On 4 April I announced my intention to enable water companies to continue to use rateable values as a basis for charging for water beyond 2000. However, I believe that the use of rateable values will gradually reduce as customers and water companies alike decide to switch to water meters.
Is my right hon. Friend aware that distortions are emerging in people's water bills due to outdated ratable values? That is compounded by the frustration at the cost of water meters, when electricity and gas meters come free. Is he planning a revaluation of domestic properties?
Late-valued new housing—late-valued before 1989—has always tended to have a higher rateable value than other housing. That distinction has existed for some time. There is nothing new about the problem, which is simply that if we do not continue with that system the only alternative would probably be to allow council tax banding to be used. The hon. Member for Truro (Mr. Taylor), who speaks for the Liberal party, seems to be saying yes to that. However, I have examined the figures from Severn Trent Water and 1.4 million of its non-metered water consumers live in houses in bands A or B; in other words, they are the poorest people. Of those, 900,000 would pay more for their water if we changed the basis to council tax banding. Something like half a million of them would pay 50 per cent. more. That is the Liberal policy to replace rateable values. I think that we should keep rateable value until more and more people acquire meters. Metering must be the sustainable development answer.
Notwithstanding the Minister's comments, I have seen pensioners in tears because they cannot pay their current water rates, which can be as much as 15 per cent. of their annual income. They cannot afford that. The council tax banding system, on which the Minister elaborated, would allow many such people to benefit if, as with council tax, help were available for people on low incomes and people living alone. That is why the old rating system was ultimately replaced by council tax and the Government did not revert to it after the poll tax. Given that the same problems occur with water rates, the same solution should surely apply.
One of the fascinating things about the hon. Gentleman is that it does not matter what the facts are, he still asks the question that he intended to ask before he heard the facts. The Liberal party must face the facts: if we moved to council tax banding, the people who would be hurt most would be those in the smallest and least taxed houses, many of whom would pay much more. If that is Liberal policy, I am prepared to advertise it widely. Everybody ought to know that the Liberals, having been given the facts, want to make poorer people pay more. That is what they want, and that is what we shall pin them with.
The sensible people in the west country are the Conservative Members who have been pressing the water companies which cover the area to be much more efficient, to ensure that they charge as little as possible and to offer people the alternative of water metering. I hope to see more companies following the example of Southern Water, which has reduced the cost of installing meters. That must be sensible.
My right hon. Friend will be aware that many of my constituents and other people throughout the country are worried about the cost of installing a water meter. However, those who have installed meters usually find that there are considerable reductions in their bills. Can my right hon. Friend make those facts more widely known and do more to encourage water metering, which must be right in terms of conservation, especially in times of drought and difficulty?
I am sure that we should consider that idea carefully. In the Anglian region, for example, if we do not opt for a mechanism to restrict the use of water more sensibly, we shall need huge new reservoirs and we shall have to draw down water from half-way across the country—in other words, we shall have to do precisely what any sense of sustainable development would forbid. My hon. Friend is right: I shall look for better ways to advertise the fact to the public and to persuade some of the water companies with high charges for installing meters to change their views.
Why does the Secretary of State permit the water regulator to continue to try to force water metering on companies which are reluctant to introduce it and on householders who are even more reluctant? With about 20 million households in the country, would it not cost between £1 billion and £1.5 billion to meter every house in Britain, and are there not better ways of spending that money to benefit the environment?
First, I cannot tell the water regulator what to do in any circumstances. That is why he is an independent regulator, and I have no intention of changing that. Secondly, no country in the world that is concerned with sustainable development is not having to face the fact that water is a resource which needs to be metered. The hon. Gentleman would be laughed out of any international conference to which anyone was mistaken enough to send him if he suggested that we should turn our backs on sustainable development for water.
The hon. Gentleman has no reputation in the environment world, and one of the reasons for that is that he will not face up to reality. Even if the figure that he gave were true, that amount would be spent over 25, 30 or 40 years. People would be able to conserve water during those years, which is necessary in parts of the country where we are bringing water long distances. We are building large reservoirs, which the Labour party always opposes on the ground that they are against environmental concerns. The hon. Gentleman has no policy on this issue.
Does my right hon. Friend welcome the fact that South West Water has now reduced the cost of installing water meters to below £200? Is that not good news for our constituents in the south west? Will he leave no stone unturned in trying to reduce the general level of water charges in the south west, which remain of great concern to my constituents?
I am pleased that water metering charges have gone down by more than one third, and I note that that was the result of a concerted effort by Conservative Members in the south-west. I hope that South West Water will get the charges down even further, and I am sure that there are ways to do so. I hope that it will also look at ways of helping people to amortise the cost of water meter installation over a reasonably long period so that they can get the benefits immediately.