§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boswell.]
11.57 pm§ Mr. Barry Field (Isle of Wight)I thank you, Mr. Speaker, for granting me this debate on water metering. The Isle of Wight faces many challenges in a changing world. We have a corrugated, stainless steel-clad low energy hospital that has not yet opened, a highly controversial, waste-derived fuel plant, which looks as though it will be joined by an equally controversial pellet and coal-fired mini power station, and to date 48,000 domestic water meters.
I had the first Adjournment debate on water metering on 14 June 1989, and tonight is the culmination of our experience thus far, although the trial is to continue until 1993. The purpose of the debate is, I hope, to have some effect on national decisions on water metering, using the benefits of experience on the Isle of Wight, as well as encouraging Ministers to follow up and tidy up a few loose ends.
Mr. Ian Byatt, Director General of the Office of Water Services, visited the island in December last year, and the opportunity for the public and interested bodies to put their views to him on paying for water ends on 31 March this year. Mr. Byatt held his first public meeting on water charging on the island at Sandown, and I must put on record my personal thanks for his courtesy, kindness and refreshingly open approach to both myself and my constituents.
I hope to tackle in this debate first the national and then the local issues. Our experiences tell us that a higher standing charge, with a fixed block tariff, would be preferable to the very low standing charge and the rising block tariff that we have. That is because the Isle of Wight is a holiday destination with a massive seasonal fluctuation and a high proportion of second homes. The consumers involved are not paying an effective price for the infrastructure costs of water supply and sewage disposal, while those of us who are resident all the year round are effectively subsidising the absentee property owners. I hope that my hon. Friend the Minister will give me an assurance that the position will be adjusted as soon as comparative data on the existing tariff structure have served their purpose, remembering that the trial continues until 1993.
The Council for the Protection of Rural England has said that water meters are the right answer to the environmental problems created by ever-increasing consumption of water nationally. The Isle of Wight escaped a hosepipe ban last summer, although we have to import large quantities of water to meet the peak demand in summer.
In my original Adjournment debate, I mentioned that the Liberal Democrats had called for the island to be metered, but had attempted to distance themselves from that position once the project was under way. It is a sad commentary on their political creed that a minority of their number have since sought to create fear and panic in the local population by suggesting that water metering has led to a rise in the number of cases of gastro-enteritis—a claim immediately dismissed as irresponsible and ill founded by the island's public health consultant, a doctor. 974 We have only to think of Italy, Spain and France, which have exceptionally hot summers and water meters, to realise how idiotic such claims are.
The waste water charges have led to some concern, particularly among keen gardeners who resent being charged for a percentage of the water consumed on the basis of its being returned to the sewer: in their case, it usually goes on their begonias. The position is difficult to explain logically; some thought will have to be given simplifying that aspect of metering nationally.
I appreciate, however, that in many areas the company supplying the water is not the one responsible for disposing of the sewage. The current freeze-up has highlighted the need yet again to reassure metered property owners that their bills will be adjusted to take account of leaks that are reported and repaired within a reasonable period. Lest anyone should suggest that the cost of water lost through frozen pipes should not be shared by the water company, let me point out that the water companies themselves have wasted many thousands of gallons through burst water mains during the severe weather, through no fault of their own.
The Parliamentary Under-Secretary of State for the Environment, my hon. Friend the Member for Wells (Mr. Heathcoat-Amory), wrote to me on 13 November following my meeting with my right hon. Friend the Member for Finchley (Mrs. Thatcher), who was then Prime Minister. I was concerned at the size of bills facing large familes with young children, and constituents with severe medical problems. I urged my right hon. Friend to consider a survey of all the meter trial areas to analyse the problem.
My hon. Friend the Under-Secretary wrote to me as follows:
I agree that some further investigation is necessary and we are proposing to carry out a small study of all the trial areas to see if a problem exists. As a first step, the water companies involved in the trials will be asked to identify from their records those customers where the change to metering has resulted in substantial additional cost. Linking this information to data obtained during meter installation surveys about the type of property and the number of occupants should provide a basis for deciding if there are grounds for conducting a small social survey along the lines you suggest.As you know, Ian Byatt has published a consultation paper on methods of charging for water. That exercise will also provide an opportunity to throw further light on this particular subject and we shall look to see what is said about it in the responses to the consultation paper.
