§ 1.25 a.m.
§ Mr. Wyn Roberts (Conway)
The purpose of this debate is to seek clarification of Government policy in connection with the provision of water and sewerage facilities in Wales. I shall therefore put a number of questions to the Minister. I hope that the hon. Gentleman, whom we congratulate on his birthday yesterday, will have observed that the planet Uranus is in the ascendant and that it is supposed to have an enlivening influence on birthday celebrants, even at this late hour.
We shall therefore expect from the Minister in his reply to the debate not the usual re-hash of criticism of the Water Act passed by the last Conservative administration but a fresh and constructive appraisal of the problems we shall bring to his notice. We know that water reorganisation has suffered from at least three handicaps additional to those experienced in local government reorganisation.
First, there was the shortage of time between the Royal Assent being given to the Act and the coming into being of the authorities on 1st April. Second, the methods of financing water services had, of necessity, to be of an interim nature. Third, there was the problem of the estimates prepared by the authorities' predecessors, including some local authorities that were being abolished. These estimates were, in some instances, so inaccurate that there had to be a complete re-examination of programmes within 1949 a short period and with a limited number of staff.
We accept that all of these difficulties confronted the Welsh National Water Authority, along with others, last year. But we are now entitled to ask what progress has beep made in dealing with these problems and whether the Government are satisfied with the rate of progress being made. At the end of the Adjournment debate on 6th May, initiated by the right hon. Member for Anglesey (Mr. Hughes) the Minister said:before next year's charges are fixed, there will have been a complete review of how charges should be levied in future."—[Official Report. 6th May 1974; Vol. 873, c. 178.]That review was clearly different from the long-term review being carried out by Sir Goronwy Daniel's committee, as was indicated by a Written Answer to my hon. and learned Friend the Member for Denbigh (Mr. Morgan) on 4th November. What were the results of that review and of the consultations that the Secretary of State and, I believe the Minister, had with the Chairman of the Welsh Water Authority to discuss charging policy? This was referred to in Questions on 29th July.
It is clear from the replies that the Government at least share the responsibility with the authority for charging policy this year. As regards fundamental changes in charging policy, the Government may well reply that they cannot act before Sir Goronwy Daniel's committee has reported. That is understandable. Meanwhile, the Welsh National Water Development Authority is taking certain actions which are causing concern and the Government cannot escape their share of responsibility in connection with those actions.
Before dealing with the Welsh Water Authority's most recent actions I would like to draw to the attention of the Minister the working party report "The Water Services: Estimates and Accounts", published last year, and to the point made there that water authorities should make provision in their estimates for depreciation rather than loan charges. Did the Welsh Authority base its estimates for 1974–75 on this principle, which is more common in commercial than public sector accounting? If not, is the 1950 authority basing its estimates for 1975–76 on this principle recommended by the working party? Some experts believe that failure to adopt this principle could have been a factor in last year's massive increases in water and sewerage charges throughout England and Wales.
This is obviously an important point and I hope that the Minister will comment upon it. I referred earlier to actions which the authority had taken and for which the Government have various degrees of responsibility. First, there is the proposal for equalisation of water rates which the authority approved on Tuesday. It will mean excessive increases in urban areas. I note that my district of Aberconwy was one of the objectors, with Cardiff and Colwyn Borough, and I hope that the hon. Member for Cardiff, North (Mr. Grist) will draw particular attention to the problems of Cardiff.
My district council wanted phased equalisation because the present proposal will mean a 135 per cent. increase in the Conway valley area if it is to be implemented in a single year. What is the view of the Government on this equalisation proposal, and phased equalisation, which has been put clearly to the Secretary of State by the Chief Executive of Aberconwy?
I understand the increase will have to be approved by the Price Commission, but apart from that, what is the Government's rôle in this? They should tell us whether they gave a direction to the authority to implement the equalisation proposal and, if not, what advice was given? What is the reaction of the Government to the suggestion that implementation should be phased to avoid exorbitant increases? Are the Government at this stage in a position to intervene—or perhaps I should say to intercede—by grant under Schedule 3 of the Act to assist those areas liable to suffer the biggest increases?
Those are all questions to which we should like answers.
The Government have acted directly and of this there can be no doubt, in that they recently told the authority that its capital allocation for 1975–76 would be 06.8 million as opposed to the £42.9 million which the authority wanted, after early trimming of some £18 million from projected expenditure. This allocation 1951 necessitated further cutbacks in expenditure of some £7 million, including about £4 million worth of sewerage schemes. These cutbacks make sad reading—£230,000 in the Usk area; £324,000 in the Wye area, £754,000 in Morganny; £488,000 in Dee and Clwyd; West Wales, £683,000; Tawe, £390,000 and Gwynedd, £835,000.
