HC Deb 10 March 1961 vol 636 cc922-40

Order for Second Reading read.

2.53 p.m.

Sir Gerald Wills (Bridgwater)

I beg to move, That the Bill be now read a Second time.

I cannot claim that this is a very exciting Bill. I do not feel that passions are likely to rise to fever heat in this Chamber this afternoon on account of it. Nevertheless, it is a short Bill which seeks to remedy a drafting anomaly in the Rural Water Supplies and Sewerage Act, 1944, and to settle problems which arise when county councils become involved in the regrouping of water undertakings in larger units.

If I may explain a little of the past history which has caused the Bill to be brought forward, under Section (1) of the Act of 1944 the Minister is empowered to make grants towards the expenditure of local authorities in connection with water supplies and sewerage in rural localities. Section 2 (1) provides that where the Minister undertakes to make such a grant: the council of the county within which the area a the authority to whom the grant is given falls shall also contribute to the expenditure. It sounds very complicated to me and it has to be spoken very slowly, nevertheless that is what happens.

This provision in the 1944 Act has worked well until comparatively recently, but now, I am given to understand, the policy of regrouping water undertakings is gathering momentum and a defect in the drafting of the 1944 Act becomes apparent and certain anomalies are created. In the policy of regrouping there are occasions when county boroughs take over water undertakings in rural areas and others when county boroughs go into joint bonds. The difficulty arises when the water undertaking supplying the rural locality is a county borough council or a joint board on which such a council is represented. In each of these cases the area of the authority does not fall within, that is to say, wholly within, the administrative area of the county council within the meaning of Section 2 of the 1944 Act.

As a result, the county council, however much it may wish to make a grant, is neither obliged, nor indeed empowered, to make a contribution to the cost. Because of that it follows that some rural water schemes receive less grant than was intended when the Act was passed and the true intention of the Act is not brought about.

The object of this small Bill is to remedy that anomaly and it does so chiefly by the provisions of Clause 1. I am sorry that I have to go into so many Sections and subsections. Subsection (1) of this Clause amends Section 2 (1) of the 1944 Act, so that the county concerned is described as the one in which the whole or any part of the rural locality in relation to the grant falls. In subsection (2) of the same Clause provision is made for the case when a scheme is carried out in a rural locality within the administrative area of a county borough and the county borough council is not itself a water undertaker and does not incur the expenditure directly.

In such a case, the county council obviously cannot contribute to the expenses involved, but the county borough council should be called upon, or enabled, to do so. This subsection makes that possible by providing that, where the authority incurring the expenditure is not the county borough council, Section 2 of the 1944 Act shall have effect as if the county borough were in fact a county. The effect of this is that the county borough council will be required to make a contribution to this extent, subject to the same conditions which would have applied to the county council if the rural locality in question had been within the county. I am given to understand that this situation may well arise in the context of the regrouping of water undertakings. notably when a county borough council ceases to be the water undertaking in its own area by becoming a member of a joint board.

Sewerage expenses are covered in the Bill equally with those of water supply, although at present this is of no practical relevance because sewerage undertakings are not being regrouped. If the time comes when they are regrouped in the same way as water undertakings, then it will be of relevance.

Clause 1 (3) authorises the additional amount of rate deficiency grant which would be payable as a result of the Bill. This cannot be precisely estimated, but it is not expected to be very large. It is expected to be small. I am assured—and my right hon. Friend will no doubt underline the assurance—that the necessary Money Resolution will be forthcoming. When a county council receives the rate deficiency grant, the grant will be payable on the council's contribution which becomes payable as the result of the Bill. I understand that to mean that it will be payable on the extra amount which the county council has to pay if the Bill becomes law.

The difficulties which the Bill is designed to remedy are not at present widespread but they have arisen at Leicester, where the county council has been unable to make a grant for a number of rural schemes which have been submitted to it. These schemes have been postponed until such time as the question which this Bill is designed to settle has been settled.

