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Column 1092Section 129(5)(a).'.
No. 263, in page 202, line 6, column 3, at end insert
No. 269, in page 202, line 6, column 3, at end insert
In section 111(1), paragraphs (a), (b) and (d).'. No. 121, in page 202, line 14, column 3, at beginning insert--
In section 23, in subsections (4), (5) and (6) the word "Local" and in subsection (12), the words "(through the appropriate representative body designated under section 24 below)"'
No. 122, in page 202, line 16, column 3, at end insert
In section 34(1), the definition of "representative body".'.
No. 36, in page 204, line 5, column 3, at end insert--
In section 567, in subsection (4), paragraph (c) except for the final "or", in subsection (5), the words "regulations under subsection (4) (c) or" and subsection (6).'.
No. 41, in page 204, line 5, column 3, leave out 526' and insert
Sections 524 to 526.'.
No. 279, in page 204, line 49, column 3, leave out Section 20' and insert--
No. 268, in page 204, line 52, at end insert--
1987 c. 47. The Abolition of Domestic Rates Etc. (Scotland) Act 1987. In Schedule 1, paragraph 28(a)(ii) and (iii)'. No. 264, in page 205, line 18, column 3, at end insert
No. 265, in page 205, line 27, column 3, at end insert
In Schedule 12, paragraph 16.'.
No. 273, in page 205, line 27, column 3, at end insert
In Schedule 12, paragraph 37.'.
No. 280, in page 205, line 28, column 3, at end insert
Amendments made : No. 223, in page 133, line 19, after 3', insert ', 9 and 10'.
No. 127, in page 133, line 19, after 17', insert and (Members' interests)'.
No. 119, in page 133, line 19, at end insert
,' with the exception in Part II of section [Expenses of Commissions for Local Administration]'.
No. 243, in page 133, line 20, after sections', insert 126'. No. 266, in page 133, line 20, after sections', insert
' [Scottish non-domestic rates : interim provisions]'.
No. 270, in page 133, line 20, after sections', insert
[Scottish non-domestic rate]'.
No. 226, in page 133, line 29, at beginning insert
Subject to subsection (4A) below'.
No. 246, in page 133, line 29, after sections', insert 29(10)'. No. 267, in page 133, line 29, after sections', insert
[Scottish non-domestic rates : interim provisions]'.
No. 271, in page 133, line 29, after sections', insert
[Scottish non-domestic rate]'.
No. 311, in page 133, line 30, leave out to 142' and insert 140, 142,'.
No. 227, in page 133, line 30, leave out and 150 onwards' and insert
150, 151, 153(1), 153(4) and this section'.
No. 228, in page 133, line 31, at end insert--
Column 1094(4A) Notwithstanding anything in subsection (4) above, any provision of Schedule 10 or Part II of Schedule 11 to this Act which amends or repeals any provision of the following enactments does not extend to Scotland--
(a) the Military Lands Act 1892 ;
(b) the Local Authorities (Expenditure Powers) Act 1983.'.-- [Mr. Gummer.]
Amendment made : No. 18, in the title, in line 13, after 1982', insert
to make amendments of and consequential upon Parts I and II of the Housing Act 1988'.-- [Mr. Gummer.]
Bill to be read the Third time today, and to be printed. [Bill 159].
Bill read the Third time, and passed, without amendment.
That this House takes note of European Community Document No. 10449/88 relating to revision of the Financial Regulation of 21st December 1977 and transfer of appropriations No. 18/88 described in the unnumbered Explanatory Memorandum submitted by the Treasury on 2nd February 1989 ; and approves the Government's efforts to press for increased value for money in community expenditure.-- [Mr. Chapman.]
Column 1095Water Metering Trials (Isle of Wight)
Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Chapman.]
