HC Deb 06 December 1965 vol 722 cc177-97

10.31 p.m.

The Chairman

I think that it would be for the convenience of the Committee if, with the first Amendment in line 12, we considered the Schedule—Conditions for the Assessment of Contributions.

If the Minister is satisfied that there are special circumstances of an exceptional nature which justify an increase in the limits of £600 and £800 hereinafter specified, he shall increase the said amounts to such extent as he shall see fit, but otherwise he shall assess the contributions under section 1 of this Act as follows: For the provisions of rural water supplies—

  1. (i) he shall take the estimated cost based on tender of all work between the source (and associated works) and the curtilage of the properties to be served by the proposed supply, including the cost of work on the source and associated work, the pumping stations, the service reservoirs and similar installations and equipment included within the scheme for the proposed supply;
  2. (ii) he shall deduct from the said estimated cost a sum calculated by mutiplying the number of properties to be served by the proposed supply by £15;
  3. (iii) he shall divide the residual amount by the number of properties to be served by the proposed supply and where the cost per property obtained by that division is £600 or less, the contribution shall be 35 per cent. of the sum so ascertained multiplied by the 178 number of properties to be so served; amounts in excess of £600 shall be disregarded.
For the provision of sewerage schemes—
  1. (i) he shall take the estimated cost based on tender of all work from the curtilage of properties to be served by the proposed sewerage scheme to the sewage disposal works or sea outfall sewer or to the connection with another authority's main sewer, including the cost of work on the sewage disposal or outfall sewer, ejector stations and similar installations and equipment included in the said scheme;
  2. (ii) he shall deduct from the said estimated cost a sum calculated by multiplying the number of properties served by the proposed scheme by £25;
  3. (iii) he shall divide the residual amount by the number of properties to be served by the proposed scheme and where the cost per property obtained by that division is £800 or less, the contribution shall be 35 per cent. of the sum so ascertained multiplied by the number of properties to be so served; amounts in excess of £800 shall be disregarded.

Mr. Graham Page (Crosby)

I beg to move, in page 1, line 12, at the end to insert: Provided that so far as the said subsection (5) as substituted as aforesaid increases the limit contained in the Rural Water Supplies and Sewerage (No. 2) Act 1955 on the aggregate contributions no contribution shall be made thereout unless it has been assessed in accordance with the conditions set out in the Schedule (Conditions for the assessment of contributions) to this Act. The words of the Amendments are an introduction to the new Schedule. The reason for the Amendment is that prior to the Local Government Act, 1958, and the introduction of the rate deficiency grant, the amount of the grant for rural water supplies and sewerage was entirely in the discretion of the Minister. There have been some formula which was applied inside the Ministry in assessing the grant to be given, but that was not made public, and it was not evident from the amount or the manner in which the grants were given.

When the rate deficiency grant was introduced in 1958, an interim scheme for assessing grants was devised and was applied for a few years. That was put into a semi-permanent form by means of Circular No. 15 of 1961 from the Ministry, dated 4th April, 1961. There, a formula was set out upon which the Ministry would in future make the grant under the Rural Water Supplies and Sewerage Acts, 1944 to 1955. Of course, in law the calculation of the grant was still in the discretion of the Ministry, but it was undoubtedly an advantage to water undertakings that they should know the formula on which their grants would be calculated, and it was an advantage to have it set out in such a circular so that they might know how much they could expect and could plan their schemes accordingly.

Circular No. 15 of 1961 set out this formula, which has been in operation now for four years and eight months. The formula, which is partially repeated in the Schedule which I have put on the Order Paper, was set out in the circular in the following way, if I may summarise it: that the grant will be assessed by taking the estimated cost of all works between the source and the properties to be served, and excluding the cost of work on the source and associated works, that is to say, excluding the cost of head works of any water supply. Having got that figure one deducted from that amount a sum calculated by multiplying the number of properties served for the first time by £15. One is therefore dealing with properties served for the first time.

Finally, one divided the residual amount by the number of properties being served for the first time and where the cost per property obtained by this division is £300 or less the Minister's grant is 35 per cent. of the sum so ascertained multiplied by the number of properties being served for the first time. That sum of £300 referred to the properties being served for the first time with a water supply. The figure for sewerage was placed at £400.

