HC Deb 22 December 1954 vol 535 cc2828-38

3.30 p.m.

Mr. W. R. Rees-Davies (Isle of Thanet)

I am indebted to you, Mr. Speaker, for the opportunity to raise today issues involving our national water supplies, and I wish to draw the attention of the Government to the immediate need for a clear cut national water policy in certain respects.

In no other industry is the Minister given the specific duty to promote a national policy as exists under Section 1 of the Water Act, 1945. It seems clear that there are two main lines of progress for this industry. Firstly, is the completion of a piped water supply to those rural areas at present not supplied; and, secondly, the merger or combination of some of the smaller undertakings to ensure maximum efficiency by this reorganisation. This merger must, in the words of the former Parliamentary-Secretary, pay full regard to local feelings and to the long traditions of many of the water undertakings.

While I desire to outline briefly the satisfactory background of our water supply, it is this latter issue, namely, the method of administrative reorganisation, to which I wish to draw attention today. I should like to pose at the outset three specific questions for the Minister. First, have the Government given favourable consideration to the admirable report of the British Waterworks Association on the organisation of this industry; second, will the Government pursue the general lines of that report as contained in its recommendations, so far as organisation of the industry is concerned; third, do the Government accept the principle that there is no need to create regional water boards where there is an efficient local undertaking upon which to build, and through whose services any required merger may be effected. These three propositions, to my mind, raise the main issues for the administrative reorganisation of this industry.

I now turn briefly to the background. Britain supplies to a proportion of the population more water than does any other country in the world. It supplies the purest cheapest water in the world. Actually less than 5 per cent. of our people are without a piped supply, whereas in America the figure is 40 per cent., and in France as many as half of the people are without such supplies. On an average, the private person consumes 10,000 gallons of water each year, at a cost of roughly£1 per head. Within the next decade, the problem of supplying piped water for the remainder of the rural dwellers should be effectively conquered.

In the summer, the quantity of water supplied daily reaches the staggering figure of over 2 million gallons, and each day the average consumed per person is between 40 and 45 gallons for all purposes, including industry. No suggestion, therefore, can be made that the supplies of water afforded by the authorities in this country are inadequate, or that the price of between 1s. and 2s. per 1,000 gallons is not impressively cheap. I should point out also the fact that the price of 1s. per head per week for a house of a rateable value of£21 per annum is only a 1¼d. greater than the figure in 1929, when it was 10¾d. Therefore, the cost is hardly any greater than pre-war.

The storage capacity in England and Wales is between 2 million and 3 million gallons, enough to supply the whole country for 100 days, even if every well became dry and every river stopped flowing. The position of the suppliers is as follows. Four-fifths of the people in England and Wales are served by only 120 undertakings. Only the remaining one-fifth therefore is supplied by 800 small undertakings. The major problem with which I wish to deal in this industry is this large number of small undertakings which, in some cases, lack the necessary resources for efficiency. Size alone is no criterion, but it is generally agreed that art undertaking should be large enough to employ qualified technical staff and up-to-date equipment.

However, water supply, by the nature of water, is essentially a local service. Water cannot be generated; it must be taken from where it is found; nor can it flow uphill without the aid of pumps, hence levels and pressures are of overriding importance. The position was admirably stated in the White Paper in 1944, called, "A National Water Policy," and I quote the following terms: The supply of wholesome water as a public service has a long and creditable history in this country.… In most of our great cities the water undertakers, whether municipal or company, can look with legitimate pride on what has been achieved. The scientific knowledge, technical skill and enterprise, which has gone to the supplying of water to London, Birmingham, Bristol, Liverpool, Manchester and Sheffield, not to mention other cities, have been of the highest standard and the local administration of these larger undertakings calls for no apology. This is true in varying degree in many of the smaller towns"— It is true, may I say, in my own constituency, in the case of Margate and Ramsgate— and also over large parts of the countryside. Control of water is almost entirely in the hands of local authorities, which supply over 80 per cent. of the total population, and over 250 of the larger municipal undertakings have special Acts of Parliament which authorise water supply in their areas. There are also about 100 water companies operating under the authority of Parliament and supplying just under 9 million people in England and Wales, but there are very many smaller and uneconomic companies, often operating in rural areas. That is the background of the problem with which I wish to deal.

The problem of organisation can be stated thus. What method is best suited to achieve the maximum efficiency and ensure the right size of unit? To achieve the right size unit, particularly in regard to the smaller undertakings, will require amalgamations, and the Socialist answer to this is nationalisation.

