WATER CHARGES BILL

HC Deb 12 February 1976 vol 905 cc656-704

Order for Second Reading read.

5.12 p.m.

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

I beg to move, That the Bill be now read a Second time.

I should explain to the House, although it is probably within the recent memory and knowledge of most hon. Members, that the Bill arises from a House of Lords ruling last December in what has become known as the Daymond case. It is concerned only with the direct effects of that ruling. We are not concerned with any of the wider questions that arise from the 1973 Water Act, on which the Government will publish a consultation paper in the next few weeks. This Bill is not the vehicle for any change in the present system.

The decision in the Daymond case was that the 1973 Water Act does not permit any charge for sewerage and sewage disposal to be levied on a property which is not connected to a public sewer. The Water Authorities (Collection of Charges) Orders 1974 and 1975 were, therefore, ultra vires to the extent that they purported to authorise sewerage charges to unconnected properties. It must follow from that that all such charges made in the financial years 1974–75 and 1975–76 were illegal. That is the situation that we have to consider and which is the reason for the Bill.

As someone who served on the Standing Committee which dealt with the Bill, I am bound to say that although we took issue with the then Conservative Government and Ministers of the day on many matters, to the best of my recollection this matter was not a subject which any hon. Members questioned. Therefore, I do not seek to lay undue blame or charge against Members of the previous Conservative Administration because, as I led for the Opposition at the time, it never occurred to me that anything was amiss about the way in which the matter was dealt with.

Both the present Opposition and the present Government thought that the Water Act conferred the necessary powers to charge all properties for a transitional period. When sewerage and sewage disposal were the responsibility of local authorities they were financed through the general rates. Therefore, everyone helped to pay for the services, and did pay for them for many years, regardless of whether or not their properties had main drainage. It was clear that the Water Act was intended to change that situation in the longer term, so that only those who received the service would be charged. However, it was also recognised, no doubt by the Ministers then in charge, that it would take some time to identify which properties were connected and which were not, because, as I understand the position, no records were specifically kept for that purpose. Therefore, a transitional period was necessary in order to deal with just the question of identification and it was necessary to continue charging people on the old basis, that is to say, everyone.

However, the House of Lords has made it clear that the Water Act did not allow such arrangements to be continued, even on a transitional basis. I emphasise that the Bill in no way seeks to overturn or reverse the decision of the House of Lords. There are arguments about the decision and we have had to consider how to deal with the decision. We have received advice from some local authority associations—some of which we have not taken—which would like us to go much further in dealing with the immediate situation than we are prepared to go. On balance, we believe that it would be wrong to seek in any way to overthrow or challenge the House of Lords decision, but we must face it and ask the House to deal with the situation that now arises.

I know that some people believe that, for example, because of the general work of sewerage and sewage disposal which water authorities do, every citizen benefits and, therefore, whether or not a person's property is connected to the mains, he should make a direct contribution because it is impossible to go into our cities, go to the theatre and so on and escape the necessity for a first-class public sewage system.

For their part the Government have accepted and do accept that no property without mains drainage should pay a sewage disposal charge, and that such charges paid over the past two years should be refunded.

I turn to the main provisions of the Bill. In Clause 1 we have two tasks. The first is to impose a duty to make refunds. It is extraordinary that, having got ourselves into this tangle, there is no duty for water authorities to make refunds. That must be put right. Secondly, we have to provide powers to recover the cost from other users. This is an important fact which has not yet been clearly understood, though it will be understood as water bills come in that if it is right or if the law demands that we exempt a large number of people from the duty of paying certain charges, inescapably those costs then have to be passed on to others. Inevitably the effect of the House of Lords ruling—the challenge to the situation—must be to increase the costs of the service to the other users who are already connected to the main sewerage system.

The main provision of the Bill—Clause 1—imposes on water authorities a duty to refund unlawful charges paid in 1974–75 and 1975–76. As I have said, legislation is necessary, because I am advised that there is no general obligation to refund money paid under an error of law. The Bill also provides for the cost of refunds to be recovered by higher charges to the remaining connected consumers, again for the reasons that I have given.

I am bound to tell the House that very large sums of money are involved. Many of the people who have been commenting on these matters in the recent past have given the impression that this is rather small change that we have been talking about, and that this matter concerns only a few small people. Without in any way decrying their right to go to law, I am bound to say that the main beneficiaries of this ruling are some very large industrial concerns. Those very large industrial concerns now have to be exempted from an obligation to pay, because they deal with their own sewage disposal problems, for example, and this has very considerable repercussions for most other water users.

The water authorities tell me that their estimate of the cost of this judgment of the House of Lords is about £60 million. I think that that will show the House the extent of the matter. This ruling will mean—it is inescapable—an average increase throughout the country of 21 per cent. on the cost of bills sent to the rest of consumers during the next financial year.

There have been suggestions that as the need to make refunds arises from a mistake in the previous Government's legislation, the Exchequer should foot the bill. I am bound to say that we have not been able to agree to that suggestion, for two reasons. First, there can be no question of adding such a large sum to Government spending during the present economic difficulty, especially in view of the advice that we are receiving from all quarters of the House and around the country to reduce the amount of Government indebtedness.

Secondly, the implication of the judgment in the Daymond case is that only the connected consumers should have been charged in 1974–75 and 1975–76. That is the clear implication of the judgment which we have to accept. If that had happened then, their charges would have been higher previously than they actually were. For the Exchequer to meet the costs now would amount to a larger subsidy to the consumers. This would be contrary both to the intention of the Water Act, that water authorities should break even without subsidy, and to the present Government's general policy of phasing out subsidies to nationalised industries.

Mr. Eldon Griffiths (Bury St. Edmunds)

Will the Minister indicate how the estimate of £60 million is arrived at? I do not challenge it now. However, I think that we are all conscious that these forward projections made by statutory bodies can be wildly off the mark. To be told that it will amount to a 21 per cent. increase in bills begs the question. Is this £60 million a figure for the lost revenue of the authorities because they are no longer getting the money from those whose properties previously were unconnected, or is it their estimate of providing the service to those people in a different way?

Mr. Howell

I shall have that matter checked. If I am wrong, I shall have it corrected in the winding-up speech. How- ever, I think that I am almost certainly right in saying that £60 million is the sum that has been illegally collected and has to be refunded, and, therefore, the additional cost that has to be collected next year to make good the refunds. That is the basic point.

I can understand the hon. Gentleman asking about these estimates of these large figures, and whether we can be reasonably sure about them. The water industry is unique, in the sense that we have eight separate industries and not just one.

Mr. Keith Speed (Ashford)

Ten.

Mr. Howell

I always forget Wales. I do that because, with my hon. Friend the Under-Secretary of State for Wales, the Member for Rhondda (Mr. Jones), sitting beside me, I dare not talk about Welsh problems, because I get a little upstaged.

However, I shall be surprised if these estimates are not very accurate indeed, because in recent years for the first time, as a result of steps that we took two years ago, we know the number of unconnected properties, and, particularly, we know the large-scale unconnected properties. One of the largest factories that we have in Birmingham now obtains relief in this way. Therefore, it is possible now to make these rather accurate forecasts and I believe that that is what has happened.

Mr. A. P. Costain (Folkestone and Hythe)

Is the right hon. Gentleman aware that I tackled my local authority about this matter two years ago and that it said that it could not make this differentiation because it had no knowledge of properties that were unconnected? The authority would not even accept from me that there was not a sewer in a particular road. How could it arrive at this sort of estimate?

