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Baroness Miller of Hendon moved Amendment No. 18:


Page 6, line 4, leave out ("either")

The noble Baroness said: In moving Amendment No. 18 I shall speak also to Amendments Nos. 19 and 20. These amendments are in fact probing amendments.

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Amendment No. 18 is purely a paving amendment leading to Amendment No. 19, which is the insertion of a new paragraph (c) to Clause 7(2).

As at present drafted, subsection (2) prohibits an undertaker from installing a meter unless the consumer has requested it, or has consented to it, or unless there has been a change in the occupation of the premises and the new occupier has not yet received a bill based on a non-metered basis.

There is one other set of circumstances where the continuation of an unmetered charge would be inappropriate because a continuation of the use of the rateable value would itself be inappropriate. This is in cases where the premises have been so substantially altered that the rateable value should have and would have been increased but for the repeal of Part V of the General Rate Act 1967.

Since rateable values were last set in the late 1970s, many properties, especially houses, have been substantially modified. Extensions and garages have been built; attics have been converted into extra rooms, and so forth. In many cases--indeed most cases--the ever-vigilant district surveyor will have caught up with the owner of the property and the rateable value will have been increased, thereby triggering an increase in the water rates. But in cases where the rateable value has not yet been increased, and in future cases where there are substantial alterations to a property, the owner could be paying an unduly low water bill because the rateable value does not reflect the enhancement of the property.

The addition to subsection (2) removes that anomaly by allowing the supplier to switch to a metered supply. It is only logical that if a newly built property is automatically to have its supply metered under the terms of this Act, then what to all intents and purposes is a newly converted or substantially altered property should be dealt with in the same way. It is also consistent with the Government's acknowledgement that eventually all properties will be on a metered charge basis, as was made clear by the Minister for the Environment during the Committee stage in the other place when subsection 2(b) was debated at some length.

The purpose of this amendment is to ensure that persons whose properties have increased in value because of substantial alterations do not pay disproportionately low water charges because there is no longer any machinery to increase their rateable value. That casts an unfair burden on the other customers.

Amendment No. 20 provides for disputes under this clause to be referred to the director under the appeals procedure set up by Section 30A. Of course disputes can arise, especially when the water company may say that it has discovered that a substantial alteration has been made to the property which would have resulted in an increase in the rateable value, and doubtless the owner will want to argue that the alteration is so insignificant that there would have been no increase.

How big is "substantial"? I do not believe we have to trouble ourselves too much with trying to define how big substantial is; the director can puzzle that one out. That is part of his job. As I said earlier in my remarks,

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this amendment seeks to draw attention to that anomaly. If this group of amendments is not acceptable to the Government, perhaps the Minister will not only tell the Committee why not, but also tell us what alternative solution they have to resolve this specific problem. I beg to move.

5.45 p.m.

Baroness Farrington of Ribbleton: As I have said before, we are concerned to give customers who currently pay an unmeasured charge the right to continue to pay on that basis except in certain circumstances to be set out in regulations under Section 144B(1)(c). We shall consult on the detail of the regulations in due course but it may be helpful if I repeat the indication we have given previously of the premises for which we consider water companies should be able to require measured charges. Those are premises which are used for commercial purposes; those where a garden sprinkler is used; those with a swimming pool; those where a power shower consuming more than 20 litres per minute is used, and those where a water softening unit is used which requires back washing.

This would be an enabling power. Nothing in the Bill places an obligation on water companies to impose meters in any cases. Where water companies want to identify customers using water for discretionary purposes, we look to them to do so without taking an approach which is unduly intrusive. A number of other circumstances where companies should be able to impose meters have been suggested to us, including those in the amendment tabled by the noble Baroness.

During the debate at Second Reading I explained the Government's aims for this Bill. One of the key aims is to promote greater customer choice in the basis of water charging. This amendment would be contrary to that spirit. It would be perfectly possible under this amendment for a water company to impose a meter on someone whose home had been altered many years previously.

Many people would believe that that is unfair. Indeed, we have already received many letters supporting that view from people who are having meters imposed on them for making, in many cases, relatively minor changes to their home. They do not believe, and I agree with them, that simply because they added a garage to their house or a playroom for their children, that their water consumption will increase. From personal experience, if it is provision for young teenage sons over the garage, as they move further away from the bathroom the water consumption may go down.

Of course, there may be situations where altering a property does increase water use; for example, if extra bedrooms are added so that more people can live there. We do not wish water companies to be tied to outdated rateable values in those situations. We believe that the fairest system is to allow water companies to update their charges without taking away customer choice.

