Water Supplies: Prepayment Devices (Hansard, 15 May 1996)

Lord Lucas
My Lords, it is a matter for the courts to interpret the law on the basis of the facts in any particular case which may come before them. I note, 463 however, that in his press release of 22nd April, the Director-General of Water Services said that he had been, advised that use of these units with the agreement of customers is consistent with the Water Industry Act and with the companies' terms of appointment".

§ Baroness Fisher of Rednal
My Lords, I thank the Minister for that Answer. However, is the noble Lord aware that legal proceedings have already started? Is he further aware that many local authorities, including Birmingham, are very concerned that such prepayment devices really serve as a means to cut off the water supply? They are not water meters; they are calibrated on a different system altogether. Therefore, when the water company decides that there is not enough money in the prepayment meter, the water is cut off. Does the Minister agree that that is contrary to the Water Industry Act so far as concerns local authorities? Surely they should be notified if water is cut off from any property.

Lord Lucas
No, my Lords; I do not agree with the noble Baroness. Such devices are installed entirely at the request of a customer. Indeed, they can be taken out whenever a customer so requests. They are purely devices to enable those who have difficulty meeting the payments for water to do so in a way which suits them. This is an interesting insight into the new Labour Party's ideas for a stakeholder society; namely, that the Labour Party cannot even trust consumers to pay water bills in the way desired and that they require such decisions to be taken by local authorities.

§ Lord Dean of Beswick
My Lords, the Minister said that customers have the recourse of going to court if they are dissatisfied. However, would it not be far better if the regulator had reserve powers to intervene beforehand if requested to do so by the customer, who may well have his water supply cut off very quickly? Indeed, would that not only save on court costs but also on costs in general? After all, are not water companies supposed to treat customers, not themselves, as their first priority?

Lord Lucas
My Lords, I believe the noble Lord, Lord Dean, is somewhat confused on the matter. Such devices can be removed whenever requested by the individual customer. If customers do not want the facility, then they can have it removed. So far as concerns taking the water industry to court, of course I am aware that local authorities are doing so. However, the water industry regulator is not doing so because he believes that local authorities are barking up the wrong tree.

§ Lord Monkswell
My Lords, bearing in mind the judgment of Pepper v. Hart, will the Minister advise the House whether it was the Government's intention, when putting the Water Industry Act 1991 through Parliament, to deprive consumers of a clean water supply?

Lord Lucas
No, my Lords; I do not believe so. Moreover, I do not believe that our actions and those 464 of the water industry taken since that time provide any grounds for thinking that that was our intention; or, indeed, that that is what has happened in practice.

§ Lord Gisborough
My Lords, is my noble friend the Minister aware that the water authorities are claiming that there are very few, if any, complaints about such metering systems? In fact, they are very popular, especially with people on small budgets because they can regulate themselves day by day.

Lord Lucas
Yes, my Lords; my noble friend is quite right. At least 90 per cent. of those who have such devices installed are very happy to pay their water bills in that way. We see no reason why they should be deprived of the ability to pay their bills in the way that they desire just because it upsets local authorities.

§ Lord Williams of Elvel
My Lords, what about the 10 per cent. who are not happy? Is it not the case that to remove such a meter—and indeed, to install one—is an extremely difficult and technical matter which requires a good deal of operational plumbing? Moreover, the removal of such meters requires several days' labour. If someone falls behind with the payments, it means that he will be deprived of what is, after all, a natural resource and one without which we cannot live. Therefore, is it right that the Government should encourage that method of payment when, according to the noble Lord's own figures, at least 10 per cent. of customers are unhappy with the situation?

Lord Lucas
My Lords, anyone who is unhappy enough with the system not to want to proceed with it merely has to ask for its removal. It is not a complicated matter; it is merely a valve in the main water supply system. Indeed, it is a very quick and simple exercise to remove it. Someone who is behind with his water payments, who is cut off through this mechanism and who, thereafter, has the device removed will then have his water supply restored.

§ Lord Williams of Elvel
My Lords, would the Minister care to undertake an experiment by having such a meter installed in his own home and then trying to get it removed just to see how long it takes?

Lord Lucas
My Lords, if there have been problems with the removal of such water devices when so requested by customers, I very much hope that that fact will be passed on to Ofwat, which I am sure will be most interested. Such devices are installed on premises on the condition that they are there at the request of customers and with their consent.

§ Baroness Fisher of Rednal
My Lords, the Minister quoted statistics from Ofwat. However, he did not give us any statistics as regards the cut-offs that local authorities are reporting. Indeed, it is reported that over 10,000 cut-offs are taking place all over the country. We are discussing a serious matter. Water has now become a very expensive commodity because water charges are based on the rateable value of the property and not the amount of water that customers are using. I completely understand why people find themselves in difficulty 465 with the payments. Does the Minister understand that people who are unemployed and living on welfare have greater difficulty in paying all their bills, but that other services are not cut off in the same way as applies with the water boards unless such cases are taken to court?

Lord Lucas
My Lords, it comes down to the fact that these devices are on customers' premises at customers' request, or at least with their agreement. If a customer wishes to have his water metered so that he pays only for what he uses, he has that right. We appreciate the difficulties which some people have in putting the money together to pay regular bills and large bills such as water bills. That is why we welcome arrangements which allow them to pay—as these devices do—more gradually than standard water bills allow, and which are proving convenient and proving to be what these customers want.