Similarly, a difficulty has occurred in a case relating to the North Leicestershire Water Board, where, again, the county council finds itself unable to contribute because the board includes a county borough. Should the Bill become law, Leeds will also benefit, and it is possible that many other places will benefit in the future. Similar difficulties to those which have been experienced in Leicester and elsewhere will arise in a number of other parts of the country in due course. I do not propose to set them out at length, but they range from Carlisle to Plymouth, from Fylde to Preston, and they include the Thames Valley. This shows that the Bill, although it benefits few at the moment, may benefit quite a number of localities as time goes on and as water undertakings are regrouped. I hope that I have said enough to explain the purposes of the Bill and to show that it will be of benefit to certain localities. In view of what I have said. I hope that hon. Members feel that the Bill will serve a useful and administrative purpose and for that reason will give it a Second Reading.

3.3 p.m.

Mr. Cledwyn Hughes (Anglesey)

On behalf of my hon. Friends, I am glad to say that this is a Bill which we can support. Although it is limited in its scope, it will clear the way for further progress in the supply of piped water to the rural areas of England and Wales. Coming as I do from a country where much still remains to be done in this respect. I welcome the Bill warmly and congratulate the hon. Member for Bridgwater (Sir G. Wills) upon introducing it and thank him for his lucid introduction.

It is clear from what the hon. Member said that the need for the Bill has become more urgent because of the progress which is being made in the regrouping of water undertakings. My right hon. and hon. Friends support this policy of regrouping, although we advocate a far more radical approach to the problem of water conservation and supply. I should be grateful to the Parliamentary Secretary to the Ministry of Housing and Local Government if he would tell us how much regrouping has taken place, how much has been voluntary and how much has been compulsory. I recollect a speech made by his predecessor, now the Postmaster-General, in the debate on regrouping in 1957, when he said that the Government would press on energetically with regrouping schemes.

In this context, it would be interesting to know precisely how much progress has been made. I understand that in some areas of the country there is a good deal of unnecessary bickering between different undertakings and, in some cases, an unwillingness to co-operate which I think is extremely unfortunate. It retards progress and holds up vital schemes. I hope that the Minister will not hesitate to use, his powers under Section 9 of the Water Act, 1945. There are still in this country about 1,000 separate water undertakings responsible for water supply. May we be given the latest figures?

Sir Harry Legge-Bourke (Isle of Ely)

On a point of order, Mr. Speaker. When I first read the Bill I did not appreciate that the whole issue of regrouping was likely to arise therefrom. If the hon. Member is to be allowed to go as wide as he now appears to be going, I wonder whether it will be legitimate for us to discuss the full policy of water regrouping.

Mr. Speaker

I am obliged to the hon. Member. I was thinking about it. Such licence as is permissible on Second Reading would extend to anything reasonably connected with the subject matter of the Bill. The hon. Member whose Bill it is has pointed out to us the utility of this amendment and that the extent of its utility will be affected by the question of regrouping, and I think that it is to that limit that hon. Members may properly talk about the question of regrouping.

Mr. Hughes

I do not want to trespass in any way, Sir, but I feel justified in discussing regrouping because the Bill seeks to deal with problems arising as the result of the increased regrouping which is taking place. I think that I am also justified in pointing out that there are 300 water undertakings in this country which cover areas of five square miles and less and that over 750,000 houses still lack a piped water supply. I say that merely to point out that there is a task of great magnitude still confronting the Government. That is why I feel justified, although the Bill is limited in its scope, in saying, on Second Reading, that there is a need for a national plan and a radical approach.

The Bill does not, so far as I can see, affect sewerage schemes. Perhaps the Parliamentary Secretary would care to comment on that. Presumably, that is because there is no Government policy for regrouping sewerage schemes. I wish there were, because the present position is unsatisfactory.

I do not wish to make a long or carping speech. The hon. Member for Bridgwater, in introducing the Bill, mentioned schemes which are now held up because of the anomaly in the 1944 Act. There are areas which he mentioned in Leicestershire and Yorkshire where rural water supply schemes are not making progress because of that anomaly. We on this side are extremely anxious that these schemes should go forward promptly. We shall, therefore, do all that we can on our part to facilitate the passage of the Bill through the House.

3.9 p.m.

Sir Harry Legge-Bourke (Isle of Ely)

As I indicated in the point of order I raised with you, Mr. Speaker, I had not appreciated that the Bill would lead the discussion to go so wide. I rise now simply to make one or two observations on what the hon. Member for Anglesey (Mr. C. Hughes) has just said.

