HC Deb 24 July 1974 vol 877 cc1772-82

12.28 a.m.

Mr. Paul Tyler (Bodmin)

I am delighted to see you in the Chair, Mr. Deputy Speaker, after the long interval of the last two and a half hours. I should like to express my gratitude that. I should be in this position, but at the same time there is a tinge of sadness, in that I know that I have put the Minister of State to great personal inconvenience to be here at this time of night. I hope that he will take it from me that it was not my wish that we should have had to sit through so much to reach this stage.

If it is acceptable, after the last two and a half hours, to move from the ridiculous to the sublime, I should like to quote the words of Petronius in the year 210 BC. He wrote: I was to learn later in life that we tend to meet any new situation by re-organising, and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralisation. If anyone prejudged the Water Act 1973 in the year 210, Petronius certainly did.

I want to deal with the question of water and sewerage charges in Cornwall under three heads. The first is the general situation of rates—and water and sewerage charges come within that category. Second, I want to deal with the situation affecting Cornwall and, third, I want to put five specific questions to the Minister.

On the general situation, the announcement this week by the Chancellor of the Exchequer, followed by the announcement of the Secretary of State for the Environment, gives great hope to those who live in Cornwall—

The Minister of State, Department of the Environment (Mr. Denis Howell)

If the hon. Gentleman wishes to put five specific questions to me and wants answers to them, it may help if he puts them at the beginning rather than at the end of his speech.

Mr. Tyler

I am delighted to oblige. If I refer now to the questions, I hope that I shall be permitted to reinforce my arguments as we proceed, so that the questions achieve their significance.

First, is it the intention to continue the special relief announced this week, including that for water and sewerage rates which rise above the 20 per cent. margin, for 1975, pending the review that has been announced by the Secretary of State?

Secondly, what comparable assistance will the Government consider for the non-domestic ratepayer? In Cornwall, small traders are facing exactly the same increases in rates—indeed, even larger ones, as a result of revaluation last year—and, in particular, they are facing enormous increases in water and sewerage charges.

Thirdly, the Treasury Bench has promised that in due course rate rebates will be extended to cover water and sewerage charges. Will the Minister of State say when that promise may be fulfilled?

Fourthly—I shall have to deal with this at some length in a moment—is the apportionment within each region by each regional water authority, district by district, or is it not controlled by any order or direction of the Minister's Department?

Fifthly, will the Minister give any indication of what will be the basis for apportioning the charge, district by district, within the region during the next financial year, 1975–76?

I hope in the meantime that the Minister will be able to obtain some assistance with the answers to the specific questions.

Mr. Howell

I do not need assistance to answer those questions, but in case I did, I thought it wise to ask the hon. Gentleman to give me early notice of them.

Mr. Tyler

I am grateful for the Minister's consideration. I have in the last few days noted a curious feeling of disappointment amongst members of the Conservative Party that their rate fox has been shot, but I genuinely congratulate the Secretary of State and the Chancellor for realising that some relief for the domestic ratepayer was urgent.

There are three aspects we must consider when looking at the peculiar situation we have arrived at in July 1974. Local authorities, Members of Parliament and ratepayers are already having to consider what will be the situation next year. That is why I put the specific question whether it is the Government's intention—should they still occupy the benches opposite—to continue relief fo domestic ratepayers only.

Secondly, I am sure that the Minister will realise that the non-domestic ratepayer, particularly the small trader, is in an exceedingly difficult situation. I was delighted to hear the Secretary of State at Question Time today, in answer to my supplementary question, confirm that the relief would extend to water and sewerage charges.

That brings me to the Water Act 1973. The Minister of State, on the subject of the Water Act, is on record as saying that the reorganisation of the water services was carried out far too quickly by the previous administration for proper administrative arrangements to be made for direct charging"—[OFFICIAL REPORT, 10th June, 1974; Vol. 874, c. 1382.] He made that criticism of the Water Act with which I and many hon. Members wholeheartedly concur. The Minister of State has been consistent in his objection and opposition to the reorganisation of water and sewerage services. That is why I am delighted that he will be replying to this short debate.

It would be worth while to cover the various ways in which the Act changed—for the worse—the situation in areas such as my own. It removed central Government financial support for water and sewerage services. It removed the precept element for water from the general rate and it removed sewerage from the general rate altogether. It placed these outside the bounds of the rebate scheme and therefore ensured that those on lower incomes—of which there are many in my part of Cornwall—would not receive the help which they would otherwise have received.

Finally, and most importantly, the Water Act 1973, supported throughout the Conservative benches, removed water and sewerage from effective democratic control. We all now rue the day in May 1973 when the Conservative Party went into the Lobby in support of the Act.

This sad fact of life appears on our rate demand. My rate demand, which I received in April this year, shows an increase in sewerage and water charges from about £10 to £39.60—a fourfold increase. There are particular sums which concern the precept and therefore that is not a direct comparison, but my total rate in the district of Caradon, in Cornwall, is £78, and £39.60 of that is directly related to sewerage and water rates. But I do not even have main drainage. The Minister will thus recognise that I, and my neighbours, have a particularly good reason—or a bad reason, depending on how one looks at it—to consider that the water and sewerage rates are an absurd anachronism.