During the Second Reading debate I asked the Joint Parliamentary Secretary whether he thought that this formula needed some revision. I said: I think that this is the first opportunity which the House has had of considering this change from a flexible system of grant to a formula system laid down in 1961. It is worth considering now whether there can be any improvements". The only reply that I received from the hon. Gentleman was, I think that so far the formula has operated fairly well, and that the limits which have been given in it of £300 and £400 have shown themselves to be adequate, but prices have risen since they were fixed, and discussions are shortly to start with local authority associations about what future ceilings should be provided. When these discussions are complete, I hope that it will be possible to look at the position again."—[OFFICIAL REPORT, 26th November, 1965; Vol. 721, c. 919–47.] There was, therefore, no firm undertaking given that these figures and this formula would be revised or even reviewed.

This was wholly unsatisfactory and the Government are bringing forward this Bill to increase the amount to be devoted to grants for rural water supplies and sewerage and in doing so, if I understand the Joint Parliamentary Secretary aright, they are saying in effect, "We think that the present system of distributing these grants is all right but we are talking to the local authority associations." I interpolate, why only the local authority associations? Why not the water boards and water companies? The Government add, "We hope that it may be possible to look at the position again".

This is extraordinarily casual. When a sum of £30 million is being brought before the House of Common it is vitally important to know on what basis the grants will be calculated and paid out of that £30 million. There will be no opportunity for the Committee to consider this matter again. If the Government decide to revise the formula or to leave it as it is, I assume that this will be done merely by issuing a circular, as was done before, and the matter will not be brought before the House of Commons for consideration.

To do this in this vague way is most unbusinesslike. The purpose of the Amendment, therefore, is to make the Minister's mind up for him. The Amendment sets out a formula which shall be written into the Bill and not be just left to government by circular. The Amendment does more than just make up the Minister's mind for him. It amends the 1961 formula so as to bring it up to modern requirements after it has been in operation and tried out and tested for nearly five years.

The Circular promised that this would be done and said in paragraph 18: It is the Minister's intention that the scheme should operate in this form for three years from that date. It will then be reviewed, though the Minister will be willing to consider an earlier review should anything occur to affect seriously the factors in the formulae. So it was contemplated by the Ministry at the time that this formula should be reviewed.

As the Parliamentary Secretary knows, several points have been put to the Ministry through the water undertakers and the British Waterworks Association giving evidence of cases in which the formula has not worked satisfactorily. I have endeavoured to take these points into account in the Amendment. First, the formula in the Circular does not take into account in calculating the grants the cost of headworks. Second, it does not take into account the properties which are not served for the first time but in respect of which the supply is improved. Third, the formula in the Circular has the figures of £300 on which the water supply grant is based and £400, on which the sewerage grant is based.

The formula in the Schedule which I am proposing would take account of the cost of headworks. This has been proved essential over these five years. The water undertakings are finding great difficulty in meeting the cost of headworks without getting grant towards that cost. It is not tenable to continue to argue that an urban water undertaking has to provide headworks and, therefore, no grant should go towards the headworks supplied by a rural water undertaking. To provide storage at the source and all the ancillary equipment is far more expensive for a scattered supply than it is to provide the same sort of equipment for an urban supply. I have endeavoured to take this into account in my proposed Schedule.

The second point is that the formula applied by the Ministry is restricted to properties served for the first time. I think that this might be better argued on the next Amendment, so I shall leave it for the moment.

The third point is, perhaps, the most important of all, namely, the need to increase the figure on which grant is based. At present, for water supply, the Minister's grant is 35 per cent. of £300 per property if the cost comes up to £300. Over the years, of course, the cost has increased, and it is now estimated by the British Waterworks Association to be £600 rather than £300. This estimate is supported by a number of examples from the water boards. One comes from the North Devon Water Board which, in 1964, considered 33 schemes, in 19 of which the cost per property exceeded £300, the highest being £700. In the case of the East Shropshire Water Board, which took a test over certain schemes, it was coming out at £500 per property. In the case of the West Cornwall Water Board, it was £400 on water supply and £800 on sewerage per property. These are the sort of figures which show that the present formula is quite out of date and inadequate. It should be increased to the maximum of £600 in respect of water supply and £800 per property in respect of sewerage.