I support my hon. Friend the Member for Bridgwater (Sir G. Wills) in his promotion of the Bill, because it would be quite wrong if, as a result of water regrouping, county boroughs or local districts suffered in relation to their rights under the Rural Water Supplies and Sewerage Act. I certainly support my hon. Friend in his efforts to ensure that they do not. We should certainly prevent that difficulty arising if we can, but I appreciate that it is likely to arise as a result of regrouping.

The hon. Member for Anglesey went much wider and raised the question whether we are regrouping fast enough and, if not, whether we should be regrouping on a different basis. He raised in principle the whole issue of whether we should have a national water grid. I wish I had had more time to consider this subject before stating my views. It has fallen to my lot to be Chairman of Select Committees on several of the Water Bills promoted by those seeking to amalgamate by agreement. Unfortunately, it is often difficult to get agreement. On the Bills I have had to consider, the deficiency which my hon. Friend seeks to make good by the Bill has never been raised as an objection.

My hon. Friend the Parliamentary Secretary will probably agree that one major difficulty appears to arise over regrouping, namely that there is sometimes a reluctance on the part of those who have plenty of water to be ready to share it with those who have not enough, especially when a different type of authority owns the surplus from the authorities which are short of water. This raises the whole question of county borough status vis-à-vis certain parts of the country, Exeter being one instance. Before Private Bills are promoted in the House to bring about amalgamation of water supplies it is very desirable that local authorities in the districts concerned should get together to see if they can thrash the difficulties out before they put their ratepayers to the enormous expense of promoting private legislation. Most regrettably, this has not always happened. Unfortunately, the worst offenders are sometimes the very people my hon. Friend is most anxious to help by the Bill.

Mr. Speaker

Order. That is as far as I can allow the hon. Member to go pursuant to his own point of order.

Sir H. Legge-Bourke

I am grateful to you Mr. Speaker. I had just about finished the point I was on and I shall elaborate it no further.

In conclusion, I wish my hon. Friend all possible success with the Bill, because it is right that we should ensure that rural areas do not have to suffer as a result of a different type of local authority being brought into the picture because of water regrouping.

3.13 p.m.

Sir Barnett Janner (Leicester, North-West)

I have no desire to detain the House for long, but I feel that it is proper that I should place before the House, for the purpose of record at any rate, what the view is in Leicester, on this subject. The city council as water undertaker supplies three-quarters of the areas of the counties of Leicester and Rutland and is anxious to see the Bill passed into law.

The council points out that the Bill deals with a problem which it has raised on a number of occasions. A deputation whose views were supported by myself and the other Members of Parliament from the area of both parties, have called upon the Parliamentary Secretary and appraised him of the problem. They tried to induce the Ministry to adopt an interpretation of the existing law which would avoid the anomalies now sought to be removed by the Bill. At that time the Parliamentary Secretary was not altogether prepared to accept the very reasonable suggestions put forward. Perhaps the Ministry thought that our suggestions were a little too extensive.

At that discussion the possibility of a Bill being introduced was mentioned and the town clerk of Leicester assisted in the drafting of the Bill. The draft was prepared, in which he assisted, and I think the Bill at present before the House follows to a large extent the proposals then placed before the Minister. The Leicester Corporation has a great interest in the Bill, as it is one of the authorities most directly affected by it.

The problem arises out of Section 2 of the Rural Water Supplies and Sewerage Act, 1944, which imposes a liability on county councils to make a contribution towards the cost of rural water supply schemes. The difficulty that Leicester, in common with many others, sees in this matter is that where a county borough like Leicester supplies water in a rural locality, the county borough undertaking as a whole does not fall within the area of a county council within the meaning of Section 2 of the 1944 Act. The result is that the county council has no liability to pay a contribution as it would have if the scheme were being undertaken by the local district council.

Leicester Corporation has absorbed the water undertakings of several rural district councils as its part in the carrying out of the Government's regrouping policy. When this policy was embarked upon it was thought by the city council that the county councils would continue to be under the same liabilities as before, and that view was reinforced by observations made from time to time by the Ministry. It asks that we should assist in facilitating the passage of the Bill into law.

The enlargement of county borough undertakings as a result of the Government's regrouping policy is a situation not contemplated when the Act of 1944 was passed, and certainly not in the case of Leicester. The regrouping is financially disadvantageous to the county borough. It says that it is parcularly unfair that merely because the 1944 Act is not aptly framed to meet the case, the effect of regrouping in such cases is to take away from county councils their liability to share in the cost of new water supplies. In the circumstances, I thought it was necessary for me to bring that view before the House because the Leicester City Council is particularly affected.

