Water Bill

Lord Curry of Kirkharle Excerpts

Thursday 6th February 2014 Lords Chamber

[Baroness Parminter]

My Lords, I thank the noble Lord, Lord Oxburgh, for his probing amendment. My Amendment 133, also in this group, seeks to amend the Water Industry Act 1991 to allow water companies to introduce compulsory metering, if supported by their customers.

Current legislation means that water companies are able to introduce domestic water meters on a compulsory basis only where the Secretary of State has determined that either the whole or part of their area is an area of serious water stress. My amendment would simply remove this barrier, allowing water businesses to do what they felt was in the best interests of their customers and increasingly scarce water resources.

We know that metering gives consumers greater control over their water consumption and so can improve affordability. It also helps water companies to target households using large amounts of water, provide water efficiency support and tackle leaks. On that point, perhaps I may say how welcome it is that this Bill transfers the responsibility for supply pipes from customers to water companies as this should help to drive down leakages. The case for smart metering, combined with advice on how to reduce water usage, and social tariffs that minimise affordability issues for disadvantaged heavy-use households, is strong, and has been well made by the noble Lord, Lord Oxburgh. As he has said, the independent Walker review in 2009 recommended a widespread switchover, as, indeed, did the EFRA Committee in the other place.

We know now that some water companies denied pursuing this course of action by current legislation want it. The chief executive of Northumbrian Water, Heidi Mottram, supports it. The company knows that it has to plan its businesses for the future, when climate change and other constraints may well impact on areas not presently water stressed. Given the opportunities in this Bill to trade water, they want all the tools they can get to maximise the precious and increasingly valuable resource that water is.

This seems to be a reasonable amendment. All it would do is give companies the right to speak to their customers and manage their businesses to their benefit, with increasingly scarce water resources. It does not force, rather it enables water companies to consider the wider social and environmental benefits that metering brings.

[Lord Curry of Kirkharle (CB)]

My Lords, I, too, thank the Minister and the department for the very helpful briefing notes we have been given, and for the opportunity to explore the Bill with him and his team. I fully endorse the comments of the noble Baroness, Lady Parminter, on Amendment 133. I also firmly support the noble Lord, Lord Oxburgh. I declare an interest in that I chair the management board of a rural estate that has an extraction licence.

At a time when the management of water is such a critical issue, I would go even further than this amendment. I think that a timetable should be set, by which time all consumers of water are charged for the volumes they use. These amendments mark a step towards that objective. I cannot understand the reluctance to expand the use of water meters. I know that there is an installation cost involved and that it will take time. The potential costs of installation could be fairly significant, as the noble Lord, Lord Oxburgh, pointed out, and of course meters have a limited life and will need to be replaced over time. However, these costs need to be set against the fact that metered customers use between 10% and 15% less water. Some will use more and some less, but the overall net benefit of a saving of 10% to 15% is massive.

The current policy of allowing companies to apply for the right to install water meters in areas of water stress has a certain logic. However, we have seen vividly over the past two years the dramatic impact of extreme weather events, whether they are the result of climate change or whatever. Flooding in winter and drought in summer could become much more frequent occurrences than has been the case historically, and water stress could become a reality well beyond the south and east of England. Even using the existing definition, we are likely to see a requirement for increased water use. Better, I would suggest, that we should extend the option of charging now in anticipation of the inevitable pressures on supplies, as mentioned earlier by the noble Lord, Lord Redesdale.

I come back to the issue of managing water. The well-known maxim, “If you can’t measure it, you can’t manage it”, seems to apply very precisely to the subject of water. As I have mentioned, I chair an estate. We are now well advanced in the process of installing meters in every household and enterprise across the entire estate. We know where every litre goes and we can charge appropriately. We are also able to monitor, remotely in the office, how much water is being used, where and by whom. It is very effective and much more efficient. The water industry needs to become much smarter in its management of water, and measuring is essential. I understand that Anglian Water now has around 90% of its customers metered, not through compliance but because it makes sound economic sense. Other companies, particularly in the freed-up market that we are trying to achieve through this Bill, need to be encouraged to do the same.

I would like to make one final point. It costs all of us £14 every year to cover the costs of unpaid water bills. It is a fact of life that if we do not appreciate the value of water, we are likely to be much more indiscriminate in our use of it. We should take the opportunity in this Bill to further establish the principle of charging for water use. The Walker review, which has already been mentioned twice, firmly endorsed this approach, and I hope that the Minister will give this proposal his serious consideration.

[Earl Cathcart]

My Lords, when preparing to speak to this amendment, I was going to support the amendment of the noble Lord, Lord Oxburgh, but having listened to the debate so far, I find myself supporting both amendments. I support in particular the part of the amendment tabled by the noble Lord, Lord Oxburgh, which states that,

“the Secretary of State shall be authorised to allow metering … in areas where metering might generate other social benefits”.

I was talking to somebody outside who, on asking what I was doing here and learning that I was involved in the Water Bill, said that they were on the board of a water company, which had been stopped by Ofwat when it tried to roll out meters across its area. I hope that I have this right—listening to the noble Baroness, Lady Parminter, I think that I have—but the reason was that the company was not in an area of water stress. This seems unbelievable. If true, and I have no reason to doubt it, what gives Ofwat the right, or the power, to stop the rollout of meters when we all recognise the advantages that we have talked about, such as reducing demand, cutting costs for consumers, promoting fairness et cetera? If Ofwat has that power, what are the Government going to do to—I was going to use the word “curtail”, but let me use the word that the Minister used in a previous amendment—amend Ofwat’s powers in this regard?