Those are the maximum figures. It does not mean that the grant must be based on those figures if a scheme does not, in fact, cost that, but the Minister should not restrict himself to the figures of £300 and £400 as they appear in the formula at present but should increase them to £600 and £800. If he is not prepared to give an undertaking to do that and to apply that sort of formula in future, it is our desire on this side to write that into the Bill. I hope that the Minister will accept that the formula set out in the Schedule is the right formula now and that he will have it written into the Bill.

10.45 p.m.

Mr. James Scott-Hopkins (Cornwall, North)

The case has been put extremely well by my hon. Friend the Member for Crosby (Mr. Graham Page) in arguing the Amendment. I shall confine myself mostly to the second part of the Schedule concerning the sewerage side. The point that my hon. Friend made about water undertakings, particularly in reference to the North Devon Water Board, which operates in my part of the world, was extremely true. It has had great difficulty in the past because of schemes costing more than the limit laid down in the 1961 Circular.

It is also true that in the West Country, certainly in my part of Cornwall, the sewerage services are extremely behind the times in many areas. Although we now have a water supply to a great many of the outlying rural districts, this has not been followed as quickly as it should have been by sewerage services, and the result is not particularly happy. Part of the reason is the enormous cost.

I attended a conference not long ago of all the authorities in my constituency concerned with water and sewerage, particularly sewage and its disposal. One authority, the Wadebridge Rural District Council, has sewerage works in hand, which ought to be carried out, to cost about £1 million. This is not a precise figure because the exact costings have not yet been done. Altogether the amount of work which needs to be done in one constituency is of between £2 million and £2¼ million capital value, which is a fantastic amount of money.

Under the existing system, outlined by my hon. Friend, the limit is £400 per property, but most schemes cost more than this. Indeed—I hope that my hon. Friend will not mind my saying this—I have doubts as to whether the words in the Schedule are not a little too rigid and not likely to allow enough flexibility. I would hope that in special cases the formula would not have to operate. I understand that this is so in existing circumstances. I believe that it is purely a Ministerial decision based on the 1961 Circular as to what the rate of grant shall be up to a certain maximum. So there is a fair amount of flexibility.

While I agree with my hon. Friend that the levels must be raised, and from the sewerage angle £800 is certainly a better level to start thinking from than the £400, I have doubts whether it will be sufficient. I hope that before the Minister finally decides he will see whether further flexibility can be imported into the provision. I trust that if he rejects my hon. Friend's suggestion, which is better than the existing position, he will give an assurance that, far from sticking to the 1961 Circular because the £400 limit there laid down is unrealistic, especially in rural areas, he will have the closest consultations immediately with the authorities concerned, not only in my constituency but elsewhere in the West Country, which are facing the problem of needing to do a great deal of work in providing sewerage facilities in their hamlets and villages in the remoter areas, something which in 1965–66 should be done. I hope that the Minister will make provision so that this can be done at a reasonable cost.

I also hope that the servicing of the capital interest will not be too great a burden on the local authorities, which is the other problem with which the local authorities which have to do the work are faced. This, of course, increases the rate burden which the ratepayers, who are rather scarce, have to carry.

I hope that the case has clearly been made out to the Joint Parliamentary Secretary that there is a great deal of disquiet in rural areas about the level of the existing grants. The Amendment would go a long way to help put this right, but over and above this I hope that there will be flexibility in respect of cases such as those of my constituency and elsewhere in rural areas, and that additional grants can be made to the local authorities with a great deal of high capital cost to face.

Mr. Peter Bessell (Bodmin)

I, too, hope that the Minister will feel able to accept the Amendment. I share the view that the position in rural districts is very difficult. The hon. Member for Cornwall, North (Mr. Scott-Hopkins) mentioned an example in his constituency and I reinforce his argument by mentioning a similar case in my constituency, which adjoins his. The example is that of Lostwithiel, where the river board has, rightly, stated that the local authority may no longer discharge sewage into the river.

