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Baroness Miller of Hendon moved Amendment No. 7:

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, and
(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: My Lords, I must begin by declaring the same minor interest as I declared at the earlier stages of this Bill. I am both personally and via family companies in which I am a shareholder the landlord of some rented residential properties. I am not involved in their day-to-day management, and I am advised that it is a matter of indifference to me whether any present or future tenants do or do not elect to have meters.

This amendment is to deal with an anomaly to which I drew attention at both Second Reading and Committee stage. I believe that it is more than an anomaly: it is an injustice that Parliament should not create because the victims are far less powerful and weaker economically than the water companies. The amendment covers the situation in which a person lets out his home for a short period. His tenant then opts to have a metered supply, as is his right. Under Clause 11 the landlord is positively prevented from objecting or even being consulted by having to give his consent; in other words, the landlord has absolutely no say or control over the matter. I do not argue with that. Clearly, the tenant who pays the water bills should be entitled to be charged for the water that he consumes in the way that suits him best.

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However, what happens when the tenancy comes to an end? I am talking about short tenancies, not very long ones. If the premises revert to the lessor after the 12-month cooling off period granted by Clause 6(5), the lessor is permanently stuck with a meter that may not suit his own domestic arrangements. One can imagine, for example, the common situation of a person who lets his house for a couple of years while he works overseas. As the Bill stands, the lessor is not only prevented from objecting to the metering of his own property but he also cannot restore the position when he comes back into possession of it.

It is axiomatic of English property law--indeed, I imagine, any sensible commercial system of law--that a tenant or lessee cannot grant rights over a property or impose liabilities on it which extend past the date of the expiry of the lease. To give a very obvious example, a tenant cannot grant a sub-tenancy which extends past the length of his own term. He cannot grant a perpetual right of way, a right of light, a right of drainage and so on. Clearly, he should not be able to impose on the landlord a burden to which the landlord has no right to object and cannot have removed after the tenancy has expired and the tenant has long since moved on; and that is a burden which will last for ever.

The noble Lord, Lord Whitty, in responding to me at Committee stage, suggested that there would be administrative costs on the water companies for what he called "unconstrained switching" and "uncertainty in pricing by the industry". I believe that that makes a major mountain out of a very minor molehill. The number of cases throughout the entire country in which the combination of all the necessary ingredients may arise must be very small. For example, the premises must be let for more than a year and the tenant must have opted for a meter. When the tenant moves out and the property reverts to the landlord he or his new tenant must decide that he does not want a meter. I can confidently predict that there will be very few such cases a year and an immeasurable and insignificant cost to the industry and its other customers.

In the past few days we have seen the furore in the press about Rebecca Mark who is reported to be about to make £33 million from her share options in Wessex Water. That company is about to be floated--no pun is intended--on the New York Stock Exchange. I do not comment on the rights or wrongs of her position, but with sums like this being involved in the industry why do the Government worry about whether the water companies might incur a negligible amount of administrative costs and lose what to them would be a minor amount of income as a result of a home owner reverting to his previous personal arrangements with them? At least the noble Lord the Minister accepted my point that there would be no need for the supplier to remove the meter or re-install it at a later date.

Just a little over two years ago the party opposite when in opposition reviled water companies as greedy profiteers who reduced large parts of the country-- I recall that it had Yorkshire particularly in mind--to the state of an arid desert due to a combination of inefficiency and the spending of their allegedly excessive profits on dividends rather than on their

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infrastructure. At the same time, their directors were reviled as fat cats. We now find the Government coming down on their side with the excuse that their profits might suffer a minor scratch, not even as much as a dent, if lessors were allowed to protect their own property rights.

The question is whether it is the Government's policy that every property shall in the short term be metered so that once a property is in, it can get out only in the exceptional case provided for in Clause 6. This amendment provides simple justice to a very small group of property owners so that their rights and assets are not diminished by the act of someone who, by definition, has a short and transient interest in the property. If there is a financial detriment, it should fall on the giant water companies which will be the ultimate winners in the metering process rather than individual small property owners. Amendment No. 8 is consequential on Amendment No. 7.

I urge the Government to accept these small provisions which do not detract from the Bill in any way, but which prevent a property owner from having a right taken away from him unilaterally. I beg to move.

