CHARGES SCHEMES (Hansard, 2 May 1973)

§ Mr. Charles Simeons (Luton)

I beg to move amendment No. 73 in page 30, line 14, at end insert: ' and in framing a Charging Scheme a Regional Water Authority shall have regard to any representations that might be made to it by any person appearing to the Regional Water Authority to be interested in any such Charging Scheme regarding any significant variations of local circumstances'. This is the beginning of the part of the Bill which deals with charges. I shall, with permission, take a little time in looking at the background. Unless we consider the background it is difficult to see the focal object of the amendment. The Bill deals with administration. That is administration of a technical nature and not, as perhaps has been apparent from debate to date, solely an extension of local government. Basically it has nothing to do with local government.

Water is more vital than gas or electricity. They are alternatives. We can do without them for considerable periods but we cannot do without water. The hazards of gas and electricity are obvious to most people. The potential hazards 1257 of water should be causing the greatest concern. I shall refer to the cumulative effects which perhaps in their simple form can be observed when the radiation content of water is measured, and the cumulative effect to the fishes of the water which has been passing through them. It is found that, for example, the measurement of strontium 90 is very much greater in the fishes than in the environment.

We are paying for a service which provides a supply. It must be adequately safeguarded to protect us from known or unknown hazards. One of the ways in which that can be done and, of course, the way in which we pay for the supply, is by obtaining cash from three different groups of people who in the ultimate are all the same. We obtain cash from householders, from taxpayers and from customers.

Charges can be levied on water supplied, on water discharged or on the subsequent treatment of water that has been discharged. Charges can also provide a brake on consumption. If we consider the effect of such a brake on the groups which I have mentioned, I believe that the small householder would be affected negligibly. We must consider the amount which he is paying. Of course, we have no means of telling how much he consumes. It is the general belief of those in the water industry that he is probably being overcharged if he has a small house with few taps and is levied on a rateable value. But if we consider the effects of charges on consumption we find that they are negligible.

Perhaps I may illustrate that point by suggesting that if the two Front Benches agreed not to wash for a week, not to have a bath for a week and to find means of attending to their daily needs which involved no flushing of water, the amount that would be saved after that week would not purchase a packet of cigarettes. Therefore, the braking effect, by so charging a domestic householder of the type which I have mentioned, is negligible.

If we consider a slightly larger type of house which has a garage tap and a tap used for watering the garden, the pattern is quite different. Such a householder pays a fixed charge. In all probability he is underpaying for the water which he consumes. The taxpayer is totally eliminated because his rôole as a taxpayer must 1258 be either as a householder or as a purchaser of goods.

We must now consider industry's rôole. Of course, there could be a control by charges on the amount that industry extracts. There could also be a charge on the amount which is discharged. That would restrict extraction. Further, there could be a charge on the cost of treatment if water standards are not acceptable. That is immensely important so long as it is used properly. That will in many instances result in the conservation of water. If the charges are balanced correctly, industry will have to decide whether to put in its own treatment plants and whether to recycle.

Great savings can accrue once people become conscious of the amount of water which they are using because they have to pay for its supply and for its discharge. I know of that from my personal experience. There is, despite what the amendment is aimed at, room for discrimination. That is the virtue of the 10 regional water authorities. Indeed, there should be discrimination as to the rates which are applied within their areas.

The guide should be that clean rivers must remain clean and that dirty rivers must be made cleaner. That should be achieved by rates which permit a competitive position between firms within various areas of the country. What is much more important is that that should be at an international level. That adds up to a temptation for the separate regional water authorities, with their built-in local authority majority, possibly to overtax industry or to make charges which are much higher to industry than to other consumers. Knowing human nature as it is, it is not impossible that that could happen at the time of vital elections.

Many problems result in as much as the Bill repeals Sections 57, 58, 59, 61 and 62 of the Water Resources Act 1963 and Section 40 of the Water Act 1945, and in as much as under the present arrangement with river authorities, where there is a local authority majority, it is well known that many of the problems result from the fact that there are no votes in sewerage.

