Previous Section Back to Table of Contents Lords Hansard Home Page

Baroness Miller of Hendon: My Lords, I thank the Minister for the full answer he gave me to the two separate parts of the amendment. I also thank both him and the noble Baroness, Lady Farrington, for their courtesy in inviting me to write to them, which I did. I thank them for their clear and concise answers. Of course, I did not agree with them, which is why I brought the amendment back today. I am disappointed that the noble Lord did not think my powers of persuasion were sufficient to make him change his mind, but that has to be my fault and not his.

The only point I wish to make concerns the first part of my amendment. I am not casting aspersions on future Members who might hold the position held by the noble Lord today, but since it has been suggested that there will be consultation, I cannot see why that could not be written into the Bill. However, I accept that that is his view and I shall not push the amendment further. I have made my point and the Minister has made his.

It is true that we discussed the positive resolution earlier, and I described these as technical matters. Perhaps I did not explain myself well, because when one talks about the quality of water, it is a fact; it is good, bad or indifferent and it can be measured in a sensible way. Here we are discussing different groups of people wanting to be qualified as vulnerable, and that would be a matter of opinion not of fact. That is why it would be more important to have it done by positive resolution rather than negative resolution. However, I accept what the Minister said and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8 Jun 1999 : Column 1378

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

Baroness Miller of Hendon moved Amendment No. 4:

Page 4, line 25, at end insert--
("(3A) Whenever it is not reasonably practicable to fix charges in respect of any premises by reference to the volume of water supplied, or to do so would involve the incurring by the undertaker of unreasonable expense, then the undertaker may instead fix charges in respect of those premises on the basis of the average consumption of water in premises of comparable size.").

The noble Baroness said: My Lords, I would like to speak to Amendments Nos. 4, 5 and 14. Clause 6(3) allows an undertaker to decline to charge on the basis of a metered charge where a meter is requested, but it is not reasonably practical for the undertaker to do so or it cannot do so except at an unreasonable cost. For example, there might be a block of flats where not all tenants want meters or where the physical construction of the building makes insuperable difficulties. The Bill is silent on how water is to be charged for in those circumstances.

The secondary amendment is purely consequential on the main one. The main amendment is to clear up that deficiency by allowing water companies to charge on the basis of average consumption in similar premises. The noble Lord, Lord Whitty, when he responded to my noble friend Lady Seccombe who spoke to this amendment in Committee, said that the amendment,

    "does not allow the water companies any flexibility in those circumstances".--[Official Report, 22/4/99; col. 1266.] I should have thought it gave them a great deal of flexibility, but what I think or do not think does not matter. It is what the water companies themselves think, they are the promoters of this method of resolving the problem. So unless the Minister will now argue that there is some objection to it, it is difficult to see why the Government should continue to refuse to consider it.

I do not agree with the Minister's suggestion that this is a matter that should be left to the director general to approve or otherwise in accordance with his powers under Clause 4, which relates to charging schemes. I believe that this is a matter where the Government, in their own Bill, should close a gap which they have themselves created, not, I hasten to say, through any wrongful intention, but simply because they took a proper decision to allow the water companies an exemption and failed to cover the resulting gap. I believe that it is in your Lordships' House that the gap should be closed, not at the desk of a newly created official.

I now wish to speak to Amendment No. 14, which is also in the group. The Minister will recall that at the Committee stage I had tabled the same lengthy amendment as a probing amendment, but I withdrew it before moving it because it was suggested to me that Clause 11 covered the concerns which are the subject of the amendment. However, I am now advised that this is not the case, which is why I have re-tabled it and present it here this evening.

The object is to resolve a particular difficulty, or perhaps an anomaly, which affects blocks of flats. In most cases, with older blocks of flats, it has proved to

8 Jun 1999 : Column 1379

be impossible to install a meter for a whole block unless all the tenants agree. Also, as I pointed out in my remarks on the earlier amendment, in some cases the configuration of the pipework in a block means that either all the flats are metered or none can be.

This amendment deals with the problem in two alternative ways. First, the owner of the building requests the installation of a meter measuring the entire supply coming into the building. The owner pays the whole water charge to the supplier. The metering in this case can be done without the mechanical problems I have just described. The owner then debits each tenant with a share of the cost of the water supplied to the building.

Your Lordships may wish to know that the director of Ofwat has recently produced a set of draft regulations on the re-sale of water which will protect tenants from unscrupulous landlords, to avoid the problems that have existed in the past in relation to electricity and gas supplies.

Noble Lords will also be aware that it is a common practice in blocks of flats that have been sold on long leases or as freeholds to the tenants for all the expenses of the building to be apportioned among the occupiers on the basis of some agreed formula contained in the identical leases. Floor area or rateable value are common criteria.

Subsection (4) defines "owner" as the immediate lessor of the occupiers or any management company or organisation. These are also commonly used devices in the case of such blocks of flats. I concede that it may be very generous, or possibly rash, for a landlord who decides to pay the water bill for the entire block and then to undertake the responsibility of acting as a debt collector for the water company by collecting it back piecemeal from the individual lessees. There will be some cases where it will be commercially worthwhile for a landlord to undertake this onerous task.