The local authority, in turn, is unable to provide a new sewage works because of the cost. The consequence is that it is unable to build any new houses, being unable to link any additional sewerage to the existing means of disposal. Thus, it cannot raise additional rates as a result of building new houses, which would create new rateable hereditaments and increase its income, enabling it perhaps to pay for a sewerage disposal plant. The local authority is between the devil and the deep sea.

In such a situation, the proposed Schedule would perhaps go some way to alleviating the position. It would not go the whole way and I was glad that the hon. Gentleman emphasised his hope that the Minister would retain some degree of flexibility so that he could make special orders in these circumstances. In the case of Lostwithiel, and possibly in the case which the hon. Member mentioned, special powers should be exercised.

Nevertheless, the Amendment and the new Schedule would go some way to meeting the problem of rural areas and I hope that the Minister will not be obstinate about this but will recognise that, with increasing costs, the original figure of £400 in the case of sewerage is no longer adequate, and that, while £800 may not be adequate, it would go a long way towards meeting the demand. I hope we shall hear that this is acceptable to the Government.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl)

I am grateful for the speech of the hon. Member for Cornwall, North (Mr. Scott-Hopkins), who made a reasonable and balanced approach to the problem. I do not think I had the pleasure of seeing him at our Second Reading debate on 26th November. If he had been here, he would have heard the hon. Member for Crosby (Mr. Graham Page) making virtually the same sort of speech as he himself has just delivered. But the hon. Member for Crosby has now contradicted himself, which has puzzled and rather embarrassed me. The hon. Member for Crosby said on Second Reading: I do not think that we ought to return to the completely flexible system, but it is worth consideration to see whether the present system of formula grant is too rigid."—[OFFICIAL REPORT. 26th November, 1965; Vol. 721, c. 919.] That is the point of view that the hon. Member for Cornwall, North put forward tonight and it is a reasonable view. In fact, this Amendment and the Schedule would introduce great rigidity into the Bill. The Amendment would bind the Minister to the comparatively narrow terms of the Schedule, with certain exceptions which are there anyway.

As I tried to explain on Second Reading, we inherited from the previous Government a survey into the working of the Act and particularly the Circulars. The results of that survey are now being assimilated and on the basis of the evidence produced my right hon. Friend will initiate discussions with the associations concerned to see how far and in what respects the present formula should be altered. The hon. Member for Crosby asked why only the local authority associations. The answer is that the British Waterworks Association itself is representative of both local authority and company undertakings and will be a party to the discussions.

That seems to be the sensible way in which to tackle these problems. We have the evidence and we will discuss what changes should be made in the present schemes laid down in the Circular. That can all be done without further legislation because those are administrative matters. The provisions in the proposed Schedule might be too much or too little. If the sums have not been done correctly and too high a maximum is inserted into the grant formula, although the amount can be reduced when shown to be excessive, there is always a danger that people will get into the habit of thinking in terms of the higher figure. It is very difficult to keep down costs when it is believed to be all right to add on another £200 or £300. It would be unwise to take a rather wild jump at saying what the maximum figure should be.

Mr. Scott-Hopkins

I follow the hon. Gentleman's argument this is the right way to do it, but are not the limits rigid at the moment? Is not the hon. Gentleman—quite naturally—adhering to the Circular and therefore to the rigid limits which are now operating harshly? While discussions are going on, could he not be a little more flexible?

Mr. MacColl

In the present arrangements as laid down in the Circular there is power to go beyond the normal limits in exceptional circumstances. On Second Reading in a discussion with the hon. and learned Member for Montgomery (Mr. Hooson) we quoted some cases in which that had been done and others in which it had not been done when some scheme had not been economically the most desirable. The Department is flexible about this matter and we recognise that there is a sort of concession stage.

One of the problems is that we are working on 1961 prices. One of the odd things about the proposed Schedule is that the hon. Member for Crosby starts by doubling the maximum in one case and he has included what is normally called the urban deduction, the supposed difference between doing this work in a rural area and doing it in an urban area, but he has left that figure at the 1961 level. That is departing from the principle that the scheme is to help rural authorities which suffer from special handicaps. That is the difficulty about headworks. It is not practical to include headworks in the grant because they are normally of the same sort of cost whether serving urban or rural communities.

11.0 p.m.