Mr. Barry Field (Isle of Wight) : I am sorry that I have detained my hon. Friend the Under-Secretary of State until such a late hour, but I am sure that he agrees that the fitting of 53,000 water meters in my constituency is a serious matter for my constituents. The week before the House adjourned for the Whitsun recess, I approached my hon. Friend the Under-Secretary and my hon. and learned Friend the Minister for Water and Planning about my worries about water meterimg trials on the Isle of Wight. After some discussion, both helpfully suggested that they would welcome a debate, although I doubt that they realised the hour at which it would take place. I am pleased that Mr. Speaker generously granted me a debate tonight. As I said to my hon. Friend the Under-Secretary of State when I met him and his senior officials in the early part of the year, I was worried that the county council elections might lead to a serious deterioration in the presentation of the metering trials on the Isle of Wight and, sadly, my forecast has proved all too accurate. I am sure that my hon. Friend has seen the wholly opportunistic comments by the Liberal party in early-day motion 955. The fact that no member of that party is here to listen to the debate shows the seriousness with which it takes this matter.
On 5 February 1985, almost two and a half years before my election to the House, minute No. 13 of the Isle of Wight water consultative committee said that Mr. Nicholson introduced the paper and explained the possibility of a large-scale pilot scheme on the island for metering domestic premises. Mr Leyton said that he felt that small users of water would welcome such a scheme and Mr. Garth commented that senior citizens would benefit from metering.
I say "opportunistic" because at that time the county, borough and parliamentary seats were all Liberal-controlled. Mr. Leyton was the county's representative on that committee. He has since retired from the county council and one would travel the length and breadth of this country without meeting a nicer man, although I have never agreed with his politics.
The minutes went on to say that the suggestion of using the island for a large-scale trial was given general support. On 30 September 1986, minute No. 9 of the same committee, albeit with some membership changes but still when the island had a Liberal Member of Parliament and a Liberal county and borough council, stated that the committee reiterated its policy that metering would be the best solution for the island.
The House of Commons Library tells me that its records show that my predecessor Steve Ross, now Lord Ross, did not raise this matter in the House in 1985 or 1986. On 22 May this year, in the other place, he said "I agree that if water can be metered"--
If the noble Lord had not left the Isle of Wight and stepped out of local politics, he would have had something to say to the county council, especially its leader, about pushing the island into the largest metering trial in the country and busily trying to cover its tracks by condemning it.
I shall put these facts behind me, for it will not serve the island's families well simply to return the fire. Indeed, my interest transcends any opportunity for political point scoring. To requote Shakespeare, methinks that a party that has encouraged a means of charging for water when it holds all the local offices but busies itself condemning that when it no longer has borough and parliamentary control "doth protest too much".
I have some questions on behalf of my constituents to which I should like to obtain answers. First, will my hon. Friend the Minister undertake to visit the island to see the trials for himself and visit some of the households affected? Secondly, will he comment on the county council trading standards officer who in last week's county press was reported as saying :
"it was only a matter of time before the meters became inaccurate"?
Thirdly, will my hon. Friend comment on the county secretary's report that a number of meters submitted to the trading standards officer for initial verification have fallen outside tolerance? As the county solicitor states, this has an effect on householders who are keen to be satisfied that the new experiment on the island is conducted accurately and some people are concerned that a credibility gap is appearing. On 8 June 1988, in a circular, the then divisional manager of Southern water authority, Grainger Davies, stated that water meters would be fitted, free of charge, over the next 18 months to measure water supplied to every property on the Isle of Wight and customers would receive bills based on volume for the first time from autumn 1989. Why, then, are householders now receiving bills on a piecemeal basis as and when the meters are installed? That is causing concern and some friction within the community because those still paying on the rateable value method are, in some cases, paying less. Fifthly, will my hon. Friend reconfirm the undertaking given by Bill Courtney, the chairman of Southern Water, to hon. Members representing constituencies in the Southern Water region during a meeting in one of the Committee Rooms of the House following my question :
"The price of water throughout the company's area will not be subject to cost centre accounting by division?"
As my hon. Friend is aware, more than 24 per cent. of the island's water is imported from the mainland. I doubt whether any of us could afford the true cost of drinking water on the island. My hon. Friend gave me an undertaking on the cost of meter installations in his letter of 13 January 1989 and I am looking for a similar undertaking on the cost of water.
Sixthly, will my hon. Friend set out the mechanism to monitor the total income obtained by Southern Water from the trial? Who will adjust the price if too much has been collected? It must be borne in mind that in some areas more than 25 per cent. of domestic dwellings are holiday homes. How is that loss of revenue to be made up without
Column 1097causing financial hardship to those who pay all the year round--if, indeed, that is the result of the data on the meter trial? Seventhly, my hon. Friend stated in his letter of 4 October 1988 : "For those families in receipt of income support this payment does not include specific provision for individual amounts payable as was the case under the supplementary benefit."
