HC Deb 16 February 1960 vol 617 cc1205-32

Order for Second Reading read.

Motion made, and Question proposed, That the Bill be now read a Second time.

7.0 p.m.

Sir Henry Studholme (Tavistock)

I appreciate that some of my hon. Friends will be very properly putting forward the views of water undertakings which disagree with the terms of the Bill, but I hope that when they have voiced those views they will agree to the Second Reading so that it can go upstairs to Committee and the details can be thrashed out. The Bill is right in principle, and is necessary for the water supplies of Devon.

As explained in the statement issued by the county council, the object of the Bill is to regroup the water undertakings in the administrative county of Devon and certain adjoining areas and to adjust the finances of those water undertakings so as to distribute the cost of the water supplies more fairly between the consumers and the ratepayers of Devon. At present, there are 22 water undertakings in the county, and the Bill proposes to reduce that number to three by reconstructing the North, South and East Devon Water Boards so that they absorb the smaller water undertakings in their respective neighbourhoods.

When the three water boards were formed and enlarged in 1945, 1950 and 1951, it was thought that the county ratepayers would have to contribute only a few pence in the £ towards the cost of the water supply. That would have been quite a fair division as between the county ratepayers and the consumers. But, as unfortunately so often happens, costs increased, and today the rate has risen to 1s. 5d. in the £, with the result that between 80 per cent. and 90 per cent. of the Board's net expenditure is now being financed by the county council, and the extraordinary position has arisen wherein the county council has no control over the rate of expenditure by the water boards. That is very unsatisfactory, and is wrong in principle.

I now want to read out what the Bill proposes, as described in the statement from the clerk to the Devon County Council. The statement says that the Bill proposes that the County Council should make grants related to rural capital expenditure on similar lines to the grants made by County Councils under the Rural Water Supplies and Sewerage Act, 1944, but more generous in amount. The balance of the deficiency of each board would be borne by the constituent councils of the board and, therefore, paid for out of the district rates instead of out of the county rates. The control of the board by the constituent councils will ensure that the funds of the board are used to the best advantage of both ratepayers and consumers. I have heard it said that the county council has rushed into the matter with undue haste and inadequate consultation, but that is not true. The question of regrouping the water supplies in Devon has been discussed for about fifteen years, to my knowledge, and the time has now come when if the county council had not introduced the Bill the Minister would have had to issue an order for the regrouping of Devon water undertakings. Some of these water undertakings, notably the North Devon Water Board, which have liked this, because they would then have had a local inquiry. But the county council is introducing the Bill because the present financial arrangements are extremely unsatisfactory as between the boards and the county council, and are wrong in principle. Regrouping cannot be settled unless the present unsatisfactory financial formula is altered, and it cannot be altered unless, at the same time, the regrouping is settled. Regrouping and financing therefore have to be treated as one operation, and that is why a Bill is necessary.

Mr. Robert Mathew (Honiton)

I hope my hon. Friend is not suggesting that the proposals contained in the Bill have been discussed for fifteen years. Various other proposals for regrouping have been discussed since the Minister received his Report in 1954, but the proposals contained in the Bill have not.

Sir H. Studholme

Of course, these proposals have not been discussed for fifteen years, but local authorities were given an opportunity to discuss them and to negotiate with the county council. Some authorities have done so and some have not. But the whole question of regrouping has been discussed for many years, and the time has come when something must be done.

I am not competent to discuss the financial formula and the various arguments of the different authorities. I would only say that 11 authorities oppose the financial provisions of the Bill and are trying to get preferential terms for their consumers. That is only natural. Two water boards, nine rural district councils and one municipal corporation, on the other hand, think that the county council is being unfair to them because it is proposing preferential terms to some of the urban authorities, which they themselves have not got. That attitude is also very human and understandable.

Of the three water boards, only the North Devon Board is opposed to the proposal to alter the basis of the county council contribution, and that board has produced an alternative formula. The other two boards do not disagree in principle, but they want to alter the basis suggested in the Bill to one which is more advantageous to themselves. Everyone wants to get the best deal he can, but the only thing the county council is interested in is in getting a just settlement between the conflicting claims of the different authorities.

I think I have said enough to show that this is not a simple question. The best solution would be to agree to the Second Reading of the Bill today so that it could be sent to Committee where the petitioners and the county council would have an opportunity to state their cases.

I am convinced that the time has arrived when the water undertakings of Devon must be reorganised, and three boards would seem to be the logical solution. We can no longer allow water to be taken piecemeal from the rivers. That is why I opposed the Torquay Water Bill last year. Our water resources must be regrouped into larger units. That is the only way in which we can meet the water needs of the county in the long run. A mass of small undertakings will not do that. This was shown very clearly in the drought in South Devon last summer. It was only because the South Devon Board came to the rescue of other smaller undertakings that we avoided a complete breakdown in the water supplies and the chaos that would have followed.

Hon. Members ask why there should not be voluntary amalgamations. That would be ideal, but voluntary amalgamations have failed sufficiently to reduce the number of water undertakings in Devon. It is therefore clear that some means of compulsory amalgamation must be used. It is no good putting off things any longer. Delay may be very dangerous, and if we have a dry summer like that of last year there might be a very serious water shortage in many parts of the county.

I hope the House will agree to the Second Reading. The Bill can then go to Committee, where any questions which have not already been decided as a result of negotiations between the different parties—any question, for instance, as to how much urban and rural consumers should contribute, respectively—can be decided after a proper hearing and a full discussion.

7.10 p.m.

Mr. Robert Mathew (Honiton)

My hon. Friend the Member for Tavistock (Sir H. Studholme), in supporting the Bill, said that this was not a simple question. That is a very great understatement. As he said, we have been considering this problem ever since the Water Act. My submission to the House tonight is that the Bill has been hastily conceived. It has been brought forward without proper consultation with the many interests, which, in a number of cases, are conflicting, and it is not a proper solution of the problem in the county.

