumer interests will at all times be safeguarded, the Government are saying that provision shall be made whereby the water undertakings can insist that a meter or service pipe can be installed in new properties for supplying water. Alternatively, it is said that provision will have to be made so that a meter can be installed later.

That is not in the best interests of the consumer. It contradicts what the Secretary of State outlined in the Bill and in the explanatory notes — that at all times the interest of the customer is paramount.

The explanatory note on page 15 says: The Government intends to monitor each trial very carefully, and in particular will be looking at the nature of complaints from customers and how they are dealt with. It is difficult to apply the principle and practicalities of the explanatory note to people who will be told that they must make provision for a meter in their dwelling before the trial periods are finished and a report submitted to the Secretary of State. An unfair burden will be placed on people who will have to meet that demand. The Minister must give an assurance from the Dispatch Box on this issue.

New clause 2 is important and has a meaning. If there is to be sincerity in this legislation, which will apply in my constituency and in 10 other areas, we must be assured that hardship will not be experienced by people who will have to install meters when building or adapting new dwellings.

I remind the Minister that the water companies have said that the metering trials and the assessment of their impact on demand should take place before decisions are taken on the general use of water meters. If the Minister accepts that view of the water companies, he must accept new clause 2. If he does not, how will the Government ensure that people adapting or building new dwellings after the suggested date—when they will have to install provisions for meters or install meters in their properties —will be fairly dealt with? I ask the Minister to answer those questions.

Ms. Walley

I shall speak briefly in support of new clause 2, which goes to the heart of the Government's legislation.

The Minister said in the previous debate that he was prepared to take on board considerations that acknowledged the important role played by consumer bodies, trading standard officers and so on. If he is prepared to be sincere and take account of the well-formulated views of those organisations, he should extend that sincerity and apply it to the Government's arguments for compulsory water meter trials, which are the basis of the Bill. We sat through hour after hour in Committee and were given every assurance by the Minister that, when selecting areas for compulsory water metering, every regard would be given to socio-economic, climatic, geographic and geological factors. It seems odd that these trials will take place in areas that, bar one, are Conservative-controlled.

We are about to embark on water metering trials to establish the correct way forward to replace the present water rate charges. Why did the Minister, by way of a planted question on 2 December, give an undertaking that he would move an amendment that would provide for the compulsory installation of water meters at the earliest opportunity—certainly as soon as the Bill becomes law?

The Minister has a chance to prove that the Government are sincere by supporting new clause 2. There must be some reason why the Government are so anxious to rush through this proposal. Why cannot the Government wait until the results in the survey areas are known?

I find the Minister's reply of 2 December quite contradictory. In reply to the question, he said: We are concerned about metering the consumption and we believe that it would be a far more accurate guide to measure and update consumption figures to assess whether metering is the best way to move forward. However, almost in the same breath, in reply to the question, Does my hon. Friend agree that it would be possible to start by introducing compulsory metering of new houses?", the Minister said: The simple answer is 'Yes'. For that reason we have introduced an amendment to be considered during the latter stages of the Public Utility Transfers and Water Charges Bill currently in Committee." —[Official Report, 2 December 1987; Vol. 1430 c. 919.] The Minister's reply to that planted question—it had to be planted—demonstrated the Government's insincerity. Compulsory water meters either represent an experimental way of deciding the best way forward or they are connected to some preconceived plan that will hasten the privatisation of the water industry. I support the new clause.

6.30 pm
Ms. Quin

I add my voice to those of my hon. Friends the Members for Normanton (Mr. O'Brien) and for Stoke-on-Trent, North (Ms. Walley). The announcement made during Environment questions took many of us by surprise, because it was made in answer to the third supplementary question. It seemed to have been slipped in at the end, although it was obviously a matter of fundamental importance to this Bill and to our debates in Committee. It is right that that point should be made.

Furthermore, the fact that the Government have decided to provide for the installation of meters in all new properties seems to suggest that their mind is firmly made up and that, as my hon. Friend the Member for Stoke-on-Trent, North said, the trials are nothing but a sham. What is the purpose of having trials if the Government have made up their mind already? Perhaps the Minister will reassure us on this point by listing for us the alternative forms of charging for water, other than water metering.