Mr. Deputy-Speaker (Sir Rhys Hopkin Morris)

It is not quite clear to me, but it appears that re-organisation will involve legislation in some form or another. If it does, it cannot be dealt with, but if the hon. Member can deal with the matter without involving fresh legislation, that will be in order.

Mr. Rees-Davies

The powers are all contained in the Water Act, 1945, to effect the necessary reorganisation, with which I am dealing.

The Socialist answer to this problem, as set out on page 19 of "Challenge to Britain," is nationalisation, and I wish to quote the three appropriate lines: Labour will bring all these undertakings into public ownership, and will place the responsibility of water supply upon the Central Government, creating such regional organisations as are necessary.

Mr. E. G. Gooch (Norfolk, North)

Why not?

Mr. Rees-Davies

Nationalisation is wholly unsupported by anyone with knowledge of water supplies, is opposed by the local authorities, by every professional association, by the British Waterworks Association and by all professional men who have any knowledge of the industry. The Labour Party put forward the further suggestion of a national water grid, which is likewise opposed by all those people who have knowledge of water undertakings, for the simple reason that the cost of pumping throughout the country, plus the cost of the mains, would make such a suggestion wholly uneconomic.

The existing alternative, and I think this will reveal the point which you have just put to me, Mr. Deputy-Speaker, is the implementation of the Water Act, 1945. The immense duties placed upon this particular Ministry have proved too great for a Department of State, and it is quite clear that, over the past seven years, this Ministry has been incapable of providing any clear administrative policy for the water industry in the present structure of that Ministry.

The Water Act, 1945, the only Act to impose such duties, placed upon the Minister in Section 1 the duty to promote the conservation and proper use of water resources in England and Wales, and, in Section 2, provided for the setting up of a Central Advisory Council, which has done most admirable work through reports on gathering grounds, on the questions of water pollution, the purifying of water and also main drainage. This Committee, therefore, is not mainly concerned with the effective day-to-day working of water authorities, nor with the administrative basis of the water industry.

The duty of administrative policy is placed by the Act on the Ministry, and it was intended by that Act, which both parties accepted, that advisory committees should be appointed to assist in carrying the burden. These committees have not been appointed, and, although the work of the Central Advisory Committee has been carefully and well carried out, no reorganisation or amalgamation that seems to me worth while has been effected in this industry at all.

The British Waterworks Association and the Water Companies Association, which are bodies of experience, have reported on the administrative changes which are necessary to assist the Minister in complying with these duties. In particular, they recommend that a body such as the Water Commissioners, who are somewhat analogous to the Electricity Commissioners, should be set up as a coordinating body to have general jurisdiction over the question of water supplies in this industry, and to advise the Minister on the problems while in no way affecting the structure of the ownership of the industry in this country. This body would be directly answerable to the Minister, and its duties are admirably set out in the Report of that association.

What action, therefore, is now required by the Minister? I envisage the following. While everybody can fully appreciate the immense burdens which have fallen on the Ministry of Housing in recent years, it is none the less true to say little effective action in this field has been taken. The excellent advice which was tendered as long ago as 1951 by the British Waterworks Association has not yet been adopted. The Ministry should give a lead to ensure the necessary amalgamations and mergers of small companies with larger undertakings in order to obtain maximum efficiency.

The amalgamation in Mid-Northampton, with its delays and difficulties, had a deterrent effect upon the Ministry. The effect of that was to bring about an erroneous view in the Ministry and in the minds of others that success could be achieved by the setting up of regional boards. This view is opposed both by the British Waterworks Association and by the Water Companies Association in their Reports. The machinery of the Act should therefore now be used by the Minister in order to ensure these necessary mergers.

Success will also be achieved by the provision of a co-ordinating body to advise the Minister, and in that way voluntary amalgamation will be able to be obtained in the overwhelming number of cases. Where that cannot be obtained, then enforcement action may be taken. Water supplies, however, must remain essentially a local service. Local prestige and pride are largely at stake while so many of our local authorities have successfully maintained such water undertakings.

The regional boards, therefore, should not be the policy of the Government as they conflict with the principle of local services, and such boards would not have either the skill, or the experience which are already manifest in existing undertakings in this country, both under private enterprise and under local authorities.