I much regret that the House, under the Private Bill procedure, has to decide whether or not to take a decision on Second Reading on a matter which is a mass of detail. My hon. Friend referred to the great detail and complications of the various financial differentials proposed in the Bill. I should like to see our procedure allow a debate after the Select Committee has considered the matter in the very great detail which is necessary in view of its complexity.

It is some measure of the shortcomings of the Bill that, although my hon. Friend said that 11 local authorities have petitioned, in fact, out of the 47 local authorities in the county, 41 are objecting to the Bill in one form or another, either in their own name or through boards in whose areas they are. This large number of petitions, should the House decide to give the Bill a Second Reading, will come before the Committee in due course.

At this stage of the debate I am not of a mind to ask the House to reject the Bill, because I think that this whole problem and its many difficulties should be looked at by the Committee. I say that subject to anything that may be said by my hon. Friends or hon. Members opposite at a later stage.

My criticism of the Bill is that in its present form it has been hastily conceived and that there has been insufficient time for consultation. In fact, although we knew that a Committee was sitting during the latter part of 1958, and again during the first part of 1959, it was only in July that it was realised that there was an intention on the part of the Devon County Council to deposit a Bill in this House in what was then the next Session of Parliament.

In my own area, East Devon, there is very great dissatisfaction and the authorities are taking widely different points of view. Although an agreement might have been arrived at had there been time for consultation, it was impossible after the Bill had been deposited at the end of last year. To some extent the Devon County Council confronted the local water undertakers with a fait accompli, by saying, "There is the differential structure and we would like you comments now." There was very little time for proper consultation. I say with all respect to the Devon County Council that its public relations slipped up very badly.

I say that the Bill was inspired, as indicated by my hon. Friend, by financial considerations and financial considerations only.

Sir H. Studholme

I did not say "only". It is partly financial consideration and partly regrouping, as I tried to point out.

Mr. Mathew

My answer to that is the water engineering considerations have not been given enough attention. There has not been time to work them out. Too little attention has been given to the very great engineering problems. My hon. Friend said that he supported the Bill partly in principle and partly because of the financial considerations, but I should like to know whether the county council area of Devon will get one pint of water more as the result of the Bill. I think that the answer is "No". I hope that the Committee will have that very much in mind when examining the Bill.

I say that the Bill is inspired by financial considerations primarily from the point of view of the county council rather than the constituent local authorities and other water undertakers in the proposed areas. It ignores the recommendations of my right hon. Friend's own Report, the Vail Report of 1954, which went into great detail about the future of water in the county from the engineering point of view and recommended four boards—the East Devon Board, the North Devon Board, the Plym Area Board and the South Devon Area Board. It recognised the main financial fact which comes out if one looks at the Bill.

Devon is the largest geographical county after Yorkshire and the largest administrative county in the country and has a very sparse population so far as those areas are concerned. Yet Exeter, with a higher rate product, is left out, although the Minister's Report recommended that it should be brought into any regrouping in East Devon. I hope that the Committee will have this matter very much in mind. It goes to the root of the financial problem and to the root of the problem of getting agreement in East Devon, which is my own area.

In East Devon, there have been a great many consultations, in trying to come together with the Minister and his officials, towards some form of regrouping so that we may face, in the spirit of the Water Act, the problems of the future for supplying, in particular, the rural areas. Of course, there were some disagreements. At the time when the county council intervened partly on financial grounds we were moving towards agreement.

May I remind the House that the present Postmaster-General, the then Parliamentary Secretary to the Ministry of Housing and Local Government, in an Adjournment debate on this matter, said, in reply to me: Towards the middle of last year"— that is, 1958— it seemed that a fairly large measure of agreement—I do not put it any higher than that—had been reached. I think that there was also hope that the terms of the draft Order might be settled quite soon. As my hon. Friend knows, however, regrouping, not only in East Devon but throughout the whole of the County of Devon, is marking time due to the decision of the county council to examine the financial arrangements for water supply in the county as a whole."—[OFFICIAL REPORT, 23rd July, 1959; Vol. 609, c. 1682.] I am convinced that, given time, there could have been an agreement, but in the circumstances in which the Bill has been deposited and brought before the House such agreement was quite impossible because of lack of time.

So far as my own undertakings, which are to a very large extent self-sufficient, are concerned—the urban districts of Exmouth, Budleigh Salterton, Sidmouth and Seaton—I am quite certain that they were prepared to work out a proper agreement had they been given time. My right hon. Friend has assured me before now that Exmouth has a first-rate, viable water undertaking, pumping as much as 1½ million gallons a day. Already, under a bulk agreement, it supplies the rural areas and fulfils what I would call the spirit of the 1945 Water Act; but it stands to gain absolutely nothing by being taken over. I have no doubt that they would take a very different view of this Bill, or of any regrouping proposals that my right hon. Friend might propose, were Exeter included in order to bear its proper share of the financial burden.

The East Devon Water Board has done a very good job in supplying the rural areas. I have had a great deal to do with the Board over the last five years, and I want to pay tribute to it for what it has done. That Board should have been a nucleus of any regrouping in the East Devon area. It has the experience, and it has the officials to carry the work out. It is petitioning against the Bill because, again, it is dissatisfied with the differential arrangements. In fact, something has been introduced by the county council that does not please anyone at all in the county.

I am sure that a number of the petitioners who are asking for rejection of the Bill would, had it been put in reasonable form, have accepted the underlying principle, but I do not think that the county will benefit if the Bill passes into law in its present form. In East Devon, we have, on a long sea coast, a number of highly efficient undertakings. Tribute has been paid by my right hon. Friend and by the county council itself to the Exmouth undertaking, and I am absolutely certain that East Devon, which has throughout maintained a reasonable attitude towards the proposals, would have been prepared to negotiate to see that the financial arrangements were on a proper basis; and to support a regrouping proposal that faced the reality that water and engineering considerations should come first.