A situation might arise where discrimination took place. I am only 1259 visualising the possibility. I am not saying that it will happen. However, every group should have some form of safeguard. I understand that that has gone with the repeal of the Acts which I have mentioned, or parts of those Acts.

Every group should have a safeguard because the only alternative, so I am informed, is to go to law. That is enormously expensive. If industry has to go to law it will put up the price of its goods. If industry is charged disproportionately, instead of an immediate increase in the cost of water becoming apparent to the elector there will be a price added to the cost of goods, despite what my right hon. Friend the former Secretary of State for the Environment said—that polluters must pay for their pollution. That would be the equivalent of 4p on a packet of crisps. That factor cannot be avoided in the ultimate. Disproportionate charging will result in an increase in the price of goods.

Perhaps my right hon. Friend will consider that matter and tell us what safeguards there will be either for individuals who feeel that they are being overcharged or for industry if it feels that it is being overcharged.

§ The Minister for Local Government and Development (Mr. Graham Page)

The House is greatly indebted to my hon. Friend the Member for Luton (Mr. Simeons) for his analysis of the possible charging schemes and methods of charging which could be adopted by regional water authorities. He desires by the amendment that water authorities when preparing charging schemes should have regard to representations made by people with interests about … significant variations of local circumstances ". My hon. Friend gave at least a partial reason for asking for representations of that sort to be recognised formally when he asked what other form of appeal there should be for a consumer who was dissatisfied.

The purpose of the amendment is to oblige the water authorities to take into account "…significant variations of local circumstances within their area when framing their charges. I sympathise with the motive, which is to enable consumers who may 1260 feel that the circumstances in their area should be taken into account in fixing the water service charges levied on them to bring them to the formal notice of the water authorities. But the amendment does not appear to be necessary to achieve that result.

There is no doubt that charging schemes of water authorities will be both long term and short term. I imagine that the authorities will make clear the distinction between the two. But the general framework of the schemes will obviously cover a number of years, and while the determination is that the non-domestic use of potable water should be charged by volume, domestic use, initially at least, will have to continue as a charge by water rate. My hon. Friend has distinguished between supply and discharge and treatment for industry, and no doubt rates will be worked out for them. It is intended that guidance on the general charging principles should be given to the authorities, but only after consultation between the Government, the National Water Council and the regional water authorities themselves, backed up, if necessary, by ministerial directions under Clause 26(3) or Clause 27(3).

It is intended that such guidance should be the subject of wider consultation with interested bodies, and it is at that stage that the representations which my hon. Friend contemplates should be made. I say "at that stage" in dealing with longer-term proposals in the schemes because the short-term proposals —the standard unit charges for measured supply, the water sewerage charge based on annual values and so on—may be varied, as indeed water rates and charges and general rates are varied at the present time and varied annually. But in the nature of things the timetable of the annual fixing of charges and the printing and issue of bills will not permit protracted consultations about the process.

But the task will, of course, be one of the most important falling to the authorities, and it is intended that the considerations leading up to the fixing of all the levels of charges should be fully publicised. But to place on top of that an obligation to hear formal representations would be so obstructive to the annual working out of the charges as to make it extremely difficult for regional water authorities to carry out their duty. 1261 The extent to which variations in the circumstances may justifiably be taken into account will, of course, be the subject of national guidance from the National Water Council from time to time.

I sympathise with my hon. Friend's point that representations should be received, and received if necessary in some formal manner. But I would not wish to tie that to the fixing of the rate annually. I imagine that the water authorities will be continually receiving representations and will work them into their charging schemes as they may see fit. My hon. Friend said that the Bill deals with matters of a technical nature. It deals with the provision of a service on a commercial basis, and to that extent we seek not to bind the authorities with unnecessary statutory obligations but merely to lay down general guide lines and general rules which appear in Clauses 26 and 27. My hon. Friend's desires will be realised. The object of the amendment will be achieved—but not by placing any statutory obligation on the authorities.