I hope that the Minister will give the Bill his blessing.

3.17 p.m.

Mr. Percivall Pott (Devizes)

I support my hon. Friend the Member for Bridgwater (Sir G. Wills). I must, first, declare my interest both as a statutory water undertaker and as one who is connected with local government.

I am sure that in some cases these amalgamations between water under-takers are necessary. They have taken into consideration what the effect would be if they were not to receive the grants from the authorities through whose land their pipes pass, but to whom they were giving a limited service. This was a problem which gave great concern to the undertakers before they agreed to amalgamation.

I believe that it is in the interests of the consumers to get an amalgamation in reasonably-sized units, and this Bill will give some assistance in persuading some of the smaller local authority undertakers to change their present feeling and to join the bigger but not necessarily slowly developing one-area authorities. This, surely, is what the water industry requires.

Major W. Hicks Beach (Cheltenham)

This is rather a complicated Measure, but it is one which affects my constituents to some degree, and I declare my interest straight away.

It seems to me that the Bill is an attempt to bring up to date a very complicated position, and, therefore, it has my full support.

3.19 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Sir Keith Joseph)

I warmly congratulate my hon. Friend the Member for Bridgwater (Sir G. Wills) who introduced this Bill so well today, both on his luck in the Ballot and on the admirably constructive Measure which he has introduced.

My hon. Friend said that his work will not arouse great passions in the House, but I have always thought that it was a very happy thing in some countries more blessed by sunshine than ours that the great men are sometimes commemorated by fountains. My hon. Friend will find that his name is writ not in water but in pipes—most useful pipes that will be welcome permanently in many parts of the country, the Bill which he has introduced having helped them to get there.

I would say also how fortunate it is that the House has heard today from the hon. Member for Leicester, North-West (Sir B. Janner) since it was the wide-awake observation of the Leicester County Borough authority that first brought to light the anomaly in the underlying Statute which my hon. Friend is seeking to put to rights. It is, therefore, fortunate that the hon. Member has been here today to give the Bill his blessing.

We are only too apt to take water for granted and we face now in this country the great blessing of rising prosperity, and rising prosperity carries with it many increases in demands of every sort but not least a great increase of demand for water. We are always told that cleanliness is next to godliness. I have always assumed that that must have referred to a situation in which it was difficult to get hold of water, so that finding water and using it to keep clean might reflect some initiative and some virtue on the part of those who used it. I cannot quite see that it is exactly as virtuous if running hot and cold water is in the room with each citizen, but nevertheless even if that virtue is reduced because the practice of cleanliness is made easier we must all wish that running hot and cold water should be at the elbow or within the reach of every citizen and I must add —since the effects of the Bill will reach far into the countryside—of every animal as well.

I am sure that there is no one in the House who would not wish to speed and increase the accessibility of water to all who live in our countryside. It is not a question of farming alone, vital though that is, but also a question of allowing the personal standards of those who live in the country to keep pace with those of people who live in the towns.

The hon. Member for Anglesey (Mr. C. Hughes) has widened the debate a little in an interesting way, and I should like to take the opportunity, before dealing in greater detail with the Bill, to remind the House that my right hon. Friend the Minister of Housing and Local Government has expressed the Government's determination to look at water as a problem as a whole, on a national basis. My right hon. Friend has reminded the House that water has a number of features that make its proper treatment vital to the many interests of every citizen in the land. There is the question of an adequate supply at all times, and the House will remember readily that even in the last two years we have had a succession first of drought and then of glut.

My right hon. Friend has drawn the conclusion that there is here a case for seeing whether water cannot be better conserved so as to serve the community more regularly, whatever, within limits, nature may do to us. He has never hidden the fact, of course, that it would be quite beyond the wealth of any country to ensure constant water supplies whatever the conditions of nature, but within those limits he has declared his resolve to do what the Government can do to iron out the extremes.