Sidmouth is included. It is a first-rate small undertaking, but I understand that it is not technically possible, because of geographical position, to bring one gallon of water into Sidmouth or to take one gallon out of it. Yet it is included in the Bill.

I hope that if the House decides to give the Bill a Second Reading, the Select Committee will study all these considerations with the closest care, because this is a bad Bill. It is bad, in my submission, because it is reasonable only from the financial point of view of the county council. It is wholly unreasonable from the point of view of the ratepayers in the rural areas, and it is wholly unreasonable for those areas where the local authorities already have their own water undertakings. It is also inequitable over the county.

I ask my right hon. Friend, if he intends to intervene in the debate, to say that the inclusion of Exeter is really very important to the rural areas. To refer, again, to the debate on 23rd July, I would remind him that the Parliamentary Secretary then said: With regard to the vexed question—as, indeed, it is—of the inclusion or otherwise of Exeter, my right hon. Friend has made it known that he does not look upon Exeter's inclusion as essential for the effective organisation of water supplies in East Devon, although I concede to my hon. Friend that the inclusion of Exeter was recommended in the 1954 water survey. It is true that if Exeter were to come in, it would be financially advantageous to the other authorities and I have no doubt that the county council is not excluding this consideration from the review which is at present under way."—[OFFICIAL REPORT, 23rd July, 1959; Vol. 609, c. 1683.] My information is that the county council did not settle, until very late, the all-important question whether or not Exeter should be included. For those reasons, I hope that the Committee will look at the Bill through a magnifying glass, and will come to the conclusion that this is a bad Measure and that other steps should be taken to deal with Devon's water problem.

7 25 p.m.

Mr. Jeremy Thorpe (Devon, North)

Those of us who are opposed to the Bill recognise the need for amalgamation and the strength of the case for rationalising the supply of water in the County of Devon. There are, however, three points that I want to make. The first relates to the background to the Bill and bears out all that the hon. Member for Honiton (Mr. Mathew) has said about the behaviour of the county council. I do not want to wash dirty Devon linen, but, as the hon. Member has said, the county council has succeeded in alienating 41 out of the 47 local authorities in the county. That is a fairly good percentage.

The reason for that alienation is largely the way in which this Bill has been introduced. The first indication that it might be promoted was given on 2nd February of last year. The next thing that happened was that authorities were invited, on 27th May, to a meeting, when they were told that there would be working parties which would discuss the financial arrangements in detail. No such working parties were ever set up, and no such meetings ever took place.

The next thing the local authorities knew was when they were told in the autumn of last year that the county council had decided to promote the Bill, first, because there was an urgent need so to do and, secondly, because otherwise the Minister might make an Order. They were summoned in October to Exeter. They were given a vague indication of what the differentials would be, but were told that the North Devon Board was not prepared to accept them as it had not yet had an opportunity of inspecting the undertakings that it would have to take over.

The next they heard was that the county council had decided to promote the Bill, and next day they were asked to send particulars so that that could be proceeded with: no detailed discussion, no working parties, no real, genuine attempt to get the voluntary co-operation of the constituent authorities involved. Finally, at the end of October they were given the figures proposed by the county council. It seems relevant that next Thursday there is to be a discussion at a meeting of the county council on a Motion that this whole Bill be withdrawn. The necessary number of signatures has been obtained to enable the matter to be debated.

I therefore say that the expense that would be involved, the amount of time that the Committee would have to spend, and the heat that would be engendered have all been brought about by the refusal of this county council to have adequate consultation—

Sir H. Studholme

I think the hon. Gentleman said that regrouping had not been considered until last February. It has been considered for years. It has been on the tapir for many years.

Mr. Thorpe

I am grateful to the hon. Member for Tavistock (Sir H. Studholme)—no doubt my speech has made the same wrong impression on him as his did on the hon. Member for Honiton (Mr. Mathew). This particular regrouping plan has not been considered since February last. There have obviously been other and voluntary regroupings, which I shall mention in a moment, that have been extremely successful, but these proposals were given to the local authorities only in February of last year and, as far as I know, there has been practically no detailed discussion of them with the constituent authorities.

The second point is that the North Devon Water Board is to take over four constituent authorities. One of them is South Molton. All I can say, in passing, about that is that it is a water authority with the lowest rate in the county and has connected 94 per cent. of the houses in its borough. It has supplied water free to its market for the last seventy years. On the strength of this asset—there are obviously others—it is to spend £30,000 in developing its market premises. This is the lifeblood of a rural town. What it will be faced with under the new scheme is buying its water from someone else and forcing the market to pay for it. That will have a tremendous economic effect on the life of this borough. At the moment, it is continuing with its extension in the borough and, in the course of the next two years, I think there will be only thirty houses left without piped water.

The third and, in my submission, as important a point as any, is the reaction of the North Devon Water Board itself. The hon. Baronet said that only one of the constituent water authorities objected. I should have thought the fact that one had objected was of vital importance. Not merely one of the constituent bodies, but one of the boards, which is told it is to be the taker-over, has objected. Its objections are strong and clear. It recognises the need for amalgamation. It was created by a Bill introduced in this House and promoted by Devon County Council in 1945. Since that Bill was introduced, under Section 33 of the resulting Act, five corporations have voluntarily joined the North Devon Water Board, five urban district councils, and one rural district council. Since 1945 it has brought water to 400 villages and hamlets and to well over 2,500 farms.