It is clear that if metered water is more expensive, especially for large young families in low rated property in receipt of income support, that will put them in an unfair position compared with the remainder of the country.
Eighthly, as my hon. Friend knows, the island is to have 30,000 meters fitted externally and 23,000 internally. He knows that I have waged a long campaign to have internal metering dropped now that about 6,000 have been fitted. The whole point of the trial was to determine the cost savings of installing internal meters. There are none ; in every area in the country there are none. Why, then, do we have to plough on with that regardless, despite the disruption it causes to householders, their kitchens and the possibility of damage to their effects?
When I wrote to the Home Office about the crime prevention aspects of internal metering with the aim of cutting the number of people required to enter homes to read meters, the Home Office said that I had no reason to worry because, as they were not slot meters, there would be no coins to attract burglars. I wonder what sort of ivory tower would think that we would have to insert 5p for two baths, a shower and a cuppa.
Lest it should be felt that metering on the Isle of Wight has been a story of unprecedented point scoring, I want to pay a special tribute to the county architect who, as a result of his representations to me as early as September 1987 after the original announcement, can take full credit for the reduction of the standing charge to £10 per annum. It is a remarkable indictment of those Liberals who recently waged such as campaign about the cost of metered water that they failed to comment on the draft charges sent to them by Southern Water with its letter of 8 September 1988. My right hon. Friend the Minister for Local Government visited the Isle of Wight, which has the highest percentage of any county in England and Wales of over-75-years-olds living in their own homes. When my right hon. Friend was asked his views about charging for water in cubic metres, he said that he would not recognise a cubic metre if he tripped over one--I checked with him whether he was content for me to mention that in this debate, so my hon. Friend need not worry--but neither would I or literally thousands of my constituents. Pints, yes ; gallons, perhaps ; but cubic metres, never.
More questions need to be answered and much more needs to be done. For 53,000 home owners, water metering trials on the Isle of Wight raise genuine concerns. I look to my hon. Friend the Minister for assistance and clarity in response to the questions that I have asked. I hope that he will accede to my request to visit the island and see the meters for himself. In the past he has been most generous with his time when, wearing his other hat as Minister for Sport, he accepted our invitation to the south coast rowing championships on the Isle of Wight. I hope to have an opportunity in the near future of acquainting him with the problems in my constituency so that he can see them for himself.
Column 10983.45 am
The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan) : My hon. Friend the Member for Isle of Wight (Mr. Field) is to be congratulated on raising the water metering trial on the Isle of Wight. He has assiduously represented the views of his constituents on the issue through correspondence, direct representation to myself and other Ministers and parliamentary interventions.
The metering trial is one of 12 areas chosen by the water industry around the country. The overall objective of the trials is to obtain information on how to implement effective metering systems and to determine the impact of charging by volume on consumption. They are not intended to show whether metering would be more or less efficient than other non-metering charging systems.
My hon. Friend has asked many questions. Those that I am unable to answer tonight, I undertake to answer in full when I accept his offer to visit the Isle of Wight to consider the problems that he has mentioned and the water metering trial. I shall do so as soon as practicable, but certainly this summer.
As the House will be aware, water charges payable by most domestic customers at present are based on the rateable value of the property. With the abolition of domestic rateable values next year on the introduction of the community charge, new methods of charging need to be found. Metering is one option ; another is a flat-rate charge. However, the final decision will rest with each of the privatised water companies. Information gained from the trials will help each company decide whether widespread metering is worthwhile and, if so, how best to go about it with the least inconvenience and at minimum cost to their customers.