Mr. Howell

The hon. Gentleman could not have heard me properly. I have said that since we came into office, for the purpose of giving a certain degree of relief we have been able to identify, over the past two years, the properties that are not connected. About a year ago there was considerable public agitation about this matter, and questions were put to me. We thought it right, as I announced in the House, that there should be some degree of relief for people whose properties were not connected to sewers, and we placed it at 50 per cent. In order to carry out that purpose, the local authorities and water authorities have since had to identify these properties. I do not complain about the fact that it could not be done previously, but that was historically a fact. We are now in a happier position and I am able to give a more satisfactory answer.

Mr. Julian Ridsdale (Harwich)

I am interested in the size of the large concerns about which the right hon. Gentleman has been talking. Will he list, say, three of the biggest, and say how big they are?

Mr. Howell

I think I am right in saying that one, in Birmingham, is Imperial Metal Industries. I am almost certain about that. I visited the plant a few months ago and I was very impressed by the tremendous amount of work that has been done there in putting in a sewage treatment plant, and so on. However, as the firm is such a large ratepayer in Birmingham, the repercussive financial effects are considerable.

I think that another such concern is the Royal Naval Dockyard in Plymouth, where a similar situation applies and the sewage does not go into the normal system. Being such a large industrial concern, the effect of that in the South-West is considerable.

Those are two concerns that come to mind off the top of my head. However, if the hon. Gentleman wants examples of others, I shall be happy to ask my hon. Friend the Under-Secretary of State for Wales to supply him with other examples.

The Government have decided not to swell the total cost of refunds by clawing back to the Exchequer domestic rate relief paid in 1974–75 on account of higher general service charges to unconnected properties. That is one of the subjects that we had to consider. It would have been reasonable, given prudent financial principles, to have said that as relief was being paid where it now clearly ought not to have been paid, that ought to be claimed back by the Government. I do not overstate the position, but I give that to the House as a matter of fact and say that we decided not to follow that course.

The Government introduced, for the year 1974–75 only, a special programme of relief to domestic properties to help to alleviate the combined impact of water reorganisation and local government reorganisation. Domestic properties whose combined bills for general rates, water and general services rose by more than 20 per cent. over the previous year got Exchequer relief of 60 per cent. of the excess over 20 per cent. Some of that relief was paid on account of higher general service charges. Although refunds must obviously be reduced by the amount of such relief—otherwise people will be refunded something that they did not pay—the water authorities will be allowed to use the aggregate amount so deducted to reduce the costs of refunds to connected consumers. The sums involved, in this small operation, are estimated to be about £6 million. Connected consumers as a whole will therefore get roughly the same benefit from special relief that they would have got if charges, and therefore entitlement to relief, had been higher than they were in 1974–75.

I should stress that there is some element of rough justice. The deal, if unrealistic, solution would be for all rate bills for 1974–75 to be recalculated. However, that would involve an intolerable administrative burden, which I do not think the House would wish to impose on local authorities or water authorities. Therefore, the Bill provides for the rough justice solution which I have outlined.

Although the Lords' judgment was about sewerage charges, the Bill provides for the refund of any water charges paid in 1974–75 or 1975–76 on properties without a water supply. Exactly the same principle applies—namely, a person does not have to pay for a service that he does not receive. I should stress that this is likely to be significant only in one small part of the country. Before reorganisation, water was paid for in one area of the Anglian Water Authority's area not by direct charges to consumers but by a precept on the rates. Just as with sewerage charges, that arrangement was continued for a transitional period after reorganisation. The very small number of people in that one area who paid for water through their rates, even though they did not have a supply, will get their money back. In the rest of the country water rates have normally been paid only on properties that have a water supply, or the use of one, so refunds will only rarely arise.

I now turn to the method of refund. In most cases, refunds will take the form of a credit against the 1976–77 general rates demand. This is the only practical and economical way of arranging for people to get back their money. This will involve a considerable amount of work for local authorities which act as agents for water authorities in collecting charges. We have worked out a detailed scheme with the local authority associations which we hope will reduce to as small a level as possible the burden on local authorities, thus keeping down the costs of administration. No part of the cost of refunds in the form of administration costs will fall on local authorities. They will be entitled to bill water authorities in full for any costs which they incur. I am sure that the House will agree that that will be a perfectly proper arrangement.

In their judgment on the Daymond case the Law Lords were critical of Section 30 of the Water Act, which contains the charging provisions. It was criticised because of its failure to make clear which water authorities are entitled to charge for the services they provide. The Law Lords concluded that the section must mean that charges could be levied only on those for whom the services were provided. However, this raised doubts about the authorities' power to charge anyone for those services which are not performed completely for identifiable users. Although such services as pollution control, recreation and amenity represent only a small part of the authorities' expenditure—about 2 per cent.—it is essential that they be funded properly. As these services are undertaken for the benefit of the community as a whole, it seems right to us—I hope that it will appear right to the House—that the community as a whole should meet their costs. Therefore, Clause 2 makes it clear that while in general charges may be imposed on those for whom services are provided, the costs of these specific services, which are defined in the Bill, may be visited on all ratepayers.

The relevant provision is declaratory in form. It clarifies who may be charged for the services since the water authorities came into being. Refunds will be slightly reduced by expenditure on these items. If people are to have refunds in the next financial year it is essential that the Bill become law by 31st March. I look hopefully at Opposition Members in the belief that they will appreciate the position. It would clearly be preferable if we could get this measure on the statute book well before 31st March as the water authorities and local authorities have to send out their rate demands. I know that all of us have great sympathy with them in the considerable administrative task that lies before them.

This is a narrow Bill. It is concerned only with the Daymond case. I know there are many other aspects of the water industry on which hon. Members hold strong views. No doubt there will be an opportunity to discuss the wider picture after the Government's consultation paper is published. As I have said, it will be published pretty soon. We shall invite comments from all sections of the industry and from the local authorities. I am sure that we shall find means in the House for hon. Members to express their views before the Government determine in the late summer how they should proceed.

Mr. Eldon Griffiths

Will the consultation paper, which some of us are eagerly awaiting, be a White Paper? Will the Minister give us some indication whether it is weeks or months away?

Mr. Howell

I do not think that it will be a White Paper. I can understand the hon. Gentleman awaiting its publication with great eagerness. We shall be giving him the opportunity to correct the mistakes of his own legislation. I think I am right in saying that we expect the document to be published in a matter of weeks. I shall be disappointed if we do not publish it within two or three weeks. I know that we aim to get replies from all interested parties, and the public, not later than the end of July, so that we can proceed in the autumn. When the House is having a pleasant time on the beaches in the autumn, we shall be getting our legislation ready for early next year.

Mr. Graham Page (Crosby)

I presume that the consultation paper will not go only to local authorities and that it will not be kept a high priority secret document. I presume that hon. Members will see it.

Mr. Howell

I hope that they will. It is intended to go to all local authorities, water authorities, consumer interests, and recreational and amenity interests. I shall personally ensure that the right hon. Member for Crosby (Mr. Page) is sent a copy.

Mr. Graham Page

And signed?

Mr. Howell

Yes, a signed copy. I know that he takes a keen interest in these matters, as does his hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths). We want the views of hon. Members.

I hope it will be generally thought that in a difficult situation the Government have faced the problem in a sensible and realistic manner. We seek to put the matter right for the future without in any way challenging their Lordships' judgment, putting on a proper legalistic basis the financing of our water and sewerage services.