In every case, the expansion of its operating area was by voluntary agreement with the constituent bodies concerned. Those constituent bodies joined only on the basis of the 1945 financial proposals contained in that Act. They were that, after the 6d. rate, the balance of the deficit should be shared among the constituent authorities, which would include Devon County Council. Devon County Council had that obligation under Section 150 of the Act. When it appeared before the Select Committee in the House of Lords there was no suggestion at all that this scheme would be on a temporary basis; quite the reverse. Now, nearly fifteen years later, a complete variation of the financial agreement which the council itself agreed to in the Bill it promoted fifteen years ago is asked for.

It was on those financial terms that the constituent authorities voluntarily joined the North Devon Water Board. They felt, as do the constituent authorities now, that the financial terms had not been properly thought out and that Devon County Council wanted to make a take-over bid with inadequate compensation, that by reason of the financial provisions it was going to restrict rural development of water supplies which, Heaven knows, are bad enough at the moment, and that this is going greatly to cramp their style and operations.

This is the Bill which the county council is bringing in without any proper consultation with the authorities concerned. The Bill itself is a misnomer. One would have thought that it related to the whole of Devon. One would have thought, if one accepted the idea of a more equitable distribution of the burden of paying for water, that Exeter and Plymouth would have been included, but they are not to be included in this Bill. Any suggestion that this is going to be a proper county Bill is shown to be illogical in that respect because the two largest areas of population which are more able to help subsidise or assist in the cost of rural supplies are being deliberately left out of the Bill altogether.

It is a misnomer to call it a Water Bill. It relates to water, but it is not going to produce an extra drop of water throughout the whole of the county. I hope the Committee will bear in mind that this is an ill-considered Bill. It is illogical, the technical objections have not been properly met, there has been no real attempt at consultation, and the tremendous opposition which will follow will be as a direct result of the way in which the county council has promoted the Bill in the House. By Thursday the Committee may have had the news that this Bill has been withdrawn if the county council now has the power to do that. The Bill is causing very great opposition in the County of Devon, which I suggest need never have happened if the promoters had gone about it in a reasonable way and attempted to promote a Bill with the same diligence and concentration which they showed over the 1945 Water Bill.

Sir H. Studholme

The hon. Member said that this Bill would not produce any more water in Devon, but if the Bill goes through we shall get a very much better supply of water in South Devon from the River Dart.

Mr. Thorpe

Do I take it that the hon. Baronet is interested only in South Devon regrouping?

Sir H. Studholme

That is a most unworthy suggestion. I am interested in the whole county.

Mr. Thorpe

Obviously the hon. Baronet is interested in the county, but his knowledge of South Devon is greater than his knowledge of North Devon. I am taking the particular point of the North Devon Water Board. I have the honour to represent North Devon, and I should not claim to know more about South Devon than the hon. Member would know about North Devon. The fact that the hon. Baronet may make a case for his district is not a reason for saying that a case could be made for the whole county.

Sir H. Studholme

That is not an argument for saying that if the Bill goes through there will not be more water. There will be.

Mr. Speaker

I think this interchange had better cease.

7.37 p.m.

Mr. F. M. Bennett (Torquay)

If I may throw my hat into this ring, so to speak, I should say, with reference to the exchange which we have just heard, that that this Bill is not necessary to provide additional water for there are many other ways in which that could be produced without this Bill. I am sure my hon. Friend the Member for Tavistock (Sir H. Studholme) would not wish to mislead the House.

As hon. Members may know, although I represent a constituency called Torquay, it also comprises, apart from several villages, Paignton and Brixham. I should like at the beginning of my remarks to bring as much comfort as is available in the general onslaught on the Bill to the promoters, and to my hon. Friend the Member for Tavistock in particular, by saying that I carry with me tonight the welcome message that Brixham stands in favour of the Bill and has requested me to say so tonight. It is also right to say that, although Paignton has objected and its objections, in my submission, go to prove the lack of proper prior consultation, those objections are not to the Bill in principle but to certain Clauses and aspects which, if they could be remedied, would meet the point of view of Paignton.

Having given that limited amount of comfort, I must now move on to the question of Torquay and the general attitude there which coincides very largely with what other hon. Members have said in this short debate. First, I wish to reiterate that it appears abundantly clear on the face of it that there has been a lack of proper prior consultation, as is shown by the fact that we have such imposing numbers and varieties of people objecting to the Bill. I have listened to a number of second readings of such Bills in my time. I was the victim of one to which there was considerable objection, the Torquay Water Bill, when I heard much of the weight of objection, but, my goodness, it was nothing like the weight of objection clearly apparent to this Bill. Not only are there forty-one out of forty-seven authorities objecting, but, in addition, three water boards—not one as the hon. Member for Devon North (Mr. Thorpe) said—have filed petitions against this Bill. That only strengthens the point he made.

Mr. Thorpe

I apologise for interrupting, but I wish to say that I am delighted to know that the other two water boards have joined the sacred throng.

Mr. Bennett

I will not read the names of all the authorities which are opposing the Bill, but they include urban and rural district councils and three water boards. Even N.A.L.G.O.,—and this should interest some hon. Member opposite—has joined in the general affray. It should be apparent to the Promoters of the Bill that if they proceed on the present lines rather than take the advice of most of us who want to see some sensible regrouping in Devon, they will not only cause even further disturbance within the county but will involve the county ratepayers in further considerable expense. I cannot say exactly how much that expense will be, but if hon. Members think of 41 Petitioners and their lawyers calling and giving evidence in Committee upstairs, they will realise that, whatever else it may be, this will surely go down in history as one of the most expensive ever Water Bills, in view of the large number of objections to it which will have to be heard.

