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The noble Baroness said: This is a drafting amendment designed to clear up an omission from subsection (3). That subsection relieves the water suppliers from the obligation to install a meter at the request of a customer in two specific instances; if it is not reasonably practical to do so or if it would involve the supplier in unreasonable expense.

A practical example might be a block of flats in which only some of the tenants want meters, but the layout of the pipes means that all have to be fitted or none. Unreasonable expense might be when extensive infrastructure work was required to comply with a request for a meter.

It is not for us to have to discuss the theoretical instances when these two exemptions which we are giving to the water undertakers would operate. If a supplier wants to rely on either exemption in a given case, the onus of proof will be on him, with a right of appeal to the director general if the customer is aggrieved. However, the clause does not specify how the water should be charged under the new regime.

All parties agree that the old system based on rateable values is no longer viable and will become even more unsuitable as time goes by. In any case, it is the rateable value of charging from which the customer will be trying to escape by electing for a meter. The Government have accepted the fact that we ourselves would have introduced a Bill similar to this one and we, too, would have been faced with the problem of dealing with cases where rateable values were not an appropriate basis for charges, or where a figure for the rateable value was not available.

This amendment provides for the charges to be fixed by comparison with similar cases where an undisputed level of charges can be calculated. It will, of course, be up to the director general to instruct the suppliers as to how they are to make their comparisons and which factors are to be included and which are to be excluded. For example, it may be that different considerations apply between different areas. The customer who is aggrieved by the calculation will still have a right to appeal to the director general and the onus of proving that comparisons are fair, reasonable and relevant to the particular case will still rest on the supplier.

During the Second Reading in the other place, when discussing a different aspect of the Bill, the Minister of State for the Environment, Transport and the Regions stated that groups of vulnerable people should be given the option of a bill based on an average measured supply. During the Committee stage in the other place the Parliamentary Under-Secretary of State for the Environment, Transport and the Regions repeated that in certain hardship cases the charges should be based on average measured consumption.

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If, in some instances, the Government agree that average and comparable consumption is a fair and reasonable way of charging the customer, then that is an established principle. That principle should be extended to cases where a customer wants to have a meter supplied but the water company establishes that it is not practical or economically possible to comply with his request.

It is not right that if either of the exemptions applies, the customer should be penalised. As I said, this amendment merely tidies up an omission from the Bill in its present form. I trust that following the precedent already established in the other place, the Minister will accept it. I beg to move.

Lord Whitty: We touched on those circumstances when discussing the previous two amendments. It is clearly the Government's intention that, where it is not practical or economic to set up a separate meter, there should be an alternative basis of charging.

We have indicated in another place and elsewhere that some concept of average, measured comparable usage would probably be appropriate. Nevertheless, the noble Baroness's amendment does not allow the water companies any flexibility in those circumstances. The protection that we have offered and which can be delivered through the mechanism which we propose by Clause 4 is that the director general will approve the companies' charging schemes and, therefore, he will be responsible for checking the fairness and equity of a charging scheme which provided an option in those circumstances. The flexibility would allow options to include charges based on average consumption across the board, an assessed consumption based on the number of occupants in the premises or, as the noble Baroness's amendment indicates, an assessed consumption based on the size of the property.

Different forms of charging may be appropriate in different circumstances and different types of premises and areas. Provided that the director general's responsibility for the equity of the charging scheme is preserved, as it would be under our measures, there would be no need to be prescriptive on the face of the Bill as to how the precise form of charging would be assessed. The noble Baroness can rest assured that it is our intention to avoid the inequity which has been identified in those circumstances. We intend to provide the alternative assessment option to the customer.

Therefore, I support the principle, but I do not believe that there is a need for us to be too prescriptive. Other mechanisms are in place to ensure that an alternative is available.

Baroness Seccombe: I should prefer to see a little more clarity on the face of the Bill. However, I shall read with care the Minister's reply and at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 14 not moved.]

