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Baroness Miller of Hendon: My Lords, I thank the Minister for her very helpful response. I suppose the difference between us lies in the fact that maybe I am seeing this glass half empty and the Minister is seeing it half full. She is very optimistic that this method of assessment will work and come into play. I am asking for something a little more specific, but I accept absolutely what the noble Baroness says and I wish her optimism well. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 5 not moved.]

Baroness Hamwee moved Amendment No. 6:


Page 4, line 39, leave out ("twelve") and insert ("twenty-four")

The noble Baroness said: My Lords, Amendment No. 6 seeks to give a consumer a rather longer period to opt back from metering; in other words, it seeks to

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revoke the measured charges notice. The amendment is to some extent about the adequacy of the right to opt back and also how far it represents, as drafted, a significant increase in consumer choice.

Clause 6(5) allows for the revocation of a measured charges notice and a reversion to an unmeasured basis if a consumer thinks that that suits his needs rather better. The Minister in another place described this as being a consumer protection measure comparable to the protection given under consumer protection legislation, under which consumers can change their minds in a specified cooling off period. I am not sure, however, that I can recall another product or service which, if not rejected by the consumer within a specific period, is then regarded as a commitment on the part of the consumer for ever--not only the consumer in this case, but the consumer's successors.

The Minister also said that a balance had to be struck between providing choice for consumers and ensuring stability in charging. She said that about a year was probably the right balance. The implication seemed to be that a slightly longer period might be considered. At the Committee stage in this House, I argued that a period of 12 months was simply inadequate for a consumer to assess whether a measured charge best suited a particular household's needs. Needs will vary from year to year and period to period as a household changes its nature. If consumers are to have real protection, there would be no limit on the period for reversion. Looking at the 12 months, I also argued that it was quite simply too short because there would not be a full year's bills on which a consumer could base a judgment. I was therefore concerned that this was not in any real sense increasing consumer choice, because the choice would not be an informed choice.

The amendment I proposed in Committee sought to take out time limits entirely. The Minister then resisted that open-ended provision. I responded briefly to that by wondering aloud whether a fixed period longer than 12 months would meet everyone's concerns. That is the purpose of Amendment No. 6. The amendment seeks to achieve the balance that the Government have said they are seeking. It proposes a 24-month rather than a 12-month period. It does not propose that a consumer can switch backwards and forwards more than once. It seeks simply to extend the period within which one reversion can take place. I hope that that will meet all concerns.

If there were a realistic possibility of our moving to some consistent basis--for instance, council tax bands rather than the move towards metering--I might be less concerned. But I have been informed since the Committee stage that the word on the street, to the extent that the street talks about these things, is that the use of council tax bands is entirely off the agenda. It would be helpful if the Minister could say something about that. I beg to move.

Lord Whitty: My Lords, the noble Baroness has somewhat restricted the ambitions of her previous amendment. We are now arguing about whether the period should be one year or two years. Perhaps I may say at the outset that we should see this in proportion.

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It is an important objective of the Bill to give consumers some rights to revert if they find that charging is not working out. At present there is no such right. We have to establish a balance with regard to the period of time the scope for reversion should apply.

Water companies are concerned that granting widespread powers to revert will increase uncertainty, impose extra costs on them, which eventually would be passed on to the rest of their consumers, and reduce stability in their planning. On the other hand, as the noble Baroness said, we need to ensure that customers have an essential protection to guard against cases where customers opt for a meter and find that they lose out or suffer in some other way as a result. We are looking to strike a balance. It is important to give people adequate time to assess what the change of charging has brought to them. On the other hand, the water companies need some protection.

In my view, it should be fairly quickly clear to consumers how the different charging system has affected them. In most cases they will be able to tell from their first six-monthly bill. It is true, as the noble Baroness implies, that the longer they have, the more information they will have. But we have to draw a line somewhere. They will have a fairly clear indication from their first six-monthly bill. If the second bill would normally appear after the 12-month period and they are concerned, they can insist on earlier billing in order to meet the deadline. Therefore, I am not convinced that, even in principle, extending the deadline would bring significant additional benefits or significant additional information to consumers.

