HC Deb 03 March 1969 vol 779 cc175-86

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ernest G. Perry.]

10.32 p.m.

Mr. R. H. Turton (Thirsk and Malton)

At Question Time on 18th February, the Minister refused to allow the cost of the proposed £8 million reservoir at Farndale to be paid for by the authorities who will benefit from the reservoir when it is constructed, and directed, instead, that those who will draw no benefit from the scheme should contribute towards its capital cost. This is an unjust decision which is quite contrary to the policy hitherto announced and pursued.

I should like shortly to recite the history of this proposal. In 1933, Hull Corporation obtained statutory powers to construct a direct supply reservoir at Farndale, but during the next 30 years, although it bought the site, it did not build a reservoir nor exercise any of its statutory powers. But in 1961, Sheffield, by a water order, obtained authority to abstract 15 million gallons per day at Elvington on the Derwent, which is a river into which the Farndale River Dove flows, and in 1964 the limit was raised to 25 million gallons and in September, 1965, the Elvington works were opened.

In September, 1967, Sheffield and Hull agreed that a reservoir should be built at Farndale to provide them with the water they would require and to allow it on completion to be managed and regulated by the Yorkshire Ouse and Hull River Authority. A month later, Sheffield and Hull were unable to agree about who should build the reservoir. In the ensuing conflict, it was agreed that the river authority should build it and on 27th March, last year, the river authority accepted this responsibility. At that meeting the river authority decided that the scheme should be financed by contributions from those directly benefiting under the procedure provided in Section 81 of the Water Resources Act, 1963.

At a public inquiry held on 14th May by an inspector of the Ministry, the agreement between Hull and Sheffield to share the burden of the costs of the reservoir was disclosed. In consequence, certain objections to the charging scheme were not pursued at the inquiry.

On 16th August, the Ministry wrote to the river authority, when forwarding the inspector's report and said: The Minister considers that a regional ronservation project … should be a charge on abstractors generally. In consequence of that direction, the river authority, on 27th November, 1968, rescinded its previous resolution to charge those immediately benefiting with the capital costs of the reservoir. At Question Time on 18th February I charged the Minister with forcing the river authority to rescind its resolution. He replied by saying that he only advised. That was really a quibble. Had the Minister not intervened, all the authorities were satisfied that those who would benefit would pay. If Hull had built the reservoir in 1939 then Hull would have paid for it. If Hull and Sheffield had not fallen out as to who should build the reservoir and had built it themselves, one or the other would have had to pay for it.

Not only was this direction manifestly unjust, but it is a very dangerous example of Government interference into local matters without adequate knowledge of local conditions. Let me give as an example the Ryedale Joint Water Board, which at considerable expense some years ago tapped an underground source at Ness which will supply its future requirements for at least the next 30 years. In consequence of the work it had to do, it has to bear the burden of a very high domestic water rate of 2s. 4d. in the £. It will receive no possible benefit from the Farndale scheme, but it will be forced, through the Minister's decision, to raise its water rate to 2s. 5d. or 2s. 6d. while Sheffield will get the extra water and enjoy a rate of about 1s. 6d. Hull probably will pay only 1s. 3d.

I wish now to deal with the question of whether the Minister is acting in conformity with the policy laid down in the Water Resources Act, 1963. At Question Time recently the hon. Member for Kingston upon Hull, North (Mr. McNamara), which has a financial interest in this matter, declared that to charge those who are to benefit with the cost would be "to fly in the face of the concept of the Water Resources Act, 1963". He forgot the 1962 White Paper, paragraph 42 of which states: Where conservation works benefit only one or two abstractors, it would be right that those abstractors should meet the whole cost. What would be the purpose of Section 81 of the Act if its concept was not that those who benefit should pay, and not throw the burden on others who could not benefit? As late as 27th September, 1967, the Minister made this clear in the Memorandum of Advice he issued. The paragraph headed "Relating charges to benefits" said: Certain conservation schemes may be primarily for the benefit of a few identifiable abstractors or a few abstractors may specially benefit from them. For instance, a reservoir may be needed mainly to permit increased abstraction by three or four statutory water undertakings in the authority's area … In such cases the charging scheme might not prove the right instrument for distributing the cost to where it should rightly fall. Another course open to the River Authority if they themselves build a reservoir, would be to secure by means of an agreement under Section 81 of the Act, a contribution towards the cost from the abstractors who benefit. Alternatively, the statutory water undertaker or a group of undertakers could build the reservoir subject possibly to an agreement under Section 60. The Minister in that memorandum was outlining the very procedure which the river auhority in their March resolution laid down and which he later forced them to rescind.