Under the Bill as it stands, water companies would be able to start charging people who had altered their property such that the original rateable value was significantly out of date on an alternative unmeasured

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basis of charging, provided it is set out in their charging scheme. Companies would be free to use licence fees or assessed rateable values, as indeed some companies do already. Companies would, of course, be able to require meters for extended properties where the household is using water for purposes prescribed in the regulations under Section 144B(1)(c), as I mentioned earlier, such as sprinklers.

We believe that this amendment would drive a coach and horses through the right for people to remain on an unmeasured charge in their current home and hope therefore that the noble Baroness will withdraw her amendment.

Baroness Miller of Hendon: I did say that these were probing amendments. I shall certainly take them away and think about the Minister's answer. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 19 to 21 not moved.]

Clause 7 agreed to.

Clause 8 [Charging by reference to rateable value]:

Baroness Hamwee moved Amendment No. 22:


Page 6, line 28, at end insert ("during the period beginning 1st April 2000 and ending 31st March 2005")

The noble Baroness said: In moving Amendment No. 22 I shall speak also to Amendments Nos. 23 and 24. These are amendments to Clause 8 of the Bill which, though it is buried in the middle of the Bill, is in a sense the most important provision in the Bill. It is the clause which prompts the bringing forward of the Bill at this time and indicates the urgency of the situation; that is, that under the 1991 Act reference to rateable value is not to have effect after March of next year.

Clause 8 provides that Section 145 of the 1991 Act shall cease to have effect altogether. The first amendment in this group proposes that the reference to the year 2000 be moved on for five years rather than being taken off the statute book. Although there is no alternative to extending the use of rateable values, which are based on notional rental values, they increasingly lack any basis in fact. No general revaluation has been carried out since the early 1970s and there is concern that those issued since then are out of step with those issued previously.

I do not seek to knock the system which was effective in its day, but I suggest that rateable values are obsolete and that, on grounds of logic and fairness, should not be allowed to be used indefinitely. As we have already discussed this afternoon, no rateable values have been issued at all by the Inland Revenue since 1990. Therefore, in this amendment I am seeking to encourage the development of an alternative basis for unmeasured charges within a period of five years. Of course, I am open to negotiation to extending that period a little, but I seek to put a period on the face of the Bill.

Amendment No. 23 proposes that district valuation offices of the Inland Revenue shall, when requested, give occupiers the rateable values for dwelling houses,


    "of which no value currently appears on the valuation list".

22 Apr 1999 : Column 1271

Occupiers of houses built since 1990 for which there is no rateable value have, as has been said, no choice as to how they pay for their water. This amendment seeks to extend fairness and equality to such occupiers and to apply choice. I take the point made by the Minister previously, that the Bill cannot be only about choice and that there are a number of other factors to be balanced.

However, I should like to repeat the view put forward earlier that if one is thinking of buying a house built since 1990 and discovers that it is metered, that is not likely to be the factor that determines the decision about whether or not to go ahead with the purchase. If one buys a house knowing that it is metered, I do not believe that it means that one should be denied the choice simply because, as the noble Baroness, Lady Miller, said, caveat emptor. I believe that a question of balance is involved.

Finally, I turn to Amendment No. 24, which refers to the possibility of charging by reference to council tax valuation bands. The amendment does not seek to introduce such a system but rather to introduce the possibility for it. It would enable undertakers to obtain information. Access to council tax bands could provide the industry with a comprehensive, readily available and quite cheap alternative method of charging. However, at present, council tax data is not available to companies that wish to have it. It is possible to find out the council tax for individual properties, but that means asking for such information property by property.

The report on the consultation to which I referred earlier says, at paragraph 23, that although,


    "the Government will continue to consider proposals that come forward [that] does not rule out the possibility of releasing Council Tax data in the future if proposals are refined to address the difficulties inherent in any change".

I understand that those difficulties include sensitivities about the use of information collected for taxation purposes. I also understand that there would be a burden on local authorities as regards providing the information. Nevertheless, I tabled this amendment because it will enable me to ask the Minister whether, without such a provision, it would be possible for the Secretary of State to ensure that undertakers have access to this sort of information so that they can make the judgments; and, indeed, so that the debate can go forward about an alternative system. In other words, can the Secretary of State do what I am seeking to allow him to do without my amendment appearing in the Bill? I beg to move.


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