If I am right in my judgment that the House will accept this measure as right and inevitable, I invite the House to give it a Second Reading. I invite the co-operation of both sides of the House in what I hope will be a short but constructive period in Committee so that we can put this measure on the statute book at the earliest moment.

5.38 p.m.

Mr. Keith Speed (Ashford)

I begin by thanking the Minister for the way in which he has advanced the Bill. As he says, I think there is no difference between the parties. Mistakes were made which were not taken up by the Opposition or the Government then responsible. Perhaps I should start by declaring an interest. I reside in a property which is not connected to anything at all, and I shall be a beneficiary under the Bill.

It has become clear to us all that a simple substance such as water becomes complex when the lawyers start to play about in it. There is no doubt that the decision of the Law Lords made this legislation necessary. There is no doubt that it is urgent, and it is important that we try to complete all its stages as soon as possible for the reason that the Minister has given.

Faced with the Daymond judgment, it would have been possible for the Government to have legislated and restored completely the intention of the 1973 Act by making premises liable to the general service charge whether connected or unconnected to a public sewer. They would have been right to do so in equity, but I do not think it would have been right to have had that element of retrospection. It would have been wrong to have challenged the Law Lords. I am sure that the Government were right to take this decision.

The Minister referred to a number of local authority associations and those who asked for the Treasury to pick up the £60 million. The Government were right to resist that suggestion. I do not wish to see that extra amount of public expenditure. It would have been popular, but I believe that it would have been wrong to take that action. Therefore, I support the Minister.

I agree that the Bill will involve an average increase of 21 per cent. in regard to general services for the rest of the community. I suspect that some people will receive a nasty shock on that score, and I do not think that that factor is sufficiently widely appreciated.

We accept the principle of the Bill, but since there is little time between this and remaining stages—which I understand are to be taken on Wednesday of next week—I shall seek to suggest ways in which the Bill needs amendment and clarification. Obviously we do not wish to see litigation arising on these matters after the Bill is enacted.

I hope that the Minister will give constructive answers to our queries and the points we make. He will appreciate that there is little time for amendments to be tabled to meet points made by the various interests who may be in touch with us over the weekend and in the next few days. It may be that amendments will have to be tabled in another place, but I assure the Minister that we shall approach this matter in a spirit of co-operation. I am sure that he will respond in the same way.

I understand that 900,000 properties are affected by these provisions. But will the Minister in his reply give the House practical examples of the effect of the Daymond judgment on domestic properties after the Bill is enacted? A great deal depends on local authority collection charges and other factors, matters at which one can only guess in general terms. I feel that at the end of the day many people may be worse off than they would have been but for the Daymond judgment. A backlash may be felt by hon. Members later on in the summer when these provisions become operative. It might stave off difficulties if advance warning can be given that people may not be in the promised land in terms of charges. We must remember that the charges on connected properties will be heavy, the rates are still rising, and incomes are tightly limited.

Will the Minister consider a suggestion made by the Association of District Councils about phasing the figure of £60 million over a longer period than a year? I can see the problems, and no doubt this suggestion was considered and rejected, but perhaps we may have an explanation.

I should like to make a number of detailed points. I shall try to pick a clear path through the technical detail, and my hon. Friend the Member for Daventry (Mr. Jones) will be dealing with other points later in the debate. Some of the points can be said to be Committee matters, but we shall seek to deal with them now since the Bill is required urgently.

Clause 1(1), which deals with the question of refunds, appears to be inaccurate since the action taken will be by way of credit set off against general rate. There are some problems involved which I should like to illustrate by reference to my own property. I moved into my present house at the beginning of November. It is not connected to services and no doubt the previous owner who has moved out of the district will have some problem in obtaining a refund of money due in the earlier period. I presume that publicity will be given to the Bill to ensure that there is a simple way for people to obtain refunds when there has been a change of ownership. It is no good giving the previous owner a credit against rates because in my case my predecessor in the house has moved to a different local authority area. This poses a practical difficulty.

In regard to Clause 1(1), should not the Bill authorise allowances against rates? I see the difficulty because, unless the situation is made clear, water authorities could be deluged with demands for cash payments, notwithstanding the fact that district councils will make the calculations and give allowances and credits in rate demands.

Subsection (1)(a) says all charges for sewerage or sewage disposal (other than charges for the removal and disposal of the contents of cesspools)…". I believe that that provision is too wide and could cover charges levied by and paid to district councils. It could also cover charges levied by water authorities for reception and treatment at sewerage works of contents of cesspools emptied by tankers. Surely what is intended is a refund of that part of the general services charge relating to the exercise of an authority's functions under Section 14 of the 1973 Water Act. I should have thought that a tighter definition was needed.

I turn to Clause 1(1)(b), which contains the phrase to which they did not supply water". I feel that phrase might be suspect. I wish to draw attention to a recent High Court decision in the case of Miguel v. West Pennine Water Board which might have some bearing on the question of the definition of "supply of water". In addition, it could possibly be argued that if people were absent from their homes or commercial premises were not operative or were closed on 1st April of the two relevant years, they could require a refund. That is not my reading of the wording, but I know that some legal experts are concerned on that score.

I should like to deal with Clause 1(2). It may be implicit in the provision that the 50 per cent. relief from general service charge in the current financial year for domestic premises not drained directly or indirectly into a foul sewer or combined foul-surface water sewer is taken fully into account. Although that may be implicit in the wording, I wonder whether it would be advisable to make it explicit. That point may be worthy of greater consideration.

On Clause 1(5) it has been represented to me by water authorities that the subsection is too narrow. They wish to recover the cost of funds in the financial year 1976–77, but since there are long and complex tasks of verification extending beyond that time there is the problem of administrative costs in the current financial year, and those costs might fall on water authorities. It might be helpful if the Bill were to state that it would relate to any period after 1st April 1976 rather than tie down the matter specifically.

I am a little worried about Clause 1(7) because complex issues can arise in the case of surface water drainage. For example, roof and surface water can drain from premises via a fall pipe across a pavement, not through any defined gully or channel, into a kerbside gutter and then to a public sewer. The occupiers of such premises clearly enjoy the benefits of the water authority's sewerage service and, in equity, should pay for it. I am not clear whether that is the situation, and perhaps the Minister would tell us.

On a more general point in seeking to prevent other Daymond-type situations in the future—as we all want to do—is it not possible for the definition in respect of refunds to apply for the purpose of future charges as well? The Association of District Councils and the water authorities have strong views on this point.

On the same point, is it the case that the words in line 29 foul water or surface water or both mean that premises, whether domestic, commercial or industrial, not connected to the foul water sewer but connected for surface water only will be chargeable in the entire general services charge?

On the general question of refund, it has been put to me that statutory undertakers, particularly the nationalised industries and electricity power generating stations, are not connected and will obtain the lion's share of the refunds. A figure of up to 70 per cent. has been suggested to me. I do not know if this is the true figure.

The situation may be that a considerable body of domestic users—those who are connected and will be paying the extra 21 per cent. this coming year—will be paying a lot of the money which will be going both to nationalised and to other major industries. If so, it will have profound consequences. The Minister hinted at this. There may be equity at the end of the day, but I do not think that this point has fully come out, or that it was fully appreciated by those who entered into the law case in the first instance.