It is true, as my hon. Friend the Member for Tavistock said, that regrouping generally has been under discussion for a long time, certainly long before I represented Torquay in the House. We are, however, discussing the Bill and not earlier Measures, which may have been considered hitherto. Torquay was first informed formally of the intention to introduce this Bill only last July. That was the first meeting, and at that meeting Torquay was given a specific promise—I stress that point—that working parties would be set up to consider all the rival interests which were affected. It is known that that promise has not been kept and that the working parties have never been set up.

The county council has said that the Bill is needed urgently because of the water shortage. The point has been made quite fairly, and I mentioned it in my opening remarks when intervening in the exchanges between the hon. Member for Devon, North and my hon. Friend the Member for Tavistock, that, and it is generally admitted, this is not a Bill to find more water but a Bill, rightly or wrongly, prepared from the financial and administrative point of view. To use the water shortage in Devon as an argument for the Bill is, therefore, not fair.

Torquay has already reached agreement for the development of a new source of supply from the lower reaches of the Teign. I should like hon. Members, and in particular my hon. Friend the Member for Tavistock, to know that this time Torquay has the agreement of the representatives of the Devon Water Board in this scheme and the agreement of the Legal and General Purposes Committee of the Devon County Council. Torquay, therefore, does not need this Bill in order to obtain more water.

As the main object of the Bill is financial and not engineering, it seems to me that we must bring Plymouth and Exeter into it, too, if we are to consider the case fairly. If the argument were being advanced on engineering grounds, the county council could argue the need to provide more water, but the county council cannot have it both ways, and since it is principally a financial Bill, there is a strong case for bringing in Exeter and Plymouth and for having consultations with them to this end. If, on the other hand, it is introduced on engineering grounds, there is no logical reason for including a number of authorities which do not want to be included, among them Torquay and the water board which the hon. Member for Devon, North mentioned, which does not want to be brought into it.

It would surely be wise of the county council not to try to steamroller this Bill through upstairs. Like other hon. Members who have spoken, I do not think that it would be right or appropriate to have a Division on Second Reading, not because I feel that it would be lost by the opponents of the Bill but because I do not think that in such a short debate we have all the technical knowledge available to us to enable us to reach a fair considered decision. That is one of the disadvantages of the present procedure.

Although I do not feel that it would be right to have a Division on Second Reading, it seems to me that there is a very good case for the county council thinking again about it, having the consultations which a number of local authorities thought would be held and then bringing forward a more generally agreed Measure than this Bill is at present. In that context it is worthy of note that this Thursday, in only two days' time, a meeting is to be held, at Exeter, sponsored by a number of opponents of the Bill—the requisite number to call such an emergency meeting—to urge on the county council, from within the county, the withdrawal of the Bill which we are discussing. That produces a paradoxical situation. I do not know exactly what would happen if we allow the Bill to have a Second Reading and the county council passed a resolution in two days' time urging its withdrawal. That is a problem which will have to be decided in due course, fortunately by someone other than myself.

Although the Minister has on a number of occasions urged sensible regrouping in Devon and has never hidden his point of view that in the last resort it may be necessary to have non-voluntary regrouping, I suggest that all the weight of the evidence which has been produced shows that that ultimate situation has not yet been reached and that there is still an opportunity for the voluntary regrouping which the Minister has himself said he would prefer to see.

For these reasons, although I do not intend to urge my hon. Friends to force a Division tonight, I seriously wish that my hon. Friend the Member for Tavistock would convey to the promoters of the Bill the widespread feeling among hon. Members representing a variety of constituencies that the Bill has not been handled very well and that the county council ought to think again.

7.48 p.m.

Mr. Percy Browne (Torrington)

I add my voice to those which are protesting against the terms of the Bill, although I am quite certain that it was put together with the best intentions in the world. I say this particularly because the chairman of the Devon County Council, Sir George Hayter Hames, has done a great deal for the county. Moreover, I have an ulterior motive in that he is one of my constituents.

The Bill is ill-conceived. As other hon. Members have said, this must be the case because of the number of authorities which are opposing it—41 out of 47. That is quite enough to break the back of Tom Pearse's grey mare. Since this is a debate with a Devon flavour, it is appropriate to say that this is not a fable and that I have two people in my division who claim direct descent from Tom Cobley in spite of the fact that Tom Cobley never married.

There are three basic objections to the Bill by the authorities in my division—Bideford, Okehampton and Crediton. One of those objections is shared by the North Devon Water Board, which is also an objector. The first objection—that of failure to consult properly before the Bill was put together—has been dealt with very fairly by the hon. Member for Devon, North (Mr. Thorpe). The authorities were asked to go to Exeter, where they were told what would happen.

I believe that the reason the county councillors voted for the Bill was that they were told that if they did not do so the Minister would make an order. I believe that the whole nub of the problem is the shortage of water in South Devon. Although the hon. Member for Devon. North said that the Bill would provide not one more drop of water, it is interesting to note that in the memorandum put out by the Devon authorities they say, … last summer showed that there is an urgent need for further and better water supplies in South Devon. I suggest that the Minister would not have had to make an order for North Devon or East Devon and would have had to concern himself only with South Devon. That would be the albatross around his neck. Perhaps I could quote "The Ancient Mariner", Water, water, everywhere. Nor any drop to drink. If the Bill had not been promoted, would the Minister have made an order to amalgamate the Devon water undertakings into three boards?

The second objection has been aired already, namely, the exclusion of Exeter and Plymouth from the three boards. The Vail Report of 1952, which was referred to by my hon. Friend the Member for Honiton (Mr. Mathew), suggested that there should be four boards and that Exeter and Plymouth should be included. That would result in lower water rates all round throughout the county, and one can only cite the position that the South Western Electricity Board would be in if Bristol were removed. There has been a lack of effort by the county council to persuade Exeter to join.