My right hon. Friend has reminded the House that there has also to be taken into account the amenity value of water, the beauty of the stretches of water spread throughout our country and the purity of the water so that it can be enjoyed both by human beings and the fish who should live in it. That introduces a vast subject which the House will, I hope, be debating on the Bill which will be introduced shortly by my hon. Friend the Member for the City of Chester (Mr. Temple). There are also to be remembered when considering water the interests of navigation. Particularly in that connection I think the House may be content that the Government are considering these problems as an interrelated whole, though, as I say, nothing can guarantee the country against flood and drought if nature imposes at any time her extremes upon us.

I turn now to the Bill, which plays a useful and honourable part in this larger picture. I would remind the House that the principle behind the Rural Water Supplies and Sewerage Act, 1944, which my hon. Friend's Bill seeks to amend, is that help should be made available from the Government, acting as a conduit for the citizens as a whole, and from the larger aggregations of local authorities, acting as a conduit for the local ratepayers, to rural authorities which are installing water and sewerage schemes for the first time. These schemes in rural areas have to cover large distances and involve a much greater cost per head of the population served than those in the denser areas of population.

It was the intent behind the 1944 Act that this help should be available for schemes carried out in rural areas irrespective of the body carrying out the work. The idea was that a grant should be made by my right hon. Friend under Section 1 of the 1944 Act, and that there should normally be a corresponding grant from the county council of the area in which the rural area to be served lay.

The House will wish to be reminded that Section 2 (1) of the 1944 Act provides that where the Minister undertakes to make such a grant towards the cost of a water or sewerage scheme the council of the county within which the area of the authority to whom the undertaking is given falls shall also contribute to the expenditure. The amount which the county council has to contribute is to be agreed with the authority providing the water or sewerage service. Failing agreement, my right hon. Friend has power to decide what contribution the county council shall make. If my right hon. Friend, failing agreement, is called upon to determine the amount of the county council's contribution, he may not fix a contribution which exceeds his own contribution towards the scheme.

The fact is that an anomaly has apparently slipped into the drafting of the parent Act, and, as my hon. Friend has explained, the county council has not the discretion to make, nor has my right hon. Friend the power to enforce the payment of, a contribution when the water undertaking supplying the rural locality in question is a county borough council or a joint board in which such council is represented. In these cases, the area of the authority incurring the expenditure does not fall within, that is, wholly within, the administrative area of the county. Therefore, as I have said, the county council is not obliged, and is not even empowered, to make a contribution. I should reassure the House that my right hon. Friend's own power to make a contribution is not affected, but he has no power to make a determination in respect of a county council contribution.

If the Government were not pursuing a policy of regrouping, this would not, perhaps, be a very serious difficulty, but it is becoming increasingly significant as the regrouping of water undertakings gathers momentum. The reason for this is that county boroughs are more and more tending to take over rural areas outside their boundaries in the course of regrouping schemes, so that their responsibilities for water supply extend over a wider area.

Then there is the trend that, as regrouping proceeds, more and more county boroughs will be represented on joint boards. As I have explained, the presence of a representative of a county borough on a joint board disqualifies that board, where it undertakes the supply of water to a rural area, from receiving any contribution from the county council. The fact arising from the anomaly in the underlying Act is that some rural schemes will receive less grant than was intended when the Act was passed.

The conception behind the Act was a clear one of partnership between the Exchequer, representing the taxpayer, the county council, representing the county ratepayers, and water undertakers concerned in bringing supplies to rural areas. The water undertakers and the local authorities are naturally concerned about the residual burden falling on them, and it is the Government's declared policy that regrouping should not adversely affect the order of grants that might otherwise be payable towards rural water supply schemes.

I have been asked several questions about regrouping. I want to acknowledge with appreciation the interest which the House regularly takes in the progress my right hon. Friend is achieving. I have not with me the exact figures, but the orders of magnitude are these: when the regrouping policy began, there were over 1,000 water undertakers. Now, by regrouping, mostly voluntary, they have been reduced to about 800. My right hon. Friend is not in the least satisfied with this speed of progress, and would like to see it going much faster. Nevertheless, substantial progress has been made.

Hon. Members have referred to evidence of bickering among undertakers whose territories are adjacent. "Bickering" is an unfortunate word to use. It would be very wrong if the House did not pay tribute to the very honourable pride in local achievements, and the very honourable desire to retain responsibility for those achievements, which lie behind the deep-seated desire of many undertakers to remain independent. We have heard of conflict between these honourable and proper motives, on the one hand, and the efficient service of a country enjoying rising prosperity and therefore a rising demand for water, on the other hand.