Clause 2 does not make provision for the validity of the 50 per cent. relief granted by the collection of charges order in 1975. I am told that the water authorities and the district councils could be challenged in the courts unless the Bill validates this relief. I do not know if this is so. I am not legally qualified, thank goodness. If there is such a challenge, we should want to stop that as soon as possible. It may be that something needs to be done to tighten up that aspect.

I apologise for making these detailed points, but I think they are important. If tonight the Minister can give us assurances on them, that is fine. If not, I hope that we can, in a constructive spirit, see whether there may be some amendments or tightening up on definitions if some of my points have validity.

In a few weeks' time the new water industry will be two years old. The problems in the Bill are not of the industry's making. There are also problems, as the Minister knows, of equitable charging of past neglect and under-investment. I am sure that these and the other things will be highlighted in a few weeks' time in the Minister's White Paper, Green Paper, or whatever colour it may be.

Real progress has been made in the last 23 months by the national water industry in its efforts to serve the whole community. We take water and sewage disposal very much for granted. These subjects are not very often discussed in this House.

The sufficient supply of water and the growing cleanliness of the rivers and coasts are in the hands of 10 regional authorities with both local authority and appointed members. The National Water Council, under the vigorous leadership of Lord Nugent, has done a great deal for the industry. The many dedicated men and women working throughout the country have also done a great deal to ensure that services are kept going and are able to meet the growing demands on them.

It is very often forgotten that water is the principal raw material of industry. It would not come amiss, therefore, if the House were to congratulate the water industry on its second birthday for everything it has done in welding the industry together.

Much progress has been made in the past two years. Although there are problems arising from the Water Reorganisation Act, the Act was necessary, and I am confident that the sort of progress already made will be maintained and expanded in the future.

I believe that the Minister shares my opinion that we can teach our Common Market partners a great deal about water and measures against water pollution. The Minister has recently been putting that point of view across in Brussels, and seeking to change some of the attitudes in Europe.

I am sure that we wish to thank all the men and women who often bear the heat and burden of water charges and other problems for which in many cases they are not responsible.

I support the Bill. I hope that the Minister will accept what we are saying in a constructive way. I wish the Bill god-speed, because we want to get it under way as quickly as possible, with the least possible administrative delay. We look forward to hearing from the Minister on these detailed points when he winds up later.

Mr. Deputy Speaker (Mr. Oscar Murton)

For the protection of the business of the House, the proceedings on this Bill must be disposed of by 7.30 p.m. Time is short and a considerable number of hon. Members desire to take part in the debate. I appeal to the House in its own interest to limit speeches to 10 minutes.

5.54 p.m.

Mr. John Tomlinson (Meriden)

I shall endeavour to confine my remarks well within the time suggested, Mr. Deputy Speaker.

I am unable to go along too far with the later remarks of the hon. Member for Ashford (Mr. Speed), in the course of which we heard his apology for the Water Reorganisation Act 1973, but before he got to that part of his speech I agreed with much of what he said.

I support the Bill and the general approach of the Government towards this measure. At the same time, I regret its necessity, which has arisen from what for other reasons besides this was an ill-conceived and badly executed Water Reorganisation Act in 1973.

That argument has been well rehearsed, and it is no part of the process of this debate to go through it again tonight, but the point has to be made that without that measure we should not be faced with the invidious circumstances with which we are faced today.

I support the Government entirely in agreeing that the cost of the measure should be borne directly by the consumers and should not be Exchequer-borne.

I differed slightly from the view of my right hon. Friend, when he was appealing that we should not go too far into other issues because there may be a consultative document produced in the next three or four weeks. By that time it may well be too late to influence some of the regional water authorities in their present attitude.

For example, the Severn-Trent Regional Water Authority—which, I believe, is seriously damaging the counter-inflation policy of the Government by the charge it is seeking to impose upon ratepayers next week—will not be influenced unless we influence it now. If we wait for the consultative document, and constrain our criticism for a further three or four weeks, it might by then well be too late.

As my right hon. Friend will know, local authorities like the West Midlands Metropolitan County Council have confined their increase in rate demands next year to 5½ per cent. My own North Warwickshire Borough Council has done even better in confining its increase in rate demand to 3 per cent., yet when it has played its full part in cutting out valuable and important areas of public and social expenditure, and played its part in supporting the Government in its necessary counter-inflationary policy, we find the Severn-Trent Regional Water Authority seeking to levy through the local authorities—so that possibly the local authorites will get the odium for it—increases in water rates next year of the order of 50–55 per cent. Such proposals are totally unacceptable and are fundamentally damaging to the efforts of this Government and the local authorities in regard to the counter-inflationary policy.

It is not sufficient to allow them to get away with the excuse that an unfortunate court judgment is the sole responsibility for this enormous increase in rate demand which they will be making next year. It is becoming too easy for them to refer to a court judgment and try to brush off the whole responsibility for 50–55 per cent. increases for that reason. That is totally unacceptable, and it needs to be said not only from the Back Benches but from the Front Benches. I hope it will be said from the Front Bench when we have the reply to the Debate.

I should have thought that at the moment it was reasonable to expect that regional water authorities, with prudent financial management, would have been led to anticipate even the vague possibility that they might lose their case in the courts, and that they should have shown some restraint on current expenditure during the current financial year 1975–76. This they singly failed to do. They are seeking in the next financial year to push the whole cost directly on to the consumer, and to continue the whole of their capital programme—without abating it in the way that local authorities are doing in seeking to constrain their rates—while at the same time blaming it on the court judgment and the unfortunate wording of the Act.

I hope that we shall make it quite clear that, while we support the measure, at the same time we express our great displeasure at the action of certain regional water authorities. I particularly mention the Severn-Trent Regional Water Authority in my own area. Other hon. Members will have examples to give from their own constituencies.

While we say that this is to be done during the next financial year, we should also make quite clear our displeasure at the fact that there is a desire and willingness on the part of the Severn-Trent Regional Water Authority and other regional water authorities to continue with their capital programmes, and to show no restraint in their public expenditure—such as local authorities are having to show—while at the same time blaming the whole of the increase in the regional water authorities' charges on this particular measure.

I hope that my right hon. Friend will take note of the fact that the absence of hon. Members from this debate does not necessarily mean approbation for the conduct of regional water authorities or of their proposals for the forthcoming financial year.

6.0 p.m.

Mr. John Cordle (Bournemouth, East)

The hon. Member for Meriden (Mr. Tomlinson) made a strong plea for a consultation document, which I, too, would have much preferred to have been available deal in some of the assessments and today, if possible. It would help a great arrangements being made by the local authorities at the moment, as well as giving some instruction and help to the constituents who have written to their Members of Parliament about this whole issue.

I find myself at variance with the Government in respect of this Bill but, in general, I shall support the Bill since it is a vital part of the effort to put right what has gone wrong because of the errors in the original drafting.

In my view, the whole philosophy and approach of this Bill is both wrong and unfair. It is wrong and unfair to large numbers of my constituents and, I am certain, to the constituents of other hon. Members. It is wrong because most persons connected to a sewerage system are to be made to suffer because of errors of the Government and of the water authorities in 1974–75 and 1975–76. Those errors were to impose charges on persons who were not legally obliged to pay the sums demanded of them. The House of Lords pointed out the error, and the Government rightly decided that the services should be charged on those who enjoy the benefits.