The third and fundamental principle is this. In my division, three perfectly good and capable water undertakings will be taken over by the North Devon Water Board without any compensation whatsoever. This is absolutely wrong. We have guarded, perhaps highlighted by Crichel Down, the principle that there should be compensation for property taken over. The memorandum issued by the Devon County Council says: … it is now clear that compulsory powers will have to be used". That is exactly what is happening. The council offered differential terms to these undertakings if they would go to Exeter and disclose the figures requested. Under the circumstances, it is not surprising that they refused, particularly because they already contribute 1s. 5½d. in the county rate towards water undertakings from which they derive no benefit at all. It is doubtful if the county council has an obligation to supervise the county water supplies. The objectors' petition, which came today, says that the duty to distribute water supplies throughout England and Wales … and to secure the effective execution by water undertakings of a national policy relating to water, is specifically imposed on the Minister of Housing and Local Government by the Water Acts 1945 and 1948". Apart from those three main points, there are three subsidiary ones, all of which are financial. First, the North Devon Water Board objects because it will no longer be able to precept on the county council. This will slow down its rate of rural connection. It will be necessary for it to make frequent changes in its charges, which, under the circumstances, is almost impossible.

Secondly, the rural councils which object to the Bill will have to pay considerably more. I disagree with my hon. Friend the Member for Tavistock (Sir H. Studholme), perhaps for the first time since I have been a Member of the House. Clause 50 (1, a) and (1, b) bear this out. This means, in the words of Major Allhusen, who is the chairman of the North Devon Water Board: The cost of carrying water to the rural areas will have to be paid for by the district, and not by the County Council". This would aggravate the lack of water in remote rural districts, as has been pointed out by the hon. Member for Devon, North. It will be further aggravated because today the water is going to the remotest districts and the Ministry pays a grant in proportion to the amount of benefit which will be derived from the water. Therefore, the remoter the areas covered the smaller in proportion is the grant.

Thirdly, the urban and borough councils which object to their undertakings being taken over are naturally very worried also about the financial side. Crediton Urban Council now pays 1s. 5½d. as a county precept, from which it derives no benefit. At the same time it pays its own rate of 1s. 4d. making a total of 2s. 9½d. Under the Bill it will pay a county precept of 11½d. and 4s. to start with—that figure will rise—for water, which will make a total of 4s. 11d. It will cost Bideford Borough Council an extra £80,640 in the next ten years, assuming that it will not have to spend more than £40,000 on capital works. Thereafter, it will cost the council an extra £14,400 a year. That is a great deal of money for a smallish borough. There are also complaints of the new concept introduced in the Bill of using the prescribed 1d. rate product in place of the actual 1d. rate product as heretofore.

If the Minister wishes to see the number of undertakings in the county reduced he should make an order. The Bill is introduced mainly for financial reasons, the idea being to stop the boards precepting on the county council, because the county council has no control over this. I sincerely hope that the Bill, in its present form anyway, will not become law. If it is to become law at any stage, there must be drastic alterations, and the objectors whom I have mentioned and the objections which I have outlined must be given rightful consideration.

7.56 p.m.

Mr. Clifford Kenyon (Chorley)

I make a short intervention only, but as one of the hon. Members who sat on the Select Committee which dealt with the Torquay Corporation Water Bill last year, I feel somewhat guilty that behind this Bill lies our rejection of the Torquay Bill. When we were considering that Bill we felt that the piecemeal taking of water from Dartmoor ought to stop and that there should be large authorities able to take over the collection of water and serve it out to those areas requiring it.

It is perfectly true that no water Bill produces any more water. It collects what water is there and serves it out. That is what the Bill will do in a far better way than has been done before. The Minister will correct me if I am wrong in saying that the Devon County Council will be the only authority that can set up the three separate boards. From the evidence which we heard, it appears that in setting up three boards the council will be taking a proper step. One board would have been too large. It was stated by a representative of the Torquay Corporation that the North Devon Water Board was too large. I do not think so. I have been a member of a very large water undertaking for nearly twenty years. These three water boards, if set up as provided for in the Bill, will serve the interests of the inhabitants of the whole area in a far better way than they have been served previously.

Mr. P. Browne

Has the hon. Gentleman read the Vail Report? If not, will he please do so? He will find that the Vail Committee suggested splitting the county into four water boards, bringing in Exeter and Plymouth, which we think is particularly important.

Mr. Kenyon

I read that Report at the time of our discussions in the Committee.

Mr. Bennett

Since the hon. Gentleman has mentioned Torquay. I think it only fair to point out that the criticisms which proved decisive for him on the Torquay Bill have been met independently since, in that the Torquay Corporation has now, with the agreement of the Devon River Board and the legal and general purposes committee of the county council, devised a new scheme for a new water supply, and as to regrouping has voluntary local agreement for a much larger area surrounding Torquay, for the Teign area and for a quarter of the population and rateable resources of the whole county. While making his criticisms, the hon. Gentleman should note that one of the reasons which led him to throw out the Torquay Bill has been met without this Bill, and this new scheme would, in fact, be put up if it were not frustrated by the Bill now before the House.

Mr. Kenyon

That was only one reason why we threw out the Torquay Bill. There were other reasons. I would not agree with dividing Devon up into four areas. I think that the areas of Exeter and Plymouth which have been left out should be brought into one of the areas now.

This whole question concerning the three undertakings proves one thing. In all our consideration of water supplies throughout the whole country, it is becoming clearer with every Bill that comes forward that there ought to be one national board to take charge of all water and apportion it throughout the country through smaller undertakings such as are envisaged in this Bill.

8.1 p.m.

The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke)

I shall not venture into the somewhat controversial matters which the hon. Member for Chorley (Mr. Kenyon) opened in his last remarks. I am glad, however, that, despite his desire for further nationalisation of some sort, he still recognises that there must be local water undertakings. Water is a local service, and it becomes intolerably expensive if one seeks to bring water over excessive distances from one catchment area to another.

