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Mr. Burden: I am grateful to the hon. Gentleman, who is making a powerful case for the provisions that relate to disconnection. If I understand him rightly, he is saying that he agrees that "can't pays" should not be disconnected. What is the Opposition's view on so-called budget payment units, pre-payment meters and trickle valves, as water companies have been rather ambiguous about whether they relate to "can't pays" or "won't pays"? The Government have made it quite clear that they are suspicious that trickle valves are a way in which to avoid disconnection. Do the Opposition agree? [Interruption.]
Mr. Burns: I am not going to duck that point, so there is no point in Labour Members laughing and making a big deal of it. I shall turn to help for vulnerable groups later in my speech. On trickle valves, if disconnections are to be banned by law, by definition trickle valves should also be banned and the Bill does that.
The hon. Gentleman may have slightly missed the thrust of my speech. I am saying not that I agree positively with what the Government are doing, but that they are legislating for what already happens in respect of the vast majority of water users. When the Bill becomes law, instead of using the courts to disconnect, water companies will have the power to use the courts to recover their money through other means.
I should now like to turn to the clauses dealing with water metering. Again, it appears that the Government are being pushed along on a populist wave and are putting into law the practice that the majority of water companies already operate voluntarily. Rightly in my view, the Government have said no to compulsory metering for all, but are legislating to make water companies install meters on request free of charge and with the option to go back to the rateable value basis of payment within 12 months if the customer does not like the meter system or, more crucially, does not like the water bills.
On environmental grounds, water meters are very environmentally friendly, especially in areas of sparse supply. To many customers, especially the elderly, single people living alone or families without children, they are probably financially friendly too. As the Minister said, only approximately 14 per cent. of households have meters and I believe that a significant proportion of them live in houses built since 1990-91. It is self-evident that the more households there are with meters, the more it helps environmentally. Thus there is an incentive for water companies to encourage and persuade people to switch to meters because rateable value customers have no incentive to be water efficient. That is exactly what many companies are doing.
Of the 27 water companies in England and Wales, 15 supply free water meters, including five of the nine largest companies. Charges for the other companies range from an average cost--so that nobody starts throwing around other figures, it should be understood that the Minister tended to use maximum costs--of £14 in an existing chamber to £60 within the boundary. A number of companies allow households to revert to the rateable value system if they do not like their meters.
Last year, Anglian Water conducted a metering exercise in Bury St. Edmunds. Meters were installed in about 12,000 homes and customers were invited to choose between continuing to pay their bills based on rateable values or paying metered charges; 52 per cent. of customers voluntarily elected to pay metered charges. At the end of the 12-month period, 5 per cent. switched back to rateable value bills. The House will agree that that is a very small proportion of the total numbers.
There is a line of argument that the provisions will cost water companies dearly. I am not totally convinced, because the majority of water companies already operate a similar policy. There are also those who say that rateable value customers will be subsidised by meter customers or that prices will be higher than they otherwise would be if everyone were metered. However, even if that is true, the system exists today, so the Bill will not alter the position significantly--or certainly not before the Government reach a strategic view on the future of rateable value billing systems, if they ever come up with a system that they find acceptable.
There are, however, a number of questions that need to be answered on this part of the Bill and I would appreciate answers, if not today, when we discuss the fine print in Committee.
The Minister mentioned the business impact assessment that has been conducted on this part of the Bill. First, I would be grateful if Ministers could let us have precise figures--not those relating to the impact of the Bill plus the existing practices of water companies, but in respect of the impact of the Bill alone. Secondly, what research,
if any have the Government carried out on the environmental implications of clause 6, especially in areas of water scarcity? Thirdly, if a household installs a meter and then moves to another home after 12 months, will the new owner have the option of reverting to the rateable value system or does the law take the view, "Caveat emptor. You buy the house knowing what comes with it so you are stuffed."
Mr. Burns:
I see the Minister kindly nodding in assent, so I take it that a household moving into a house after 12 months have elapsed since the installation of a meter will have no option to go back to the rateable value system. I find it helpful that he has clarified that point.