There is one further excuse made by the Minister for his decision. He declares that he does not wish to give Sheffield or Hull a vested right in the water in the reservoir, as he might wish to switch it away to some other part of Britain. The logic of that argument would lead to the payment of costs of the reservoir out of general taxation and not out of water rates, but there is no need, because Section 81 does not present that difficulty. The payment could be by way of annual contribution, and if, after a period of years, the right to the water was switched away, so also could be the obligation to contribute.

This is a matter not merely of local concern; a far wider principle is involved. The Cow Green reservoir is being built for the benefit of Imperial Chemical Industries. I.C.I. is rightly paying for that reservoir, not the Northumbrian water ratepayers in the whole of the river authority area.

The Welsh, willingly or unwillingly, allow their water to be stored in reservoirs and conducted to Liverpool and Birmingham. Under the Minister's new policy, are they to be saddled with the cost of the reservoirs which they regard as stealing their water from them? Why should rural Yorkshire pay for the works needed by the more wealthy urban Yorkshire constituencies represented on the opposite side of the House?

The citizen looks to the Minister for justice. He is dismayed and disappointed. He can see no justice in this decision, which I ask the Minister to reconsider.

10.43 p.m.

Mr. Kevin McNamara (Kingston upon Hull, North)

On listening to the peroration of the right hon. Member for Thirsk and Malton (Mr. Turton) I am forced to the conclusion which I always reach when listening to speeches from hon. Gentlemen opposite, that one can expect to hear nothing but narrow parochialism from the party representing the majority on the other side of the House.

One interesting point about this Adjournment debate is that the Water Resources Act, 1963 was the product of the party opposite. By a miracle they realised that water resources had to be looked at not in a narrow parochial sense, but in the interests of the country as a whole, and that water was of prime concern both to rural areas and to our great cities; not only to Wales, but also to Liverpool.

Plans had to be made, therefore, thought had to be given to water resources and the responsibilities of the various interests involved had to be carefully considered. By a stroke, equivalent to the flash of lightning that hit St. Paul and resulted in his conversion, the party opposite brought forward the Water Resources Act, which treated water on a national scale. This is something which surprises me, but I believe that the age of miracles is not yet passed.

The other interesting point is that hon. Gentlemen opposite who are here to speak in this debate were members of the Government which introduced the Water Resources Bill. It was passed with no dissension. The only substantial opposition was from my hon. and gallant Friend the Member for Kingston upon Hull (Commander Pursey), who spoke only to strengthen the Bill and in favour of the interests of Hull rather than against the concept of the Bill. Everybody else who at that time represented the East Riding and the City of Hull voted for it or was not present.

Obviously, this is a proper thing to do. We want to see the resources of the country treated as a whole. If the system which has been proposed does a little towards that, it is obviously very proper. It is ridiculous to suggest that constituencies represented by right hon. and hon. Members opposite do not benefit from it. Obviously, they benefit from the industry which is in Sheffield and in Hull; obviously, they benefit in terms of balance of payments, resources and industrial developments which happen in these great industrial cities. It is for their constituents' benefit as well as mine that the scheme is of such vast importance.

To listen to the right hon. Member for Thirsk and Malton, one would think that the City and County of Kingston upon Hull—I can speak only in terms of that—will, by a sleight of chance, get a tremendous bonanza from the area represented by the right hon. Member. Nothing could be further from the truth. The city council and the citizens of Kingston upon Hull will be put to considerable expense for the works which are to be connected with the scheme. They regret it as much as anybody else, but they do not shrink from it because they realise that the scheme is necessary for them, as it is necessary, I suggest, for the citizens of Sheffield and for the people of the country as a whole.

10.47 p.m.

The Minister for Planning and Land (Mr. Kenneth Robinson)

The issue raised by the right hon. Member for Thirsk and Malton (Mr. Turton) embodies a fundamental policy question—namely, to what extent a river authority should finance water conservation works through charges levied on abstractors of water generally, instead of by seeking direct contributions from particular beneficiaries.

