Household Water Charges: 23 May 2007: Westminster Hall debates (TheyWorkForYou.com)
I was saying that the constituents who drew to my attention the position on household water charges felt that they had received poor service from Thames Water, and that advice given to them was inaccurate and incomplete.
One of the residents whose case I took up applied for a meter in May 2005 and was refused in July 2005. It was not until I took up her case in March this year that she was put on the average household charge. Her own telephone calls to Thames Water did not result in her being given clear or accurate information. Now she is on the average household charge, which saves her a bit in comparison with the water rates, but she is still paying over the odds, because the average household charge operated by Thames Water is the average of all non-business metered users and does not reflect the lower consumption that is typical of someone in her circumstances.
My review of my constituent's case and many others points to several things that need to be done. First, much clearer, more consistent rules on the operation of the water charging regime are required throughout the country; secondly, clear advice should be given to residents on the options that are open to them; and thirdly, for those who cannot have meters fitted, there is a need to have a charging regime as of right that takes account of their household type.
People who cannot have a water meter installed, whether because it is technically not possible or because their landlord will not agree to it, are eligible to choose to go on an average household charge. In most cases, that will save them money on their water charges compared with standard water rates. The savings can amount to a pound or two a week or, in some cases, more. The problem is that they have to apply for a water meter first, and then Thames Water tells them that they cannot have one but that they can go on to the average household charge.
The average household charge is badly publicised, so many people do not know about it. Water companies and landlords should be obliged to advise customers and tenants of their rights. People should be put on the household charge automatically if they cannot have a meter but would be better off not paying standard water rates. Hundreds, if not thousands, of residents in Oxford are losing out, and there must be hundreds of thousands losing out across the country.
The water regulator has responsibilities as well. I looked on the internet for the Ofwat briefing sheet on Thames Water charges—I have a copy with me that I will gladly leave with the Minister afterwards. There is no reference in it whatsoever to people going on to the average household charging scheme if they cannot get a meter.
As the experience of my constituent illustrated, the situation is especially unfair to Thames valley water customers who are pensioners. Even if they get on to the average household charge, no account is taken of household size, so they still pay over the odds. The residents of Lucas place and Remy place in Iffley village whom I mentioned earlier do not have their own washing machines, for example, but they still pay the same average household charge as much larger families in bigger properties.
It is not just pensioners who lose out. A letter was written to The Guardian "money" page last year by someone living in a one-bedroom flat in London. Their water bill, which was based on rateable values, came to £246.68 for the year. They asked for a water meter to be installed and were told that that was not possible. They were put on the average household charge of £244.78—a grand saving of £1.90 a year. However, as they pointed out, the Thames Water website said at the time that the metered charge for a one-bedroom flat would be only £148 for low consumption or £175 on average, so the complainant reasonably felt that they were being done out of at least £70 and possibly £107 a year. When challenged by The Guardian adviser, Thames Water said that any change would be too bureaucratic and costly to administer. Some other water companies, for example Anglian Water, do adjust the charge according to the type of property. If some companies can do it, why cannot Thames Water?
The water regulator Ofwat approved the charging policies for the water companies, so it too, has let down pensioners and people in small flats. To be fair to Thames Water, it obviously realised that its position was unsustainable and in an e-mail sent to me after I called this debate, it told me that it will introduce a tiered system of average household charges from1 April next year. If that fairly addresses the situation of pensioners and others in small properties, it is to be welcomed. However, for many customers of Thames Water, the system will be qualified by the knowledge that it is an admission that they have been overcharged for years. The new charging regime must be approved by Ofwat, but given that it approved the previous manifestly unfair regime, it will need to make an extra effort to show that it is insisting on a fair system for low-consumption customers who cannot get metres.
Section 142 of the Water Industry Act 1991, a copy of which the Library has provided—I am sure that the Minister keeps a copy close by him at all times—states that, under the terms of their licences, water companies must ensure that
"in fixing or agreeing charges...no undue preference is shown to, and that there is no undue discrimination against, any class of customers or potential customers".
I am not qualified to say whether the practices of Thames Water and the other four companies that operate a fixed assessed charge at the average metered level have breached the letter of the law, but they have infringed its spirit. Pensioners in shared blocks are the class of customers who have systematically lost out. Ofwat information note 20 explains the duty that section 142 of the 1991 Act refers to in these terms:
"Any charging method should be fair. The Director has a duty to protect the interests of customers by ensuring that there is no undue discrimination or preference in a company's water and sewerage charges. This means that a customer's bill should, as far as practicable, reflect the costs which that customer imposes on the water and sewerage systems for a supply of clean water, disposal of dirty water and draining surface water from the property and the highways".
That makes it surprising to me that Ofwat has accepted the undifferentiated average household charge for as long as it has.
First, I should like my hon. Friend the Minister to provide an assurance that he will personally look into these matters and use every power at his disposal to obtain a clearer, fairer and more consistent system of entitlement for those who cannot have water meters, so that pensioners do not pay over the odds. Secondly, I urge him to find a means, and to legislate for one if there is none to hand, for water customers to have the right to get accurate information on the charging options open to them, with redress where that does not happen. Thirdly, I should like him to discuss with his colleagues who have responsibility for housing what obligation there is on landlords to inform their tenants of their rights in respect of water charges. After all, this is quite a complicated issue and someone only has to say the words unmetered average household water charge and most people's eyes will glaze over.
Lots of pensioners, tower block residents and one-bedroom flat tenants have been overcharged by hundreds of pounds for their water consumption over many years; money that many people on modest incomes can ill afford. Unlike other utilities, water is a local monopoly, so people cannot go somewhere else for their water, which places more of a duty on the Government and the House to ensure that unfair charging practices are ended and justice is done.