The proposed Ofwat regulations may allow him to make a small percentage profit, or the water company may allow him a discount, or the leases may allow him to make an administration charge on all amounts disbursed for the block. The landlord will make up his mind whether or not he wants to get involved. The truth is, I suspect, that not many landlords will.

That is where the second arm of the amendment--plan B, if you like--comes in. This will enable the water company to assess and charge for water on the basis of the average consumption in dwelling-houses of comparable size. I have discussed the implications and advantages of this system in my Amendment No. 4 to Clause 6 and I shall not take up the House's time by repeating the points. Once again, I have provided for potential disputes to be referred to the director by either party under the procedure laid down in Section 30A.

Whichever method is used, it will enable the occupiers to escape from the increasingly obsolete method of calculating water charges based on an out-of-date rateable value. The amendment is long but the principle and the objectives are short. Once more,

8 Jun 1999 : Column 1380

I ask the Minister to accept it. If she does not wish to do so, perhaps she will offer some other solution to the problem. I beg to move.

8 p.m.

Baroness Farrington of Ribbleton: My Lords, as an overall principle, we want to see a water charging system which gives customers increased choice. For some people, this may mean opting to have a meter installed because they would prefer to pay on the basis of a measured charge. However, there will be some circumstances where it will be impractical to fit a meter or one could be fitted only at great expense. The noble Baroness, Lady Miller of Hendon, cited the example of a block of flats with shared supply pipes. While I do not believe that it makes sound economic sense to force water companies to spend a disproportionate sum of money on fitting a meter in these circumstances, I agree with the noble Baroness that it would be desirable for customers to have access to an alternative basis of charging.

In our consultation document, Water Charging in England and Wales, A New Approach, we recognised that some customers could face problems of not being able to have a meter fitted for reasons of practicality or expense and proposed that in such cases householders should be able to pay an assessed charge. We therefore strongly support the principle of protecting customers' interests in such circumstances. I made clear during Committee stage our intention to avoid the inequity which has been identified where customers serve a measured charges notice but find that it is unreasonably expensive or impractical to fit a meter.

Protection to such customers can be delivered effectively through the mechanism that we propose to introduce, via Clause 4 of the Bill, for the director general to approve companies' charges schemes. Furthermore, in contrast to the arrangements put forward in this amendment, the use of Clause 4 would give water companies flexibility to consider arrangements for assessing charges which meet their customers' concerns. Possible options include charges based on average consumption, an assessed consumption based on the number of occupants, or an assessed consumption based on the size of the property, as suggested in the noble Baroness's Amendment No. 4.

Amendment No. 14 seeks to assess particular issues which may arise where it is not possible to install meters in blocks of flats. The noble Baroness's amendment introduces the idea that there are two ways of dealing with this problem when an occupier wants a measured basis of charging. One option would be an assessed charge, more nearly related to the bill that might have been payable, given average consumption, in a property of similar characteristics. This is the same provision as that in Amendment No. 4, which seeks to apply this in any case where a requested meter cannot be installed.

The amendment also provides for consideration of an alternative arrangement whereby the whole block is metered, the undertaker charges a measured bill to the owner, lessor or management company, and that owner re-charges the individual occupiers. As drafted, the

8 Jun 1999 : Column 1381

amendment is permissive and not triggered unless the owner asks to take on responsibility for paying water charges for the block and is subject to the terms of any lease.

However, like Amendment No. 4, there does not appear to be anything in Amendment No. 14 which cannot be implemented under the existing provisions of the Bill. As I hope I have explained, the development of an assessed charge to protect the interests of these customers can be delivered effectively through the mechanism that we propose to introduce, via Clause 4 of the Bill, for the director general to approve companies' charges schemes. In respect of the proposal for the landlord to take on the responsibility for charges, such an option already exists, subject to the terms of the leases.

We believe that this rather complex amendment shows the difficulties and potential inflexibility of attempting to set down in primary legislation the level of detail of all that should happen in such cases. I believe that it would be unnecessarily prescriptive to set out the procedures for calculating assessed charges on the face of the Bill. I hope that the noble Baroness will recognise the clear support that I have given to the principle of assessed charges where meter fitment is impracticable or unreasonably expensive, and will agree that in those circumstances these amendments are not necessary.

The noble Baroness also raised during the earlier stage of the Bill the issue of subsection (5) of Amendment No. 14, requiring any dispute under this section to be referred to the Director General of Water Services for determination under Section 30A of the Water Industry Act 1991. We believe that such disputes could take many forms between the owners and occupiers of buildings and between landlords and their tenants. It seems highly unlikely that the director general or his staff will be qualified or equipped to deal with the whole variety and potentially considerable number of disputes that this amendment could result in their receiving. For this reason alone, there must be some doubt that the amendment as drafted is workable. However, I hope the reply that I have given is as helpful as it possibly can be and will enable the noble Baroness to feel that she can withdraw the amendment.

Next Section Back to Table of Contents Lords Hansard Home Page