This is something we could look at if there is convincing evidence that there is a marked disparity between them. I ask the House not to accede to the hon. Gentleman's Amendment. I think his formula is wrong. Even the hon. Gentleman nods occasionally, and it is a warning to lesser Members, that we might ourselves get into trouble. The thing to do is to continue these discussions which are going on in the normal way. There is no doubt that there will be a fair bit of haggling about it. But at the end of it an agreement will be reached on the best formula. When that is done the Circular will be amended.

Mr. Graham Page

I would draw the attention of the Parliamentary Secretary to the first few lines of the Schedule. It reads: If the Minister is satisfied that there are special circumstances of an exceptional nature which justify an increase in the limits… then he shall make provision accordingly. That is far less rigid a formula than the one laid down in the Circular, so his argument that I am endeavouring to make it more rigid falls to the ground. This Schedule provides for the Minister to consider special circumstances and to increase the grant in those cases. There have been very few cases, as far as I understand it, under the Circular, in which any increase in grant has been made. It may have been reviewed later, when some exceptional circumstances have arisen in the provisions of the scheme, but not outright, when the grant is first made.

The second point is that we have been given no assurance that the figure will be amended as a result of the review which is now taking place. I do not ask the Parliamentary Secretary to prejudge what may come out of the review, but does he not think that prices have increased since 1961, and that there is a real justification for increasing the formula figures on that basis? He held out a tempting word or two about the cost of headworks, saying that they might be considered again. Can he not go further than that and give some assurance that these various factors com- bined will make the Minister increase the formula figures?

Mr. MacColl

We have had some forward estimates of what we think the average cost will be and they do not show very substantial changes from 1961. They are greater. Certainly in England they have been running recently at about £100 more. The estimates do not show that there is going to be a very substantial jump. These are matters we are prepared to discuss with the people who know the facts.

Mr. Graham Page

If the Parliamentary Secretary is not prepared to go further than to say that his information does not show a very substantial change from the original figures, I feel no inclination to withdraw the Amendment.

Mr. Scott-Hopkins

I was very disappointed with the reply of the Parliamentary Secretary. What I was trying to argue is that there are a lot of special cases, and what worries me is the existing position. If the Parliamentary Secretary will not give an assurance to the Committee, and I cannot see why he will not, that there will be a reasonable increase, though I accept that he cannot prejudge the case, I think that he should give an assurance that there will be an increase in these levels of grant.

The thing that bothers me is that he is going to have these discussions with the local authorities concerned sitting round a table and then he will come to a conclusion, and the conclusion will be his. He said that there will be harsh bargaining during the negotiations, but it is the Minister's decision which is final and, as far as I can see, this Committee will have no opportunity whatever of knowing what this decision is. Nor shall we have any opportunity of being able to debate it, and trying to persuade the Minister that he has got the wrong formula, or that he has been too niggardly in dealing with the generality of cases. This is the most worrying aspect. I should like the Joint Parliamentary Secretary, if he is authorised so to do, to give the Committee an assurance that when he has come to an arrangement with the local authorities, he will find means of announcing to the House the levels at which the grants will run from the time of that agreement.

Mr. MacColl

I will take advice about the way that it should be drawn to the attention of the House. A circular, however, is a document which is available to hon. Members in the Library. It has the good fortune that it is also open to discussion on the Adjournment, because it does not involve new legislation. I think, therefore, that the opportunities available to Parliament will be adequate.

Amendment negatived.

Mr. Graham Page

I beg to move, in page 1, line 12, at the end, to insert: Provided that no contribution shall be made under this section towards replacing, enlarging, augmenting, linking or adding to the capacity of an existing water supply, sewerage scheme, or sewage disposal works unless the Minister is satisfied that the replacing, enlarging, augmenting, linking, or adding will result in the provision of a more efficient supply, scheme, or disposal works. The intention of the Amendment is not restrictive, as might appear from reading it. It has necessarily to be in this form to be in order with the Long Title of the Bill and the Money Resolution. The intention is to force the Minister to recognise that replacing, enlarging, augmenting, linking or adding to the capacity of an existing water supply, sewerage scheme, or sewage disposal works comes within the purview of grants originating under the 1944 Act.