My hon. Friend the Member for Torrington (Mr. P. Browne) referred to Uncle Tom Cobley. It seems to me that the disputatious differences among Devonians of which we have been conscious this evening indicate why things did not go altogether happily on the way to Widdicombe Fair. I wish to be a peacemaker rather than otherwise. I express my plain view that the Bill should have a Second Reading, and I appreciate very much the fact that even those of my hon. Friends who have spoken most vigorously against it will not stand in the way of the Bill being read a Second time and being examined, as, of course, it should be, thoroughly and meticulously in Committee.

On a water Bill, the Minister is in a position somewhat different from that in which he stands when he is invited to give advice on, let us say, the ordinary Private Bill promoted by a local authority inasmuch as Parliament has imposed upon him definite duties with regard to water, as my hon. Friend the Member for Torrington reminded us. I ought, I think, to begin by reading Section 1 of the Water Act, 1945, because it is essential to an understanding of these matters and it is bound to govern my approach Parliament has said in that Act: It shall be the duty of the Minister … to promote the conservation and proper use of water resources and the provision of water supplies in England and Wales and to secure the effective execution by water undertakers, under his control and direction, of a national policy relating to water. Those words do not imply that the Minister must do everything himself. Indeed, they specifically refer to "effective execution by water undertakers". The Minister, therefore, must have a direct interest in seeing that there are water undertakers in existence or brought into existence which will be effective in carrying out the responsibilities for water supplies. I do not demur to help from any quarter in this task. Whether it be a county council, an hon. Member of the House or anyone else who has suggestions to bring forward, it does not seem to me that we should lightly reject them. Indeed, the grave shortages of water in certain places brought about by the drought of 1959—a drought which in these days, perhaps, we are on the point of forgetting, but which was very vivid to all of us who had any knowledge of the areas of shortage last summer—put, I submit, a special responsibility on Parliament.

In certain parts of Devon, as my hon. Friends know, there were severe shortages of water last summer. In addition, there are many people in the county, who, unfortunately, have not yet a piped water supply laid on. It is my desire to co-operate with all who assist towards ensuring that Devonshire and other counties are safeguarded against the constant risk of water shortage if prolonged drought recurs.

My concern, also, is to try, so far as I may, to achieve for as large a percentage of our population as reasonably possible a piped water supply. We already have a larger percentage of our population served with piped water than any other country in the world. It is 95 per cent. or more. We may never be able to reach 100 per cent. because there are outlying farms and cottages which, perhaps, can never be reached, but we shall press on, and I am quite sure that everyone who has taken part in the debate, and, indeed, every hon. Member of the House, would wish to see the water supply of Devonshire organised so that those who have not yet piped water will have the best possible chance of receiving it.

My sole concern in relation to the Bill is to further those two purposes. But, as I think will have become apparent from our debate, the water problems of Devonshire are more complex than the problems elsewhere because of the system of water finance embodied in the North Devon Water Act. In July last, my right hon. Friend the Postmaster-General, who was Parliamentary Secretary at the time, pointed out that, until the financial arrangements were reviewed by the county council, it seemed almost hopeless to have any further Measures of water regrouping adopted in the county.

As Minister, I frankly say that I am not vitally concerned about what precise method of water charges is adopted or what precise method of allocation between direct water charges and rate liability is adopted. That must be a matter for the people of Devon themselves. In passing, I will say that it would always strike me as unsound if people were to pay far less than the actual cost of the water they consumed and the difference were made up by very substantial contributions from the rates.

In general, each person should pay the cost of what he uses. It is particularly unfair if an exceptionally heavy burden falls on local rates in an area where a substantial proportion of the population is not provided with water, because in that event the people are having to pay and they are getting nothing back. All these points, no doubt, will have to be considered in relation to the Bill.

I say again that the precise arrangements for charging and for division of cost between water rates and general rates is certainly a matter which the Committee should examine with care. It is the affair of Devonshire rather than primarily the affair of the Minister. It is, however, very much my concern that something should be done about that, because I believe that until it is done all hopes of further voluntary regrouping will be frustrated. That has been the experience hitherto. The efforts which have been made have broken on that rock.

These financial changes can only be brought about by an Act of Parliament. They cannot be done by the Minister or anybody else by Order. They spring from the North Devon Water Act and they can be altered only by a further Act of Parliament. That is why the Bill is important to the cause which I have at heart—the cause of regrouping.

I am determined that there must be some further regrouping in Devon. It could be in three boards or in four boards. I think that three would be preferable, but I grant that four would be possible. None of that, however, can take place until the present arrangements relating to bearing the cost of water have been reviewed and altered.

The Bill may be open to serious criticism—I do not know—but it is a serious-minded attempt to strengthen the structure of the water industry in Devonshire for the provision of water for the people of the county. I am quite sure that, as such, it deserves and requires examination in Committee.

I come back to the Report of the Committee on the Torquay Water Bill of last Session, to which the hon. Member for Chorley referred. That Committee, in its Report dated 21st April, 1959, said: The Committee recognise that in the near future Torquay Corporation will need additional supplies of water and that a supply of piped water is urgently necessary in some rural areas. They consider, however, that the first step should he some form of regrouping of the water undertakings in South Devon and that thereafter the new authority or authorities should come to Parliament to seek powers for any additional supplies which may prove to be necessary. The Committee feel that, in considering the sources of such additional supplies, serious attention should be paid to the problems raised by abstraction of the headwaters of rivers where these are already being heavily exploited. That is a Report to the House from a responsible Committee. Although there may be individual differences of opinion, I believe that the House as a whole would accept that as a fair and just assessment of the situation in South Devon. I certainly do. I agree with the Committee on that Bill that some form of regrouping in South Devon is essential.