How many started schemes will have to be abandoned as a result of these cuts? Is it true that £800,000 will be lost on the Sker scheme? What will be the effect of these cuts on housing? One cannot build homes without sewerage, and the Minister has been tramping the Principality urging local authorities to build more houses. Will he now detail the housing programmes likely to be postponed because of the cuts?
The cutback is bound to have an adverse effect on industrial development and my hon. Friend the Member for Pembroke (Mr. Edwards), who is at present speeding peacefully to his constituency, is deeply concerned about South Pembrokeshire sewerage schemes and has given me a letter from the chief executive of the local authority to the national water authority. I should like to read part of it.
The chief executive states:I will not reiterate the situation of inadequate sewerage in the district, the steps taken by former councils to rectify, and the manner in which, outside their control, these were aborted. Enough correspondence has already flowed on this matter. What I will reiterate, however, is that the water authority must be fully aware of the situation in this district, must be fully aware of the necessity to provide services (which in the national interest will cope with the expansion and development of the Celtic Sea) and in the light of all previous evidence, and submissions made; why the Water Authority now propose to give these schemes an apparent low priority will never be capable of a satisfactory explanation—whatever the circumstances.The reference to Celtic oil introduces an entirely new, United Kingdom and, in-indeed, international, dimension to the problem. My hon. Friend was right to suggest that the Secretary of State's Oil Advisory Committee should give urgent consideration to the implications for Celtic Sea developments, of delaying the South Pembrokeshire schemes. What has been the Government's response to my hon. Friend's suggestion?
1952 Other hon. Members will, I am sure, indicate the effects of the cuts on their own areas, and I shall refer only to one other by way of contrast. Included in the cuts is a £40,000 scheme to provide basic main sewerage for the little village of Minffordd, near Bangor, in my constituency. At the request of the residents, I visited the area some months ago and saw for myself what the absence of main sewerage meant—people having to carry buckets of excreta, sometimes through the main living room, to a communal dumping ground, which was undoubtedly a serious health hazard, especially for children. I regret to say that this is the second time the scheme has been postponed. When I see that the authority is to spend £300,000 on increasing the size of its headquarters in Brecon I wonder on what basis the authority's cuts in expenditure were made, and the people of Minffordd will wonder, too. Perhaps the Minister will give us some hope and tell us when these desperately needed schemes will be implemented.
We all understand the need for economy and restraint in spending—a need spelt out clearly to local authorities on 23rd December by the Welsh Office circular. With such exhortation—which we hope was not lost to the authorities in the Christmas mail—and with the scathing cutbacks in expenditure on sewerage schemes as the result of Government limitation on capital allocation, one might have expected that the water authority's rate increases would have been more moderate than they appear to be. We know that the authority inherited debts of £180 million, but are the Government satisfied that the proposed rate increases are fully justified? Do they have the Government's approval?
On the brighter side, there is the authority's decision, based on the provision of the Act, to charge more for future supplies going outside Wales. I refer particularly to the negotiations in connection with the expansion of the Craig Goch reservoir, in the Elan Valley. I wish the authority all success in its efforts.
Overall, the subject of water and sewerage facilities in Wales is a depressing one, and the Government cannot shirk their responsibility—certainly not for the cuts in sewerage expenditure which are the direct consequence of the Government's 1953 economic policies. Neither can the Government blame the Act, as they have done repeatedly in the past, for although the Minister may have believed that water services should be paid for from general taxation as much as by a direct charge on the consumer, the Government do not share that belief as regards water, or any of the services provided by nationalised industries.
The Chancellor of the Exchequer has declared the Government's policy to be that of charging realistic prices for the goods and services of nationalised industries. As I said at the beginning of my speech, we need clarification of the Government's policy and I hope that we get it in the reply to this debate.
§ 1.40 a.m.
§ Sir Anthony Meyer (Flint, West)
At this late hour I shall not go in detail into the grave problems of sewerage, which have been so admirably covered by my hon. Friend the Member for Conway (Mr. Roberts).
The problem of sewerage, aggravated by the Government cuts, has been causing difficulties owing to disputes over the interpretation of Section 16 of the Water Act. This has resulted in arguments between the Welsh National Water Development Authority and the district councils as to who precisely is responsible for providing new sewerage facilities for new housing developments. In certain cases this has led to absurdities.
I know of one case in which a sewerage scheme on a new development does not function because it has not been connected to the main scheme. The gap is a matter of feet. The scheme crosses a minor road, but because there is no proper co-ordination between the water authority and the district council the connection has not been made. The authorities are blaming each other for the failure to complete the scheme. I hope that the Minister will encourage his officials to bang a few heads together and will consider whether more co-ordination and co-operation can be achieved.