§ Mr. David Evans (Welwyn Hatfield)Is my hon. Friend aware that water metering trials were carried out in Welywn Hatfield in the Brookmans Park area and that, after tremendous representation to me, the local media, the Government and the local water authority, the meters—over 500—were found to be faulty? The huge bills, such as those my hon. Friend has mentioned in the Isle of Wight, were found to be far too high. The meters did not work and the whole scheme has been abandoned, much to the delight of the people of Brookmans Park. We are now waiting for the local water authority and the Government to come up with a much more satisfactory scheme that will not cause inconvenience to my constituents. I entirely agree with my hon. Friend the Member for Isle of Wight that it is a ludicrous and unnecessary factor of our life today to introduce water meters that do not work and are against the public interest.
§ Mr. FieldFrom his experience of just 500 meters, my hon. Friend might consider how busy I have been with 48,000 of them.
I hope that my hon. Friend the Under-Secretary will agree that it should not be necessary for me to keep troubling the Prime Minister about this. Since my hon. Friend the Member for Wells wrote to me, I have been to see the chairman of the Social Security Advisory Committee, who has drawn attention to the need for some additional adjustment to social security benefits to assist low-income families with their bills. I hope that my hon. Friend the Under-Secretary will tell me where his officials have got to with the study. I urge him to consider recommending a local adjustment to the housing benefit structure to meet the problem if the study shows that it is warranted.
There appears to be an on-going concern with the non-domestic metering of church property and village halls. Such properties used to receive water at a reduced rate, and the transfer to the full non-domestic tariff has been quite a problem for their already stretched finances. That needs serious consideration. I have been unable to obtain any conclusive help from Ministers or the water companies on this point. For my constituents and the various church authorities, it is still very much a live issue.
I should like to use this Adjournment debate to draw the attention of my hon. Friend the Under-Secretary to an anomaly in the law. There is no ability to reduce or waive the infrastructure charges. That is particularly unhelpful for first-time sewage schemes. There is no method available to require households to connect to new sewage schemes, yet those who do not are often the first people to complain about pollution of streams and rivers. That anomaly must be addressed, and I believe that I have the support of the National Rivers Authority in saying that. I make that point in the hope that my hon. Friend the Under-Secretary will take it up and ensure that his Department addresses it in due course when it is considering environmental legislation.
I can tell my hon. Friend the Under-Secretary of one domestic property that has since decided to disconnect from the first-time sewage scheme in order to save the charges. That is irresponsible. The ability not to connect, or even to disconnect, runs contrary to the excellent environmental programme in which the Government are engaged to clean up our beaches and estuaries. It is quite wrong that this should still be a voluntary matter, especially when the borough and district councils and the water company have invested so much in new sewage schemes.
Last week, Southern Water announced that it would not fit any more meters on the island, and that it is drawing the line at 48,000 out of a total of 53,000 homes. At the beginning of the trial, I had an avalanche of correspondence from constituents who did not want their property to be metered. Now I regularly receive letters urging me to obtain meters for my constituents.
I have two secretaries on the island, one with a metered property and the other with an unmetered property. The latter pays £125 a year for her water, based on a rateable value of £180. The former pays £108 for her metered water supply and her house had a rateable value of £240. Those figures show why an increasing number of my constituents want to know why they cannot have meters fitted.
I urge my hon. Friend to find a modest sum to enable the water company to offer meters to customers, allowing 976 an element of customer choice to the remaining 5,000 dwellings. I appreciate that these dwellings are largely the uneconomic properties and that it is uneconomical to meter subdivided flats in large buildings, but I hope that the Minister will agree that 5,000 homes are too many to be left unmetered. I realise that it would never be possible to cover 100 per cent. of the properties on the island, but given our strong island community spirit—we are all in the same boat—the number not yet fitted with meters should be significantly reduced. I believe that we need another 1,000 to 1,500 meters.
My only other plea tonight is that the review of the community charge and the abolition of rateable values should not impede the installation of water meters in the parts of the United Kingdom where water is often in short supply. This method of charging for water puts a precious resource in its proper perspective, and we must make progress with it for the sake of future generations of people and wildlife. I hope to hear that my hon. Friend the Minister for the Environment and Countryside will shortly accede to my request to visit the island to see the scheme for himself.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry)I congratulate my hon. Friend the Member for Isle of Wight (Mr. Field) on securing time for a further debate about water metering trials, which are being conducted throughout the whole of his constituency. He has made a number of points with care, and I shall do my best to respond to them in detail. If time prevents me from dealing with all of them, I shall write to him with more details.