I was grateful for the comments made by my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) who, from his great experience in these matters, spoke sadly of the failure by adjacent authorities to resolve their differencies before coming to Parliament. I am sure that what he said will be widely read and considered, but the fact is that we cannot achieve the policy of re-grouping, which is common to both sides of the House, without disappointing the natural desire of many undertakings to remain independent. I am glad to say that to a very large extent the progress has been voluntary, but it would be disingenuous to hide from the House that the very presence in my right hon. Friend's hand of a sanction of compulsion has its effect. Although that compulsion has been used on only a handful of occasions, with authorities widely differing in size, it remains in reserve and it has been shown that my right hon. Friend is willing to use it.

The hon. Member for Anglesey asked me about the application of the Bill to sewerage, and rightly drew the conclusion that, since regrouping is not being applied to sewerage, as it is to water, the Bill is not immediately relevant. Water regrouping has clear general advantages which both sides of the House have acknowledged, but sewerage seems to the Government to be more suitably dealt with area by area. A general regrouping policy might result in unhealthy concentration of sewerage, creating almost insoluble problems of disposal in certain areas. There are powers in the Public Health Acts for the formation of joint boards for sewerage, but broadly the hon. Member was right to say that although the 1944 Act and any Amendments to it—and I do not exclude this extension—applied equally to sewerage and water, there is no great need for the Bill for sewerage, as there is for water, because there is not a regrouping policy for sewerage.

I now come to the provisions of the Bill itself and what it will achieve. The anomaly which has been described is removed in Clause 1 by amending the wording of Section 2 (1) of the 1944 Act so that the county concerned is no longer described as the county in which the authority to which the undertaking to contribute by my right hon. Friend is given falls—because it is this definition which excludes the county borough which is not by hypothesis wholly within the county—but is amended to be described as the one in which the whole or any part of the rural locality, in relation to which my right hon. Friend's undertaking to pay grant is given, falls.

It might help the House if I read the relevant Section, because these notional Amendments are difficult to follow and it will then be seen what it is my hon. Friend's purpose to achieve. Section 2 (1) of the 1944 Act reads: Where the Minister undertakes under the preceding section to make a contribution towards expenses incurred by the council of any borough or urban or rural district or by a joint board or joint committee, the council of the county within which the area of the authority to whom the undertaking is given falls, or, where that area falls within more than one county, the councils of each of the counties, shall undertake to make towards those expenses contributions of such amount and payable at such times and subject to such conditions, as may be agreed between the council and the authority or in default of agreement may be determined by the Minister. If my hon. Friend's Bill is passed, the relevant Section, as amended, will then read as follows, and I must read it all to the House, since half of it is altered: Where the Minister undertakes under the preceding section to make a contribution towards expenses incurred by the council of any borough or urban or rural district or by a joint board or joint committee, the council of any county within which the whole of any part of the locality in relation to which the undertaking is given falls shall undertake to make towards those expenses contributions of such amount, and payable at such times and subject to such conditions, as may be agreed between the council of that county and the authority to whom the Minister's undertaking is given or in default of agreement as may be determined by the Minister. Therefore, the House will see that the definition of the power of the county to contribute is made dependent upon the area in which any part or the whole of the locality in relation to which the undertaking is given falls, as opposed to the area in which the authority to which the undertaking is given falls. I hope that I have managed to explain that.

Mr. H. Hynd (Accrington)

It is perfectly correct.

Sir K. Joseph

I am grateful to the hon. Gentleman for that remark. It is always good to see townspeople taking an interest in the question of water in the countryside.

Mr. R. J. Mellish (Bermondsey)

That is not really true. We are waiting for another Bill.

Sir K. Joseph

While that may be true, I am sure that the hon. Member is not minimising the importance of this matter for people in the country.

Clause 1 (2) is really a large extension, because it gives the county boroughs for the first time the power to make a contribution, in parallel with the contribution which under the 1944 Act is made by county councils, where a rural area within its responsibility is to be served by a water scheme, and where that service is to be provided by an undertaking other than the county borough's own water undertaking. Obviously, if the county borough's own water undertaking is providing the service, there is no need for a grant, but there may be cases where the undertaking to provide the service is perhaps that of a joint board which operates within the area of a county borough. It is to cater for that sort of contingency that subsection (2) of my hon. Friend's Bill gives power to make a contribution—exactly corresponding to the power given to a county—to a county borough. This is the important extension.

