§ Mr. Burns
I beg to move amendment No. 30, in page 5, line 48, at end insert—'(12) When under subsection (4) the Director upholds a water undertaker's refusal to give effect to a measured charges notice the consumer shall have the right to opt to pay as an alternative to the current charge either:—I reassure the House that this is a probing amendment. We are simple seekers after information, which the Minister will no doubt give us.
- (a) a charge assessed by the water undertaker by reference to the estimated volume of water supplied to the premises; or
- (b) the water undertaker's average household charge and any dispute between a water undertaker and a consumer as to the application of (a) above may be referred to the Director for determination under Section 30A above by either party to the dispute.'.
As any aficionado of the Bill will know, clause 6 adds new section 144A to the Water Industry Act 1991. It covers homes that currently pay for their water on an unmeasured basis under a charging scheme. It gives these consumers a new right to require their water company to charge them by reference to volume. Anyone who has been following the debate closely will know that, once the Bill becomes law, consumers who currently pay for their water on a rateable value basis will have the opportunity to have a water meter installed in most, although not all, cases. They will then have up to 12 months to decide whether they want to continue on a metered basis or revert to the rateable value basis. I suspect that many households will take that decision according to whether they like the size of their bills during those 12 months.
Clause 6 also provides that water companies should not have to install a water meter where it would not be "reasonably practicable" or where it would be unnecessarily expensive for them to do so. The vast majority of hon. Members will agree that the Government are right to include that perfectly reasonable qualification. It would place an onerous burden on water companies if there were a blanket requirement in the Bill for them to install a meter in every household that demanded one, even if it were technically feasible for them to do so.
The Bill makes no provision, however, for customers denied the opportunity to pay on an unmeasured basis—those required to continue to pay on a rateable value basis, which may involve their paying substantially more than if they were paying on a meter and thus paying only for the water that they consumed in a year.
The Minister looks a little puzzled, so let me elaborate. I understand that it is late and that he has had to work hard. There are a number of properties in multiple occupation—most comprising flats—which share a supply pipe. Also, the internal pipework of some of these properties is such that flats have individual cold water supplies but joint hot water systems. Older, purpose-built blocks of flats—in the local authority and private sectors—may have one supply pipe, which would make it very difficult, if not impossible, for a water company to 427 install meters. Ironically, especially with local authority flats in that category, it is possible that residents will include owner-occupiers, elderly single pensioners or families with young children. Clearly, families will consume much more water than single pensioners.
The scale of the problem varies around the country, but it is widespread in the areas covered by Thames Water and Southern Water. The problem is likely to be greater in large cities such as London than in the south-west or more rural areas, where fewer blocks of flats are owned by local authorities. In such areas, the problem may be negligible.
A case highlighted on a recent Radio 4 consumer programme involved a Thames Water customer who lived in a flat, where his annual metered bill for both water and waste water services was £122. When he moved to another flat of similar size and value, which could not be metered, he ended up with a bill under the old rateable value system of just over £1,000. His water consumption and use of waste water did not rise beyond what he had averaged in his previous property, but, through no fault of his own, his water bill rose by more than £800 a year. I am sure that the Minister has some sympathy for that customer, whose problem no doubt is replicated elsewhere.
I am not asking the Minister for instant legislation, and I do not expect a solution tonight. However, by the end of this evening, the Bill will be only halfway through its progress through the House. I ask only that the Minister think about the problem to see whether a system can be devised that is fair to householders who are trapped in the way that I have described and who will not benefit from other provisions in the Bill. It is clear that the Government believe that the Bill will benefit consumers, and any system designed to overcome the problem that I have outlined must be fair to them and to the water companies. I hope that a realistic solution can be achieved.
I should like to help the Minister by giving him some information about the way in which companies voluntarily try to solve the problem. Their solutions are, by definition, ad hoc. As was noted in Committee, water companies have produced their own unique schemes to try to help people and families who are less well off by lessening the impact of their water and sewage bills.
I believe that I am right in saying that at least one of the water companies is prepared, if all residents agree, to meter an entire property, such as a block of flats that suffers from a problem, say, with a single-pipe supply, and split the bill equally. That may superficially appear attractive, and might, with some fine tuning and deeper thought, alleviate the problem. I see one flaw at the outset, however, concerning the metering of a block of eight flats, in which all families did not have similar backgrounds or consume similar amounts.