Finally, let me turn to clauses 4 and 5 which deal with the making and approval of charges schemes and the Secretary of State's regulatory powers. To be quite frank, they are very nasty powers--a throwback to the days of Government intervention in the marketplace. They show that, underneath new Labour, the Government still hanker after the interfering, nannying powers that they so enjoyed using in the past. It is self-evident that any decent person wants to provide help to those who need special protection, but help does not have to be provided through the political interference of a Secretary of State. Currently, water companies make special provision for vulnerable customer groups.
North West Water, for example, has an extra care services scheme to help elderly customers, customers with a disability or a serious illness and those with sight or hearing difficulties. The help includes steps to ensure that customers receive a constant supply of water. The company employs two counsellors to visit customers at home to offer them help and advice when they get into difficulties, a scheme similar to the one that my hon. Friend the Member for Billericay mentioned.
Anglian Water, which covers my area, has a number of innovative schemes, including SoLow, which helps elderly customers--whom the hon. Member for Milton Keynes, South-West (Dr. Starkey) mentioned--or those on benefit by removing the standing charge and charging a slightly higher rate per cubic metre. Its Plus 4 scheme assists the larger low-income families who use more than average amounts of water by raising the standing charge but cutting the volume rate. Giving the Secretary of State extra powers to interfere will stifle the incentive for water companies to employ an innovative tariff strategy.
Dr. Starkey:
Will the hon. Gentleman give way?
Mr. Burns:
I will give way to the hon. Lady who, although she does not know it, has cost me dearly this evening. I hope that my giving way to her will not cost me more.
Dr. Starkey:
I am intensely flattered by the hon. Gentleman's comments on my effectiveness. In answer to my earlier intervention, my right hon. Friend the Minister pointed out that his intention was not to stifle innovation by water companies, but to ensure that the worst companies lived up to the standards that the best companies have adopted voluntarily.
Mr. Burns:
I, too, heard the Minister's reply, but I will believe it when I see it. With his honeyed words, he no
Mr. Meacher:
The hon. Gentleman must not spoil his speech, which has been very welcome; he has endorsed much of what the Bill does and I am grateful for his understanding. On this point, however, he is wrong. The clauses are drafted in such a way as to circumscribe the powers so that there can be no question of interfering with the proper economic regulation that is laid down by the Director General of Water Services; there will be no threat to the water companies' revenue base. The hon. Gentleman is wrong to suggest that the clauses contain a new, wide-ranging power which will threaten the water companies; they merely formalise what is already in place in the guidance to the director general.
Mr. Burns:
Obviously, we can return to that in Committee. My point is that the Government are laying themselves open to the charge of social engineering by deciding who should be assisted and by imposing that decision on the water companies; they could shift to the water companies their responsibility to assist vulnerable groups through the benefits system.
The Minister will not want to admit that on the Floor of the House, and we will be able in the not-too-distant future to discuss the matter in greater detail in Committee, but I am firmly of the view--it has not been altered by anything that the Minister has said--that clauses 4 and 5 are a blunt instrument, which will probably fail to take into account wide regional variations in the problems and circumstances that face water companies and water supply.
As the Minister knows, different water companies charge different prices for water and sewerage, but the proportion of income support to help to pay water bills is constant across the country. In July last year, he told the Environment Sub-Committee that he would not press for that proportion to be variable. Perhaps he will now reconsider the matter; I express no opinion on it except to say that, logically, the system should be brought into line with the system that applies to housing and council tax benefit, which is variable down to individual rent and council tax.
No one would disagree with the gist of the right hon. Gentleman's words--that water is an essential to life. Given that that is so, however, surely there should be a variable element in the benefits system to help the less well-off to pay their water bills, just as there is a variable element for housing and council tax benefit. It was illogical for him to reject that out of hand when he spoke to the Environment Sub-Committee. I suspect that he agrees with the logic of my argument, but he knows that his views would not, because of their cost implications, be approved by the Treasury in a month of Sundays.
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