This trial, the largest of the 12 metering trials taking place around the country, has been the focus of much attention both within and outside the water industry. My hon. Friend has spared no effort in pursuing a number of important issues that have arisen as a result of the trial with Ministers, senior officials and Southern Water, and he has been steadfast in the pursuit of his constituents' best interests.
As the House will be aware, the water industry has used rateable values as the basis of charging for its services for many years. That basis provides only a rough and ready link with consumption and, like the old system of domestic general rates, it has resulted in anomalies and unfairness, particularly for pensioners and other small households living in houses and flats with high rateable values.
With the abolition of domestic rates last year and the ban on the use of rateable values as a basis of charging for water and sewerage from the year 2000, there is a need for the water industry to move towards new methods of charging for its services. Metering, a flat rate charge per property and banding of property with a flat rate charge for each band are the main options being considered. The House will be aware that the debate on various charging options is being carried forward in a consultation paper that the Director General of Water Services issued last year.
Each water company must make its own choice of future charging method in the light of all the circumstances in its operating area. Although, with normal rainfall, we are not yet near the limit of supplies, even in dry areas, it is an obvious fact that the supply of water is finite. One of 977 the most effective ways of reinforcing the prudent use of water, by discouraging indiscriminate use and waste, is to relate charges to the amount of water used.
I believe that metering is potentially the fairest option, as it extends the normal principle that customers pay for what they use. It is, of course, the method used in relation to other utilities, such as gas and electrictity. My hon. Friend will be aware that a recent survey by the Consumers Association of its members on the Isle of Wight confirms my belief; 66 per cent. or so of those responding expressed a preference for water charges on the basis of a metered supply. My hon. Friend made it clear that some of those on the island who are still unmetered see the benefit of having meters fixed.
The number of domestic properties that have a metered water supply is growing all the time. In addition to the 61,000 properties in the metering trials, many households have opted to have a meter installed on a voluntary basis, and many water companies now require new properties to be fitted with a meter as a condition of connecting a water supply.
The metering trials were set up in 1988 to provide information on the costs and problems of implementing a general system of metering and to determine the impact of charging by volume on consumption. The main aim of the Isle of Wight trial is to establish the practicality and costs of metering on a large scale. It is also designed to investigate the advantages and disadvantages of internal and external metering. It is the only large-scale trial in the programme, involving around 52,000 properties. The installation phase is almost complete, and about 94 per cent. of the properties on the island have been metered.
It is, of course, inevitable that a fundamental change in the basis of charging for water, from rateable values to charges based on the volume of water used, means a shift in the incidence of payment between households. My hon. Friend will be aware that, in the small-scale trials, about two thirds of customers on average are paying the same as, or less than, they would under the rateable value system of charging. Similar information is not yet available from the Isle of Wight because not all customers have been charged on the basis of metered use for a full year, and those that have may not be a representative sample.
Nevertheless, an analysis of some 7,750 annual metered charges for 1989–90 on the island has shown that only about 10 per cent. are paying £50 or more per year more than they would have done under the rateable value basis of charging. This compares with about 11 per cent. of customers in the small scale trial areas. I accept that the Isle of Wight sample may not be representative of the whole, but at this stage I have no reason to believe that, in general, the effect of metering on the Isle of Wight is any different from that in the other trial areas.
My hon. Friend is aware that the charges scheme for the Isle of Wight provided a number of safeguards designed to protect the interests of customers. These included a limit on the amount by which charges can be increased, and provision for the tariff to be reduced if income from the trial exceeds what would have been received from charges based on rateable values for the island as a whole, provided that the increased income did not arise from increased consumption caused by abnormally dry weather conditions.
978 I know that the question of income from the trial has raised particular concern. Monitoring this safeguard poses some difficulty, because not all properties were metered during the first year of the trial, and during this period customers would have been billed variously on rateable value, on part rateable value and part metered consumption, or wholly on metered consumption. This has made it difficult for a proper comparison to be made. In addition, certain information about a water company's operations is commercially sensitive, and it would be improper to make it public.
However, my hon. Friend will be aware that, in order to achieve the same level of income as would have been received under the rateable value charging basis, the trial tariff was determined on the basis of the average consumption per household on the island. He will also be aware that the average consumption is running well below the level assumed when the original tariff was agreed. There is no reason, therefore, to doubt the assurance that my Department has received from Southern Water that its income has not exceeded the level that would have been recovered from rateable value-based charges.