The major consideration of water undertakings is the increased consumption of existing users and to provide an adequate supply of both water supply and sewerage for existing users to cope with that great increase in consumpiton. In some cases it has doubled over the last dozen years. The estimated increase in water consumption is 4 per cent. a year, which at least doubles it over a score of years. The replacement of small, inadequate supplies by modern, adequate supplies is, and increasingly will be, absolutely necessary over the next few years in many rural districts.

The circular to which we referred on the previous Amendment denies that the Minister has power to make a grant in those cases. It states in paragraph 7: The Minister has no power to pay grant for any work of replacement, whether in water or sewerage schemes. Further, work which simply augments supplies of water from mains will be ineligible except in so far as the augmentation is incidental to the scheme for making first time provision. In calculating grant in cases where supplies are augmented, regard will be had only to the number of houses receiving a supply of water from mains for the first time. This precludes the Minister from giving grant for a water undertaking laying another lot of pipes along the same line to provide an adequate supply to users who are increasing their consumption of water. It prevents, for example, any grant being made to a water undertaking which is taking over an estate or village supply which itself is adequate but which needs the linking pipe. It prevents any grant being made when larger pipes are provided, whether for water supply or for sewerage.

But, in fact, it is not what the Act says. The Act does not preclude grants in these cases, and it is my submission on this Amendment that the Circular is wholly wrong and that it does not follow out the terms of the 1944 Act. Under Section 1 of the Rural Water Supplies and Sewerage Act, 1944, provision is made as follows: Subject to such conditions as the Treasury may determine, the Minister…may, in any case in which it appears to him to be desirable so to do, undertake to make a contribution towards the expenses incurred by a local authority at any time after the passing of this Act—(a) in providing a supply, or improving an existing supply, of water in a rural locality; (b) in making adequate provision for the sewerage, or the disposal of the sewage, of a rural locality. "Improving an existing supply": that surely must include replacing, enlarging, augmenting an existing supply. What else can the words "improving an existing supply" mean? Then the sewerage provision, "in making adequate provision for the sewerage" must surely include enlarging the existing scheme to make it adequate for the locality. Why, then, should the circular say that the Minister has no power to make grants in these cases?

The fact that grants are being made only in respect of property which is supplied with water or supplied with a sewerage system for the first time is causing great difficulty to the water undertakings and the sewerage undertakings. It is preventing what is so important at the present time—in fact, I think, in many cases more important than installation of a new supply—and that is the improvement of an existing supply. There is no purpose in having an inadequate supply, whether of water or sewerage, and to continue to reduce grants in those cases is depriving many of the rural areas of a proper supply.

I hope the Minister will accept this Amendment so that there will be written into the Act a recognition that grants can be made in these cases. As it stands, because he has bound himself by this circular not to give grants in these cases, grave hardship is being caused to rural areas where the water undertakings just have not got the money to carry out these schemes without grant.

Mr. Scott-Hopkins

There are two points I wish to make very shortly on this Amendment so ably moved by my hon. Friend. As I understand the position, it is quite clear that in the 1944 Act there is permission to make these grants in particular cases including the improving of an existing supply, or a supply which is inadequate, and making changes to it to ensure better disposal of sewage. It is this 1961 Circular which has prohibited these payments. I accept the fact that it was brought in under the previous Administration—for other reasons.

The first of the two points I wish to make is that under existing Regulations at the moment about the pollution of rivers there are many small towns in the countryside, particularly in rural counties like Cornwall, which are being put in extreme difficulty by the operation of the local river authorities, the new river authorities under the recent Act, and therefore, if they are going—[Interruption] I am sorry that the Minister should be quite so placid about it as to carry on a private conversation. I know that what I am saying may not be very interesting to him, and he may know the answers to all these matters and questions, but he could be a little more courteous. I shall not be more than two minutes—or three minutes at the maximum.

The Minister of Housing and Local Government (Mr. Richard Crossman)

Will the hon. Gentleman allow me? No?