The district council has been in touch with me urging that the Act should be amended, but clearly we cannot amend the Act after it has been in operation for such a short time. If we were to attempt to do so we should almost certainly make 1954 matters worse. Clearly, the Act has imperfections, but we must allow it to remain in operation for a little while before we decide to amend it. However, even without any amendments to the legislation, I feel sure that the Minister and his officials could make the process work more smoothly if they were to call together round the table the district council and the water authority to discuss some of these practical problems.
Even at a quarter to two o'clock in the morning, I thought that I must be present in the Chamber to convey to the Minister a fact of which I am sure he is well aware of, namely, the continuing fury of my constituents, as no doubt of constituents elsewhere, at the way in which water rates doubled last year. Furthermore, some of those people can look forward next year to still steeper increases. Some commercial ratepayers have no water on their premises, but they will still have to pay water rate or sewerage charges—and that also applies to people whose premises are not connected to main drainage. They are compelled to pay charges for services which they do not enjoy, at a time when the Government are for ever telling them how successful they are being in keeping the cost of living down by tight and effective price control.
I received a letter from a constituent today complaining that he had written to the Price Commission asking why his water rate had virtually doubled at a time when the commission was supposed to be keeping a close eye on these things—and my constituent had not even received an answer. I am looking into that, but I can see the difficulties the commission is in.
People have been led by the Government to expect that measures are being taken to keep costs down, but they find that these costs, imposed on them by public authorities, are not being kept down. This leads to a sense of uncomprehending despair by people whose incomes are fixed as they face rising charges which they cannot escape. One can cut down on other things, such as fuel, sugar, and postal charges—not writing to one's parents when they are ill, for example—but one cannot economise on one's rates or water rates. They are totally non-elastic.
1955 For those whose incomes are frozen, rises in rates and water rates inexorably drive down their living standards at a time when some Ministers and all union officials are saying that we all have a right, at the worst, to maintain our living standards. It puts me and other hon. Members in difficulty when our constituents write to us in anguish and ask what they are to do. They are told that they can maintain their living standards, yet those living standards are falling because of demands imposed on them by public authorities.
If only the Government would say frankly that we must all take a cut in our standard of living—as some Ministers are beginning to do—I could urge my constituents to be a little more philosophical. But I give a pledge that, whatever the provocation, I shall in no circumstances ever encourage any of my constituents to refuse or delay payment—although I can well understand the motives which lead many of them to do so.
I hope that the Government will feel able to give more help to hard-pressed ratepayers and water ratepayers and accept the notion not just of the absolute but the relative hardship of those who are not in absolute want but are suffering a sharp fall in their living standards because they have no flexibility.
I assure the hon. Gentleman—I am sure he found this in his own constituency—that in both elections last year this above all was what was said when people buttonholed me at the doorway. I am sorry to say that I see no sign whatever of this indignation beginning to die down.
§ 1.48 a.m.
§ Mr. Ian Grist (Cardiff, North)
I want to raise two issues. The first concerns a sewerage scheme in an area in which I lived until recently, and the second concerns the charges now falling to the city of Cardiff.
My hon. Friend the Member for Conway (Mr. Roberts) has already mentioned the cancellation, or postponement, at any rate, of the treatment and disposal scheme at Sker. This has been under way for two years and is one of the most amazing examples of the 40 schemes to be put on ice by the water development authority. 1956 I presume that the Under-Secretary of State is aware of the details, so I shall not rehearse them now. But a number of major questions arise. The first and most obvious is, for just how long has this scheme been postponed? We hear that it has been "temporarily abandoned". I fear that there is nothing more permanent than the temporary. I should like to know when the Minister expects this scheme to be taken up again. The director of the development authority has said that it will be "utilised at some time". I cannot think of more depressing words. What do they mean? I am sure that the Minister will try to enlighten us.
It has been stated that the cost of diverting the sewage from the central scheme to the Merthyr Mawr plant could be as high as £3 million. If that is true, it would seem to be easier and cheaper to have continued with the original scheme on which already well over £½ million has been spent.
In the end, three major points arise. The first is the apparent complete failure of the development authority to forewarn or consult the Ogwr District Council or the community councils, all 23 of which have protested vigorously at the announcement of the step the authority propose to take. Nor did the authority consult the consultants engaged on the Methyr Mawr treatment plant itself. This is a failing of statutory bodies, and we in Cardiff have had a prime example this week.
The second point concerns the capacity of the Merthyr Mawr plant itself. Can it deal with the new demands which are to be made upon it? I have read that with the diverted sewage that is to be put through it it will reach its capacity in about two years. If that is so, clearly it will put a considerable strain on the development of Bridgend and the valleys in the hinterland, for which the Merthyr Mawr scheme was first devised.
