Looks good:
Millions of households could be forced to install water meters under proposals being considered today by ministers.
Pricing a scarce resource by usage. Sounds like a good idea doesn’t it?
Usual caveats, there should be a minimum amount that’s included in the basic tariff but consumption over that charged per unit used, great idea to me.
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Suggestion that households will have to pay £40 for the compulsory privilege. And it will only apply in drought-prone areas. That’s the Conservative south-east, then.
Tim, I agree that the economics of meter based charging are good. However, I bet compulsory metering would also mean higher water bills. As I understand it, only those who live alone or those who live in very expensive houses could plausibly have equal or lower water bills on a water meter compared to existing flat tariffs (though I’m not sure about Portugal!).
Tim adds: We are metered here. Two people in a flat, about €35 every two months. Goes up substantially when the grandchildren come to stay.
Whilst I agree with Tim’s sentiments on water metering, it surely can’t be right that a government minister should decide whether people should be metered or not. If the extra cost of metering saves a greater cost in the supply of that water, won’t the water comapanies do it anyway (and if not, they won’t)?
Harry, I don’t think your assessment of costs is correct. I believe it’s true that water metering cuts the bills of most, partly because people use less (which reduces the cost of supply) and partly because a comparatively small number of users have very high usage and, when unmetered, they tend to be subsidised by everyone else.
My experience (normal family, normal house) is that my bills went down and that we are more careful not to waste water.
HJHJ,
I should have said that the relative costs depend on which water board area you reside in. In my area (Wessex Water), the relative costs I mention really do apply, and that is based on a very low levels of water use (I think we worked it out using about 110 litres per person per day against UK average of 150. Trust me, 110 is very parsimonious and difficult to achieve). So the comparison already takes into account any reduced water consumption (I remember OFWAT saying it is about 10% if meter is installed, sorry I can’t remember the reference). Again though, this is clearly dependent on your water board area.
With respect to the cost of supply, surely average costs increase if supply is lower? The water industry is characterised by a high proportion of fixed costs as opposed to variable costs.
I agree with HJHJ. If we had a free market in water the government would not need to intervene at all.
In Greece, where water is obviously scarce, per month usage over a certain amount is (or has been in the past) punitively priced so as to force people to use water wisely. Not sure on the figures but every cubic metre over the limit was certainly priced at some multiple of the basic rate. I don’t know if this system is still in force, but I would expect that it is.
As for the UK, as I understand it, a component of my Council Tax is levied for water supply and sewerage, if that’s a word.
I therefore expect my council tax bills to fall by a commensurate amount when the water meter is installed on my supply.
Mr Eugenides, charging for water and sewerage using council tax only happens in Scotland, where the only water company is still a public enterprise and, unsuprisingly, water bills are the highest in the UK. They’ve got a fair bit of water up there though.
One result of metering users’ consumption is that the suppliers’ distribution losses can be known (well, much better estimated). The percentage is often a shock.
Not too much sympathy here. Be grateful that water comes out of your taps at all, unlike mine half the time.
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