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Baroness Miller of Hendon: As I said previously, I shall look very carefully at what the Minister has said. However, I am disappointed by it. I commented on the fact that other regulations in the earlier Act are subject to the negative proposal, but here we are talking about vulnerable groups and possibly competing groups. I even mentioned to the noble Lord the problem that his noble friend Lord Ahmed had raised. I understand from the noble Lord that to date he has not received an answer on the matter. He believes that this matter should be considered. I shall not press the amendment at this stage. I believe that the Minister should consider the difference between this clause and those matters which are subject to the negative resolution procedure in the earlier Act. There is a distinction and it is a matter to which I shall return. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 8 not moved.]

Lord Addington moved Amendment No. 9:

Page 3, line 44, at end insert--

The noble Lord said: This amendment is as straightforward as it appears on the Marshalled List. It merely states that a water company shall not be able to pass on costs for the drainage of roads to the consumers. If one has the privilege and the financial rewards of supplying water to a series of customers and something goes wrong, it is not unreasonable to ask the water companies to make sure that the highways of the nation stay clear of great deluges caused through a failure in the supply system. I beg to move.

Baroness Hamwee: I support my noble friend. In doing so, perhaps I may refer to the Government's paper on decisions following the consultations on water charging. I should like to place this on the record. I particularly welcome the comments made in paragraph 47 of that paper in which Government state that they believe it important to set out the charges in customers' bills in as transparent a manner as possible so that customers can see where their money has been spent and are aware of the individual elements which make up the sewerage charge. The Government expect water companies' bills to identify separately the foul drainage, surface water drainage and highway drainage elements.

That is not to say that I am not interested in hearing the response to the particular amendment. I am encouraged by the Government's keenness for transparency. If this amendment is not accepted, at least

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we shall know--I invite the Minister to confirm the words that I have just read--that the Government are keen that the individual elements of the bills are made entirely clear to the customers so that they know for what they are being charged.

Baroness Farrington of Ribbleton: This amendment would ensure that water consumers could not be charged for highways drainage as part of their water bill. As the noble Lord, Lord Addington, said, there are some interesting arguments for removing liability for payment of highway drainage charges from water consumers, but any such changes would involve considerable upheaval. Transferring the funding obligations to highway authorities would mean most of the expenditure moving to local authorities and to the local authority finance system.

The vast majority of water customers pay unmeasured charges, generally related to the rateable value of their property. While there is not an exact parallel between rates and council tax, there would be very little difference between paying a property-based charge to a water company and paying a property-based charge to a local authority. It is therefore far from clear that any significant benefits would be associated with the change proposed in the amendment. Of course, any such change would need careful consideration by all interested parties and would need to be an issue for the longer term. However, we will keep this matter under review.

I am pleased to be able to confirm to the noble Baroness, Lady Hamwee, that we believe it is important for customers' bills to set out charges as transparently as possible so that customers can see where their money is being spent and are aware of the different elements which make up their sewerage charge. We look to water companies to ensure that customers are aware of how much they pay for the separate elements of their sewerage bills. In the light of my response, I hope that the noble Lord, Lord Addington, will be happy to withdraw the amendment.

Lord Addington: I thank the noble Baroness for that reply. I shall want to study it carefully to see whether we have run this issue totally to ground. At the moment, I am quite prepared to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 agreed to.

Clause 6 [Right of consumer to elect for charging by reference to volume]:

4.45 p.m.

Baroness Hamwee moved Amendment No. 10:

Page 4, line 15, after ("below,") insert ("on payment of the cost of the meter and of its installation")

The noble Baroness said: In moving this amendment I wish to speak also to Amendments Nos. 12, 14 and 21 standing in my name and that of my noble friend Lord Addington, which are grouped together.

Amendment No. 10 takes us into Clause 6 of the Bill which deals with the consumer's right to elect for charging by volume; in other words, paying for what is

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consumed rather than paying on the basis of the rateable value of the property. The first amendment raises the question of the cost of metering. The Bill provides for free meters. However, I suggest to the Committee that there is no such thing as a free meter. It will have to be paid for.

Meters cost money to buy and to install. Ofwat has said in the past that it costs up to £200 for a basic meter in an external box. That payment has to come from somewhere or from someone--the "someone" will be the remainder of the customers, the majority of whom will not be metered. Therefore, in moving the amendment, I am raising the issue of whether there is a justification for such a subsidy.

The cost of meters is simply hidden. Households which prefer to stay with the rateable value basis will be subsidising those which opt for meters. In the short term, unless the undertakers absorb the charges, the bills will be inflated by an element that is unrelated to consumers' consumption. Indeed, one might say that, however it is dealt with, either the cost will feed directly into the bills going to the unmetered customers or will feed indirectly to them because the amounts being absorbed by the undertakers would otherwise have been available to reduce bills. I am concerned about the possible skewing of customer choice that might result from this.

Amendment No. 12 raises the issue of what will happen if it is not practicable to fix charges by reference to volume or, if by doing so, an increase in charges to other customers would take place. The amendment seeks to promote fairness and rational choice in charging, which is the Government's declared aim, in the face of the dice being loaded against the unmeasured consumer in an attempt, I suggest, to speed conversion towards metering. The Government's logic is that metering saves the industry money by avoiding the need for investment in new resource development. If that were so, there would not be a need for a redistribution of revenue and there could not be an objection to the amendment. If the Government are opposed to it, that might go to support the argument that metering--at least voluntary metering--does not save money over all.

Amendment No. 14 seeks to deal with the period of time within which a customer who has opted to use the freebie to move to a measured basis has to evaluate whether or not to stay with metering or to revert to unmeasured charges. The amendment seeks to allow consumers who are giving a meter a trial to revert to unmeasured charging without such a limit. Two points arise: first, whether there should be any limit at all; and, secondly, whether, if there is a limit, it should be the 12-month limit.

I suggest that 12 months is insufficient. Consumption year on year can be affected by a number of factors, not least by climate. The reason advanced for introducing the option to change--fitting the charging method to a consumer's circumstances--seems to justify an arguably indefinite period because people's circumstances vary over the years. If there is to be real choice--during the proceedings on the Bill we have been talking about real choice for the consumer--it cannot be time-limited.

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There is a more technical point. If the trial period is exactly a year, the customer will not have a full year's bills on which to make a judgment. I am seeking through the amendment to achieve a better balance between consumer protection and the other concerns that are raised in the Bill.

Finally, Amendment No. 21 seeks to amend Clause 7, which deals with the restriction on change in the basis of charging. The amendment seeks to allow consumers who use meters, by way of serving an unmeasured charges notice, to experiment with an unmeasured charge and find the tariff which best suits them and so enjoy the same protection as unmeasured consumers against an unsuitable tariff. At the Committee stage of the Bill noble Lords spoke of the difficulties for consumers who are already metered, perhaps because they live in a house which was built after 1990--since 1990 rateable values have not been available--or who will in future move into a house which is metered. Those customers are not given the same choice as the occupants, for instance, of houses built before 1990.

Again, I seek some equality. The argument has been advanced that the presence of a meter would be known to a purchaser of a house. Indeed that is so. But I cannot believe that that would be the factor which sways a decision about whether or not to buy a house. The known presence of a meter does not in itself make it appropriate to deny choice to that consumer. I beg to move.

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