On an entirely different matter, I could not complete a speech today without wishing Liverpool every success in the football this evening.
I was saying that the constituents who drew to my attention the position on household water charges felt that they had received poor service from Thames Water, and that advice given to them was inaccurate and incomplete.
One of the residents whose case I took up applied for a meter in May 2005 and was refused in July 2005. It was not until I took up her case in March this year that she was put on the average household charge. Her own telephone calls to Thames Water did not result in her being given clear or accurate information. Now she is on the average household charge, which saves her a bit in comparison with the water rates, but she is still paying over the odds, because the average household charge operated by Thames Water is the average of all non-business metered users and does not reflect the lower consumption that is typical of someone in her circumstances.
My review of my constituent's case and many others points to several things that need to be done. First, much clearer, more consistent rules on the operation of the water charging regime are required throughout the country; secondly, clear advice should be given to residents on the options that are open to them; and thirdly, for those who cannot have meters fitted, there is a need to have a charging regime as of right that takes account of their household type.
People who cannot have a water meter installed, whether because it is technically not possible or because their landlord will not agree to it, are eligible to choose to go on an average household charge. In most cases, that will save them money on their water charges compared with standard water rates. The savings can amount to a pound or two a week or, in some cases, more. The problem is that they have to apply for a water meter first, and then Thames Water tells them that they cannot have one but that they can go on to the average household charge.
The average household charge is badly publicised, so many people do not know about it. Water companies and landlords should be obliged to advise customers and tenants of their rights. People should be put on the household charge automatically if they cannot have a meter but would be better off not paying standard water rates. Hundreds, if not thousands, of residents in Oxford are losing out, and there must be hundreds of thousands losing out across the country.
The water regulator has responsibilities as well. I looked on the internet for the Ofwat briefing sheet on Thames Water charges—I have a copy with me that I will gladly leave with the Minister afterwards. There is no reference in it whatsoever to people going on to the average household charging scheme if they cannot get a meter.
As the experience of my constituent illustrated, the situation is especially unfair to Thames valley water customers who are pensioners. Even if they get on to the average household charge, no account is taken of household size, so they still pay over the odds. The residents of Lucas place and Remy place in Iffley village whom I mentioned earlier do not have their own washing machines, for example, but they still pay the same average household charge as much larger families in bigger properties.
It is not just pensioners who lose out. A letter was written to The Guardian "money" page last year by someone living in a one-bedroom flat in London. Their water bill, which was based on rateable values, came to £246.68 for the year. They asked for a water meter to be installed and were told that that was not possible. They were put on the average household charge of £244.78—a grand saving of £1.90 a year. However, as they pointed out, the Thames Water website said at the time that the metered charge for a one-bedroom flat would be only £148 for low consumption or £175 on average, so the complainant reasonably felt that they were being done out of at least £70 and possibly £107 a year. When challenged by The Guardian adviser, Thames Water said that any change would be too bureaucratic and costly to administer. Some other water companies, for example Anglian Water, do adjust the charge according to the type of property. If some companies can do it, why cannot Thames Water?
The water regulator Ofwat approved the charging policies for the water companies, so it too, has let down pensioners and people in small flats. To be fair to Thames Water, it obviously realised that its position was unsustainable and in an e-mail sent to me after I called this debate, it told me that it will introduce a tiered system of average household charges from1 April next year. If that fairly addresses the situation of pensioners and others in small properties, it is to be welcomed. However, for many customers of Thames Water, the system will be qualified by the knowledge that it is an admission that they have been overcharged for years. The new charging regime must be approved by Ofwat, but given that it approved the previous manifestly unfair regime, it will need to make an extra effort to show that it is insisting on a fair system for low-consumption customers who cannot get metres.
Section 142 of the Water Industry Act 1991, a copy of which the Library has provided—I am sure that the Minister keeps a copy close by him at all times—states that, under the terms of their licences, water companies must ensure that
"in fixing or agreeing charges...no undue preference is shown to, and that there is no undue discrimination against, any class of customers or potential customers".
I am not qualified to say whether the practices of Thames Water and the other four companies that operate a fixed assessed charge at the average metered level have breached the letter of the law, but they have infringed its spirit. Pensioners in shared blocks are the class of customers who have systematically lost out. Ofwat information note 20 explains the duty that section 142 of the 1991 Act refers to in these terms:
"Any charging method should be fair. The Director has a duty to protect the interests of customers by ensuring that there is no undue discrimination or preference in a company's water and sewerage charges. This means that a customer's bill should, as far as practicable, reflect the costs which that customer imposes on the water and sewerage systems for a supply of clean water, disposal of dirty water and draining surface water from the property and the highways".
That makes it surprising to me that Ofwat has accepted the undifferentiated average household charge for as long as it has.
First, I should like my hon. Friend the Minister to provide an assurance that he will personally look into these matters and use every power at his disposal to obtain a clearer, fairer and more consistent system of entitlement for those who cannot have water meters, so that pensioners do not pay over the odds. Secondly, I urge him to find a means, and to legislate for one if there is none to hand, for water customers to have the right to get accurate information on the charging options open to them, with redress where that does not happen. Thirdly, I should like him to discuss with his colleagues who have responsibility for housing what obligation there is on landlords to inform their tenants of their rights in respect of water charges. After all, this is quite a complicated issue and someone only has to say the words unmetered average household water charge and most people's eyes will glaze over.
Lots of pensioners, tower block residents and one-bedroom flat tenants have been overcharged by hundreds of pounds for their water consumption over many years; money that many people on modest incomes can ill afford. Unlike other utilities, water is a local monopoly, so people cannot go somewhere else for their water, which places more of a duty on the Government and the House to ensure that unfair charging practices are ended and justice is done.
On an entirely different matter, I could not complete a speech today without wishing Liverpool every success in the football this evening.
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