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Mr. David Hanson (Delyn): I advise my hon. Friend of something that the Secretary of State said in answer to a parliamentary question from the hon. Member for Wimbledon (Dr. Goodson-Wickes):
- "The Government believe that metering is in the long term the best basis for paying for water".--[Official Report, 4 April 1995; Vol. 257, c. 1054.]
I will explain why we believe that water metering is on the Government's agenda. To put pressure on the companies to introduce meters, the Government prohibited them from basing their charges on rateable value after 2000, or from using council tax bands in England and Wales. In Scotland, council tax bands have been used. This is all part of the Government's promotion of metering.
As far as we can see, the Government and Ofwat have not done much research into alternative ways of charging, and, worse than that, they have tried to prevent the water companies from doing research into alternatives. As a
result, only one option is being promoted: metering. There is no choice for the companies or for the customers. The Government line is a paraphrase of Henry Ford: "You can have any system you like, so long as it's metering."
The Government started to rig the system in favour of metering right from the start of privatisation. They laid down a code of practice for leaks which did not mention leaks from company pipes but which gave the companies the power to force customers to repair leaks in their pipes, and to charge customers for repairing the leaks. Things got off to a bad start and, sadly, they got worse.
In 1991, the water regulator said:
Mrs. Elizabeth Peacock (Batley and Spen):
I have listened carefully to what the hon. Gentleman has said about the Director General of Ofwat. Many Conservatives do not agree with the Director General of Ofwat, particularly his comments about water metering.
Mr. Dobson:
I agree with the hon. Lady, and I do not agree with the director general's comments, but the Secretary of State presumably does, because he does not say anything about them.
Mr. Matthew Taylor (Truro):
Will the hon. Gentleman clarify whether he is opposed to compulsory metering for people with excessive, non-essential use of water, such as sprinklers or swimming pools? Some water companies are introducing such compulsory metering, and I wish to be clear about the hon. Gentleman's position.
Mr. Dobson:
That is a different matter. There is a case for metering people who use excessive amounts of water on domestic premises, but the vast bulk of people do not. [Hon. Members: "Ah."] It is no good Conservative Members saying, "Ah," as if they were at the doctor's trying to show him the bottoms of their deep throats.
Mr. Dobson:
Oh, for God's sake.
Mr. Gummer:
Before the hon. Gentleman leaves his attacks on the independent head of Ofwat, will he confirm that he would sack the independent head of Ofwat if he disagreed with him, and if he were in a position to do so? Or does the hon. Gentleman agree that an independent figure should run Ofwat? If the hon. Gentleman thinks that the head of Ofwat should not be independent, the House should know that, were there a Labour Government, Ofwat would have no independence, and the hon. Gentleman would decide what it should do.
Mr. Dobson:
We have made it clear that we do not approve of the present regulatory system, which leaves both the customers and the managers of industries victims
The Environment Act 1995, passed by the House last year, continued the disreputable tradition of putting the blame on the customers. It required each water company to promote the efficient use of water, but by its customers, not by the company itself. When my hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson) proposed that that requirement should also apply to the companies, her arguments were dismissed with the combination of effortless ignorance and arrogance that Environment Ministers have brought to the issue.
The regulator--the public official whom the Secretary of State apparently does not even dare to try to influence--wrote to water companies to warn them that he would monitor their promotion of metering as a way of discharging their new duties under the Environment Act 1995. He advised the companies to promote metering in press releases and in other dealings with the local media. He even suggested that the companies should try to use organisations representing elderly people as a front for installing meters, because--I quote the regulator--
This year, the regulator told three companies to improve what he called "their meter options" to comply with his interpretation of the law. One was the York Waterworks Company, which supplied water to people in the middle of Yorkshire when Yorkshire Water, which covers the area surrounding York, failed to do so, but the regulator did not chide Yorkshire Water about anything. As recently as June this year, the regulator obliged companies to consider--I ask the House to listen carefully--water restrictions on unmetered customers to avoid cuts in supplies to metered customers. It is part of his drive to force us to have meters.
The regulator has rigged the water price formula, beginning with the startling decision that the cost of installing meters should fall not upon the customers who get the meters, but upon those who do not have meters. He also came to the extraordinary conclusion that the fixed cost element of the charge to unmetered customers should be higher than that for metered customers. He said that it would be short-sighted to include in the fixed cost to metered customers items such as the cost of reservoirs, treatment plants, mains sewers and sewage treatment plants. Apparently that did not go far enough, so in March 1994, he ordered the companies to reduce further the standing charges for metered customers.
The regulator was still at it in May this year, saying that he would press for further reductions in the standing charges for metered customers--which would be met at the expense of unmetered customers. As a result, average water bills in England and Wales for customers on unmeasured supplies have risen by 39 per cent. in real terms since privatisation. In the same period, water bills for customers using water meters have fallen by 2 per cent. in real terms. In the words of the Consumers Association, it means
The water regulator's promotion of metering at the expense of non-metered customers is so excessive that I believe that he may be breaking the law. In 1991, he said:
It seems to me that, if it is lawful to load customers, it may be unlawful to unload them. Even if it is not unlawful, it is certainly unfair, and an abuse of the regulator's discretion. It cannot be right to charge unmetered customers but not metered customers for the cost of installing meters.
The water regulator is not alone in his obsessive pursuit of compulsory water metering: Ministers have been at it as well. They have tried to promote metering at every opportunity, no matter how far they strayed from the truth.