I am aware of speculation that Southern Water might increase the charges to compensate for any loss of income. There is no provision in the charges scheme for an increase in the tariff on that account. A proposal to do so would require an amendment to the charges scheme, which can be made only with the approval of my right hon. Friend the Secretary of State, following consultation with all customers. I understand that the proposed increase in the trial tariff for 1991–92 falls within the limits on increases provided for in the present charges scheme, and that Southern Water is not proposing to seek approval for a further increase.
My hon. Friend has expressed concern over the effect of the rising block tariff on those people who have a need to use large amounts of water. I should explain to the House that the particular tariff used in the Isle of Wight trial is designed to encourage the use of water for essential purposes but, at the same time, to limit non-essential usage. All customers pay a standing charge. The first 90 cu m of water used each year is charged at a preferential rate, and all usage in excess of this amount is charged at a higher rate.
The amount of water charged at the preferential rate was calculated to cover the essential water requirements for a household of three people. This was to the benefit of most customers, since the average household size on the island is less than three people. I accept, however, that this tariff places a relatively higher burden on large families and those who have a need to use larger amounts of water than normal because of a disability or medical condition.
Concerns about the rising block tariff were raised at the public meeting that my hon. Friend arranged in conjunction with Southern Water last December. I understand that Southern Water has taken note of what was said at that meeting and is prepared to adjust the tariff so that the allowable increase in charges for 1991–92 will not bear so heavily on large users. It is proposing to increase only the standing charge and the preferential rate, leaving the higher rate at its present level.
The effect of this is that, at the average level of consumption on the island, the overall increase in water and sewerage charges will be 14.7 per cent.—which is in line with the average increase in regional charges generally. The increase for larger users will be less. For example, at 979 200 cu m, the increase will be only 10.4 per cent. It is inevitable, of course, that low users will pay proportionately more. Households using 80 cu m, for example, will face an increase of 16.7 per cent. But even at this level, the increase works out, on average, at less than 5p per day, and, in general, it is the smaller households that have gained most benefit from the change to metered charging.
I am sure that my hon. Friend will welcome this move towards reducing the differential between the preferential and higher-rate charges. I appreciate, however, that it does not fully allay his concern about the level of charges faced by large low-income families and those people who have a need to use larger than normal amounts of water because of a disability or medical conditon. He is aware that my Department has collected information from the trial areas about the number of households facing substantial increases in bills as a result of metering together with information on the number of people in those households, and whether they are in arrears with payment, in an effort to gauge the possible extent of the problem and to see whether a small social survey was justified.
I have to say that there have been considerable difficulties in making any meaningful assessment of the information from the Isle of Wight trial. That is mainly due to the fact that few customers provided Southern Water with information on the size of household when the properties were surveyed prior to installation of meters. However, based on such information as is available from a relatively small sample, it has been estimated that about 1.5 per cent. of households on the island consist of families with three or more children who are paying £50 or more than they would have done under the old system of charges based on rateable value. It has, however, not been possible to put a reliable figure on the number of households in arrears with payment.
980 My hon. Friend referred to a commitment given by my hon. Friend the Member for Lewisham, East (Mr. Moynihan), when he was Under-Secretary for the Environment, to pursue the question of including increases in water charges in the uprating of income support. I can assure him that this matter has been discussed extensively between my Department and the Department of Social Security. I am aware that the Social Security Advisory Committee has recommended an increase in income support rates by an amount greater than would otherwise be the case in recognition of the fact that water charges are increasing faster than the rate of inflation. I am sympathetic to that recommendation, and we are pursuing it with the Department of Social Security. However, my hon. Friend will of course appreciate that that is one of many demands on public expenditure and will have to be considered alongside those demands.
My hon. Friend raised a number of other points about which I promise to write to him in detail. Those points ranged from the position concerning church halls to hygiene. However, I hope that he will have been reassured by my comments, by the fact that we continue to give attention to his concerns and that my hon. Friend the Minister for the Environment and Countryside has accepted an invitation to visit the island on 30 April.
I congratulate my hon. Friend on bringing the metering trials once more to the attention of the House. As he has said, they will continue well into 1993. A great deal of information has already been collected and published about the cost and problems of installing meters. We are anxious as far as possible to resolve any outstanding difficulties that may still remain.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes past Twelve o'clock.