Perhaps worst of all in some respects is that the sewage is now to go out through a leaking pipe, of which I know, having walked with my children in that area. Can it be right, at a time when we take pollution seriously—when we look to cleanliness on our beaches, when we are considering health—that this enormous weight of sewage diverted 1957 through the Merthyr Mawr plant should go out through this old, outworn and pre-war pipe? I cannot think that it is right, and I hope that the Minister will say something on the point.
For a relatively small sum—small when set against the extra £1,000 million the Government seek for food subsidies, a form of expenditure which should be phased out, not increased—we are endangering the environment and threatening the development of one of the most promising areas of South Wales, one of its growth areas. I wonder whether we are returning to the brake on housing and industrial development which we saw under the last Labour Government in the latter part of the 1960s—a break which was released by the last Conservative Government, as the Minister well knows from the major sewerage scheme in his constituency.
I turn to the problem facing Cardiff—the problem of the water and sewerage charges. This has arisen overwhelmingly from the decision of the water development authority to equalise charges throughout Wales. I have serious reservations about the policy and I want to say something about the way in which it is being carried out.
The Consultative Paper on Finance said that water authoritiesshould plan to eliminate variations in water charges over seven years.The Third Report of the Steering Group on Economics and Financial Policies appointed by the Secretary of State for the Environment has been published. Among its recommendations, the 26 members of the steering group—except for the Chief Executive of the Welsh National Water Development Authority—said thatIn view of the substantial increases in the general level of charges that must be expected next year, any moves towards the greater equalisation of charges in 1975–76 should be both gradual and limited in extent in order to avoid further sharp increases in charges to particular groups of customers".I cannot conceive how, in that case, the present situation has arisen. It is the development authority, by this sudden and violent increase in charges, which is out of line with the original consultative document and with the steering group.
1958 May I illustrate what this has meant for Cardiff? In the coming year, water charges will rise by 89 per cent. following last year's rise of 82 per cent., and sewerage charges will rise by 353 per cent. These increases are quite monstrous and grossly out of proportion to any possible increase in anybody's income, particularly as they affect houses of lower rateable value. In Cardiff, a house with a rateable value of £100 will, if these proposals are accepted, pay water charges of £17.50 in the coming year, compared with £8.20 in the current year. I say "if they are accepted", because they are to go before the Price Commission, and I hope that when they get there they will be drastically amended or, better still, turned down completely.
But what is most resented by people who live in Cardiff, as I do—and I should point out that I have an interest in this matter—is that we cannot see the fairness of this policy of equalisation as it is proposed. Equalisation of bills for water consumed, yes; but equalisation of rate poundage, no. Apart from the fact that we are being saddled with the high cost of new installations in other areas, we are expected to pay more for every gallon of water we use in Cardiff than people in any other part of Wales.
It is difficult to get comparable examples in housing and, therefore, I take a three-bedroom council house built to Parker Morris standards. In Cardiff it has an average rateable value of £177, in Port Talbot, £126—one cannot tell me that the average income is lower in Port Talbot than it is in Cardiff—and in Merthyr Tydfil, £119. In short, compared with other areas in South Wales, the house in Cardiff has a rateable value which is approximately 50 per cent. higher.
On the equalisation of poundage, that applies to the bills we must pay for the water we consume. Next year, the average ratepayer in Cardiff will be paying £12.19 more for his water and £17.70 more for his sewerage. I hope that the Minister will not tell us that for a clear and final answer we shall have to wait for the report of the Daniel Committee. The development authority should also wait before implementing its proposals.
We in Cardiff represent about 10 per cent. of the population of Wales, and 1959 yet we are expected to provide between 20 per cent. and 25 per cent. of the receipts of the Welsh National Water Development Authority. This is a monstrous policy. It is unfair and unjust, and I do not think it should proceed.
§ 2.0 a.m.
§ Mr. Caerwyn E. Roderick (Brecon and Radnor)
I am delighted to join in this short debate. I was fascinated by the fact that the Opposition were so concerned with water charges that they should seek it. I was also fascinated to look forward to what they said. They have not let me down. We have had a great deal of confused thinking. However, I am glad that the Opposition have joined us in the campaign to change the structure of the water authority. They were missing a year ago, but we welcome them now as converts.
The hon. Member for Conway (Mr. Roberts) seemed to suggest that the formal financing should be of an interim nature. I find it difficult to recall his having said that a year ago. It is only now that that has dawned on him. He also mentioned that the Aberconway District Council objected to equalisation, and that the 130 per cent. increase in one year was just too much to bear. I do not recall that the hon. Member helped me last year, when the local authorities in my area were suffering from 297 per cent. increases, while those in another area were suffering from a 250 per cent. increase.
The hon. Member told us what the people in Aberconway believed. He failed to tell us what he believed. I recall that some months ago he said on the radio that he believed in equalisation. He should tell us what his view is now, not what the people of Aberconway are thinking.
