My Lords, the choice of meter type and frequency of meter readings is a matter for water companies and their customers. There is a trend towards smart meters. This varies by company and by customer, reflecting factors such as water scarcity and customer preference. Not all will benefit from sophisticated data and fitting new meters will affect the bills of all customers. Water companies therefore need to consider all the costs and benefits when taking any decision.
My Lords, I declare an interest as CEO of the Energy Managers Association. Our members are the ones who will be buying our water in the non-domestic marketplace. However, about 80% of all meters are not AMR or smart meters, so they cannot get the data on whether they are actually saving water or finance. As the purpose of deregulation of this marketplace was to introduce competition, will the Government ensure that this is kept under constant review? Also, following on from the Minister’s Answer, who is the customer? In the non-domestic sector the customer is the water retailer. There is no direct link between the company and the customer on the ground.
My Lords, the meter data, of course, belong to the customer. Therefore, any company wanting access will have to agree with the customer. Indeed, the new retail system that is coming in, which is designed to be of enormous benefit to the consumer, will provide an opportunity for greater competition. We believe that it will be of benefit, in this case, to the non-household customer as a beginning, but clearly we will consider how best we can bring better competition for the whole water market, because we think that competition in this sector is going to have benefits.
My Lords, that is certainly not the intention. As I have said, there is a trend towards smart meters. With the arrival of a smart meter, the tendency is to reduce consumption by about 10%. The water companies are very mindful of those customers in vulnerable circumstances. Schemes already exist to help 760,000 households, and the companies forecast that by 2020 they will help 1.8 million households. There are also social tariffs to assist them, which all companies will have by end of this year.
I declare my interest in the register. Does my noble friend agree that the voluntary use of meters has made a massive contribution to allowing people to manage their budgets? Will the Government go further and introduce legislative measures to tackle bad debt, which is adding £22 to the average bill for water services?
My Lords, I do not believe that it is the intention at this stage to introduce legislation. The water companies do not want to have bad debt; clearly it is not in their interest. But because there are such difficulties, particularly with customers in vulnerable circumstances, there are social tariffs. At the moment they help 30,000 households; by 2020, the companies forecast that it will be about 380,000 households. But, clearly we want to ensure that bad debt is reduced.
My Lords, I am afraid that I am not technical at all and will need to take advice on that. Because of the technicalities of all these matters, the best thing I can do is to write to the noble Lord with some of the very technical details. But it is a very pertinent point.
My Lords, genuine social tariffs would be enabled by universal smart-metering of water, but, unlike energy, we have no mandatory rollout of smart meters for water. Indeed, the smart meters for energy have some problems. Will the Minister consider having genuine smart meters—smarter than the current ones for energy—which incorporate water-metering, so that the next phase of mandatory installation would cover water as well as energy?
What the noble Lord says is probably the direction of travel. I know that at the moment the meters for water are, in many cases, not as sophisticated as those in the energy sector, but I am sure that this is going to be very important. I am particularly mindful of the non-household sector, particularly large consumers of water, where smart meters are definitely assisting in factories and commercial production a better understanding of where water is used. Of course, we all want to reduce water consumption, so it is very important.
My Lords, the noble Lord referred to social tariffs. Is it not the case that 14 of the 18 water companies have social tariffs but are failing to achieve their own targets for registering customers? Many people do not even know that that opportunity exists. At the same time, more than 1 million people are struggling to pay their bills. The noble Lord talked about the roll-out of social tariffs, but is there not a case for putting more pressure on the water companies to speed the process? After all, it is not such a difficult process. He talked about a deadline of 2020, but I am sure that it could be done before them.
My Lords, I assure the noble Baroness and your Lordships that the Government will continue to work with Ofwat and the water companies to ensure that they continue to provide a fair deal for all customers. Indeed, average water bills will fall by about 5% before inflation by 2020, while at the same time there will be a very considerable amount of investment.