The Minister, on 10th April, in answer to a Question from me, confirmed that the increase in the water rate in the old East Cornwall Water Board area was 229 per cent. over 1973. I challenge any hon. Member to compete with that figure. The sewerage figure is less easy to estimate, because previously it was part of the general rate, but the increase is in the region of 250 per cent.

This is not merely a local reflection of a national problem. That is why the figures are so exceptional. The real reason for the disproportionate rises in South-East Cornwall and other parts of the West Country is that we have become a victim of a curious calculation by the new South-West Water Authority. Instead of apportioning needs and income area by area, as one would have logically thought would be the best way, on either a rateable value or population basis, the authority bases its calculation of the apportionment on the previous year's budget. The extraordinary result is that the district of Caradon which you, Mr. Deputy Speaker, love and often visit, is being asked to pay £753,961, while the new district of Plymouth is being asked to pay £751,578. The district of Plymouth has a population five or six times that of Caradon. I am told that this extraordinary apportionment by the South-West Water Authority is as a result of some Government-sponsored directive or report. I have not yet been able to find any such directive or report.

Indeed, I am told that other regional water authorities—those affecting parts of Yorkshire, for example—have decided to apportion their costs in a different and much fairer way. But, somehow or other, the South-West Water Authority has decided that this is the way it will do it, with the result that the urban areas are finding their rates are not nearly so badly affected by increasing water and sewerage charges, while we in the rural areas are suffering.

This extraordinary apportionment is causing untold misery and hardship to a considerable number of ratepayers in my area. As was made clear when I led a small deputation to see the Under-Secretary of State on 25th March, ours is not a rich area; it is very poor. An enormous number of people are already having to apply for rate rebates.

We all welcome the relief which the Chancellor of the Exchequer and the Secretary of State for the Environment have given this week, but my constituents still face large increases. Many of them, because the rebate does not extend to water and sewerage, will still find it difficult to pay the increases. It is not just the domestic ratepayer who may find himself in considerable difficulties because of the astronomical rise in water and sewerage rates; it is the small trader as well.

Dr. Keith Hampson (Ripon)

The hon. Gentleman said that the £150 million for rebates would not apply to water and sewerage charges. I was told at Question Time today that it would, but the Minister did not say that in the distribution of the £150 million special care would be taken to give those not on main sewerage a higher proportion of the payout than the general ratepayers.

Mr. Tyler

The Minister of State may want to reply to that point tonight, but I want to conclude now. This situation is the result of an iniquitous Act and the subsequent maladministration of that Act by a basically undemocratic bureaucracy. I am delighted that the Minister of State is to reply, because he has consistently attacked the very canker I am referring to.

12.43 a.m.

The Minister of State, Department of the Environment (Mr. Denis Howell)

I am grateful to the hon. Member for Bodmin (Mr. Tyler) for once again drawing the great defects of the Water Act 1973 to the attention of the House. I entirely agree with him. There has rarely been, in the annals of modern Parliament, such administrative nonsense as that Act, unless it be the Local Government Act 1972. The Water Act was imposed within months of the Local Government Act coming into force, and before local government reorganisation had been sorted out. In other words, the Conservative Government quickly imposed a further piece of administrative nonsense on top of another. One readily understands, against that background, why there has been such grave concern in recent weeks about rates.

Everyone in the country now has two treasurers where once there was one; there are two planning departments where once there was one. If one doubles the administrative bureaucracy of local government, one doubles the cost, and that is exactly what has been happening. It has also been happening at a time of large-scale inflation.

But, to make the situation even worse, not only did the last Government double local government administration; they tripled the administration of water service through the Water Act by hiving it off from local government. They thus tripled the administrative costs for water and sewerage. The hon. Gentleman has generously quoted what I have said previously on the subject. The new water authorities were set up with only minimum time to get to grips with the situation, to recruit staff and to try to deal rationally with the problems they inherited. All these things taken together created a sorry situation for many ratepayers.

The Government were faced with trying to deal with these urgent problems. The Chancellor introduced emergency proposals in his Budget, designed to give relief to those democratic ratepayers who have suffered worst. I have looked at the result of the Chancellor's proposals, as announced on Monday, in respect of the hon. Member's constituency and Cornwall generally, and I can tell the House that according to our computer—I think it is accurate; I hope it is—the average householder in Caradon will benefit to the tune of £17.46 in respect of general rates and water and sewerage charges. In North Cornwall, the average amount of benefit will be £16.32, and in Restormel the relief will amount to £17.05.

Mr. Jeremy Thorpe (Devon, North)

What about North Devon?

Mr. Howell

The right hon. Gentleman the Leader of the Liberal Party rightly wants to know about North Devon. I am sure he will not mind if I say that I had not expected him to be here at this hour, otherwise I should have had the figures, but if he puts down a Question I shall be happy to answer it.