The metering trials were set up last year under provisions in the Public Utility Transfers and Water Charges Act 1988. Each metering trial charges scheme had to be approved by my right hon. Friend the Secretary of State under the provisions of the Act. It is worth noting that, as part of the process of considering whether to approve each scheme, my right hon. Friend was required by the Act to have regard to the interests of the customers likely to be affected by the scheme, and a number of other matters, which include the methods and principles on which the tariff was fixed ; the reasons for selecting the trial area ; the period of the trial ; consultation about the proposals ; the handling of representations about the trial ; and the supply of information to him about the operation of the trial. As a result of the latter, my Department receives regular reports of progress on each trial and summaries of customer complaints and comments. This monitoring procedure will help my right hon. Friend to ensure that the water undertakers involved in the trials do what they promised to in their original submissions. If the monitoring process shows that the assumptions on which the tariffs were fixed are subsequently proven to be widely out, my right hon. Friend will encourage the water undertakers involved to amend their schemes. The Isle of Wight trial is the only large-scale trial among the programme of 12 trials announced by the industry. It was chosen by the water industry because it was self-contained, was known to have water- resource problems and contained a wide mix of different types of property in rural and urban areas. The wide mix of
Column 1099properties was a particularly important consideration, as the main objective of the large-scale trial is to establish the practicality, economics and cost of metering on a wide-scale in other areas of England and Wales. The housing had to be represenative if the lessons were to be applied elsewhere.
Within that general objective, the Isle of Wight trial is designed to investigate the advantages of internal versus external metering, and the use of a rising-block tariff. Those objectives contrast with those of the 11 small-scale trials which are designed primarily to assess the impact on demand of various different types of tariffs in tightly controlled areas of similar housing. The results of all of the trials will be made freely available to all of the water industry, including those companies and authorities that are not directly involved. In recognition of that, my Department is contributing up to 50 per cent. of the cost.
My hon. Friend has expressed concern that some of his constituents will face increased bills as a result of being metered. That is an inevitable consequence of the inequity of the present rateable value-based charging system and a move to a fairer system of charging linked to the volume of water supplied to customers. However, I can assure my hon. Friend that the metered tariff to be applied on the Isle of Wight is fair. It contains a number of safeguards designed to protect the interests of customers. Some of those safeguards are worth repeating.
The tariff for the trial area was initially based on regional costs and consumption figures. As such, it did not reflect the additional costs, such as the installation of meters and the processing of data, attributable to the trial. Furthermore, as the average domestic rateable value on the island is lower than that for the whole of Southern Water's area of supply, the tariff was reduced so that the level of income to be recovered from customers on the island did not exceed the income that would otherwise be recovered through regional rateable value-based charges. Southern Water's calculations were based on an average regional consumption figure of 45 cu m per person across the entire region, or about 121 cu m per year for a typical household of 2.5 people on the island. Both those factors favour customers on the Isle of Wight, where average occupancy and rateable value is below the regional average.
As a further safeguard, Southern Water assured my right hon. Friend when he approved its scheme that if consumption in a normal year was found to be above that forecast and income was to rise above the estimate, the tariff for the following years would be adjusted to take that into account. However, the tariff would not be adjusted if income rose from increased consumption caused by abnormally dry weather conditions. That was because consumption in subsequent normal years would revert to lower levels and Southern Water would then suffer an income loss. As I mentioned earlier, my right hon. Friend will monitor all aspects of the trial, including income recovered, and if necessary, the tariff will be adjusted.
Another safeguard is provided by the fact that any future increase in the trial area tariff will be linked to changes in the regional tariff, so if consumption is less than forecast, Southern Water will not be able to increase the tariff to make up the loss. Once again, that is to the advantage of customers.
Column 1100As I have already mentioned, customers will be charged for water on the basis of a rising block tariff. Southern Water's lower tariff rate for this year is 30p per cu m for the first 90 cu m of water per year. Consumption above 90 cu m will be charged at 56.5p per cu m. The preferential allowance of 90 cu m represents Southern Water's estimate of the essential water requirements for a typical household of three people. Those essential requirements include water used for food preparation, drinking, hand washing, manual dishwashing, toilet flushing, automatic washing machine use and daily bath or shower. That is a wide interpretation of what constitutes essential use and refutes the suggestions that metering will lead to a decline in health standards.