Mr. Matthew Taylor

I shall not delay the Labour Front Bench spokesman for very long. However, new clause 2 is important because it is a test of the Government's genuine commitment to the metering trials. There are no two ways about it. The Government say that they are serious about a metering trials scheme. They say they wish to try metering to see whether it works and to decide whether to opt for compulsory metering. They say that they are serious about examining the difficulties that will undoubtedly arise for some of the poorest in our society, which need to be taken into account and which may be a bar to such compulsory metering. If they believe that, they should not be proposing measures that clearly pre-empt such a scheme.

Schedule 1(1) is aimed at preparing the ground for a compulsory metering scheme right across the country before the metering trials have even taken place. Representatives of my local water board raised the issue with me before the Minister had tabled the amendment and before he had publicly announced it. I was asked, "Will you be supporting the Government amendment? We think that it is important so that we can get metering installed as soon as possible after the trial scheme." In effect, they were saying, "This measure is important because it will allow us to put in compulsory metering at the earliest possible opportunity" — in an area where there has been no trial scheme. In other words, the measure is a way of bringing forward privatisation and compulsory metering across the board.

If Ministers were genuine about wanting a trial scheme the results of which they could examine and from which they were prepared to learn lessons—they might have to decide that compulsory metering as proposed does not allow for adequate consumer protection or for the protection of those who most need it—they would not be putting forward this proposal, which they did not even come up with when they were drafting the Bill. This proposal has been advanced as a result of pressure from the water authorities, which want privatisation pushed through as early as possible—not with any thought for the consumer or the results of a metering trial scheme. I hope that the new clause will be passed because it is important.

Mr. Boyes

We have had a good debate on this important matter. The Minister must be most embarrassed about the proposal, because, as my hon. Friend the Member for Stoke-on-Trent, North (Ms. Walley) said, he tried to sneak in this change of policy at Question Time. As my hon. Friend the Member for Gateshead, East (Ms. Quin) said, that took us by surprise. It is most unfortunate that the Minister had to have recourse to a planted question to announce a policy change that has serious implications. As my hon. Friends and the hon. Member for Truro (Mr. Taylor) said, it nails the lie about the water metering trials being trials. I suspect that the trials may be intended to establish whether the hardware works. They will have nothing to do with people or consumers. The Government have made up their mind that the trials will be successful whatever happens.

During the debate on new clause 1, I reiterated the question that I asked the Minister a dozen times or more in Committee. How will the Government determine whether the trials have been successful? How are they going to analyse the results? We never got an answer to that question in Committee, and this evening I again challenged the Minister to reply to that specific question, which is of great interest to all Opposition Members. We need to know in advance what criteria will be used to judge failure or success so that we can measure the results against them. If the Minister gives us no criteria, it is obvious that he will say that the scheme was successful.

The other reason why we think that the trials are a sham piece of kidology is that there are two Bills running in parallel — the Public Utilities Transfers and Water Charges Bill and the Local Government Finance Bill. The Minister said in Standing Committee: we have announced, in the Local Government Finance Bill, our intention to abolish domestic rates from April 1990. New domestic properties and dwellings created by conversions will not be rated from that date. They will come under the new system. Therefore, it is necessary that water undertakers have an alternative means of charging for their services to such properties." —[Official Report, Standing Committee B, 14 January 1988; c. 666.] In other words, irrespective of how long we take on this Bill or of what happens in connection with it, the Minister, the Secretary of State and others in the Department of the Environment have already determined that water metering for new houses is absolutely essential because of the abolition of domestic rates and their replacement by a poll tax.

If the poll tax comes in and the Minister has no method of charging for water other than by metering, whatever happens in the trials he will not dare do anything other than announce in one and a half or two years that the trials have been successful. He will have no alternative. Of course this is a sham, of course it is idiocy and of course the Minister, who time after time has proved himself to be extremely intelligent and knowledgeable on these matters, must find it extremely embarrassing to have to push this proposal.

I am told that the source of the information was the Minister himself.

