My Lords, I add my thanks to the Minister for his courteous and helpful replies to questions raised at Second Reading, and in particular for the publication today of a new briefing note from his department about the bodies involved in the regulation of water, which I hope may go some way towards dispelling the concerns that were expressed in the previous discussion. I have not had time to digest it yet but look forward to reading it.
I have commented previously that my experience of water matters comes from a different jurisdiction, and that I expected to find some differences in this jurisdiction. That said, I had not expected the convoluted morass of uncodified legislation and regulation that surrounds the water supply in this country. My only comfort is that someone as experienced in water and legislative matters as the noble Lord, Lord Crickhowell, is as frustrated as I am.
12.30 pm
My reason for raising this issue again is that this complexity must impose a significant bureaucratic burden and cost on the industry, not to mention the department. I suspect that the only people who benefit from this are specialist advisers and lawyers. I believe that there is an urgent need for codification. Will the Minister say whether this is something we can look forward to when the present Bill is passed?
Various contributors to the Second Reading debate commented that the Bill was distinguished as much for what it did not include as for what it did. This is my reason for introducing this probing amendment, which I shall certainly withdraw when we have had our
discussion, on a topic on which the Bill is virtually silent and which has been raised by a number of those who have written or spoken to us—namely, metering private water supplies. It is appropriate to discuss this topic at this stage as it is not something that you can discuss within the structure of the Second Reading debate. However, many of those outside who read our proceedings would regard it as odd if discussion on a Water Bill did not include at least some reference to this topic.
I found the silence of the Bill on this issue even more surprising when I discovered a report of which I had been unaware—perhaps I should have been aware of it—commissioned by Defra and published in 2009, entitled, The Independent Review of Charging for Household Water and Sewerage Services by Anna Walker. This seems to me an exhaustive and thoughtful report which could have formed the basis for part of the Bill. It includes a very thorough discussion of the advantages and disadvantages of metering private water supplies and was the outcome of extensive and wide consultation. It also gives considerable attention to the concomitant problems of water poverty that go hand in hand with energy poverty. It seems to me that the only respect in which the conclusions of the report are marginally less relevant today than when they were published is that in the intervening years we have become even more painfully aware of the challenges of water stress and the rate at which our weather patterns are changing.
Walker’s consultations gave a clear message that two views are strongly held by the public. One is that metering is the fairest way of charging for water. Another equally strongly held view is that metering should be voluntary for existing householders. She noted, however, that the majority of householders found that their water charges fell after meters were installed. The report makes the point that the overriding argument for metering water supplies and charging by volume is fairness. There is no other commodity for which we do not pay according to use, particularly when that commodity can be in short supply. I am told that we are the only country in Europe that does not charge for water by volume. That is not something that I have been able to verify independently, but it seems plausible. Metering has the benefit of making people realise that water is not a free good of which there is a boundless supply. Before and after comparisons suggest that demand tends to fall by 15% to 20% after meters are installed. This may mean that expensive improvements to the system that would otherwise have been necessary are not needed. The main disadvantage of metering is that meters can be costly to install, and inconvenient and costly to read. Typically, they are located at the bottom of shallow holes at the edge of the properties where there is connection to the public supply.
However, metering technology is changing and smart meters can transmit usage information to water suppliers and alert householders to leaks or other unintended releases of water on their property. Over the next few years, costs for meters can be expected to fall and the means of reading them remotely will improve. I declare an interest as a director of a company that works in the area of smart meters.
So where do we stand today? I am not going to delve into the plethora of regulations that cover water metering. We are in a situation in which we may in future need to be much more nimble in dealing with challenging and novel weather, and where new technology is becoming available to help deal with it. One possible way forward is to separate the authority to install a water meter from the authority to use it for charging—an important distinction—and to make it easy for any supplier that wants to install meters throughout a particular area to do so. The reason for this is that installing meters for a whole street or area is much less expensive than doing it piecemeal. Water suppliers could equip a whole area but then use meters to charge only those who had opted in. However, the presence of a metering capability in an area would improve resilience and allow a more rapid response to a change in water stress conditions than is possible at present.
My question for the Minister, therefore, is in tune with present Government initiatives: why not completely or significantly deregulate the installation of water meters and allow suppliers to install them when they wish, while continuing to regulate their use for charging? The need to be more agile in response to changing conditions and the availability of more effective and cheaper technology means that such an easing of red tape would have benefits both for suppliers and consumers. I beg to move.