The hon. Member then complained of the cutbacks in certain schemes of the former river authorities, and named several authorities. Does he believe that those schemes should go ahead and that the charges for water and sewage should be increased? He did not come clean on that point, either. He complains that the money is not being spent and that the charges are too high. He should tell us what he believes about those matters.
The hon. Member for Flint, West (Sir A. Meyer) suggested that we should delay 1960 the amendments to the Water Act 1973. That is exactly what the Government have said. There has already been a delay of two years, but I would be satisfied with a delay of one year. I hope that the hon. Member has no complaint on that score.
The hon. Member seemed to suggest that meters should be installed, since consumers could not control, or cut down, their payments. That suggests to me that he is in favour of domestic metering. However, I wish that he had made that point clear in his speech. The hon. Member for Cardiff, North (Mr. Grist) said something similar. He complained that the equalisation should apply to the volume of water consumed. Was he complaining that the Government were responsible for the change in the Ogwr scheme? He seemed to suggest very strongly that the Government were responsible. Since the Welsh water development authority took that decision, it is unreasonable to blame the Government, when we were not responsible for giving so much power to that water authority.
The hon. Member also complained about the Cardiff water charges and said that equalisation should be a gradual process. I invite him to tell that to my constituents who are anxious for change. They have had enough of the present scheme, and are desperately anxious to be relieved of the burden from which they suffer.
Those points should be clarified, since the Opposition are shielding themselves behind the fact that the Government have borne the brunt of the attack on the anomalies and shortcomings of the legislation for which the Conservative Government were responsible.
This evening, I returned from a very wet part of the country. It is also extremely beautiful. Besides suffering a heavy rainfall, a lot of the rain is stored in the form of man-made reservoirs, providing water for people in various parts of the country. I refer specifically to the Elan Valley. Other areas in my constituency have reservoirs, and we are fortunate in that many, but not all, of my constituents have running water and mains sewerage.
The existing Craig Goch reservoir is to be replaced by a project costing about £100 million. Its capacity at present is 1961 2,028 million gallons. The capacity of the new reservoir will be 120,000 million gallons. Its height will be increased from 120 feet to 350 feet. It will have a perimeter of 36 miles. I quote those figures only to demonstrate the magnitude of the project. The water stored in the reservoir will supply the needs of people living in the Severn-Trent authority's area and areas beyond it.
We undertake this kind of activity and are glad to be of assistance. But there are factors which do not make the project an attractive one to many of my constituents and others living in the community.
With the emergence of the new authorities, formed as a result of the Tory legislation, we found that residents in Radnorshire and North Breconshire were to pay 20p in the pound water rate, when residents in Montgomery were paying 4.1p in the pound. For the benefit of the uninitiated, I remind them that Montgomery is next door to Radnorshire. Meter charges have been 50p and 16.7p per thousand gallons in Radnorshire and Montgomery respectively. Simply because of the accident of an arbitrary boundary line, Montgomery is in the Severn-Trent area, whereas Radnorshire is in the area of the Welsh National Water Development Authority. To my mind, Montgomery cannot be separated from Radnorshire. They are virtually identical counties.
Montgomery benefits from sharing with Birmingham, with its concentration of population, and thus the rate per head or per household is considerably reduced. But why should not Radnorshire benefit in the same way? Again, it is the accident of the boundary. We understand the historical explanation, but we cannot accept that the situation should be allowed to continue. Whenever I have spoken about it to those of my hon. Friends who represent Midlands constituencies they have hardly been able to believe me when I have told them of the situation, and that Birmingham pays something like 4p in the pound in water charges, whereas Radnorshire pays 20p in the pound. I ask hon. Members to imagine what it is like trying to explain to someone living in the shadow of the reservoir, where they have all this water on their doorsteps, that it can be trans- 1962 ported 80 miles and still obtained for a fifth of the price.
We have covered this ground many times in the past, and suggestions have been made of ways to correct the anomaly. Equalisation is one. The Welsh National Water Development Authority is proposing for its area a scale of £5 per household, plus a rate of 12p in the pound. That is all that it can do at this stage. Without further legislation, it can only suggest equalisation within its boundaries. But this is still well above the scales for other parts of the United Kingdom, which means that we must continue to campaign at least for equalisation throughout the United Kingdom rather than simply throughout Wales.
It has been suggested that we should sell water, that we should charge for the water which crosses Offa's Dyke. I have been opposed to that all along. Such a proposal is full of contradictions. Water leaves Breconshire for Cardiff. Are we to charge for that water crossing the county boundary? I see no sense in that, I am opposed to charging by volume, because it is just metering again.