Mr. Moyniham

indicated dissent.,

Mr. Boyes

I hope that the Minister is not suggesting that civil servants are accountable. If so, we shall say that civil servants should have better things to do. I do not believe that the information came from a civil servant. I believe that it came from a member of the press who was doodling. According to the Daily Mirror, the Minister made 640 interventions in Committee. He is proud of that, but I take it as a compliment to Opposition Members for having pressed the Government so hard in Committee.

In Committee, my hon. Friends the Members for Gateshead, East, for Newcastle upon Tyne, North (Mr. Henderson), for Stoke-on-Trent, North, for Stalybridge and Hyde (Mr. Pendry) and for Normanton (Mr. O'Brien) asked the Minister the most difficult, penetrating and pointed questions. As a consequence, the Minister has been forced to intervene on all those occasions. Although he might claim a record—if it is a record, he can take credit for it — I hope that he will explain to his civil servants and to the Secretary of State why he had to make all those interventions.

I wish to ask the Minister to comment further on a matter which greatly concerns Opposition Members—the activities of the East Worcestershire Waterworks company. I do not question the integrity of the people who run that company, or of the dedicated staff who work there, but the company has not acted correctly; indeed, it may have acted illegally. I raised this matter in Committee when it was brought to my attention that the company was issuing a letter to customers about water metering.

Like many other companies, that company offered customers the opportunity of voluntary metering, provided that the cost of installation of the meter was borne by the consumer. In September 1985, the company decided that properties with new supplies should be connected automatically to water meters.

The letter to customers started, "Dear Customer", so it was not a personal letter to individual consumers. It was a general circular letter, so presumably everyone concerned received the same letter. The letter went on: It has been normal practice for the Water Industry in the United Kingdom to charge for water supplies to domestic properties on the basis of rateable value of the property supplied which is used as a proxy to reflect the quantity of water likely to be used at the property. The relationship has come under increasing attack in recent years on the grounds of unfairness. That may be a value judgment by the East Worcestershire Waterworks company and many Opposition Members would claim that it is fairer to use rateable values than meters. That is what we have argued in the Bill. However, we do not agree with that judgment.

The letter continued: In order to overcome this criticism and to make charges which properly reflect the quantity of water used by our customers, the Company adopted a policy of metering all new domestic properties with effect from the 1st September, 1985. When the East Worcestershire Waterworks company issued that letter, the proposal to introduce compulsory metering of all new properties was not even a twinkle in the Minister's eye.

6.45 pm

As I am not a barrister or a legal expert, I would not know whether the company has acted irregularly or improperly, but I could seek legal advice on that. The letter was signed by Mr. G. A. Booker, chief executive. The letter did not state that metering was optional. As the Minister knows, when people receive an official letter, they believe that the contents reflect the law, and that therefore it must be correct.

When I raised the matter with the Minister, he agreed to take it up with the East Worcestershire Waterworks company on behalf of Opposition Members. I thank the Minister for that. He has sent me two letters, dated 29 January, which deal with this matter. He sent me a copy of the metered water supply agreement form issued by the East Worcestershire Waterworks company and other documents which deal with completion of a meter card. He also sent me a copy of the terms and conditions for the supply of water by meter.

I have studied those documents, particularly the agreement that the consumer must sign. When I sign agreements, I am accustomed to there being little red boxes which state the individual's rights under consumer law, so that, if he does not like the goods, he can send them back after so many days, not pay any further instalments and withdraw from the signed contract. The agreement makes no mention of the consumer's rights, nor does it state the conditions under which he can withdraw from the agreement.

I highlight this company because it was brought to my attention and because the Minister undertook to check with the water authorities and the water companies whether this was a common practice. Again, I thank him for doing so. All the water companies and water authorities may have done this for some time. The letter dated 29 January that I received from the Minister on 1 February, stated: I am now able to let you have the information which I promised in Committee on 21 January (Official Report, Col. 702) about the general practice of water undertakers on the installation of meters in domestic properties under their present powers. I have written to you separately, as on reflection I think was right, about the position of the East Worcestershire Waterworks Company. In the time available, it was not possible to consult all the undertakers individually. But I am advised by their Association that the water authorities do not routinely install meters in new domestic properties. They charge for water on the usual RV basis, unless the customer asks for a meter. The Water Companies' Association report that their members have various policies. East Worcestershire is the only one which arranges for the developers to install a meter and then charges by measure as a matter of policy unless the customer asks for RV charging. In none of the documentation supplied to me previously, or on 1 February by the Minister, does it say that the East Worcestershire Waterworks company —which is unique—informed people, either by correspondence or by telephone, that they could opt out. That concerns me greatly.