This Bill proposes to recoup the losses incurred by refunding illegal charges collected over two years from the remaining ratepayers over one single year. This seems to be quite wrong in principle. The refunds should be paid and the water boards should be reimbursed out of a central fund. Surely that is the more just and equitable way to deal with the problem.

Therefore, Clause 1(5) should be deleted and replaced with some provision to ensure that the burden of the necessary refund should fall on the community as a whole.

The Bill is unfair because the great increases in water charges for 1976–77, if the Bill is enacted unamended, is particularly unfair to those on fixed incomes who already are hard pressed by inflation and now are to be instructed to compensate the water board for the refund within a single year.

The increase presently proposed for my area—the Wessex Board—is 25.3 per cent. for unmeasured supply, the highest figure in the entire country. This is far too large to be either fair or acceptable, and it must be reduced.

If the Government will not listen to reason and pay the refunds from public funds, at the very least the ratepayers should be able to spread the burden over, say, five years and not be expected to find the whole amount immediately.

May I draw attention to the drafting of the present Bill? Clause 1 makes it the duty of all water boards to pay refunds on 1st April 1976. Clearly, this is quite impossible as a mere matter of administration. Whatever else the Bill does, it must cause the authorities to have to increase their staffs, even temporarily, to deal with it.

The wording of Clause 1(1) should be altered as recommended by the Association of District Council Treasurers at its meeting on 6th February of this year to allow the authorities a reasonable time to make repayment. Therefore, the wording should be altered from "On" to From and on or after 1st April 1976. It is clear that the implications of the Bill in Wessex and Bournemouth have meant not only a great deal more work but a considerable increase in money costs to both local authorities and water boards. They have meant that the local authorities have had the task of identifying unsewered property, and it is estimated that the regional cost of refunds in respect of 1974–75 and 1976–77 could exceed £4.1 million. I understand that this sum has been added to the normal income requirement for 1976–77 as it is the authority's decision to recover the cost of refunds from connected consumers in a single year.

Sadly, the overall effect of the Daymond judgment is to increase charges in 1976–77 over 1975–76 by an average of 28 per cent. In the case of Bournemouth, £380.000 is the apportioned cost of refunds to be borne by the connected consumers. This represents an enormous increase in terms of the rate in the pound of 17.9 per cent. when compared with 1975–76 and, in addition, the effects of increased expenditure and the reduced charging base require a further increase of 13.5 per cent. That represents an overall increase probably of 31.4 per cent.—another regrettable Daymond consequence.

Will the Minister give some indication when he winds up whether he will agree today to a longer period of repayment for those constituents and local authorities who, through no fault of their own, now face not only increased water charges but the refunds demanded in the Bill by 1st April?

6.7 p.m.

Mr. Julian Ridsdale (Harwich)

The reason why I make a brief intervention is that I fear that this may be another case of not being fair to the small man. During the passage of the 1973 Bill, it was my criticism that we were not being fair to the small man. In this Bill, as it is drafted at present, once again I fear that the Government are making the same mistake.

A great number of occupiers—rate-payers—will be angry if this Bill is not amended. The words in page 2, line 29, "or surface water" and, in lines 31 and 32, the use, in respect of the hereditament, of facilities which drain to a sewer or drain so communicating", can be interpreted so as to debar a great number of hereditaments from eligibility for refunds.

The benefit accorded to a hereditament from "run-off" by gravity which results in the surface water flowing to a street gutter should be regarded as one of the services paid for on the general rate levy of the district council, as should the disposal of surface water which drains directly to a surface water sewer.

That is the one point which I wish to put to the Minister, and I am sure that he will follow it in detail. It is more of a Committee point, perhaps, but it is one which, if it is not covered, will lead to an increasing burden being placed on the small house owner and the small bungalow owner—the very persons whom we wish to help—and not the big user, as the Minister pointed out.

I hope, as a Government spokesman said, that the water authorities, unrepresentative as they are, will not use this Bill as an excuse for extravagance and for not cutting back on some of the capital expenditure which in my view is unnecessary in these difficult times.

6.9 p.m.

Mr. Eldon Griffiths (Bury St. Edmunds)

At the outset, I have to declare two interests. The first is that I was one of the authors of this Bill and, in the circumstances I promise to be brief because, on this matter, I have a good deal to be brief about.

I agree with everything that my hon. Friend the Member for Ashford (Mr. Speed) has said. Far from believing that the 1973 Water Act is a bad Act, I believe it is an extremely good one and that we have now in this country the best structured and probably most efficient water and sewerage industry in the world. This is not to say that all the water authorities are the best in the best of all possible worlds—of course not—but I hope that the Minister will go very carefully in bringing in a White Paper and proposing new legislation. I hope he will not seek to dig up by the roots an important radical reform of this vital industry.

Secondly, I want to declare an interest in that I am not connected to the sewers in my own cottage. I am perfectly happy that way. Indeed, I would advise a lot of regional water authorities not to regard it as a measure of their hydrological virility that they have to connect every single cottage, however remote, to the main sewers. That would be far too expensive. Provided one has a proper cesspit, regularly cleaned, that is perfectly adequate.

Having declared my interest, may I deal briefly with the Bill. I have looked up the Committee stages of the 1973 Act, and I am bound to say that this particular matter was not debated by the Government side of the day nor by the Opposition. We were far too concerned at the time about the general question of metering. Possibly, we should have paid rather more attention to the precise language of Section 30(1) of the Act. Nevertheless, for my part, having had some of the responsibility, I ought now to say that had I realised at the time that the result would be that large numbers of people not connected to the sewers would be charged for sewerage, I would not have accepted it. To that extent I believe their Lordships have quite rightly inter-pretend the intention of at least one Minister on that Committee.

I would have regarded it as contrary to natural justice, in exactly the same way as I would have thought that the GPO's charging for a telephone that was not installed would be wrong, or if the BBC were to charge for a television licence when a person did not have a television set, and so on. I would not have agreed to it had I known at the time that this would be the consequence. Therefore, I welcome the Bill. I feel that the Government are quite right to bring it in, and for my part I shall hope to give it a fair wind.

I raise three brief questions with the Minister. The first is in respect of those who are not connected and who now will be relieved, at least for the time being, of the charges. What is to happen henceforth? Plainly, they are going to have to continue to have their cesspools cleared. Is it the intention from now on that a direct charge will be made to them for that particular service? How is it to be calculated? Can the Minister who is to reply give some indication of how large these charges will be? Many of those who are not on the sewers are extremely poor people living in remote rural areas and if the emptying charge is a steep one they will be in difficulty. Therefore, it is important that the House should know approximately the level of direct emptying charges that may now be imposed.

My second question concerns the balance of consumers who are to have this very high new cost laid upon them. Many will find that their water and sewerage rates go up very steeply. A 21 per cent. average means some very nasty shocks indeed for many of our constituents. It is only fair to acknowledge that. I ask whether people who receive these extremely heavy increases will be eligible for rate relief? That is an important point particularly for people who are on small fixed incomes, as mentioned by my hon. Friend the Member for Harwich (Mr. Ridsdale).

Mr. Denis Howell

If I may deal with that point immediately, of course there cannot be any rate relief because the Government of the party opposite created a national industry and there is no rate relief for a nationalised industry, a water industry. Under the proposals of hon. Gentlemen opposite, these organisations are nationalised and, therefore, there cannot possibly be eligibility for rate relief.

Mr. Griffiths

I disagree with the right hon. Gentleman that this is a nationalised industry. We were very careful indeed not to do that.