Logically, we should have to charge for every transfer—for water coming back to Wales, as it does, as much as for water leaving it. Any charges should be uniform throughout the United Kingdom. Gas, coal and electricity are not charged for in this stupid way, when the rate in one area can be five times the rate in another.
I have made what I believe to be a sensible suggestion to the Daniel Committee, set up by the Secretary of State to study charges in Wales. There is much talk of transferring to central Government such costs as teachers' salaries. I have proposed that domestic water charges should be transferred. It would be difficult to do this for industry, because consumption varies so much, and metering is essential, but this proposal could cure all domestic anomalies immediately. Then water provision could be paid for by grant, in the same way as are so many other activities.
I was glad to see that the Welsh water authority has proposed that charges should be cut for those who are not connected to main sewerage. They have 1963 been cut by 50 per cent., but I am disappointed that they have not been abolished altogether; after all, the reduction recognises the anomaly. I ask my hon. Friend to press on the authority the fact that it need not stop there.
We inherited a hotch-potch from the Conservative Government. It is ironic that Conservative Members should be critical now, when they were silent a year ago. I welcome them to our ranks. We were complaining last January. I hope that they will join us in trying to achieve justice for everyone and not be parochial. We shall be blamed for the set-up, as we were at the last two elections. We have this anomaly to correct, and I hope that we will undertake the task.
§ 2.14 p.m.
§ The Under-Secretary of State for Wales (Mr. Edward Rowlands)
I thank the hon. Member for Conway (Mr. Roberts) for his kind wishes on my birthday. I could think of no better way to celebrate it than to take part in a debate on the water issues of Wales at this time of the morning.
§ Mr. Deputy Speaker (Mr. George Thomas)
I am sorry, I did not hear the hon. Gentleman. I should like to be associated with that and wish the Minister a happy birthday.
§ Mr. Rowlands
Thank you, Sir. I was born under the sign of Aquarius, the water bearer, which is an apt sign for this debate.
The hon. Member for Conway said that he did not want to hear the arguments about the 1973 Act. I appreciate that he would want to draw a veil over his murky past. He said that we should not shirk our responsibilities. I hope that he will not shirk his responsibilities for his failure to object to the principles of that Act.
There was a little shirking tonight, when the hon. Gentleman did not reaffirm his position on equalisation. He is on record as being in support of equalisation, in rather strong contrast—at the present time, anyway—to the hon. Member for Cardiff, North (Mr. Grist). However, we have to go back.
I have been asked many questions, with which I shall try to deal objectively. I hung on to certain facts about the water situation as it was becoming more and 1964 more complex. Anyone who reads the steering committee's reports will realise that although it affects us—housewives, mothers and the man in the street—the esoteric descriptions of the economics of water and some of the suggestions for the future give us considerable scope for concern.
I want to try to answer many of the points raised and, in doing so, to underline exactly what the 1973 Act said, upon whom it placed responsibility, and in what direction.
First, there was the fundamental principle of self-financing. Unlike the previous situation, the Water Act 1973 laid down unequivocally that water should be self-financing. It then drew boundaries around areas to create the Welsh National Water Development Authority and stated that within that authority the books had to be balanced.
We were then doing two things. If any hon. Member talks about sharp increases, he must remember what happened just a year ago. There was, at a stroke, the withdrawal of a range of indirect subsidies to the consumer on both water and sewerage. Many Welsh local authorities—my own did it, and Anglesey and others—through their own sewerage provisions, had to allow water authorities and boards to precept on their rates, and then, in return, claim from central Government a significant proportion in rate support grant to offset the cost.
What happened when we established the Water Act 1973—with some of my hon. Friends moving amendments to try to prevent it happening at a stroke, within a matter of months—was that there was a withdrawal of indirect finance and support from central Government to the consumer. Consequently, we had the most arbitrary and capricious increases in charges, as my hon. Friend the Member for Brecon and Radnor (Mr. Roderick) has illustrated so vividly, with a curious geographic incidence which could not bear any relation to the actual costs at that time or any relation to the needs of the consumer or his ability to pay. We have to start with that principle because it is enshrined in the Act, and to understand and appreciate where we go from there and the question of equalisation.
The second fundamental thing that the Water Act 1973 did was to take away 1965 powers from both local government and central Government. It is no use hon. Members saying to me "Why are you shirking your responsibility? We want an answer. You must accept your share of responsibility for these things." The truth is that we share responsibility for only a very small proportion of the responsibilities and functions that are now vested in the Welsh National Water Development Authority.
When I was in the Welsh Office for the first time, back in 1969, I used to have to stand at this Dispatch Box and announce and defend our decisions on loan sanctions on both water and sewerage schemes. The Secretary of State had power and supervision over charges. He now has neither of those functions; they have been basically transferred to the Welsh National Development Water Authority. The basic function of fixing charges and deciding what water or sewerage scheme should go ahead was taken away from central Government—from the Secretary of State, answerable to hon. Members in the House. We had that transfer of power from central Government to the nominated body in the form of the Welsh National Water Authority.