This squalid little Bill is all about imposing on people something that they may not want. From now onwards, all new houses will have water meters installed in preparation for metering. Rateable values will have to exist for a long time after the introduction of the poll tax because water meters cannot be incorporated into all houses overnight. However, we are concerned that one water company has acted prematurely.

The Minister has been true to the spirit of the Bill, but the Government have failed to give us sufficient notice of their amendment concerning meters in new buildings. I hope that the Minister will comment on the East Worcestershire Waterworks company. My hon. Friend the Member for Normanton made a lengthy analytical speech and we have given the Minister much to think about. I hope that the strength of our arguments will enable the Minister to concede new clause 2.

Mr. Moynihan

If this is my 631st intervention—we have the arithmetic talents of a first-rate young lady, Jackie Allen, to thank for that information—the only reason has been my determination to answer the many important interventions put to me. Miss Allen is an assiduous student of the Public Utility Transfers and Water Charges Bill with a remarkable capacity to count. She is to be commended if she has embarrassed me with her comments.

One important point that she would have drawn to my attention — the hon. Member for Houghton and Washington (Mr. Boyes) was right to refer to it again—is how we shall assess the success or otherwise of the trials. We do not see them as scientific experiments—to use the hon. Gentleman's words — to be judged against defined scientific criteria on which one can say that they have succeeded or failed. We regard all the additional knowledge in a whole range of issues connected with the trial schemes to be important, and each incremental learning curve along which the water authorities move are successes in their own right because they will bring additional knowledge to the water undertakers. That is essential in determining the outcome of their considerations about the best possible form of charging for water after 1990.

The hon. Member for Houghton and Washington made an important point about the East Worcestershire Waterworks company. I gave him an undertaking that I would try to make a further statement on that point to the House at the appropriate time. I understand that the East Worcestershire Waterworks company generally has meters installed in new properties by developers and asks the new occupier to sign a measured water supply agreement if he wishes his water charges to be based on the measured flow. The vast majority of customers in new properties choose to sign the agreement and pay for water according to measure.

I now understand that the company has responded to the concern expressed by hon. Members in Committee and decided to amend its literature to make the option of being charged by rateable value or by measure more apparent to occupiers of new properties. As I said when the issue was raised in Committee—I know that all hon. Members understand this point—I cannot give an opinion on the legality or otherwise of the company's position. That is a matter for the company, its customers and its legal advisers. However, I hope that that additional information, which has been taken up in the national press only today, shows that responsible action has been taken by the East Worcestershire Waterworks company. That action is due as much to the representations made by the Government as to the persistent pressure that the Opposition have applied to the issue and brought regularly to the Committee's attention.

The new clause raises the important issue of whether, within the constraints of legislation, water undertakers should be left to make their own decisions about future charging policy, or whether Parliament should take their decisions for them. In the Government's view, the industry and its eventual shareholders, not Parliament, are best placed to decide whether a move to metering is worth while.

In particular, the industry needs to make a decision soon on how to charge for water services to new domestic properties and conversions completed after 1 April 1990 which, as a result of our eagerly awaited reform of the rating system, will not be rated after that date. Schedule 1, paragraph 1, would allow each undertaker to decide whether to meter new domestic connections. It does not require them — I emphasise that — to meter such connections. The decision, quite rightly, is left to each undertaker's commercial judgment.

However, I expect that each undertaker will take full advantage of that new power since it will give them access to the metering option at minimum inconvenience and expense to themselves, their customers and the construction industry. The Government will expect the building industry and consumer groups to be fully consulted by the water industry in drawing up specifications for use under this provision. We expect that that consultation process will take about one year. In consequence, we do not see the provision coming into force until at least one year after the Bill receives Royal Assent, but, for the reasons that I have already mentioned, before 1 April 1990. That, as hon. Members will be aware, would be by commencement order under clause 8(2).