Mr. Denis Howell

What is it then?

Mr. Griffiths

The right hon. Gentleman is apparently answering my question. There will not be rate relief, but I feel that I was right to raise that point.

In conclusion, this Bill clarifies the position in respect of the charging for services rendered by the regional water authorities in respect of pollution control, recreation and amenity, and a number of other matters. That certainly was the intention of the original Act. But I feel it is right to say that when the 1973 Act was placed on the statute book we were in a better financial situation in this country than we are today. There was a good prospect that we could go forward with the new structure for the cleaning of rivers and opening up of water space for recreation and amenity. I am very sorry that, for a variety of reasons which I should not go into here, the financial background today is such that we are not making the progress on cleaning the rivers and opening up water space that was intended at the time that the Bill was passed.

I hope that when the hon. Gentleman comes to issue his White Paper he will restore to the industry and to the British people a little of that momentum towards pollution control and the improvement in recreation and amenity in water space which was the intention of the 1973 Act and of both sides of the House when we passed it. I entirely agree with my hon. Friend the Member for Ashford that there is no more vital raw material in this country than water, but we have to look at both dirty and clean water, for it is the recycling of the one to make the other that is the future for water supply in our country.

I for one welcome the Bill. I regret that it is necessary. I hope that it will have a speedy passage, and I endorse entirely all that my hon. Friend has said from the Front Bench. We owe to those who work in the water industry, whether in sewerage, water supply, land drainage or recreation, a vote of thanks for the very good work that they do.

6.18 p.m.

Mr. Gwynfor Evans (Carmarthen)

The House will appreciate that in Wales at any rate water is a burning subject. There the Water Reorganisation Act of 1973 has had, in conjunction with the local government reorganisation, a dire effect. In creating a water authority for a big part of Wales joined with a small part of England, the Act disregarded the integrity of Wales. But, in addition, perhaps more seriously, the Act endowed so-called Welsh national water authorities with great and valuable assets of local authorities and water boards without giving them or the ratepayers a single penny in compensation, although these authorities throughout the years had themselves built up and financed the water undertakings.

Following this kind of legalised robbery by the State, the ratepayers, especially in Wales, were further subjected to an unprecedented escalation of water charges and, of course, charges by authorities for sewerage services, even when they were not connected with the public service, which is why we have this Bill before us today. In Wales, the burden imposed on domestic consumers is a scandal, and it is not mitigated by any material return for Welsh water which supplies industry and the domestic needs of consumers in huge and wealthy conurbations in England. Water has been referred to more than once today as the biggest raw material of industry, and we should be in a position to have some material return from it in Wales.

Welsh commercial users have been among the greatest sufferers in this matter. A formidable impediment has been created in the way of industrial development in Wales. Now that the Government have been forced by the Daymond case to remedy a wrong of their own making, whereby charges were imposed on households and premises which were not connected with the public sewerage services, they seem to have compounded the injury that the Act did to local authorities.

Whatever may be said about the debates at the time—I was not in the House then—the Government had been warned about the consequences of this part of the Water Act. There is no doubt that the responsibility for the wrong is the Government's. In these circumstances, it must be argued that the cost of reimbursing those wrongfully charged should be borne by the Government. But it is the ratepayers and the ordinary commercial users who will have to pay another addition to their back-breaking burdens. The Minister skated too lightly over this aspect of the matter.

Again, instead of accepting the cost of administering this piece of retrospective legislation, the Government have loaded it on to already overworked local authorities. They are expected to take on no more staff to deal with it. Since Whitehall and Westminster made the errors, Whitehall and Westminster should shoulder the financial responsibility for correcting them. Instead of presenting the ratepayers with yet another addition to their rates, the Treasury should have been instructed to make the refunds itself, as well as paying for the heavy costs of administering the refunding.

In Dyfed, in my part of the world, the Government's refusal to accept responsibility has become almost a habit as we have seen in their refusal to accept responsibility for the costly and disastrous accident with the Cleddau Bridge. But, apart from imposing these extra burdens on the ratepayer, the administrative work itself has been thrown on to the district council staffs. That administrative work is considerable, especially in rural areas like the one that I represent. The work involves identifying the unconnected properties, which in itself means a great deal of work.

The Under-Secretary of State for Wales (Mr. Alec Jones)

Just to get this one out of the way, I assure the hon. Gentleman that it is not the intention that costs will fall on rating authorities. In fact, the rating authorities will bill the water authorities for the administrative costs to which the hon. Gentleman refers.

Mr. Evans

Am I to understand that the Minister is now saying that the local authorities will be reimbursed for the costs of administration which are now being imposed on them?

Mr. Alec Jones

For the administrative costs, yes.

Mr. Evans

That is very good news, which I am sure will be greatly welcomed.

I was going to say how great these burdens are. Even the reimbursement of the direct costs of the administration does not do away with the heavy labour which has been imposed on local authorities in this respect. Arduous work is involved in making the survey which is necessary to identify unconnected property—indeed, in refunding for as tar back as 1st April 1974 and adjusting the refund to take account of the special domestic relief. In additoin, I understand that the rating computer programme has had to be amended. At any rate, the cost of the administration is pretty heavy and until now has fallen on the district councils.

I should also like the Minister's comment on the fact that these councils may find it administratively impossible to keep to the timetable in the Bill. There has been a great clamour in some political quarters about the so-called overstaffing of local authorities and the increased costs of local government, but much of this is hypocritical when one realises how much of a load is put on local authorities by this kind of thing, partly due to the reorganisation scheme, but also because of the Water Act itself.

But I should also like to touch on the preposterous and unacceptable aspect of sewerage and water rates, quite apart from the refunding and the new load of work thrown on local authorities by the Government. Whereas the sewerage and water charges were, before local government reorganisation, an insignificant part of the general rate, they now assume the proportions of major charges—indeed, the biggest charges of all in the case of district councils.

In my district of Dinewfr, the water rate and sewerage charges this year are more than twice the general rate levied by the district council. The water rate is 14.8p and the sewerage rate 14p, making a total of 28.8p payable to the Welsh Water Authority. The general rate demand for the district authority is only 13p. So the charges for those two public services are more than double the total charged for district council services put together.

Furthermore, those whose very low incomes qualified them in the pre-reorganisation days to a rebate now get none. There is no rebate on these big water and sewerage charges, even for the very poorest. The poorest ratepayer has to pay the full amount, just as much as the richest. The least that the Government could do is amend the Bill in this respect to provide for assistance to the poorest section of the community. Also, the position of the Welsh Water Authority in relation to the rate support grant should be re-examined.

The householder who is not connected to main sewerage is not out of danger with this Bill. He may have avoided the Scylla of the charges only to collide heavily with the Charybdis of perhaps penal fees which could be levied by the district council for clearing his cesspit. I hope that this will not prove to be the case.

6.27 p.m.

Mr. David Penhaligon (Truro)

I suspect that much of the agreement in the House tonight is due more to relief that this matter is settled than to admiration for the settlement which has been worked out. My party certainly agrees that it was illogical to charge people for something that they did not receive. That is the basic cause of the judgment referred to, as the Bill recognises. But we would add that people should pay—we know that to a certain extent they now do—for services which benefit everyone.

The view has been expressed that these services account for a larger percentage of the total bill sent out by water authorities than has been recognised hitherto. In other words, the most important thing that water authorities achieve, at least so far as sewerage is concerned, is the prevention of mass disease. One benefits from that service whether connected to the sewerage system or not.