The reserve power in Section 30(6) enables the Secretary of State to give a direction to the water authority on the general criteria. This is vital, since, under Section 30(1), the Welsh water authority has the power to fix water charges. The Secretary of State can exercise his reserve power to vary the general criteria under which charges are fixed only in extraordinary circumstances. In addition, he must consult the National Water Council and the authority.
These two principles show the debate in a fresh light. These arguments cannot be ignored. I assure hon. Members that I would be only too happy to assume responsibility for water in some respects, but since that responsibility now lies with the water authority it is to it and the Act that we must turn for answers. The issue should be considered against the background of this relationship between the Government, Parliament and the water authority.
On discovering this arbitrary and capricious arrangement for water charges, which arose from the combination of an 1966 accident of history and the withdrawal of the subsidy which had been paid until the passing of the 1973 Act, we alleviated it in the only way possible in the short term—by a massive increase in the relief to domestic ratepayers.
Even after the latest rate support grant negotiations and settlement the domestic ratepayer in Wales enjoys double the rate relief afforded to his English counterpart. In Wales it is 36p in the £ and in England it is 18p. We did that to try to offset some of the impact of the 1973 Act and its charges. Secondly, we had discussions with Lord Brecon and he made a modest reduction in the 50p per 1,000 gallons imposed upon the metered industrial consumer.
We have also urged on the Welsh water authority the removal of the anomoly and injustice under which people were being charged the full rate for sewerage when they were not connected to the system. I must correct the hon. Member for Flint, West (Sir A. Meyer) in one respect. To our knowledge no industrial, commercial or domestic consumer pays a water charge unless he is connected to a water supply. The hon. Member implied that he knew of a case where charges were imposed. I should be interested to see such an example. He would be correct if he was referring to the charge for sewerage because there the charge was imposed irrespective of whether ratepayers were connected to the system.
The water authority will give a 50 per cent. relief of the general service charge where premises are not connected to the sewerage system. My hon. Friend the Member for Brecon and Radnor asked why the relief was not greater. The charge is not only for sewerage, but goes on to cover such things as river pollution and drainage. Sewerage is only a part, although a significant part, of that general service charge. We have given relief of 50 per cent. to cover what we see to be the sewerage side of the general service charge to those not connected to a sewerage system.
The hon. Member for Cardiff, North discussed the issue of equalisation, but my hon. Friend countered him on this point. The hon. Gentleman asked what was the Government's rôle. I think that he was unfair in describing the increased 1967 charges to the consumer in Cardiff without comparing them with the increase to the consumer in my hon. Friend's constituency and elsewhere. I cannot argue with the hon. Gentleman whether rateable values in Cardiff are incorrect in relation to those in Port Talbot. As both water and sewerage charges relate to rateable value, we can ask where the inequity lies in ensuring that the same charge is paid in respect of houses of £100 rateable value in Cardiff and in Brecon and Radnor.
In Cardiff in the current financial year the charge for water is £8.20 for a house of that rateable value, and the new charge is £17.50. But the hon. Gentleman forgot, perhaps conveniently, to quote what others were paying. For example, in Taff Ely the charge is £16.80.
The Welsh water authority has equalised the charges throughout Wales, because that seems the only equitable basis on which to assess them for the future. My hon. Friend gave graphic illustrations of the present haphazard charges. Yet last year and this year the domestic ratepayer of Cardiff received exactly the same rate relief as did my hon. Friend's constituents. When we have tried to relieve the ratepayer through the domestic rate relief on a uniform national basis throughout Wales it is not unreasonable that the Welsh water authority should move towards equalisation of its charges throughout Wales.
The hon. Gentleman asked why Cardiff should pay for other people's projects. That is the principle of the 1973 Act. During the passage of that measure many hon. Members fought bitterly against what they saw as the rape of local authority assets. The assets of many local authorities, built up and paid for by ratepayers, were being handed to another authority. The hon. Gentleman cannot now rest his case on the fact that one community should never make a contribution to developing the facilities of another. The facilities of all local authorities have been pooled. The inevitable and logical consequence is to try to move towards equalisation.
§ Mr. Rowlands
I do not know how that could be done. The charge is now based on rateable values. We would have to revise all the rateable values and decide, for instance, whether Cardiff should have lower or equal rateable values than Port Talbot. That would have to be done, of course, on the assumption that the system of revaluation is reasonably rational. The hon. Member for Cardiff, North might quarrel with the idea of basing water charges on rateable values. That is a broader point. It is only reasonable that the Welsh water authority should move towards equalisation.