Mr. Scott-Hopkins

The point I was making was that in these rural areas where local authorities have had to change the disposal of their sewage because of the operation of local river authorities they will be in the position where they will not be able to get grant under the existing Circular of 1961. As my hon. Friend said, it is absolutely necessary that that should be so under the new arrangement that I hope the Parliamentary Secretary and his right hon. Friend will be bringing in after discussions with the local authorities. If that is so, I am more than satisfied. If it is not so, I hope that the Parliamentary Secretary will be able to accept the Amendment.

11.15 p.m.

Mr. MacColl

Whatever may be said about the Amendment, there is no doubt that it goes right outside what was the intention of the original Act. The Act was intended to be a short-term operation dealing with the special problem of catching up on the extension of rural supplies for sewerage and water and something that would be a once and for all job. It is ironical to note that the Minister of Health at the time thought that he could do the whole job on —15 million. Already it has been running for much longer than that.

The Amendment would put a permanent charge on the Exchequer to go on paying out subsidy and grants indefinitely for the continual improvement of water and sewerage undertakings, and it might mean something like another £9½ million added on. So that, in addition to new works, there would be the improvement of existing ones—

Mr. Scott-Hopkins

They have to be done in the case that I have mentioned, so that the £9½ million would be borne by the ratepayers and the rate deficiency grant. That is surely a more suitable way of doing it.

Mr. MacColl

It is to deal with the special problem and the inherent difficulties in getting a supply to an area which has never had it. Where great increases of population lead to a more intensive use of the source or where, for some other reason, it is necessary to improve it, it becomes a different problem. It is the ordinary development of local authority services, and some of them will be picked up in the ordinary local authority provisions. It might well apply in the case of an expanding town, just as it would apply in the case of a village which suddenly doubled its population. There would be little point in making a rigid distinction between rural and urban the basis of the Bill.

If we accepted the Amendment we should be recasting the principle upon which the legislation works and making quite a different goal. I want to make it clear that where both jobs can be done and where a particular operation is primarily concerned with extending a service to a new area and happens to have the ancillary result that it improves or augments an existing supply, that can rank for grant.

The present arrangements are fairly flexible. As I said in the Second Reading debate, the water position is much more satisfactory than the sewerage position, and one has more cause for looking critically at the sewerage position. Certainly my right hon. Friend will be doing so in the course of the next few months when it is under review.

Mr. Graham Page

I cannot accept that the words of the Amendment go outside the Act, which states that for water supplies the Act authorises grants for improving existing supplies. What on earth can that mean except replacement, enlargement, augmenting or perhaps linking up with another supply? It cannot mean anything else.

Mr. MacColl

The hon. Gentleman and I appear to be at cross purposes. I am not chopping law. I was giving, in the ordinary lay sense, the object of the exercise. Indeed, on 18th May, 1944, Sir Henry Willink stated: The object of this Bill is to foster and stimulate the making of those plans so that we shall be ready to make a sustained attack, without one day's unnecessary delay, on the problem of the 30 per cent. of the inhabitants of rural England and Wales who are still beyond the reach of adequate wholesome supplies of water in pipes."—[OFFICIAL REPORT, 18th May, 1944: Vol. 400, c. 361–2.]

Mr. Graham Page

It is satisfactory to note that since that time the 30 per cent. has dropped to the 1 per cent. we discussed on Second Reading. Thus, the 1944 Act has had this good result. However, that does not mean that this process need come to an end now.

If the hon. Gentleman were now presenting a Bill it would be open to him to interpret what he meant by it and to give its intentions. But he is not doing that. He is presenting a Measure which authorises the payment of grants under a previous Act. The grants authorised under the 1944 Act extend to work on improving existing schemes, providing adequate sewerage or sewage disposal. This must necessarily include improvements to existing schemes.

I admit that the Circular issued in 1961 was issued by a former Administration and that it was stated in it by the then Minister that grants would not be made for such improvements. But that scheme has worked for nearly five years and it was stated in the Circular that the scheme would be reviewed in three years' time. I am now asking that it he reviewed, certainly to the extent that grants for improvements be admitted.

We are now concerned with the 1 per cent. hard core of houses in this country which do not have a water supply and, perhaps, sewerage. We can, therefore, go on using these grants for improving the existing schemes; and it is no good saying that, compared with expanding towns, the same problems exist. We have recognised, in the previous Act, that the rural districts are entitled to some assistance from the community in general in the provision of water and sewerage. Progress has been made and in these areas the point has almost been reached when dwelling houses can be supplied with water and sewerage, but to do this we must continue to use the grants for improving existing schemes.