To postpone the use of those powers until 1993, when the trials are likely to be complete, or later, to allow for the compilation of a report and for approval by Parliament, would, apart from creating enormous problems for the industry in charging for new properties, add to the cost of any later decision to move to more widespread metering. I emphasise that we are talking about new properties, not about requiring water undertakers to meter such connections. We are talking about an opportunity for water undertakers to decide whether to meter such new domestic connections.

To sum up, the effect of the new clause would be to delay the adoption of widespread metering, if that is what the industry eventually decides to do. I re-emphasise that it is not the Government's intention to pre-empt the outcome of the trials, or to argue at this stage, or indeed at any stage, that their view about charging is sacrosanct and will not take into account the full outcome of the metering trials as the detail of those trials comes to light. Indeed, flat-rate charges are an option which a number of water undertakers are looking at carefully alongside another range of charging systems.

Some have argued—we looked at this in Committee —that the high level of infrastructural costs that would go towards the traditional standing charges is such that the water supply element would be a small proportion of the total bill. Those who urge that would argue against metering and more in favour of a flat-rate charge. That sort of issue needs to be examined in detail during the metering trials. It is not for the Government to pre-empt the outcome of those; it is for the industry, in the final analysis, to decide on the method of charging that would be most appropriate to its specific circumstances.

Mr. O'Brien

Has the Minister—or the Secretary of State—agreed with the water industry that charging by rateable value will continue into the next century?

7 pm

Mr. Moynihan

No, I have not. From 1990, for 10 years, the industry will be able to continue on rateable value, seeking new charging systems to be introduced during that period and not into the next century. That 10-year period — the hon. Gentleman knows that I always try to answer his questions accurately, and it would be misleading to say that the system was going into the next century—will expire and that option will no longer be in place on new year's day in the year 2000. But it will still be there for the undertakers on new year's eve.

Mr. Matthew Taylor

What would happen to a water-connected property that was greatly improved during that time? Would it pay on the basis of a rateable value assessment made before those improvements or would it be possible to have some form of assessment done on that property in the intervening period? If the latter is the case — it is the only thing that would make sense — why could not the same be done for new properties or properties that had just been connected to water?

Mr. Moynihan

The undertaker will be entitled to use that rateable value and to go over the charging system that it wanted, in the full knowledge that the rateable value would not be available in the year 2000, at any stage during the 10-year period. This is an enabling power, as the hon. Gentleman knew when we introduced the complex provisions, to allow undertakers to insist that new properties should be fitted with appropriate technology so that metering could be put in place at an appropriate time. Our reasons for doing so were as much to avoid duplication of cost—

Mr. Matthew Taylor

I understand that, but, unless I am much mistaken, the Minister has not quite got my point. If there is an option for properties to continue to be charged on the basis of rateable value, is it possible to update that rateable value if the property changes? Is there a possibility of a new rating assessment up until the year 2000?

Mr. Moynihan

I understand that the answer is no. I must correct a point about which I was trying to be specific earlier. I made a minor error: it will not be on new year's eve in the year 1999. Rateable values will continue to be an option until 31 March in the year 2000. Those extra 100 or so days are relevant in the interests of accuracy. I am grateful to those who have reminded me of that important information, which is now on the record.

I believe that the main points about the new clause have already been covered in my response. I want now to take up one important point about charging that was raised by the hon. Member for Normanton (Mr. O'Brien). Except for certain specific circumstances set out in schedule 1, paragraph 5, the cost of complying with the requirement under the schedule is to be met by the developer. That is critically important, reflecting the shift of emphasis from the consumer to the developer since the earlier legislation of 1945 and 1951. Limited exceptions to the rule in subparagraph (1) are provided for in paragraph 2. They are outlined clearly and concisely. When a meter is installed by or at the request of the undertaker, he must bear the costs of installation and connection, and any expenses of maintaining, repairing or removing a meter in accordance with any requirements of the undertaker; and the expense of any works associated with the installation or connection, or with the maintenance, repair or removal of the meter in accordance with any requirements of the undertaker. Additional limited exceptions are provided in sub-paragraph (2), but I hope that what I have said clarifies the point about charging.

I ask the House to reject the new clause.

Question put and negatived.

Forward to