One hon. Member claimed for his area the record increase because of this judgment—24 per cent. I do not know what the largest increase is, but in Cornwall, which is covered by the South-Western Water Authority, the increase will be 35 per cent. That is a substantial sum to collect in just one year. Despite the Government's present financial difficulties, I wonder whether they could not think again about recouping all this money in one year. If the Government could make a contribution, I am sure that that would be welcomed.

It is unfair that the rates in my area will rise by 35 per cent. when the national average increase will be 21 per cent. People in my area are connected to the system like everyone else, yet they are to be punished in this way for living in an area where many properties are not connected. I hope that the Government can look into the possibility of help towards the refund.

Mr. Eldon Griffiths

Is the hon. Gentleman saying that it is the Liberal Party's policy to increase taxation to pay for it?

Mr. Penhaligon

One of my hon. Friends suggested before I entered the House that perhaps we were in a Clay Cross situation and that those responsible for the original legislation should pay personally. If I say that the Government should make a contribution, that means that the money comes either from taxation or from borrowing from some of our friends. I do not deny the implication.

I must admit that I am not impressed by the water authority. The hon. Member for Bury St. Edmunds (Mr. Griffiths) said that we had one of the best set-ups in the world. I do not consider myself an expert on what the other parts of the world have, but if ours is the best I feel sorry for some of the others.

The water authority in my area is famous for its glossy magazine. My hon. Friend the Member for Cornwall, North (Mr. Pardoe) has collected nine or 10 of the magazines, which add up to an impressive document. I cannot help wondering how much it costs to produce them.

There is a tremendous argument in our area about the water authorities' decision to charge direct instead of through the local councils. One cannot help coming to the conclusion that it is bound to cost the people in the area of the South-Western Water Authority more money individually, even if it might give a small advantage to the water authority because it receives its money earlier.

The hon. Member for Carmarthen (Mr. Evans) pointed out the nonsense of the present situation, saying that some people pay more for water and sewerage than for local government. We all know the reason. It is not that local government does not cost more, but those serving in local government are elected and report to somebody. They can be chided or thrown out. Two-thirds of their money is given to them by the Government. But every penny of the revenue of the water authority, which appears to report to nobody, is taken out of the local ratepayer's pocket. That is nonsense of the first order and a basic contradiction of the democratic principle.

There is one thing that disturbs me about the idea that water authorities must be self-financing. I can comment only on what has happened in my area in the past two years. There is no recognition of the lack of local resources. There is no resources grant for water, if I may put it in that way. We have reached an appalling situation in areas such as mine. Cornwall has a winter population of about 330,000. I understand although I am always a little dubious about the figures, that during the summer we have 3 million visitors. Sewage disposal in Cornwall at the peak of the summer is nearly at breakdown point. Merely refusing to talk about that, as most people in our area do because of the possible effect on the summer trade, will not make the problem go away. I draw the Government's attention to the fear which is at least expressed behind closed doors in my county. The lack of a resources grant means that the situation will never be rectified.

I hope that some comments can be made about another big anomaly which is about to be created. If we are to charge people for emptying their septic tanks, which must be the logic of the Bill, I presume that the charge will be liable to VAT. I do not understand why it is logical to charge VAT on emptying a septic tank just because the householder does not have a pipe for the sewage to go down when presumably there is no VAT on the water rates. In my area, where many people already have their septic tanks emptied and are charged VAT, the VAT charge is not very popular. Perhaps the Minister could speak to the Chancellor of the Exchequer about that.

My hon. Friend the Member for Isle of Ely (Mr. Freud) has had great concern expressed in his area about people's apparent inability to obtain compensation from the water authorities for loss of business caused by the carrying out of public works. I understand that a road in his constituency has been blocked for about six months because of a new installation, with the tragic result that a business has gone bankrupt. It appears that the constituent concerned is not entitled to compensation.

Despite the criticisms advanced from the Liberal Bench, I do not believe that there will be much opposition from the Liberal Party to the Bill. It is important to get the matter cleared up as soon as possible, and then perhaps the new White Paper will give us the opportunity to look again at the difficulties encountered in the last two years, but there will not be much opposition until 31st March.

6.36 p.m.

Mr. John MacGregor (Norfolk, South)

I am grateful for the opportunity to take part in the debate, because East Anglia is one of the areas most affected by the Bill. It has a much higher than the national average proportion of households not connected to mains sewerage.

I understand the difficulties in which the Government and the House are faced over the Bill, not least because if we reversed the House of Lords decision we should be introducing retrospective legislation, which in general I deplore. But I have considerable doubts about whether we are doing the greatest service to either group of ratepayers in the Bill we are discussing tonight. Let us consider first those who are not connected to main sewerage. I have a feeling that those who pushed through to the House of Lords and won the decision there will have gained a Pyrrhic victory. The decision may well boomerang on many who are not connected. I suspect that the average charge for emptying septic tanks will turn out to be bigger than the saving that many of those not connected will have achieved as a result of that decision. Of course, averages can be misleading and some will undoubtedly benefit. But many others will not.

In the area of my district council it will now cost £30 a year, plus VAT, for an average number of emptyings of septic tanks. I have heard the rumour—I do not know whether it is true—that in one water authority area the cost will be £90 a year. That will certainly be greater than the saving that many will have as a result of the decision. Many of those not connected will find that there is a nasty backlash and that the decision has not been to their benefit.

I come to those who are connected, particularly the domestic householder and ratepayer, with whom I am most concerned. In the area of the Anglian Water Authority, for example, the costs of sheer administration in dealing with the refund are thought to be about £500,000 in the coming year. Although the local authority can reclaim the money, the water authority must meet the extra charges in the end, and so they will come back to the ratepayer, who will have to bear this burden.

Secondly, the refunds in the authority area will amount to £11 million. The combination of refunds and administrative charges means a 31 per cent. increase this year in the water authority precept to those who are connected. That has ruined the tremendous efforts of my county council in the past year to hold down the general local authority rate. The council feels that it will be unfairly accused of having caused a great deal of the increase, whereas it arose from the House of Lords decision.

The unfairnesses go even further. I am concerned about the unfairness to the individual ratepayer. Had it been known that the decision would be made, it is likely that the charges for emptying septic tanks in the previous two years would have been higher. Therefore, the ratepayer who is connected is now being asked to pay an even bigger charge than he would otherwise have been, because the costs to be recouped would have been less. Above all, it is the poorest ratepayers for whom I am most concerned. I was unable to check this before the debate, but I understand that there are no rate rebates for the water authority charges. An average increase in Norfolk in the coming year of 31 per cent., unrebated in any way, will be a heavy burden on the poorest ratepayers at a time of high inflation.

Many of those benefiting from the decision are not domestic ratepayers but the public institutions, nationalised industries, and private-sector industries. They will benefit at the expense of the poorest ratepayers who have no opportunity for a rebate.

I know that the Government, having made up their mind on a difficult decision, are determined to push this legislation through. Therefore, I conclude with three suggestions by which we can ameliorate some of the effects of the Bill which I have described, suggestions which can be pursued in Committee. The first two are concerned entirely with the administrative costs. There are considerable doubts about the inclusion of surface water in Clause 1(7)(a). If that were excluded, it would be easier for local authorities to trace those ratepayers who are not connected, because that would directly relate to the provision of 50 per cent. rebate for those unconnected which applied to last year. But through this Bill we are changing the definition of non-connection and thereby making the task of tracing greater and the cost of administration higher.