It is too early to judge how many customers will pay more and how many less. Customers have been paying by measure only for two months and the first bills will not be sent out to customers until the end of September. However, a sample of 1,000 readings taken by Southern Water suggests that the average yearly bill will be around £120. On that basis, Southern Water expects that about 50 per cent. of customers will be paying less than £120 and 90 per cent. paying less than £200 per year. It is encouraging to note that the likely annual charges based on those sample readings are in line with the estimated annual charges that Southern Water set out in its information leaflet which it sent to customers last year. However, I heard what my hon. Friend said earlier, which would appear to vary from the information I have received. I give him an undertaking, therefore, to respond to that point specifically in writing in the very near future. The trial is being managed on a day-to-day basis by a full- time project manager. He is supported by a large team of technical and supervising staff. The management team's close day-to-day supervision of the contractors has ensured that the equality of work has generally been of a high standard. So far, Southern Water has received only around 50 complaints about poor reinstatement. Of those 34 were for damage to carpets, wallpaper and paintwork when an internal meter was installed, and the remainder related to the level of the meter box lid where the meter was installed in the pavement. Those were all put right by the contractor. Only 10 claims for compensation have been made. Those have been for damage to boundary walls and for grit in taps. All have been resolved.
With over 9,000 external installations and 3,000 internal installations completed so far, I am sure that my hon. Friend will agree that the number of complaints about poor reinstatement and the number of claims for compensation are very small in comparison. My hon. Friend raised the important issue of internal and external meters. As I have already mentioned, one of the objectives of the Isle of Wight trial is to compare, on a large scale, the costs and benefits of internal and external meter locations. To do that, Southern Water is installing external meters in properties on the more urban, eastern side of the island, whereas those on the more rural western side will have internal meters. Once again, that will generally be to the benefit of customers, as properties in rural areas tend to have longer underground supply pipes and hence are more prone to leakage. Water lost through leakage on supply pipes will not be recorded by internal meters, and customers will therefore not pay for it.
Customers in the trial areas who suspect that they have a leak on their supply pipe can ask their water undertaker to carry out a confidence check of the plumbing system
Column 1101and the accuracy of the meter. This is a service for which customers will not be charged. In addition, we have also agreed with the water industry a code of practice which provides important safeguards for all metered domestic customers where their supply pipe develops an unidentified leak. Essentially, the code provides for water undertakers to reassess metered charges on the basis of past normal consumption when an unidentified leak is located. This reassessment of charges will be a one-off concession and will be conditional on the customer carrying out remedial work within a reasonable period. The code will be one of the licence conditions. While on the issue of the accuracy of meters, I would like to stress that all meters used in the trials--and generally for domestic purposes since 1 April 1989--have to comply with regulations under the Weights and Measures Act 1986 governing their accuracy and in-service performance. However, as part of the trials, a random sample of meters will be removed at various intervals during the trials and subjected to a detailed accuracy assesment on a test rig. This will provide the industry with further information about the in-service performance of meters to compare with that already done in the laboratory by the water research centre. That research indicated that, in normal conditions, water meters will sustain their accuracy for many years.
I know that my hon. Friend is concerned about the problems that can arise for customers when meters are installed indoors. In such cases, the normal location for a meter would be under the kitchen sink alongside the stoptap. However, in some properties, it has been necessary to install the meter in airing cupboards and in bedrooms. This can cause installation problems, difficulties for the meter reader and privacy problems for customers.
Nevertheless, we should not lose sight of the fact that one of the main purposes of the trials is to investigate the advantages and disadvantages of internal metering. I am sure that the House would agree that it would defeat the purpose of the trials if water undertakers took the easy option every time a problem came along. We should not forget that internal metering does have a number of advantages for the customer. These include the fact that customers do not have to pay for water lost through repeated leaks on underground supply pipes ; it is easier for customers to read the meter ; and it is cheaper for water undertakers to install internal meters. The cost is currently averaging £82, whereas for straight forward installations of external meters the average cost is £164. Bearing in mind the fact that about 25 per cent. of customers have so far been identified as having joint supplies, and with the average cost of separation running at £380, the overall cost of installing all external meters is around £260.
It is too early to say whether the obvious disadvantages of internal metering--for example, the problem of gaining access to install and read the meter--outweigh the advantage of generally lower installation costs. That said, let us not forget that most electricity and gas meters are installed internally.
My hon. Friend has previously expressed concern that internal meters could lead to bogus workmen and officials gaining access to customers' properties. He raised this important crime prevention point with my hon. Friend the Minister of State Home Office, the hon. Member for Oxford, West and Abingdon (Mr. Patten). The House will