My hon. Friend the Member for Hillsborough has devoted much effort to explaining the shortcomings of compulsory metering. She knows a great deal about the subject, as she will demonstrate when she winds up tonight for the Opposition. She was duly denounced by the right hon. Member for South Ribble (Mr. Atkins)--I warned him that I intended to mention him--then an Environment Minister, on 15 February 1995. He said that she had conducted an
No one corrected the Minister's statement, until February this year, when the Secretary of State finally admitted, in a written answer to me, that the answer had misled the House. He added later that it was no more than a slip. We all make slips--I am as guilty as anyone--but it was a very convenient one. It was such a large slip that it might be described as a slide. It furthered the promotion of water metering, and it went uncorrected for a whole year.
The official promotion of water metering did not end there. My hon. Friend the Member for Hillsborough promoted a private Member's Bill to set mandatory leakage targets for water companies. It had all-party support, and was also supported by the Royal Society for the Protection of Birds and the Chartered Institute of Environmental Health. What happened? The water regulator, ever willing to take an opportunity to do down any other way of saving water and to promote metering, issued a press statement headed "Mandatory leakage targets will mean higher customer bills." That was designed to coincide with the Bill, and to discredit it.
The press release also included the claim, which was being peddled at the time by Ministers and water companies, that the companies were pledged to spend £4 billion on reducing leaks. That was, to say the least, a bit of an exaggeration. The real figure being spent that year on identifying and mending leaks was £65 million, just 1.6 per cent. of the total referred to so favourably by the regulator and the Government.
All those statements were, of course, made in pursuit of the holy grail of water metering. All that shows how water metering has been promoted by the Government and the regulator. It is also promoted by some in the water industry, but the Water Services Association went on record in September 1994 as saying that compulsory metering was
On top of that, it is not at all clear that charging people for the amount of water they use would save much water. Badly off families, however, would find it hard to pay the bills and would start to reduce their water use, which could harm their health. Saving water by cutting company leaks would do much more for environmental sustainability, and would come into action more quickly.
Other measures could reduce domestic water consumption. More effort should be put into promoting more water-efficient household appliances, such as washing machines and dishwashers. The building regulations and water byelaws could be changed to reduce water wastage. That could have been done in the Housing Bill or the Housing Grants, Construction and Regeneration Bill which have recently gone through this House.
Was that opportunity taken? No, it was not. Little or no effort has gone into those sensible ideas. Everything has been subordinated to the drive to promote water metering. The water companies could also be required to provide domestic customers with a free service to detect and mend leaks on their premises, but that has been ruled out.
This Government are mad keen on tests, but they will not accept that compulsory metering fails the economic test, the social test and the environmental test. The Labour party is campaigning on this issue to expose the
Government's secret agenda and to stop the metering madness. We shall be supported in that by all sorts of organisations, but above all, we shall be supported by the people of this country.
In 1991, the Office of Population Censuses and Surveys found that 54 per cent. of the public were opposed to compulsory metering. In 1992, a survey carried out for the regulator showed that 82 per cent. of water customers were satisfied with the existing method of charging. Half believed that the money they paid into the companies should be spent not on metering but on replacing old water mains and sewage pipes.
By the autumn of last year, opposition to metering had risen to 67 per cent., and 87 per cent. said that the companies should do more to cut the leaks. In March this year, a survey for the Royal Society for the Protection of Birds found 69 per cent. saying that the best way in which to save water was to set mandatory targets to reduce leaks.
"I encourage water companies to develop targeted programmes for compulsory metering of domestic supplies in those places where the benefits are likely to outweigh the costs . . . I would not regard the phased introduction of selective compulsory metering as involving undue discrimination or preference."
The water regulator is in favour of pursuing compulsory metering.
"customers distrust the company's intentions if they are approached directly".
He is not kidding about that.
"that consumers who are still paying for their water by the old rateable value system are now effectively subsidising metered customers".
Sir Anthony Grant:
Will the hon. Gentleman give way?
"charges must broadly reflect the costs of providing water and sewage services to particular customers".
That is the reverse of his present policy of loading the cost of meters on to non-metered users. Case law in the electricity industry makes it clear that excessive action, even to achieve a legitimate aim, can be unlawful, and that it is lawful to require an occupier to contribute to the greater capital and maintenance costs incurred in serving his or her premises. Yet the costs incurred in serving the premises of metered customers are being loaded on everyone else.
"obsessive campaign against water metering"
and delivered the following magisterial ministerial statement:
"I would like the House to know the facts. First, most of the water leakage comes from domestic pipes, not company pipes . . . the increased incidence of metering will help to solve the problems of leakage."--[Official Report, 15 February 1995; Vol. 254, c. 983.]
The only problem with that magisterial statement is that it is the reverse of the truth. I do not know whether the Minister knew the truth--he certainly should have, as should the Secretary of State and his officials. The Secretary of State was sitting next to the Minister on the Front Bench, but he did not tap him on the shoulder and tell him that he was wrong. None of the officials passed notes to the Minister--I checked that when I watched the video earlier today.
"an untenable option"
because of
"the cost, impracticality and effect on customers' bills".
Despite all the efforts of the promoters of metering, who stick to their dubious economic theories in the face of all the evidence, we find that compulsory water metering has no good in it. It would be wildly expensive, costing as much as £4 billion to install, £500 million a year to run and further billions in replacement costs every decade. Surely the country has better things to do with that money.
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