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Baroness Miller of Hendon moved Amendment No. 15:

Page 5, line 12, at end insert--

    ("(7A) In any case where--

    (a) the premises had been let for residential purposes for a term not exceeding 21 years, whether commencing before or after the commencement of this Act,
    (b) the lessee for the time being had given a measured charges notice to the undertaker without the express written consent of the lessor for the time being, and
    (c) the premises have reverted to the original lessor or his successor in title, whether upon the expiry of the term, or upon forfeiture or abandonment or disclaimer or surrender of the lease or by any other means, the consumer (here meaning the original lessor or his successor in title or, if the premises have been re-let, any new lessee of the premises) may within 12 months of the premises reverting to the original lessor or his successor in title, give a notice to the water undertaker revoking the measured charges notice.").

The noble Baroness said: In moving Amendment No. 15, I shall speak also to Amendment No. 16. The latter amendment is entirely consequential on the main amendment which seeks to insert a new subsection. The main amendment is a non-controversial drafting amendment to clear up an anomaly to which I drew attention on Second Reading. I expressed the hope that the Government would correct it at this stage but they have not tabled their own amendment, hence this amendment.

Clause 6(5) provides that a consumer can, within 12 months, revoke the measured charge notice and revert to being charged on the basis of the rateable value. It emerged in debate in Committee in the other place that a new purchaser of a house with a volume-charging system which had been in operation for more than 12 months was stuck with that system, whether he liked it or not. Everyone agreed that that was fair enough on the basis of caveat emptor. A purchaser would be able to find out what the charging situation was before he signed a contract. If he did not like it, he would be able to withdraw from the negotiations. In the case of leasehold homes, Clause 11 expressly forbids a landlord from preventing his tenant choosing to have a metered supply if that suited him. As that would be in cases where the tenant was paying an exclusive rent and was responsible for the water bill, that too seems eminently reasonable.

We now come to the anomaly which I invite the Committee to correct with, it is hoped, the Government's co-operation. However, first, I remind the Committee of a declaration of a minor interest which I made on Second Reading. I am the part-owner of two rented residential properties. A family company, of which I am a shareholder, owns another two such properties. I take no part in their management and my adviser tells me that it is a matter of complete indifference whether the tenants do or do not decide whether to have water meters.

The anomaly arises if a tenant exercises his right, under Clause 11 to have a water meter and then 12 or more months later, the tenancy comes to an end. As the Bill now stands, the landlord must keep the meter even if it is not in his interest to do so. He may, for example,

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be an expatriate worker who is returning home after a couple of years abroad. The tenant may have enjoyed a tenancy which had continued for several years. The needs of the outgoing tenant may be quite different from those of the landlord or the successor tenant.

My amendment merely permits the landlord, under what is called a "short tenancy", which I have defined as being less than 21 years, to cancel the measured charge notice within 12 months of the premises reverting to him. Some Members of the Committee may find it strange for a lease originally for a term of up to 21 years to be described as "short". However, in the world of the law of landlord and tenant, particularly in the case of residential property, I understand that 21 years is regarded as a demarcation line.

In reality, I imagine that most purely residential leases, other than flats on very long leases at ground rents, are for very much shorter terms than that. The amendment does not apply where a landlord has expressly consented to a meter because it would clearly be unreasonable for a landlord to resile from it after the initial 12 months from when it was installed. It applies only when the meter is installed without his consent and when it has, in effect, been imposed upon him.

Quite rightly, the general law does not permit a tenant to prejudice his landlord's interest in the property by accepting some burden that extends beyond the terms of the lease. He cannot, for example, grant a sublease for longer than his own term. He cannot grant a right of way or a right of light. So there is no reason why a tenant should be able to saddle his landlord with an unwanted meter.

It may be argued that it would somehow be onerous on the supplier for the meter to be cancelled after the initial 12 months or if a landlord who had exercised that right then let the property to a new tenant who, again, elected to have a meter. That is an entirely specious argument. There is no question of the supplier having to rush back and forth, removing and then reinstalling a meter at the same premises. It would be simple commercial sense to leave the meter dormant and ignored on the premises rather than incurring the uneconomic expense of disconnecting and collecting it.

I believe that this uncomplicated amendment does not affect in any way the principles of the Bill. It does not prejudice the consumer; nor does it prejudice the supplier. It simply protects the landlord from having his long-term property rights being prejudiced permanently by the action of someone with only a short-term, transient interest in the property. That would be quite inequitable. I beg to move.

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