Reference has been made to the Vail Report. There are, of course, two Vail Reports. There is the Vail Report of 1954, which was before the Committee in the last Session, and there is the second Vail Report, which was produced after the Committee had reported, when my inspector paid a further visit. His report is not a secret document. It was made available to all the water undertakers of the county. The substance of the second Vail Report was that there are both short-term and long-term problems of water supply in the area which can only be satisfactorily solved if the development of new sources is looked at over a wider area than is covered by individual undertakings now, preferably over the whole of the southern part of the administrative county west of the Exe.

As Minister I accept that view. I believe that it is right. I believe this to be an area where careful consideration must be given to the right way of meeting the growing demands of South Devon, where there is known to be water shortage, at least at all times of summer drought, and I do not think that a satisfactory solution can be secured without some substantial measure of regrouping.

My hon. Friend the Member for Torquay (Mr. F. M. Bennett) said that there was no need for the Bill to supply Torquay with water, because Torquay had found an additional source. That may be so, but Torquay, of course, does not yet have the powers to exploit that source. I have no idea what objections might be raised to it. In any case, I would have, in my consideration, to come back to the second Vail Report and its strong recommendation that the problems of South Devon should be looked at as a whole, whatever may be found, in the end, to be the best final way of meeting them.

If, by the Bill, the existing financial arrangements in the county, which have proved a serious obstacle to further regrouping, are altered either in the manner embodied in the Bill, or in some other manner which, after consideration in Committee, may be found to meet the case better, what has proved to be a lasting obstacle to the progress of regrouping will be removed. That will open the way to objective—I hardly dare say dispassionate—examination of the problems of regrouping in North and East Devon, too. From the water viewpoint, it is the South Devon problem that is the urgent one—I grant that at once. For my part, however, I do not think that the structure is right either in North Devon or in East Devon, nor do I believe that any progress can be made until the financial arrangements are altered.

If the Bill receives a Second Reading today, as I hope it will, it then will become my duty in the ordinary way to submit a report to the Committee on all the relevant provisions of the Bill. Certainly, nothing that I say on Second Reading today should be taken as an indication that I consider that the Bill as drafted should be regarded already as the law of the Medes and Persians, which cannot be altered. Very likely, improvements can be made in Committee. I hope the Committee will be able to find means of meeting some at least of the strong objections which are raised to the Bill.

As regards the position of Exeter, I can simply say this. I would always be reluctant to see compulsory powers of any kind used against a water undertaking which was strong enough to continue on its own. Exeter is strong enough to continue on its own. In an ideal world, some wider arrangement covering large parts of Devon might be better. We have, however, to proceed from where we are at present and the Exeter undertaking being in existence, I cannot see that I would be justified in seeking to ask Parliament to use any form of compulsion to bring it into a still wider group.

Mr. Mathew

Will my right hon. Friend please clarify that? He says that Exeter is strong enough to stand on its own. What is the criterion? Is it size, or, as has often been said by officials of the Ministry, a question of having a full-time water engineer? In fact, Exeter has only a part-time engineer and Sidmouth in my constituency has a full-time engineer.

Mr. Brooke

There may be in an individual case a number of criteria, but an undertaking, to be strong enough to stand on its own, must have the requisite population, the requisite financial strength and be well-fitted to employ a full-time and qualified engineer.

Mr. F. M. Bennett

If that is the criterion, I am a little surprised, because earlier by right hon. Friend referred to Torquay. I did not interrupt him then, though I was tempted to do so. Is he suggesting that under the new proposals from Torquay, on the one hand as to the new supply with the agreement of those who have been approached, including the Devon River Board and the General Purposes Committee of Devon County Council, and, on the other, as to regrouping with agreed representation of one fourth of the resources and population of the county, Torquay is not capable of standing on its own?

Mr. Brooke

When I referred to the particular project of Torquay for exploiting a new source of water, I was not discussing the strength of the Torquay undertaking or its qualifications to be an undertaking on its own. I was simply mentioning that Torquay would need to obtain powers if it was to exploit this source, and until it had been advertised and representations and objections had been invited it would be quite impossible for me to know whether substantial objections would arise or not.

As for Devon County Council, I am not proposing to intervene in the arguments about its behaviour. I am not qualified to say whether the county council has or has not done all it should have done. I must say that if no one in the county, neither the county council nor anyone else had initiated action of some sort at this time, I believe that I should have had no option as Minister but to intervene in some way, because the danger signals were out last summer. If we were to continue with the existing financial arrangements which could be altered only by legislation, and if no one proposed to alter them, it would not be consistent with my duties under the 1945 Act if I sat back with folded hands and simply hoped that something would be done by voluntary arrangements.

I cannot escape the responsibilities laid upon me by Parliament and, if the Bill were to fail or have to be withdrawn I should have no choice but to take some initiative from outside. I do not wish to take that sort of initiative. I would much prefer that Devon solved its own problems from within the county and that a scheme should be worked out which, after scrupulous examination by a Committee of the House, would be a real solution and, if possible, would meet many of the objections which have been enumerated to the detail of the Bill. That is the better way and I cannot help but think that, with all the resources of mind and understanding and keenness in Devon, that should be possible.

I have only to add that if it really proves to be impossible, the duty laid upon me by the 1945 Act would compel me to do something which would be in itself distasteful, and that would be to call people together and perhaps impose or demand a solution. But I cannot effectively impose a solution, as one or two hon. Members have suggested that I might, because I cannot do this by compulsory Order. No compulsory Order will solve this problem until the financial arrangements are altered. That is the complex which we have to face, and it is because of that complex that I greatly hope that the House will give the Bill a Second Reading in a spirit of reasonable good will and wish the Committee luck in what may possibly be a prolonged series of sittings in examining in detail all that everybody has to say about its provisions.

Question put and agreed to.

Bill accordingly read a Second time and committed.