I come now directly to the questions which the hon. Member for Bodmin asked. He asked, first, whether the specific relief now announced will apply next year. The answer is, "No, Sir; we hope not". We have undertaken to carry out a major review of the whole charging policy of the water industry and we are looking at the question with considerable urgency. We hope to be able to announce the whole of our proposals for next year's rate and water charges in adequate time certainly to be able to take account of the developing situation, and therefore we do not believe that in the next year's rate exercises it will be necessary to reintroduce this special measure; it will be taken care of by the normal processes of negotiations with local authorities.

Dr. Hampson

The Yorkshire Water Authority, because of inflation and the Chancellor's first Budget, is very heavily in the red, although it had put a 4 per cent. working balance aside. Because of this, it may have to increase its charges next year by 25 per cent. or more. This is quite an acute problem. It will be a tremendous burden on the ratepayers. We think that it should be spelt out clearly what the Government's measures are for helping on this question. Moreover, will the hon. Gentleman admit that this is a transitional arrangement—this system of using local authorities as agencies, when the whole intention of the Water Act was to make water authorities public utilities—

Mr. Speaker

Order. The hon. Member is making another Adjournment speech.

Mr. Howell

I am obliged to you, Mr. Speaker.

I do not know what the intention of the Act was. I do not believe that the authors of the Act know what the intention was. We were not the authors. We all voted against it. The hon. Member for Ripon (Dr. Hampson) was not here to assist us in opposing it. The Labour and Liberal benches voted against it. We predicted what would happen if the Act were enacted, and exactly what we predicted has come to pass. We are now trying to deal with the situation.

I have referred to the position of Cornwall; I hope the House will excuse me if I do not deal with Yorkshire. I am anxious to answer the question which the hon. Member for Bodmin asked.

The hon. Gentleman's second question was whether comparable assistance to that which my right hon. Friend has announced for the domestic ratepayer can be given to the non-domestic ratepayer. I am afraid that the answer must be "No". The House knows the serious economic situation facing the country, and there is not an unlimited amount of public funds which can be made immediately available. We had to decide where our priorities were in disbursing the global sum which the Chancellor of the Exchequer announced, and we felt that it was essential to give first priority to the domestic ratepayer on this occasion.

The hon. Gentleman asked about the promised rate rebates. I am sorry to have to correct him. I have checked what we have been saying. We have not promised to grant rate rebates in respect of sewerage and water, but we have said that, as we are considering the whole matter urgently for next year's charges, we shall exclude nothing from our consideration. Therefore, we shall be happy to look at this possibility.

The difficulty arises from the point which the hon. Member for Ripon has just raised. What the Conservative Government did was to create nine almost autonomous nationalised industries away from democratic control. That was one reason why we opposed their measure. It is only for the administrative convenience of the water authorities this year that their charges have been collected with the general rate. That is not intended to continue. The charges next year and in future years will be collected directly by the water industry. The very fact that the water authorities were taken out of democratic control means that they are not now eligible for rate rebates. That is one pernicious result of this situation. Rate rebates are applicable only to rates. Since no one now pays rates for water and sewerage—they are now charges—it would require new legislation to enable rebates to be paid. It would immediately raise difficulties in relation to other public utilities, such as electricity and gas, if there were special rebates for one utility and not for others. These are some of the considerations which we are having to examine.

The hon. Member for Bodmin then asked about apportionment within regions, and whether this was controlled by Ministers. I have to tell him that it is not controlled by Ministers. Each regional water authority is a self-governing body. If it chooses to have differential charges within its region, that is its own affair, although there is what might be called a reserve power opportunity for Ministers, if they feel that a regional water authority is following a policy which is so inconsistent with the public good that Ministers should issue a direction. Ministers are loth to issue directions to reputable organisations carrying out an Act of Parliament. It is the Act to which we object and not the ladies and gentlemen who are doing their best to make it work in the various regional water authorities.

The hon. Gentleman's final question was about the situation next year in respect of the apportionment of charges within regions. Here again, Ministers will determine policy in the autumn, when we have the advice for which we have asked from the National Water Council and everyone else. Although I have said that nothing can be done this year about apportionment in the regions, this is a matter that I shall be interested to take up with the water industry and the National Water Council in respect of future years.

We shall also do our best, next year, to deal with sewerage charges levied on unsewered properties. Although this practice has been going on for many years, unnoticed by most people affected because it was covered by the general rate system, it has now been highlighted and obviously should be put right. We are making haste to put it right. I guarantee to have some scheme to deal with it next year. We have every intention of maintaining that commitment. However, it is impossible to do anything about it in this financial year.

A considerable degree of attention has been given to water matters—indeed, more in the last 20 weeks than in my 20 years as a Member of this House. I have an interest to declare. Many years ago I was elected vice-president of the old British Waterworks Association and have had a great interest in local authority water services. One by-product of this agitation is that more public attention is being concentrated on the importance of the water industry and its related services, which for too long this country has taken so much for granted. It is one of the most fundamentally necessary of our basic services, which every citizen has the right to enjoy.

I am sure that the House is indebted to the hon. Gentleman for drawing yet further attention to the principles and difficulties involved in this matter and the need to sort them out.

Question put and agreed to.

Adjourned accordingly at three minutes to One o'clock.