This was a key point of controversy both when the Water Resources Bill was before Parliament in 1963 and more recently in connection with charging schemes prepared by certain river authorities. It may help if I deal with the policy issue before coming to the Farndale project itself.

The 1963 Act transformed the old river boards of England and Wales into river authorities charged with the duty of conserving and augmenting water resources, who would increasingly assume responsibility for major conservation projects in their areas. The White Paper which was issued preceding the Act said that expenditure on conservation should be a charge bearing on all licensed abstractions and uses of water, whether from surface or underground sources". It went on to say that where works were carried out which benfited one or two abstractors it would be right that they should meet the full cost, but the emphasis from the outset was on spreading the costs of conservation works.

That same emphasis is to be found in statements made on behalf of the Government during the Committee proceedings. I would like, in particular, to quote what was said on 18th June, 1963, when an Amendment was put forward by the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) which sought to secure the apportionment of charges according to benefits received—slightly ironical, I think,

The then Joint Parliamentary Secretary advised rejection of the Amendment partly because it cuts across the whole basis of the charging scheme, partly because it would be wholly unworkable and partly because it would undermine future conservation work. Broadly, we would be asking river authorities to erect new conservation structures purely to meet specific future demands, leaving those who have got there first firmly entrenched without making any contribution". Subsequently, in accepting that it might be right in certain cases for river authorities to make charge-payers within particular catchments pay the full cost of works within those catchments, he went on to say: I do not think we can go further than that and try to identify the exact degree of benefit every abstractor is likely to obtain from each particular conservation work. We have to follow the general principle which we adopt in connection with such things as drainage and water supply where we spread the load".—[OFFICIAL REPORT, Standing Committee F, 18th June, 1963, c. 532–62.] There is, however, no better evidence of what Parliament intended than what appears in the Statute. The plain fact is that Parliament did not—and deliberately did not—legislate for apportioning charges according to benefits received. It is true that, under Section 81 of the Act, authorities may receive voluntary contributions from other bodies, but they have no power to levy such contributions, and their only assured revenues for meeting conservation costs will, from April this year, be licence fees and charges.

The right hon. Gentleman referred to paragraph 13 of the Department's Memorandum. If that is read in the context of these statutory limitations, it is clear that the exceptions to the general policy of spreading the costs of conservation works are bound to be few. Any widespread insistence that major works should be financed either in whole or part by voluntary contributions from beneficiaries would disastrously undermine the functions of river authorities under the 1963 Act.

There are, moreover, two other critical objections to such an approach. The first is the practical difficulty in many cases of apportioning costs according to benefits—which often go wider than appears at first sight—and the second is the economic undesirability—as well as the unfairness—of relieving those who have pre-empted existing sources of supply from their share of the costs of works necessary for the general augmentation of resources.

Therefore, as I see it, where this issue of charging the costs of conservation work arises, the broad criterion must be this. If the river authority is carrying out a major project as part of its general strategy for augmenting resources, it should be allowed to raise in charges the necessary funds. Where, however, it is virtually acting as agent for particular abstractors in carrying out works which those abstractors might normally have been expected to carry out for themselves, then it could be reasonable to insist that the authority must either meet the costs from direct contributions or not incur them at all.

I now turn to the particular circumstances of the Earndale project, and I would emphasise at once that, in discussing how it should be financed, I must not be taken as prejudging the question whether the project should be carried out at all. The sole question that we are debating is how it should be financed if it is to be carried out.

The right hon. Gentleman has pointed out that the present project is the successor to another which Hull Corporation has for many years had powers to carry out on its own account, and that, before the river authority assumed responsibility, the water undertakings mainly concerned considered the possibility of executing it themselves. However, the history of the project merely reflects the changing balance of responsibilities brought about by the 1963 Act itself. In the event, it was considered more appropriate for the river authority to carry out the project, and at the time its charging scheme was put to my right hon. Friend for approval, the position was that the authority proposed to carry it out, and had provided for the costs in the scheme, but the question of direct contributions had not been finally settled.

The question was not whether the project was, in fact, to be financed through charges, but whether the authority should be allowed so to finance it if it wished; and the real test of this was the nature of the project. Was it a project of general benefit to resources, or was it, as the right hon. Member has contended, simply a scheme for the exclusive benefit of certain water undertakers? And was the authority, in assuming responsibility for the project, simply acting as agents for those undertakers?