I wish to conclude by drawing the analogy which affects my own, constituency, and Kent as a whole, and that is the recent unfortunate friction which has arisen in the case of the Kent Water Bill. That friction draws vivid attention to the failure of the policy of the Ministry to achieve the objects of the Water Act by effective administrative action. Had the amalgamations, within the frame work—

Mr. Deputy-Speaker

That Bill has passed this House and is now before the other House.

Mr. Rees-Davies

I am well aware of that, Mr. Deputy-Speaker, and am using it purely as an analogy of the failure to use the machinery on the national issue. I am concerned with it in this aspect and in relation to the failure of the Bill to fit within the framework generally of water policy. It is as an illustration that I am now concerned with the Bill.

Had the amalgamations, within the framework of private industry, been obtained, the need for the Kent County Council Water Bill would have been obviated. As it is, a comprehensive scheme was prepared, and the effect was that the Kent County Council picked up a sledgehammer with which to crack a nut. The result is an unnecessary Bill, causing unnecessary friction, has been put forward to create an unnecessary board in order to add unnecessary expense to the ratepayers.

Mr. Deputy-Speaker

The hon. Member is now discussing the Bill.

Mr. Rees-Davies

I am discussing the effect of the passage of the Bill, Mr. Deputy-Speaker. I referred to it merely as an illustration, because it brings vividly before one the whole problem of the necessity for this action under the terms of the Water Act.

In fairness, I would say that there were two strong undertakings, Margate and Ramsgate and two small and weak undertakings, including the Birchington and Westgate Company. The former strong undertakings can be merged by the action of the Minister under the Act with the smaller undertakings. If that had been achieved, local authorities could continue to meet local needs, and friction would be obviated.

In summing up, I invite the Minister to use the machinery of the 1945 Act in order to secure the necessary mergers, as he thinks fit. Secondly, he should accept the broad recommendations of the British Waterworks Association's Report to set up such independent bodies as may be necessary to give guidance on the manifold problems of water which are entirely subject to the Minister's control. Thirdly, and finally, he should state clearly the Government's intentions on their opposition not only to nationalisation and to a national water grid, but also to the setting up of regional water boards, where efficient undertakings are operated and where local needs and local people are able to meet the necessary problems.

3.47 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. W. F. Deedes)

I am grateful to my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies) for raising this subject today. It is a topic on which discussion is welcome and useful. I am grateful to him also for having given me notice in advance of the points he proposes to make, as this has enabled me to meet at least some of them.

As my hon. Friend has indicated, a great deal remains to be done in this field. That is indisputable and, in this immense field, hardly surprising. Neither he nor anyone else should, however, overlook how much has been done. Perhaps I might start off by saying a word about the achievements in this field, which not everybody recognises.

There has been an immense and surprising increase in water consumption during the last 12 years. One example is from Birmingham, where the daily consumption increased from 37 to 49 million gallons. In the Tees Valley the increase is from 19 million to 28 million gallons, and in the Metropolitan Water Board area from 299 million to 320 million gallons. On top of that, big social and industrial developments have had to be met, as well as the heavy arrears created by the war.

Since 1945, that is in nine years, the total value of water supply schemes authorised in England and Wales has been£93,064,072 in urban areas and£48,392,403 in rural areas. Since 1945, over 28,000 miles of mains have been laid, amounting to an increase of one-third in about eight years. Our storage capacity has gone up by 25 per cent. At the time of the 1951 census there remained 2¼million people—more than 5 per cent. of the population of England and Wales—living in households with no piped water. About three-quarters of that number were in rural areas.

As my hon. Friend has said, there remains a formidable task, but it should be laid against the background of what has been done. The capital costs of water supply schemes started in England and Wales since the war amount to£142 million. The present rate of start is£20 million a year. Obviously, some of the rural areas still present an enormous problem, and considerable expense, both for central and local government, because we contribute generous assistance. The rural share is not unsatisfactory, because out of the£142 million it is£48½million. That proportion is being maintained. It should not be many years before piped supplies are extended to virtually all the remaining sizeable villages.

So much for what the military call the "Q" side. Now I wish to say a word on what they call the "I" or Intelligence organisation. A great deal has been done, as foreshadowed by the 1944 White Paper and provided for by the 1945 Act, to collect and sift information about needs, sources and supplies. Engineers on the staff of the Ministry have completed a series of surveys in almost the whole of England and industrial Wales, and that does not include the river gauging by the river boards. The body of information so far built up offers most valuable guidance for the future.

