Examination of witnesses (Questions 540-554)|
TUESDAY 13 FEBRUARY 2001
MEACHER MP AND
540. And large numbers for whom it is not.
(Mr Meacher) There will certainly be some for whom
that is not so. Those who have high use particularly if they have
several children; those who may have medical conditions, but those
can be taken into account by movingand indeed we did in
the previous Water Bill, where a shift was made to metering but
one was able to provide that, if one was a low income family with
three or more children or with someone with a medical condition
like incontinence or dialysis, one could still, whilst having
a meter, be charged at the average basis under the uncharged system.
541. To what extent do you currently monitor
the impact of water charges on different income levels?
(Mr Meacher) I think we do. Long ago when I first
entered Parliament, which was in prehistoric times, I think there
was a pamphlet called Family Expenditure Survey. I do not
know whether the DSS continues to publish it but that had a breakdown
of average budget household expenditure which would include expenditure
542. Is this something that you would expect
the Regulator to take into account?
(Mr Meacher) Yes.
543. Are you aware that he is doing so currently?
(Mr Meacher) As far as I know. I have no reason to
doubt that. The Regulator, in determining a price structure, would
take into account the impacts on those who are on lower incomes.
544. What concerns us is that if more people
move towards metering and their costs are lower the people who
are not metered pay the difference.
(Mr Meacher) That is perfectly true.
545. It is terribly important that we should
know that, is it not?
(Mr Meacher) This is the unbalancing of the tariff
basket. It is exactly the point that you are making and, yes,
I agree. It is a matter of concern.
546. You can call it a ramp, if you like, Minister.
All I am saying is I do not like it.
(Mr Meacher) Nor do I. I do not think we are yet at
the point at which this is becoming a serious problem, but if
the level of metering goes to levels of 30/50 per cent it could
become a serious issue.
Christine Butler: Should not the government
grasp the nettle now and do something about that, because I cannot
see the Regulator having the ability to do it without an intervention
from the government. You could be hurtling towards a situation
very soon now where you would be looking at what the cost of water
would be to a poor family in a drought area, where there are overheads
and external costs which are beyond yours, mine or their control
and comparing what they pay in water to someone who is lucky enough
to have a water company which does not have such high external
costs, who has a nice large house and has decided, because there
are only two of them, to go to a water meter. You would start
to see some big differences but we know that that situation is
not only here now but it could go on increasing. It would not
be many years before you had a situation where you have gross
inequities in the system.
Mrs Dunwoody: We think that problem is arising
very quickly. What we want to know is what are you going to do
547. Only government can grasp it and take a
lead on this.
(Mr Meacher) I entirely agree with your analysis.
I was thinking, as you were speaking, as to what are the options
of dealing with it, other than a shift to a universal system of
metering. Otherwise, if the Government were to regulate a form
of charging more closely in order to prevent it I suspect it could
become very complicated and probably inequitable. I doubt if there
are general, national rules which could be laid down which deal
with this efficiently and fairly in all regions of the country.
548. Can we take it, Minister, that there is
some work. Firstly we need to know whether it is happening. Yes?
That will be one of the things you will look at.
(Mr Meacher) We would be very happy to provide you
with a quick note, I know you are at the end of this investigation,
of the extent to which this is happening and the impact on other
consumers who have not shifted to metering.
549. I am sorry to be cruel, Minister, but if
you do not like the situation why did you introduce the Water
Bill that has allowed it to happen.
(Mr Meacher) I have never said that I, or we, are
opposed to metering. What has caused it, or what will cause it,
is a critical mass in terms of metering, a threshold point beyond
which this unbalancing effect, between those who are metered and
those who are still on an uncharged system, will begin to bite.
550. This was known when the Bill was being
debated a couple of years ago.
(Mr Meacher) That is perfectly true. Of course it
has been discussed. I do not think that that is a reason for saying
that there should be no metering, which would seem to be the premise
of your question. I think there is a lot of sense in people being
metered for the water they use. It is certainly a way of making
people conscious of the water they use, because a lot of people
continue to believe that water is somehow free and they can use
it in profligate quantities and there is no problem. It would
encourage people, as well as all the pressure we are putting on
business, to be more circumspect in their use of water. It is
more equitable. Why, you might say, should one have to pay for
the amount of electricity, gas or telephone that you use but not
551. Can I just say, it looks as if the Regulator
does not have to take the view that the basket has to unbalanced
by spreading the cost. In fact, it could be borne only by the
(Mr Meacher) It could be. I do assure you, because
I have had discussions with the Regulator about this, the previous
Regulator was extremely conscious of this, and I am sure the present
regulator, with whom a have not discussed this, is equally conscious
552. You are going to give us a note on this.
I just want to finish with one matter, do you think the new regulatory
arrangements could increase regulatory risk and, therefore, add
to these bills? We had beautifully framed evidence from Dr Dieter
Helm on this point, do you think that the new powers and the new
regulations could actually increase regulatory risk?
(Mr Meacher) I do not believe that the powers that
are in this Bill are likely to increase regulatory risk. It is
about greater transparency, greater accountability. There is an
independent consumer council, there are clear divisions between
the regulators, the Environment Agency, the Drinking Water Inspectorate
553. I do not think that was the suggestion,
the suggestion was the right to fine companies, the extra powers
that have been taken to set standards, all of these could increase
the regulatory risk. Somebody would have to pay for it and almost
inevitably it would be the customer.
(Mr Meacher) The fact that there is greater regulation
in terms of water supply in order to prevent excessive useincreased
penalties for companies if they breach the terms of their appointment,
which can be up to ten per cent of turnover, like other utilities,
the increased charges for the supply of water unfit for human
consumptionall of these seem to be very clear. I see no
real reason why there should be greater unclarity. If I did think
that I would reconsider it. I have not seen the evidence which
suggests that the water companies are not very clear about their
responsibility. The only issue is this question of sustainable
development, social and environmental matters. If those are brought
into the equation it could be said to be complicating a situation,
it is no longer exclusively decided on an economic basis. We think
one should integrate those other considerations. I repeat, it
is guidance, it is not a direction. Ultimately it is for the Director
General, even if he has his advisory panel, it is he himself who
in the end then takes the decisions. We think that is clear.
554. Minister, I think, if I may say so, I hope
you will not misunderstand me, your evidence to this Committee
always constitutes, really, a very excellent example of how a
select committee should work in conjunction with the Government.
It is very helpful and I believe you when you say you are going
to go away and take account of some of the points we have made.
I wish I could always say that to all of your colleagues. Thank
very much for coming.
(Mr Meacher) You are becoming so complimentary I am
beginning to get worried.
Chairman: Do not worry, it will not last. Thank
you very much.