My right hon. Friend decided that it would be wrong to regard the project in that light. First, it was for a river regulating reservoir, a type of project obviously appropriate to the functions of a river authority. Secondly, the Water Resources Board, in an interim report of its survey of the North, had strongly recommended it for the purpose of meeting the next 10 years' regional needs. It was considered that if such a scheme were carried out, paid for and controlled by the river authority, it would be a valuable addition to resources which need not be regarded as allocated to particular beneficiaries for all time.

Mr. Turton

I have read the report of the Water Resources Board. It recommends this reservoir for the benefit of Hull and Sheffield.

Mr. Robinson

My assurance is that it recommended it for its general regional benefits.

Mr. McNamara

This scheme has been backed by the C.B.I., the C.E.G.B. and other industrial undertakings.

Mr. Robinson

I think that this is true. I want to develop the point further if I may have the time to do so.

Thirdly, like most river regulating projects, it would confer more general benefits; there would be increased opportunities for abstraction from the Derwent over and above the immediate requirements of Hull and Sheffield, and there would be a greater assurance of supply for existing abstractors; in addition, some of the water abstracted from the Derwent would eventually be discharged as effluent to other rivers in the authority's area, thus adding to the resources of those rivers.

In the light of these considerations, my right hon. Friend decided not to delete from the authority's charging scheme, either in whole or part, the provision made for meeting the costs of the Faradale project. However, and I must stress again, the actual decision remained with the river authority, and it was only when the authority sought the advice of the Water Resources Board and the Department that it was urged—not directed—to finance the project through the charging scheme, rather than by direct contributions. That advice seems to me to be absolutely sound.

I appreciate that if the Farndale project is carried out there are bound to be a number of abstractors in the river authority's area who will have to share the costs, but who will not—at any rate in the immediate future—benefit from it. I sympathise, in particular, with the Ryedale Water Board's consumers in having any addition made to an already admitedly relatively high level of rates and charges.

But this is not a subject where we can afford to be short-sighted. This project is the beginning of an era, not the end of it. Other major works, with a different spread of benefit, will eventually be required to meet the area's needs, and at some point it may be sensible, as the Water Resources Board has pointed out, to reallocate the resources made available by the Farndale project itself. It would, therefore, in its view and that of my Department, be wholly mistaken to assume that those who do not benefit now may not benefit in some way later.

For these reasons I cannot accept that my right hon. Friend was wrong to approve the river authority's charging scheme in its present form, or that it was wrong subsequently to advise the authority to recover the costs of the Farndale project through the charging scheme. It would be quite wrong for us now either to persuade, or to try to persuade, it to change its mind or indirectly to relieve particular abstractors of their obligation to share these costs by requiring the authority to make special reductions of charge. It seems to me that it would be an extremely difficult and dangerous road to embark upon. To take such action would be unjustifiable in itself, it would vitiate the charging scheme, and it would undermine the position of the river authority in assuming the new responsibilities entrusted to them by the 1963 Act, which I remind the right hon. Gentleman and his hon. Friends was passed through this House when the party opposite was in power.

The action that my right hon. Friend has taken in this case is wholly consonant with the purposes of the Act as intended by Parliament.

I have some sympathy with the right hon. Gentleman's constituents, because I can see their point of view, but it is, as my hon. Friend rightly said, a parochial point of view. I ask the right hon. Gentleman to take a somewhat broader view of the matter. If he does, I am sure that he will see the wisdom and the justice of the action that my right hon. Friend took in advising the river authority, consonant with the advice that the Water Resources Board gave, to arrange its charges in this particular way so that they fall generally upon abstractors throughout its area.

Mr. Paul Bryan (Howden)

Before the Minister sits down, will he answer the straight question: what possible future benefit could the East or North Riding get out of it? The Minister said that in the broadest sense something one day might happen. This does not interest people where I live. They would like to know what benefit they will get.

Mr. James Johnson (Kingston upon Hull, West)

It is a fact that the two adjoining constituencies of Hull—Haltemprice and Bridlington—will share in the benefits. They are part of this large corporation undertaking. Hull is the larger or the main partner, but the adjoining areas will share in its benefits.

Question put and agreed to.

Adjourned accordingly at one minute past Eleven o'clock.