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Lord Whitty: It depends in the first circumstance on who is requesting the metering. It could be the landlord; it could be individual customers; or it could be a group of customers, some of whom want a different system. Sometimes the landlord will be paying the bill,

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sometimes the individual tenants, so it is not quite as straightforward as all that. In the case of a terraced house--the noble Baroness raised this example--or a block of flats, it might not be practical from the company's point of view to fit meters in every flat even if the landlord or the tenants wanted that, particularly if they had a shared water supply. That is why, when faced with a request for a different system, we are giving the power to companies to offer customers in those circumstances an alternative to metered charging; that is, being charged on the basis of an assessed measured charge based, broadly speaking, on the average of metered charges for similar properties in the area.

As far as the potential for conflict is concerned--my noble friend envisaged such conflict in the circumstances, and I accept that it might well arise--there are provisions for disputes over whether metering is practical. If they cannot be settled, those disputes will have to be referred to the director general.

Baroness Hamwee: I wonder whether the Minister is prepared to comment further on Amendment No. 14. He dealt with it on the basis (which is entirely fair because that is the way the amendment is drawn) that the ability to give another notice would be entirely unlimited. I said that 12 months may be too short. The Minister will readily appreciate that I may be tempted, at Report stage, to suggest a period of two years. If it would be helpful to look at that now it might save us a little time. One of the points I made was that if the trial period were exactly a year, there would not be a full year's bills for the customer to compare and on which to base a judgment.

Lord Whitty: I did not comment on the particular provision because the clause as drafted obviously leaves it completely open-ended. We would not want a general provision which gave at any future time the ability to revert. Indeed, in new premises there is no other basis for charging than metering. As a general right, therefore, we could not accept such a provision, whatever the figure or date the noble Baroness suggested.

Baroness Hamwee: I am not quite sure that I understand that, but I shall read what the Minister has said, as indeed I shall with regard to Amendment No. 12 which he said was very detailed. He will readily understand that I was not wholly serious in Amendment No. 10, but that I wanted to flush out, if that is not an inappropriate expression, comments on the real cost of the exercise.

The Minister suggested that my amendments restrict choice. I do not agree with him on that. What I particularly do not accept is that one should necessarily read all amendments in a group together. We happily do not have a procedure which takes one amendment at one stage and another amendment at another stage so that by the time we have got through 25 amendments we have had 25 stages of the Bill. In order to raise a variety of aspects, one has to table a variety of amendments, so I do not think I want to let the Minister get away with that. Having made that point, I beg leave to withdraw Amendment No. 10.

Amendment, by leave, withdrawn.

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Baroness Hamwee moved Amendment No. 11:


Page 4, line 18, at end insert--
("(2A) In determining the period within which effect must be given to a measured charges notice under its charges scheme in accordance with subsection (2) above, a water undertaker shall be entitled to take into account--
(a) the environmental impact of furnishing the supply of water in question; and
(b) the cost to it of providing and installing the meter in question,
taking into account the cost to it of complying with all the other measured charges notices that have been or may be given to it.")

The noble Baroness said: Amendment No. 11 seeks to ensure that the installation of free meters is taken forward in a way which might be more sensible and cost-effective than could be the position under the Bill. I believe that metering will only have a positive environmental effect if the industry can take a strategic approach. It may well be sensible for it to target specific geographical areas and specific types of property which will best deliver water savings and which relate to the water resources which are most stretched. The point is similar to that made on Second Reading by the noble Baroness, Lady Young of Old Scone.

It cannot be sensible to have a scatter-gun approach with an instant or almost immediate response to each customer when requesting metering. That will not be in the interests of the industry and therefore of customers. Companies must have investment programmes with wider considerations. The Minister referred to environmental obligations and managing resources and I am concerned that there is an element of chance which will skew the different works programmes of the different undertakers. I beg to move.

Baroness Farrington of Ribbleton: The amendment would give companies considerable freedom in how long they can take to install meters when issued with a measured charges notice. I should like to start by assuring the Committee that we do not wish to be unduly restrictive on the timescales in which companies must install meters. To demand that a measured charges notice must be complied with within, say, a month in a large company would be in the best interests of neither water company nor consumer, since it would be unlikely to be the most cost-effective way of carrying out a meter fitting programme; and there may be particular environmental benefits to be gained from giving priority to metering customers in areas with fewer water resources.

However, as was explained earlier, one of the main aims of the Bill is to increase customer choice, providing those customers who wish to pay on a measured basis with a real choice on whether to do so. I am concerned that this right would be eroded with this amendment. Water companies would have scope--perhaps too much scope--to leave considerable gaps between the receipt of a measured charges notice and fitting a meter, perhaps even several years, provided that they could justify this with reference to water resources or costs. This could substantially erode the rights conferred under the Bill.

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Furthermore, the amendment does not address the needs of less well-off consumers, many of whom could make savings from having a water meter, and for whom the savings could be particularly important. In any meter fitting programme we would expect to see priority being given to such customers.

This, however, does not mean that we do not take seriously concerns about cost effectiveness and environmental benefits. We have no intention of enforcing a blanket requirement on water companies to fit all meters within exactly the same timescale. But, at the same time, consumers should not be expected to have to wait for very long periods of time for their meters to be fitted. There is scope for that guidance on the timescales for meter fitting to be included in the Secretary of State's guidance to the director general on his function of approving charges schemes. We would not envisage such guidance to be overly prescriptive and it would, of course, leave scope for local flexibility, with the director general approving the precise arrangements. We believe that this approach offers more protection to customers than allowing timescales to be decided solely by water companies, while allowing companies to ensure that their programmes are as effective as possible.

I should point out that water companies will not have to fit meters where to do so would be unduly impractical or expensive. In these cases, we propose that they will have to offer customers an alternative basis of charging; for instance, an assessed measured charge.

The noble Baroness raised the issue of costs. The Director General of Water Services has indicated in Prospects for Prices that in the five years from 2000 to 2005, £300 million would be allowed for the capital costs for optional and selected metering across England and Wales. This includes the metering which the companies were already programming in the absence of Government policy on this issue. At present, 3 per cent of customers across England and Wales are switching to meters each year, and that number is growing. The cost is small in comparison with the £8 to £8.5 billion environmental programme which we want to see delivered and which will still allow significant reductions in the average bill in 2000. We do not believe that the water companies will be faced with an unmanageable task.

I hope that I have now made clearer our intentions in this area and that the noble Baroness will feel able to withdraw the amendment.

Baroness Hamwee: There is not a great deal between us and the Minister and I shall read her reply carefully. We do not seriously suggest total freedom; we were seeking a common sense approach. I thank the Minister and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 12 not moved.]

22 Apr 1999 : Column 1261

5.15 p.m.

Baroness Seccombe moved Amendment No. 13:


Page 4, line 25, at end insert--


    ("In either of those cases, the undertaker may instead fix charges in respect of those premises on the basis of average consumption of water in premises of comparable size.").


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