The result of all these changes is to raise the possibility of a change in the rate deficiency grant payment, and that is why subsection (3) makes provision for any possible increase in the rate deficiency grant. The House will realise that mention of Scotland in this part of the Bill is only because there is a link between the rate deficiency grant paid in England and the Exchequer Equalisation Grant paid in Scotland. The House will also realise that it is impossible to predict the effect on the rate deficiency grant of these—on a national scale—almost imperceptible changes in payment. Where a county or county borough is in receipt of a rate deficiency grant and is enabled, empowered or obliged by the Bill to make a contribution which it would not otherwise have been enabled, obliged or empowered to make, because it is in receipt of a rate deficiency grant, there is a potential increase in the payment to that authority. Similarly, if a grant is not available to an area in which an extension of the water supply scheme is placed, and to make up the short fall of expenditure that area raises money, not on the water rate, but on the general rate, that, too, could alter its claim to a rate deficiency grant.

It would be going much too far to say that these two implications must necessarily result in an increase in rate deficiency grant, because, very roughly, that grant is paid on the difference between the average rateable value per head of population, in the national class, and the rateable value per head of population in the particular authority seeking the rate deficiency grant. The results of all these changes could alter that differential, and might even mean a reduction in rate deficiency grant. It is quite impossible to predict the changes, but in case it should result in an increase in the rate deficiency grant the Bill makes provision for that.

The House would probably now wish me to explain the different situations in which the Bill would enable a contribution to be made which would not otherwise have been possible. There are three possibilities. First, there is the position under the 1944 Act, where a rural area which lies wholly within a county seeks an extension of the water service. Under that Act my right hon. Friend is empowered to make a grant, and where he makes a grant the county council concerned is empowered itself to make a grant. If it fails to agree the amount of grant with the area receiving the service, my right hon. Friend is empowered to decide what that grant from the county should be, provided that it does not exceed the grant that he himself has made. That applies where the area concerned and the undertaking supplying that area lie entirely within the county.

Now we come to the second situation, where the authority to be helped is in a rural district council, but the authority providing the service is a county borough. It is this situation for which no county contribution was possible under the 1944 Act, and it is this situation which impelled Leicester County Borough to raise the problem. This is the position which my hon. Friend's Bill seeks to remedy. The provisions of the Bill will result, in this case, in a county still being enabled to make a contribution if the rural locality to be served lies within the county, even if the undertaking which supplies the service is either a county borough or a joint board on which a county borough is represented. That is a clear extension which the Bill will produce over the 1944 situation.

Then there is the third situation, which again the Bill will help, where a rural locality within a county borough's administrative boundaries requires an extension of the water service and is to be supplied by a water undertaking which is not the county borough's own undertaking. In this situation the Bill empowers the county borough to make a contribution towards the cost if my right hon. Friend himself makes a contribution.

This shows that there are two clear ways, out of the three in which this help may be available, in which the Bill will make a clear difference to the financing of these water schemes which are very important for those who live in the country. My hon. Friend was too modest in implying that this was a humdrum, unromantic and unglamorous Measure. Judged by any criterion of human happiness, this sort of legislation leaves its mark upon a country longer than much more dramatic Measures.

I hope that the House will not think that I have treated this subject too seriously. Indeed, it is the proper tribute which a townsman should pay towards those who live in the country. I also hope that, within the bounds of our debate, I have been able to answer the questions asked by the hon. Member for Anglesey. It is always distressing to my right hon Friend when, for larger purposes, he has to override local enthusiasm and local responsibility, but the regrouping policy as a whole which the Bill seeks to serve, and which it will serve effectively, is moving undramatically but usefully forward, and I hope that hon. Members will give all the help they can in pointing out to their constituents that there are national and regional interests at stake here which must, if we are to keep pace with the rising demand for water in a prosperous economy, take precedence over purely local pride and local responsibility.

I congratulate my hon. Friend on his initiative, on his forbearance, and on foregoing the easy glamour of larger and more tendentious issues to pursue by this useful and constructive Bill a purpose which we all applaud. I commend the Bill to the House, and I hope that it will get a Second Reading.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Sir G. Wills.]

Committee upon Friday, 5th May.