A number of points have been made about capital programmes. Continual mention has been made of costs. I was interested in the idea that there had been significant, massive cuts in capital expenditure this year compared, for example, with last year. The hon. Member for Conway did not mention the fact that this year there will be an increase. I do not see how an increase equals a cut. The hon. Gentleman spoke as though this Government had suddenly and savagely cut the capital expenditure programme of the Welsh water authority. Last year the capital expenditure programme was £30 million. Until this week it was £35.8 million. I am pleased to announce tonight that only this week we have been able to add an extra but modest £1 million to the capital programme. I do not think that by any form of grammar or dialectic which the hon. Gentleman can deploy he can describe a rise of £6 million as a savage cut.
The most savage cut that was made was the 20 per cent. cut in capital expenditure that occurred under the famous Barber axe in December 1973. I suspect that the hon. Gentleman's scheme, which he so effectively put before us tonight in a manner that plucked at our heart strings, was also cut by the Barber axe.
§ Mr. Wyn Roberts
I hope I made it clear that the cuts of about £7 million to which I referred were cuts imposed by the National Water Development Authority rather than by the Government. Nevertheless, such cuts are related to the Government's capital allocation.
§ Mr Rowlands
I accept that we desperately need to do a lot more regarding 1969 sewarage projects. There is a tremendous backlog of sewerage works and schemes that are desperately needed to improve the environment and communal life. I am glad that the hon. Gentleman is not suggesting that there has been a savage cut in the capital programme.
The point has been made—it is an awkward one—that under the 1973 Act the authority is in a considerable dilemma. The more it embarks upon capital expenditure programmes the more the charges increase. There are no grants and no offsetting Government supports. They are not allowed in general terms under the Act. The larger the programme the higher the charges. There must be some balance. The authority seems to be undertaking as much as it can cope with within the present financial and economic constraints. It is probably undertaking the largest capital programme it can involve itself in, given the present circumstances. No schemes that have been started have been cut or stopped. Of course, much depends on the way in which one defines "cuts". A great deal of argument is taking place on some aspects of the schemes that are going ahead.
I was asked about housing. Paragraph 9 of the first major housing circular issued by the Government in March said that priority must be given to housing. I assure hon. Members that whenever possible that priority has been brought to the attention of the Welsh water authority. I cannot direct it to choose scheme A, B, or C; alas, that does not lie in our power. Whenever we have had representations from any housing authority we have conveyed to the water authority the fact that this priority should be afforded to housing. When I tramp the countryside I always ask each local authority to give me chapter and verse of cases when sewerage schemes with a high housing content have been deferred or threatened with deferment.
§ Mr. Rowlands
I was about to mention Sker and Ogwr. I do not want to com- 1970 ment in any detail on the Sker-Bridgend situation, because there is to be a meeting on 30th January between the Welsh water authority and councillors and officials from Ogwr. I have a great personal interest in the South Pembrokeshire scheme. I have a high regard for the local authorities there. I know that they are keen to get on with the job. They had bad luck, in that they had gone through an inquiry into the scheme but the inquiry was unfortunately overtaken by the 1973 Act, which led to a loss of power on the part of the Secretary of State, who could not make any judgment on the scheme. It then passed to the Welsh water authority. I am desperately anxious to ensure that the parties get together. I have written today to the Chief Executive of the South Pembrokeshire District Council suggesting that we call an urgent tripartite meeting with officials from the water and environmental divisions of the Welsh Office acting as honest brokers, when the other officials of the local authority and the water authority can try to resolve the complex problems that have arisen with the regional scheme.
It is unfortunate that procedures are not as good as they should be, particularly at the discussion and formative stage. We have conveyed our concern about this to the Welsh water authority and hope that there will be an improvement. One of the problems is that the water authority meets in public. Its committees are open to the public and the Press, and the committee discussions are reported—sometimes misreported.
There is a desperate need to improve the consultation procedures between the authority and the local authorities. If I or the Department can make a contribution in this direction and help establish such procedures we shall be only too pleased to do so.
It is not for me to make any judgment on the merits of the argument. We are not in a position, and have no power to be involved now, but we shall do our best to help.
I shall refer briefly to the future. The major question looming up is that of the surcharge and the power in the Act to surcharge, and, most important, the imminent report of the Daniel Committee.
1971 Hon. Members have said that I should not shelter behind that committee. I hope, in the facts and in the information I have given, that I have not sheltered behind it, but we expect it to report in a month or so.
Hon. Members cannot blame me for asking them to be patient. What they thought they were passing in the 1973 Act and its effect on Wales is not, perhaps, what they desired, and we look to the Daniel Committee to see if it makes any recommendations which could amend the situation to meet the needs of the Welsh people as a whole.