I congratulate my hon. Friend the Member for Isle of Wight (Mr. Field) on securing time for a further debate about water metering trials, which are being conducted throughout the whole of his Constituency. He has made a number of points with care, and I shall do my best to respond to them in detail. If time prevents me from dealing with all of them, I shall write to him with more details.

This trial, the largest of the 12 metering trials taking place around the country, has been the focus of much attention both within and outside the water industry. My hon. Friend has spared no effort in pursuing a number of important issues that have arisen as a result of the trial with Ministers, senior officials and Southern Water, and he has been steadfast in the pursuit of his constituents' best interests.

As the House will be aware, the water industry has used rateable values as the basis of charging for its services for many years. That basis provides only a rough and ready link with consumption and, like the old system of domestic general rates, it has resulted in anomalies and unfairness, particularly for pensioners and other small households living in houses and flats with high rateable values.

With the abolition of domestic rates last year and the ban on the use of rateable values as a basis of charging for water and sewerage from the year 2000, there is a need for the water industry to move towards new methods of charging for its services. Metering, a flat rate charge per property and banding of property with a flat rate charge for each band are the main options being considered. The House will be aware that the debate on various charging options is being carried forward in a consultation paper that the Director General of Water Services issued last year.

Each water company must make its own choice of future charging method in the light of all the circumstances in its operating area. Although, with normal rainfall, we are not yet near the limit of supplies, even in dry areas, it is an obvious fact that the supply of water is finite. One of the most effective ways of reinforcing the prudent use of water, by discouraging indiscriminate use and waste, is to relate charges to the amount of water used.

I believe that metering is potentially the fairest option, as it extends the normal principle that customers pay for what they use. It is, of course, the method used in relation to other utilities, such as gas and electrictity. My hon. Friend will be aware that a recent survey by the Consumers Association of its members on the Isle of Wight confirms my belief; 66 per cent. or so of those responding expressed a preference for water charges on the basis of a metered supply. My hon. Friend made it clear that some of those on the island who are still unmetered see the benefit of having meters fixed.

The number of domestic properties that have a metered water supply is growing all the time. In addition to the 61,000 properties in the metering trials, many households have opted to have a meter installed on a voluntary basis, and many water companies now require new properties to be fitted with a meter as a condition of connecting a water supply.

The metering trials were set up in 1988 to provide information on the costs and problems of implementing a general system of metering and to determine the impact of charging by volume on consumption. The main aim of the Isle of Wight trial is to establish the practicality and costs of metering on a large scale. It is also designed to investigate the advantages and disadvantages of internal and external metering. It is the only large-scale trial in the programme, involving around 52,000 properties. The installation phase is almost complete, and about 94 per cent. of the properties on the island have been metered.

It is, of course, inevitable that a fundamental change in the basis of charging for water, from rateable values to charges based on the volume of water used, means a shift in the incidence of payment between households. My hon. Friend will be aware that, in the small-scale trials, about two thirds of customers on average are paying the same as, or less than, they would under the rateable value system of charging. Similar information is not yet available from the Isle of Wight because not all customers have been charged on the basis of metered use for a full year, and those that have may not be a representative sample.

Nevertheless, an analysis of some 7,750 annual metered charges for 1989–90 on the island has shown that only about 10 per cent. are paying £50 or more per year more than they would have done under the rateable value basis of charging. This compares with about 11 per cent. of customers in the small scale trial areas. I accept that the Isle of Wight sample may not be representative of the whole, but at this stage I have no reason to believe that, in general, the effect of metering on the Isle of Wight is any different from that in the other trial areas.

My hon. Friend is aware that the charges scheme for the Isle of Wight provided a number of safeguards designed to protect the interests of customers. These included a limit on the amount by which charges can be increased, and provision for the tariff to be reduced if income from the trial exceeds what would have been received from charges based on rateable values for the island as a whole, provided that the increased income did not arise from increased consumption caused by abnormally dry weather conditions.

I know that the question of income from the trial has raised particular concern. Monitoring this safeguard poses some difficulty, because not all properties were metered during the first year of the trial, and during this period customers would have been billed variously on rateable value, on part rateable value and part metered consumption, or wholly on metered consumption. This has made it difficult for a proper comparison to be made. In addition, certain information about a water company's operations is commercially sensitive, and it would be improper to make it public.