Now I come to what I know my hon. Friend is principally interested in, which might be called the "A" side, or Administration, of the industry. He asked me to answer three questions, the principal two of which were related to the report of the British Waterworks Association. We have, of course, studied this very stimulating report, and how far we have followed its recommendations I hope will emerge to my hon. Friend as I go on to explain what our policy has been and is.

To begin with, he will know that the Central Advisory Water Committee was appointed in 1946. From 1951 its sittings were suspended for reasons of economy, but, as has been recently announced, it is to be revived. It will be invited to set up a sub-committee to advise the Minister on all questions relating to the collection, collation and use of information about water resources, and I may add that we are hoping to have substantial scientific representation on the sub-committee.

I am fully aware that some people, including my hon. Friend, I think, would like to see something bigger and stronger than the revived Central Advisory Water Committee. This was the point of much that he was saying. I would only say that it is generally agreed that central direction and co-ordination are necessary for the proper planning and use of the country's water resources. Various types of organisation have been suggested which could carry out this function and be either semi-independent of or responsible to a Minister.

Experience with central bodies of this kind in other fields causes one some doubt on the effectiveness of such an arrangement. If the Minister is to have ultimate responsibility and be answerable to Parliament, he cannot hand over completely his duties with regard to the whole field of work. If, on the other hand, he retains a great measure of responsibility, the establishment of another central body as well as the Department means that there are three sets of people involved in the industry instead of two.

The Ministry has had a long and close association with the water industry since the days of the Local Government Board, and I cannot accept the suggestion of my hon. Friend that our onerous duties have led to our incapacity to meet the requirements of the water industry. There is no reason why a Government Department should not be able to carry on the wider duties of co-ordination imposed on the Minister by the 1945 Act. The appointment of the Central Advisory Water Committee ensures that the Minister can call on the advice and knowledge of all the different interests and organisations connected with water resources and supplies.

My hon. Friend had something to say about the joint regional advisory committees. The 1945 Act made special provision for the establishment of these advisory committees. Subsequently it was decided that information should first be collected in the engineers' surveys; and no statutory committees came into being. There is no doubt that these regional advisory committees could play a useful part in the future, but we want to get the basic organisation right first. I can say that in certain areas a much clearer pattern is now emerging, and the ground offers better prospects for setting up some joint advisory committees. I hope that will be some encouragement to my hon. Friend.

I do not deny that the task of recasting this industry's organisation remains formidable. As my hon. Friend said, in 1945 there were nearly 1,200 undertakings and there are still over 1,000, 951 of them local authority undertakings. Since the 1945 Act, 121 water undertakings have gone out of existence. Some of the companies have amalgamated, some local authorities have taken over companies and some local authorities have combined, by agreement, into joint boards, such as the three which now, between them, supply a large part of Devon.

My hon. Friend suggests that progress might be faster. That is arguable, but it has yet to be shown that the 1945 Act cannot achieve it. We believe that it can and that it has yet to be put to the test. It has been suggested that it has already proved itself incapable of meeting the requirements, but we do not think this is so. If that were so proven when it was put to the test, certainly we should think again.

My right hon. Friend urges water undertakers to come forward with proposals, relying on the procedure which the Act offers. My hon. Friend has mentioned—and I will not follow him in detail—the Kent Water Bill, which is the most ambitious move in this category of reorganisation. But my hon. Friend knows as well as I know that that Measure did not reach its present stage without a tremendous amount of preparatory work and negotiations.

I stress that because it reflects on a suggestion that, given different powers, or by different methods, we could get reorganisation at the gallop. Local feelings play a very strong part in this, as my hon. Friend rightly said; and it is right and proper that that should be so, and it ought to be recognised. Many of these undertakings have long traditions of which they are very proud, and that, certainly, ought to be recognised, too.

There is more than one way whereby we can achieve co-ordination. I differ from my hon. Friend in thinking that perhaps the best way, within the framework of local government, may be the joint board, in which the authorities concerned are partners. The advantages of the joint board are that it safeguards local interests, offers a certain flexibility and, above all, secures a strong enough group to afford competent engineers and staff—and the engineer is the cardinal factor in efficiency in the water world. Moreover, such boards enlist the experience and the wisdom of those men and women who for many years have given generously of their services to local public service—work which is sometimes taken for granted.

In conclusion, I think all this holds forth a reasonable prospect. Bearing in mind the physical progress which we have made and to which I referred at the beginning of my speech, the prospect is far from discouraging.