One could use extremes to illustrate the point, such as a single pensioner who lives in the same block as a young family with one or two young children. Such billing would be disproportionately unfair to that single pensioner. Would one be able to fine-tune a scheme further and reach some agreement with all residents, so that they paid proportions of the bill? Could estimate bills be issued?
To be frank, I do not know the answers to those questions. To be fair on Ministers, I would not expect them to come up with an instant answer. However, 428 would they be prepared to think more about it, and consult the regulator and the water companies to see whether there is any way in which that might be a feasible way forward?
Would it be possible to allow people who are caught in the traps that I have described to be charged on the basis of an average household bill? Again, I do not expect Ministers to be able to give an instant answer, although it is reasonable to ask them to think about the matter. They may want to consult the regulator and water companies, so that, voluntarily, the Bill's benefits are extended to people who, through no fault of the water companies or the Government in drafting the Bill, may not receive the benefits enjoyed by others who live in less difficult circumstances, such as a property where there is a clear-cut opportunity to install a meter.
Neither of those ideas is ideal; they may not even, on reflection, be workable. It is however certainly worth the effort of looking into the matter further in order to come up with some other scheme that might seek to benefit further the customers to whom I have referred.
§ Mr. Meale
I shall try to be as helpful as possible—certainly on some of the points on which the hon. Member for West Chelmsford (Mr. Burns) required a response.
As hon. Members are aware, the Government want a water charging system that gives customers increased choice. For some people, that will mean opting to have a meter installed because they would prefer to pay a measured charge. However, as the hon. Member for West Chelmsford pointed out, in some circumstances it would be impractical, difficult or very expensive to fit a meter, such as in a block of flats where residents share pipes. We do not believe that it makes sound economic sense to force water companies to spend a disproportionate sum of money on fitting a meter in such instances. However, at the same time, we are concerned to ensure that customers who find themselves in such circumstances are not disadvantaged.
At present, customers who would benefit from paying on a measured basis may request the installation of a meter, but if that is impractical, they may find that the water company is unwilling to change the basis of their charging from rateable value. In our consultative document, "Water Charging in England and Wales: A New Approach", we recognise that that could be a problem for customers, and propose that in such cases householders should be able to pay on an assessed charge. We therefore strongly support the principle of protecting customers' interests in such circumstances.
The hon. Member for West Chelmsford rightly pointed out the rather strange case of Mr. Paul Slawson-Price, who moved from his flat in Kensington, where he paid a water bill of £122 a year, to one in Westminster, where the bill rose as high as £1,055.48. He rightly pointed out that the company—Thames Water—had existing powers to charge in the way that we would prefer, but that, although it had admitted that, it refused to do so.
The protection that we require for residents can be delivered effectively through the mechanism—which we propose to introduce by clause 4—for the director general to approve companies' charges schemes. Moreover, by contrast with the arrangements detailed in the amendment, 429 the use of clause 4 would give water companies flexibility to consider arrangements for assessing charges that meet their customers' concerns.
I appreciate the offer that the hon. Member for West Chelmsford made when he suggested that the Government should be open to on-going ways in which we can try to help establish better systems for people caught in this way. We would also expect the regulator and the water companies to use that clause to enable satisfactory solutions to be found to the problem. We therefore believe that it would be unnecessarily prescriptive to set out procedures for calculating assessed charges on the face of the Bill. In the light of the assurances and help that I believe that I have given the hon. Gentleman, I hope that he will withdraw his amendment.
§ Mr. Burns
I am grateful to the Minister. May I seek clarification? At present, water bills are paid either according to a meter or on the basis of the rateable value system. Given those two systems of payment, would it be legal, at present or after the Bill becomes an Act, for a water company to start charging people for their water on a hybrid version of either scheme? What I—
§ Mr. Meale
As I tried to explain to the hon. Gentleman, there are ways in which assessed charges can be introduced now. The water industry Acts enable that, and it is for the water companies to achieve that. In the specific case that the hon. Gentleman mentioned, the water company, Thames Water, chose not to do so. I believe that that effectively means that, yes, it could place its own charges that are found to be acceptable, and which, like all other charges, may be open to challenge by the customer to the director general. I believe that the hon. Gentleman is correct in that assumption.
§ Amendment, by leave, withdrawn.