Lord Skelmersdale: My Lords, in response to the previous amendment, the Minister (to paraphrase and precis his comments at the same time) told the noble Baroness, Lady Hamwee, that she had gone over the top. I am quite sure that he will say exactly the same to my noble friend. In answer to the point made by my noble friend in Committee, the noble Lord commented that the power was in the hands of whoever paid for the water. In other words, if the landlord paid for the water he was covered by the Bill; if the tenant paid for the water he was covered by the Bill. That is fair enough. But my noble friend makes a valid point. In those cases where the tenant is in the property for a short period and elects to pay for the water through the water bill, surely the landlord should have some powers as regards his property.

In this country we used to have the system of shorthold tenancies. They lasted for a maximum of six months and had to be renewed. That is no longer the case. The former government extended the period to a year, or perhaps two; I cannot remember. I suggest that the period of the true shorthold tenancy would be an appropriate period for the involvement of the landlord in the decision on water metering.

8.30 p.m.

Baroness Hamwee: My Lords, I support the noble Baroness's amendment. She is right to come back to this point. We have talked about the need for balance. She identifies a point where the Bill is unbalanced. I support her attempts to rectify that balance.

Baroness Farrington of Ribbleton: My Lords, Amendments Nos. 7 and 8 would mean that water companies would have to accept a notice of revocation from subsequent tenants or from property owners into whose property a meter had been installed at the

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instigation of the tenant without the express permission of the landlord, even where that may have occurred 20 years before.

We have made clear our desire to increase customer choice in water charging, and our proposals do that. However, we have previously explained that this needs to be tempered by ensuring that customers have some stability and predictability in their bills. Giving this very extended right to opt in and out of measured and unmeasured charging could cause uncertainty for the industry and the regulator in predicting companies' revenues and could lead to increased administrative costs. To be drawn into discussions about potential fat cats and levels of drought in Yorkshire--a county which is slowly falling into the sea, I understand, on the other side of the Pennines--and a debate on profits I believe would spoil the positive relationship that we have had during the passage of the Bill.

Anything which reduces the stability in bills we agree is the concern of customers. That is why we thought carefully about the provisions in the Bill which relate to consumers switching between measured and unmeasured charging. We believe that provisions in the Bill regarding reversion provide the right balance between greater choice for customers and ensuring stability in water charging. We are working from the position that those who pay water charges should be neither more nor less advantaged because they live in rented or owner-occupied dwellings. It would not be consistent with this approach to give tenants or landlords rights which are not available to other consumers. That is what underlies our thinking, not a wish to make life more difficult for landlords.

New tenants moving into a property have as much chance as house purchasers to establish beforehand the basis of calculation of rent and other charges; and if they feel strongly about water metering they will weigh that alongside other factors in taking on the tenancy. The regulations to protect vulnerable groups under Clause 5 will apply just as much to tenants as to owner-occupiers, and will offer protection to those with a high essential water use who could face hardship if moving into a property with a meter. The noble Baroness gave the example of a landlord who moved back into the property as an owner-occupier. He would be in exactly the same position as any other owner-occupier moving in.

On the question about shorthold tenancy, under Clause 11, new Section 209A((3) does not apply where the tenancy is a fixed term tenancy for a term of less than six months. I hope that that answers the question.

The regulations protect vulnerable groups. If landlords feel strongly about the basis for water charging in their properties, it is open to them to arrange to be responsible themselves for paying the water and sewerage charges to the undertaker and charging tenants a rent that includes water services. In such circumstances, the tenant would not be expected to have an interest in seeking to change the basis on which the undertaker set the charges. This is an important reassurance for landlords unwilling to have a meter in their premises. We have listened carefully to the points made by the noble Baroness, Lady Miller of Hendon, about potential problems for landlords.

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I wish to state again that there is nothing inherent in metering that makes anyone's bills higher or lower. On average, they should be about the same. So although metering may be more or less attractive to different consumers, it should not affect average costs or the value of the property.

We do not believe that there is a persuasive case for treating rented properties differently from others. Where the landlord takes on the role of consumer and tenants do not have direct responsibility for the water bill, it will be the landlord who decides whether to have a meter. Where the tenant has liability for the water charges, the method of payment is predominantly a matter between him and the water undertaker, and we consider that the same regime should apply as to owner-occupied premises.

I appreciate that the noble Baroness, Lady Miller of Hendon, may feel that some of the points have been repeated. But I hope that the totality of the answer will demonstrate that we have given careful consideration to the points she raised. I hope that she will feel able not to press the amendment.

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