Tory water meters 'will cost pounds 5bn'

LABOUR will this week accuse the Government of a "hidden agenda" to impose water metering on the entire country, at a cost to the consumer of pounds 5bn.

A report by the party's environment spokesman, Frank Dobson, will argue for water charges to be made part of the council tax system, removing the pressure on water companies to install meters.

Labour will say that council tax banding "needs modification to make the system fairer", and is likely later this year to propose two new bands - one at the top and one at the bottom of the scale.

Mr Dobson's report, called "Money Down the Drain", says that, at a cost of pounds 200 a time, installing meters in 25 million households would cost pounds 5bn.

Labour believes low-income families would suffer, and is not convinced of the environmental case for metering. Whereas the Government has argued that metering would encourage householders to conserve water, Labour says that three-quarters of leaks are from mains pipes, which would be unaffected by metering.

At present 93 per cent of all bills are based on the old rateable value, which dates back in many cases to 1973. Most new homes are automatically fitted with meters.

The Government refused to allow water companies to use council tax banding as a basis for charging, and initially ruled that they should not use rateable values after 31 March 2000. This stipulation was recently relaxed ,but it has left the companies with the option either of increasing the number of meters, or of using a very outdated form of banding based on 1973 rateable values.

Many water companies are dissatisfied. Wessex Water, for example, argued in a recent paper that "rateable value cannot be used for ever as it is already out of date". It wants a choice for the consumer "between a structured banded charge, preferably based around the council tax" and "a cheap or free meter option with a range of metered tariffs".

Ministers have been reluctant to allow council tax information to be used as a basis for additional charges, and have been sympathetic to the principles behind metering.

Mr Dobson's report argues: "The Government and the water regulator, Ofwat, are trying to force people to install water meters into their homes. Their hidden agenda is to force people to have water meters installed regardless of the cost or the impact on families who are hard up."

Labour does not oppose voluntary metering but Mr Dobson's report shows public opposition to the move. It says: "Of all the complaints which Ofwat received last year about billing, one-third were about metered supplies, despite the fact that metered supplies form only seven per cent of the total connections.

"This means people with meters are five times as likely to complain about their water bill as people without a meter."

Labour points out that in Scotland the council tax banding system is already in use. "In the meantime," its document says, "we will support legislation to enable water companies to continue to base their charges on rateable value."

Helen Jackson, chairwoman of the Parliamentary Water Group, and Labour MP for Sheffield Hillsborough, said: "Rationing water to peoples' homes is the wrong way to address the conservation issue. Pressure can be put on the companies and industrial customers to address the problem of leakage and the source of pollution, which also puts up the cost. Rationing water in the home is a price I would oppose full stop."