Amendment negatived.

Clause ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Bill reported, without Amendment.

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

11.25 p.m.

Mr. Graham Page

I do not think that we can let the Bill go just on the nod, as it were, on Third Reading, because I should like the Parliamentary Secretary to give us a little further assurance about the way in which this Measure will be administered, and how the grants will be administered. I appreciate that this Bill is another stop-gap Measure like the Rating Bill and the Housing (Slum Clearance Compensation) Bill, but while these stop-gap Measures are on the Statute Book they have to be administered, but it is no good—

Mr. Crossman

Hear, hear.

Mr. Graham Page

I am glad that the Minister says "Hear hear"—but it is no good saying "We are just carrying on while we think about what to do," which is what we have been told, in effect, during the course of the debates on this Bill.

Last year the Minister addressed a questionnaire to the water undertakings. He now tells us that he is having discussions with the local authority associations, but there has been no formal indication as to how the Bill and the grants made under it are to be administered in future. The basis of water supply and sewerage schemes and the administration of these grants in the past has been a partnership between the Government, the county councils and the water undertakings. If one of those partners, the Government, does not intend to be, in legal language, just and faithful to the other partners the partnership will collapse. Indeed, some water undertakings will soon have to find the excess money over the grant to provide water supply and sewerage schemes.

It would be a very great pity if the partnership were to collapse because of bad administration by the Government of these grants, which has made great progress in the last dozen years, and I hope that the Parliamentary Secretary will be able to tell the House of his own proposals for reforming the assessment of the grant in order to make this Bill, when it becomes an Act, as much a success as have past Measures which have authorised these grants.

11.28 p.m.

Mr. MacColl

This Bill has nothing to do with anything about which the hon. Member for Crosby (Mr. Graham Page) has been talking. It is about increasing the amount of grant available for rural water supplies and sewerage by about £30 million, as there would otherwise be nothing in the kitty. That sum ought to last for about five years. With great respect to the hon. Member, I do think that we have spent an awful lot of time to get this very necessary Measure approved.

11.29 p.m.

Mr. Scott-Hopkins

I must take issue with the Parliamentary Secretary when he says that we have taken an awful lot of time on this Measure. The amount of money involved is quite considerable, and in some areas there is very great hardship because they do not have either the water supplies or the sewerage, and now hope to get it. I welcome the Bill—it does add to the amount of money that will be available for these grants to bring that about—but I feel that the hon. Gentleman has been very cavalier in criticising and condemning my hon. Friend the Member for Crosby (Mr. Graham Page) for taking time to examine the matter. We want to make sure that the proposed way of administering the grant is the right way, and that the remaining 1 per cent. of areas concerned get supplies at the earliest possible date.

I am extremely glad that the subject has been brought forward in this way. There are special cases in areas like Cornwall, where a large proportion of the 1 per cent. is concentrated, which will need special arrangements made for them out of the fund being provided, but we should not let this Bill go through without examination, neither should we allow the Parliamentary Secretary to say that we have been taking an awful lot of time. This is an important Bill—and important to a great many of my constituents—the sum of money involved is very considerable, and we want to be quite sure that it is rightly and properly administered.

11.30 p.m.

Mr. Peter Bessell (Bodmin)

I will not take up much of the time of the House, but I wish to underline the remarks made by the hon. Member for Cornwall, North (Mr. Scott-Hopkins). Both he and I represent constituencies where the problem of sewerage and in many cases water supplies remains quite acute for a large number of people in those areas. I hoped throughout the debate in Committee for a positive assurance from the Parliamentary Secretary that the moneys which will be provided under the terms of the Bill will be administered in such a way as to ensure that the hardship which at present is experienced by the 1 per cent. mentioned again and again will be alleviated and the money used to ensure that there are proper sewerage works and proper water supplies to those areas which at present are suffering real hardship. For those boroughs and rural districts which are quite unable to fund these things from their own resources, I hope that we may still have an assurance from the Parliamentary Secretary.

Question put and agreed to.

Bill accordingly read the Third time and passed.