There are, however, some technical points about the amendment as drafted which I wish to draw to the noble Baroness's attention. I assume that one effect of the amendment is unintended. Under our proposals, customers who opt for a meter but find virtually at once that it does not suit their needs would have the reassurance that they would not have to face more than 12 months on a measured charge. However, the amendment, if accepted, would enable water companies to refuse to allow customers to revert to an unmeasured charge until two years after the meter was installed. Customers who opt for a meter and realise quickly that they have made a mistake--for example, after six months--would not regard this amendment as being in their interest. The amendment has an additional defect in that it would require a corresponding amendment to Clause 6 to make it workable. Therefore, as it stands, it is a technically defective amendment. In the light of those arguments, both the technical and the substantive, I hope that the noble Baroness will feel able to withdraw her amendment.

The noble Baroness asked me about the current position on shifting charging to council tax bands. This is a complex issue. If water companies wish to proceed to develop council tax-based charges, the next step for them is to draw up detailed proposals. My colleague Michael Meacher has met water companies on a number of occasions and we certainly have not ruled out for all time a move to council tax charging. As there is a complex effect in terms of winners and losers, it seems

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a difficult move to make. Companies which were going to make that move would have to make some substantial preparations. If companies require any information to help them develop their proposals, they can approach the department for that information. But at present we do not see an early move to council tax-based charging. We have not received a request to release the council tax information on which such a system could be based. But that is different from saying, as the noble Baroness said, that we have ruled it out entirely.

8.15 p.m.

Lord Skelmersdale: My Lords, before the noble Lord sits down, he said that he believed that after the first six months a customer would be able to make a realistic assessment; and then after the six months he would have another five months to make up his mind what to do about the situation. However, it depends where in the year the six-month period comes up. Has the Minister any information on the average pattern of water use? One would have thought that people take more baths or showers in the summer. Therefore, the noble Baroness might well have a point in saying that 12 months is not long enough. Whether two years is right, I have no idea. Perhaps the Minister could respond to that comment.

Lord Whitty: My Lords, the level of water consumption changes over the year, but not quite as dramatically as the noble Lord indicated. If people are worried about their first six-monthly bill, they can request from the company a second bill before the next six months is up. In other words, they could meet the 12-month deadline to see what the total, or something close to the total, 12-month pattern would look like. However, in general, I would say that the first six-monthly bill either comes as a shock or a pleasant surprise once one changes one's metering arrangement. To some extent, most people, having been convinced that they need to change their system, would have an expectation of which way it would go. If it went in the opposite direction, that would be clear from the first bill in almost all circumstances.

Baroness Hamwee: My Lords, I am grateful to the noble Lord, Lord Skelmersdale, who precisely picked up the point which concerned me. I take the two criticisms of the amendment. The first was that I have not dealt with the consequential amendments later in the clause in a way which would make the amendment properly workable. The most important piece of information that I have received concerns the ability of a customer to insist on earlier billing than normal. I had not been aware of that, but I am sure it is my own fault that I had not taken that on board. That being so, it is particularly important that water companies are encouraged, if not directed, by the director general to highlight that provision when information is being given about the ability to opt for metering and then to switch back. Customers need to know what mechanisms are available to them to take decisions. I am sure that I am not the only Member of this House--certainly not the only person in the wider community--who bins all the

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bits of small print that tend to accompany bills from utilities. I hope that very plainly presented information about this matter will be an absolute requirement when these provisions come into effect.

As to council tax, the point about winners and losers is one that has also been made to me. I am told that the water companies are still concerned that perhaps for reasons of data protection--nevertheless, it is a real problem for them--council tax banding information is available only in conventional or (if I may so put it) primitive documentary rather than electronic form. It is a pity that a way has not been found to provide information that is quickly and easily accessible--no different from information that can be accessed by asking a whole series of questions of a local authority and receiving pieces of paper--in a way that they can handle more easily. I express that little whinge. However, to return to the question of the 12 and 24 months I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.


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