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Lord Whitty: My Lords, one of the main purposes of the Bill is to provide a right to customers to remain on the unmetered charges. This slightly disparate group of amendments is brought together because they all attempt to restrict that right.

The first question is whether we need any change to the face of the Bill to allow the kind of circumstances to which both noble Baronesses have referred. At present, the position is that the right to remain on unmetered charges has to meet the criteria specified within the Bill. We have already indicated that, through regulations, we propose to allow water companies to

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require metering for certain purposes, for example, commercial use, garden sprinklers, swimming pools and so on.

We could use the powers on the face of the Bill to extend the provisions of the Bill to some of the areas to which both noble Baronesses have referred. Therefore, I do not believe that we need a change to the Bill. No doubt the noble Baronesses will wish to know the Government's intention in this area.

On Amendment No. 9, clearly there is a problem about demand and conserving water in cases where water resources are under stress. The proposal to allow more widespread metering in those areas is, to some extent, an extension of the principle to which I have already referred. The arguments are fairly finely balanced. It could be argued that water companies already have the power to require meters for those using significant amounts of water for discretionary purposes, and that we do not need to do anything further on that. However, we recognise that in some areas of the country, particularly in parts of the South East, the demand for water is rising above its provision and that there could be danger to the local environment.

Therefore, in principle, we are prepared to consider allowing water metering in the kind of circumstances that the noble Baroness, Lady Hamwee, described. We need to be careful how we do that. My colleague, Michael Meacher, has invited the director general to develop proposals that will give effect to the aims that lie behind the amendment of the noble Baroness. Organisations such as the RSPB are pursuing that. We can already do that under the provisions for regulations. Therefore, I do not think that it is necessary for the noble Baroness to pursue her amendment.

On Amendments Nos. 10 and 11, I understand that water companies are reluctant, in some circumstances, to continue charging at the pre-1990 rateable value when the property has been significantly amended. There is nothing in our proposals that require water companies to stick to the rateable value assessment for those properties, but that does not mean that, if they move to a different system, that overturns the right of the customer to remain on an unmetered charge.

Amendment No. 9 indicates that there is an argument that metering is justified because of the conservation and environmental benefits. That does not apply to all altered premises and we cannot provide for it on that blanket basis. The fact of adding a garage, for example, does not of itself mean that water consumption increases. There is a fair amount of correspondence from customers saying that it would be unfair for a meter to be imposed upon them because of relatively minor changes to their houses which had no real effect on water use.

While we do not want water companies to be tied to outdated rateable values for properties where that is not appropriate, the fairer system is to allow water companies to update the basis of their charges, but without taking away customer choice. Under the Bill, as it stands, water companies would be able to use licence

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fees or to assess rateable value, provided that the basis of such charges is set out in the company's own charges schemes. As I expect the noble Baroness is aware, some companies already adopt that approach. Therefore, I do not consider that the right to remain on an unmeasured charge should be overridden by reference to an alteration in property. It should relate to specifics which will be set out in regulations of the same order. We have already indicated that we are prepared to allow water companies to impose meters, as I said at the beginning of my reply. As we can already do that under regulations, I hope that that will convince both noble Baronesses that it is unnecessary to pursue these amendments.

9 p.m.

Baroness Hamwee: My Lords, I thank the Minister for his reply. I accept that, since the amendment is not prescriptive as regards the detail of dealing with water stress areas, it may not add anything to the powers which are already available. As the Minister anticipated, it is the Government's intention which is of particular interest rather than the words on the face of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 10 and 11 not moved.]

Lord Addington moved Amendment No. 12:


After Clause 9, insert the following new clause--

RESELLING OF WATER

(" . After subsection (5) of section 150 of the Water Industry Act 1991 (charging for services provided with the help of an undertaker), there is inserted--
"(6) An order under this section may--
(a) require any person who resells water supplied by a water undertaker to furnish the purchaser with such information as may be specified or described in the order; and
(b) provide that, in the event of his failing to do so, the maximum price applicable to the resale shall be specified in the order, or shall be reduced by such amount or such percentage as may be so specified."").

