Water Charges (Amendment) (Hansard, 22 July 1997)

I beg to move,

That leave be given to bring in a Bill to amend the Water Industry Act 1991 to prohibit the use by water undertakers of rateable values as a basis for charging from 31st March 1998; to provide for charging by water undertakers in accordance with council tax bands; and for connected purposes. It is a well-known fact that, while we may do without food—and some of us could certainly eat less—no one can do without wholesome water for very long. That most essential commodity is often taken for granted. Since the privatisation of the water authorities, for a variety of reasons, water and sewerage charges have risen relentlessly and continually. They now represent a significant part of most household budgets—indeed, some families in my constituency spend almost 10 per cent. of their net income on water charges.

The original charging system, which was based on the old rateable values of properties, will cease to be used after April 2000. The Government are now undertaking a review—among many other reviews—of the water charging system in England and Wales. In Scotland, however, the council tax banding system is already used to calculate sewerage and water charges. Surely what is good enough for Scotland is good enough for England and Wales.

During recent years, the installation of water meters, mainly in new properties and through schemes conducted by the water companies themselves, has reached less than 10 per cent. of households in England and Wales. Thus more than 90 per cent. of households are still paying water charges based on the old rateable values of their property. Some of those figures are now 25 years old. Water and sewerage charges must be paid for, but the basis of such charges must be fair and have widespread support. There should be no compulsory water metering for essential household use, but conservation demands that any charging system should promote the efficient use of water, and thus metering for heavy users of non-essential water must be an integral part of any future charging system.

The existence of monopoly suppliers in each region for such an essential commodity means that national charging systems must be fair, not only among individual customers of each water company, but among the companies themselves, so that the huge disparities between water charge payments in the south-west and those in most other parts of the country do not continue. A new system for charging must take account of that innate unfairness, particularly to those living in the south-west of England. The charges levied by South West Water have risen by some 75 per cent. in real terms from 782 1989 to 1997, while the average rise throughout the rest of the country was only 42 per cent. Not only does the south-west pay the highest water charges, but it is an area of households with low incomes and above average unemployment, and it has more elderly residents than most other areas.

The Bill proposes that the future charging system for unmetered water should be based on council tax bands, with meters being available as a choice to the consumer. Indeed, there should be an ability to switch from one form of charging to another, to allow for householder preference. The introduction of a system of charging based on council tax bands would be well understood by customers. It would be cheap and easy to install and to administer, and if properly structured, would broadly reflect the use of water. It is likely that it would promote metering in bands E to H. Customers in bands A to D would probably see a reduction in their bill. Such proposals would, therefore, encourage conservation by high users, while protecting low-income consumers from the present high charges that are levied on them.

A system based on council tax bands could also include the ability to give single-adult households a 25 per cent. discount, and households on very low incomes a rebate, in the same way as under the council tax system. That would provide a much fairer distribution of the charges that have to be made, without deterring further metering. There would be administrative savings, as councils could collect water charges on an agency basis. That would cut out duplication, and householders would be able to see clearly the relative costs of different local services. It has been estimated that the complete metering of all properties could take up to 20 years and cost over £2 billion. Thus an alternative system must be adopted in the period between 2000 and that time.

The Bill could make a substantial difference to many people, without removing the option of metering, and at the same time tackle the inherent unfairness in the present system. I commend it to the House.