However, my hon. Friend will be aware that, in order to achieve the same level of income as would have been received under the rateable value charging basis, the trial tariff was determined on the basis of the average consumption per household on the island. He will also be aware that the average consumption is running well below the level assumed when the original tariff was agreed. There is no reason, therefore, to doubt the assurance that my Department has received from Southern Water that its income has not exceeded the level that would have been recovered from rateable value-based charges.

I am aware of speculation that Southern Water might increase the charges to compensate for any loss of income. There is no provision in the charges scheme for an increase in the tariff on that account. A proposal to do so would require an Amendment to the charges scheme, which can be made only with the approval of my right hon. Friend the Secretary of State, following consultation with all customers. I understand that the proposed increase in the trial tariff for 1991–92 falls within the limits on increases provided for in the present charges scheme, and that Southern Water is not proposing to seek approval for a further increase.

My hon. Friend has expressed concern over the effect of the rising block tariff on those people who have a need to use large amounts of water. I should explain to the House that the particular tariff used in the Isle of Wight trial is designed to encourage the use of water for essential purposes but, at the same time, to limit non-essential usage. All customers pay a standing charge. The first 90 cu m of water used each year is charged at a preferential rate, and all usage in excess of this amount is charged at a higher rate.

The amount of water charged at the preferential rate was calculated to cover the essential water requirements for a household of three people. This was to the benefit of most customers, since the average household size on the island is less than three people. I accept, however, that this tariff places a relatively higher burden on large families and those who have a need to use larger amounts of water than normal because of a disability or medical condition.

Concerns about the rising block tariff were raised at the public meeting that my hon. Friend arranged in conjunction with Southern Water last December. I understand that Southern Water has taken note of what was said at that meeting and is prepared to adjust the tariff so that the allowable increase in charges for 1991–92 will not bear so heavily on large users. It is proposing to increase only the standing charge and the preferential rate, leaving the higher rate at its present level.

The effect of this is that, at the average level of consumption on the island, the overall increase in water and sewerage charges will be 14·7 per cent.—which is in line with the average increase in regional charges generally. The increase for larger users will be less. For example, at 200 cu m, the increase will be only 10·4 per cent. It is inevitable, of course, that low users will pay proportionately more. Households using 80 cu m, for example, will face an increase of 16·7 per cent. But even at this level, the increase works out, on average, at less than 5p per day, and, in general, it is the smaller households that have gained most benefit from the change to metered charging.

I am sure that my hon. Friend will welcome this move towards reducing the differential between the preferential and higher-rate charges. I appreciate, however, that it does not fully allay his concern about the level of charges faced by large low-income families and those people who have a need to use larger than normal amounts of water because of a disability or medical conditon. He is aware that my Department has collected information from the trial areas about the number of households facing substantial increases in Bills as a result of metering together with information on the number of people in those households, and whether they are in arrears with payment, in an effort to gauge the possible extent of the problem and to see whether a small social survey was justified.

I have to say that there have been considerable difficulties in making any meaningful assessment of the information from the Isle of Wight trial. That is mainly due to the fact that few customers provided Southern Water with information on the size of household when the properties were surveyed prior to installation of meters. However, based on such information as is available from a relatively small sample, it has been estimated that about 1·5 per cent. of households on the island consist of families with three or more children who are paying £50 or more than they would have done under the old system of charges based on rateable value. It has, however, not been possible to put a reliable figure on the number of households in arrears with payment.

My hon. Friend referred to a commitment given by my hon. Friend the Member for Lewisham, East (Mr. Moynihan), when he was Under-Secretary for the Environment, to pursue the question of including increases in water charges in the uprating of income support. I can assure him that this matter has been discussed extensively between my Department and the Department of Social Security. I am aware that the Social Security Advisory Committee has recommended an increase in income support rates by an amount greater than would otherwise be the case in recognition of the fact that water charges are increasing faster than the rate of inflation. I am sympathetic to that recommendation, and we are pursuing it with the Department of Social Security. However, my hon. Friend will of course appreciate that that is one of many demands on public expenditure and will have to be considered alongside those demands.

My hon. Friend raised a number of other points about which I promise to write to him in detail. Those points ranged from the position concerning church halls to hygiene. However, I hope that he will have been reassured by my comments, by the fact that we continue to give attention to his concerns and that my hon. Friend the Minister for the Environment and Countryside has accepted an invitation to visit the island on 30 April.

I congratulate my hon. Friend on bringing the metering trials once more to the attention of the House. As he has said, they will continue well into 1993. A great deal of information has already been collected and published about the cost and problems of installing meters. We are anxious as far as possible to resolve any outstanding difficulties that may still remain.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes past Twelve o'clock.