The noble Lord said: My Lords, in this amendment we return to a subject which has been touched on earlier in our discussions on other amendments. It relates to the right to know exactly what one is being charged and why. It has particular reference to groups of people who have water resold to them. We had very interesting and lively discussion on this matter on the last occasion. I believe I described it as the most forceful probe imaginable made by the noble Lord, Lord Graham of Edmonton.

The argument is that people should know what they are being charged for the resale of water. That means that they should be given information. Opportunities are occurring for landlords: in particular, owners of

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temporary housing sites and mobile home sites are effectively ripping off people by overcharging them for water. The sums involved may not be very large, but one is being overcharged for a public amenity.

This Bill suggests that no longer will someone be denied basic water or at least enough of it to live in a civilised manner. A secondary individual--a person between the supplier and the user of the water--will be allowed to extract extra money by the simple process of not having to tell a person what they are being charged so that that person cannot take action.

This amendment would solve that problem. But we are at Report stage and it would be invidious to suggest that we have not had discussions already on this matter. Indeed, I have a copy of the letter which the noble Baroness, Lady Farrington, sent to the noble Lord, Lord Graham, saying that the Government were prepared to take action under regulations that a cap would be placed on what could be charged down to the normal household rate for the area.

That probably comes close to answering paragraph (b) of my amendment, but it does not refer to (a). Even in the spirit of moving forward, it does not answer the point of principle behind this amendment. It is a practical and possibly a short-term answer. The letter does not answer the whole of the question for the long term.

When replying, if the Minister can give me an answer which tells me when we can have the rest of the answer and find out what is going to be done long-term to deal with the problem, I would feel much happier. If it is not for this legislation, when will it occur? I beg to move.

Baroness Farrington of Ribbleton: My Lords, Amendment No. 12 proposes an addition to the powers of the Director General of Water Services when making a water resale order. The amendment would allow the order to force the disclosure of information by the person reselling water to the purchaser. This is a subject slightly outside the scope of the Government's water charging review and the other measures in this Bill, in which we have concentrated on the charges paid to water undertakers.

The use of the powers in Section 150 is so far untried. The director has recently proposed to make an order to limit resale prices and this has been widely welcomed. I welcome this proposal too. But, as I explained at Committee, we do believe that it is premature to propose an extension of powers to make an order before the existing power has been used even once. The Government would prefer first of all to consider how the order works within the present available powers. These already enable the director to limit water resale prices to the fair recovery of the sums paid by the reseller to the water undertaker. Once the order was in operation, if we were confronted with evidence that it was not entirely effective, then we would consider legislation or some other measure. But I would prefer not to accept an

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amendment that assumes that the presently proposed order will not be effective in forcing water resellers to charge only reasonable prices.

The proposals for an order do move some of the way to meeting the concerns which have been expressed. For example, in Ofwat's consultation paper on water resale, it suggested that,


    "To provide a basic, transparent test which will address particularly high charges, it is proposed that annual charges for unmeasured resale purchasers should not exceed the average unmeasured household water and sewerage bill for the relevant supplier unless the landlord provides evidence that application of the principles below warrants a higher charge". This would provide a safety net of a simple price limit based on readily available information and would shift the onus of producing information to justify high charges to the reseller. If a purchaser feels that he is being overcharged but cannot obtain information from the reseller about the basis of the charge, it would be up to the reseller to demonstrate why a higher charge than the safety net charge should be paid.

During debate in Committee, the noble Lord, Lord Addington, asked how the Government would obtain information on whether the proposed resale order proves effective or whether some strengthening of the director's powers might be needed. The proposed order will strengthen Ofwat's role in policing arrangements for water resale. I hope that this will raise awareness of water resale issues among those affected and raise the profile of Ofwat's role in this area. This should ensure that information is collected more systematically and problems identified more thoroughly.

I hope that the noble Lord, Lord Addington, will recognise that positive steps are being taken to assist those obtaining water services via resale arrangements, and that we shall continue to consider this subject in co-operation with Ofwat and through other bodies. On top of the fact that action is already being taken to improve the position of those subject to water resale and to provide greater fairness, it is also the case that this amendment is defective in that it relates only to water and not to sewerage services, which for many customers make up the greater proportion of the bill.

I can assure the noble Lord, Lord Addington, that this issue will be kept under close review. We will act immediately should there be evidence that such action is necessary. In the light of that reassurance, I hope the noble Lord will feel able to withdraw his amendment.


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