Secondly, the Rating and Valuation Association believes that the word "facilities" in Clause 1(7)(a) is unclear, and a clearer definition in the interpretation clause would help in administration.

Third, I hope that even at this stage something can be devised to help the poorest ratepayers, who are facing particularly heavy charges. Properties subject to special rating under Clause 1(7)(b), and also properties which I understand are, in the technical term, rated in cumulo, are to be aided substantially. They are often properties in the public sector. I question whether it is desirable that they should have such substantial concessions when others are having to bear the burden. Surely the Exchequer will gain from these measures, because, if some private sector industries get such rebates, that will increase their pretax profits and so, in a roundabout way, the Treasury will draw something back. If a scheme could be devised whereby that money could be given back so that the charge to the domestic ratepayers was not so high, we would be very grateful.

6.41 p.m.

Mr. Graham Page (Crosby)

I am sorry that the Minister of State is not here at the moment, but I hope that my thanks will be conveyed to him for the way he introduced the Bill. There is in the Water Act a section which does not carry out the intention of either the then Government or of the then Opposition at the time the Act was going through the House. The House of Lords has decided that the intention, as expressed on several occasions in debates when the Act was going through the House, was not carried out in the wording of the Act and that certain refunds have to be made.

In Committee when the Act was going through this House, I made the intention clear, and it was never questioned by the then Opposition. I said: The immediate problem is the transition from the system of paying on a rateable value basis, whether one has a service or not. Indeed, one pays whether or not one has a sewerage service or a water service."—[Official Report, Standing Committee D, 12th April 1973; c. 982.] I made it clear that there was to be a transitional stage in which even those who did not have a service would be paying. I made it clear again on Report that that was the intention. I said then: There will be a transitional arrangement… That is merely a transitional arrangement, and a temporary measure of this sort will give the authorities sufficient time to be able to set up direct charging arrangements. If direct charging has to start, or had to start on 1st April 1974 when the new authorities take over, the existing authorities would have an enormous task in identifying all properties connected to the public sewers."—[Official Report, 1st May 1973; Vol. 855, c. 1022.] That is exactly the position.

It was clearly the intention that, because of the difficulty in identifying those properties which were not connected with the sewer, as the Minister said, we intended to allow a transitional stage. Unfortunately, the wording of the Act did not allow that: it did not carry out our intention. But there is no doubt that it was intended that there should be that transitional period during which a general charge would be made—a charge on all ratepayers based on their rateable assessments, whether they were receiving the service of a sewer or not.

The court having decided that that intention was not embodied in the Act, I stand by its decision in the same way as the Government are doing. It is necessary and proper to abide by the court's decision, but only until it is altered. Indeed, it can be altered by this House. I have never advocated retrospective legislation—that is why I will abide by the decision up to the time it is altered. It can be altered prospectively or retrospectively. I question the wisdom of the Bill in altering the decision of the court prospectively as well as retrospectively.

I agree that, while the decision stands, the refunds must be made, and in connection with the refunds the Minister has said that the cost will be £60 million. That, I assume, is the assessment of the refund itself. But, of course, if one continues to allow the judgment to stand prospectively, there will still be the increased liability for providing the service as a whole in the normal local government service manner. So I agree that the Bill should not alter the law retrospectively, but I see no reason why we should still hold to the Daymond case in future.

I would have chosen to return to the intention of the Act that there should be a transitional period, and if it has been taken away by the court's decision for these two years, there is no reason why we should not restore that transitional period and allow it to hold good for perhaps another two to three years.

At the same time, I agree with my hon. Friends who have said that the result of the Act in not carrying out the intention of both sides of the House at the time should be spread over a longer period, and not reclaimed from the general ratepayer over a period of only one year. I see no reason why we should put that heavy burden on the general ratepayer, although, of course, it is a measure of how the general ratepayer has benefited out of the unfortunate occupier of property who has not been given a service. But it is a blow and I would have hoped that it would have been spread over a longer period.

Why not return for the future, to the original intention of the Act and of our debates on it, at least for a further transitional period? We were thinking at the time of a transitional period of some five years. Now that the transitional period has been removed entirely, although I abide by the decision removing it for two years past, I see no reason why the Bill should remove it for the further three years. If we allow the transitional period to continue, the only amendment I would require would be that cesspool charges should be credited against the general rate charge. If someone who is not being served with a sewerage service has to pay not only his general rates but also for the clearance of his cesspool, that is unfair, but there is no reason why he should not be allowed to credit the charge against his general rate payment.

If we continue the general transitional period as intended in the Act, it will allow rate rebate to continue, because the sewerage charge has, up to the present, been included within the general rate demand and, therefore, has had the benefit of rate rebate.

As I said, I am grateful to the Minister for the way he presented the Bill. After all, he is now probably receiving advice from the same civil servants from whom we received advice. We are grateful to them and the parliamentary draftsmen. It is not, therefore, a party matter. It is one of those things that no one on either side spotted at the time, and it has been brought to light only by their Lordships in their judicial capacity. I see no reason why we should not, for the future, go back to what we intended. I do not know why the Minister chose to construct the Bill so as to apply the Daymond case for the future when he could have fulfilled the intentions of both the major parties by restricting it to the past.

6.51 p.m.

Miss Janet Fookes (Plymouth, Drake)

I was not closely associated with the passing of the Water Act and I therefore listened to my right hon. Friend the Member for Crosby (Mr. Page) with particular interest. The Daymond case is of concern in the South-West, which is where my constituency is located. Mr. Daymond lives close to Plymouth, and he was represented by a Plymouth firm of solicitors. I fully agree that the refund should be paid, the Lords having made their decision, but I take issue with both Front Benches about where the burden of repayment should lay. Here I am enjoying what I believe is called the freedom of the Back Benches. It seems that since the error was made—as both sides admit—through the ambiguous drafting of the Act, in all equity and fairness it is the Government of the day who should foot the Bill. The authorities might well have budgeted differently had they known what the future held, and I do not see why they should be landed with extra payment which at the time they could not foresee having to make.

I share the view expressed by my right hon. and hon. Friends that it is a stiff penalty to ask that two years' refund should be made in one year. This seems a great burden, as is illustrated by the case of the South Western Water Authority. It estimates that the refunds will be about £3 million, whereas its total net expenditure on general services will be about £18.5 million. That is a pretty fair proportion of the total. It masks the situation for the individual connected ratepayer. Perhaps I may correct the figures which were given by the hon. Member for Truro (Mr. Penhaligon). It is true that the increase will be 35.5 per cent.—more, on average, than last year—but 3.1 per cent. of that increase is due to rising costs, and the rest directly or indirectly to the result of the Daymond ruling. That is still extremely high, however, and the burden will fall very heavily on a number of people whose wages generally are not as high as those paid in the rest of the country.

I am not impressed by the Government's argument that they cannot afford the additional expenditure. At the very least they might have made a contribution and said that they could not do more because of public expenditure requirements. But it comes oddly from a Government who have already vastly extended public expenditure unnecessarily and harmfully on a number of projects—such as the nationalisation of oil and the Community Land Act—which should never have been carried out. If they had not been there might have been more to spare for the unconnected ratepayers.

The Plymouth solicitors to whom I have referred drew my attention to one point that has not been mentioned so far in the debate. It concerns the question of court fees and costs for those who resisted the attempt to make them pay the charges and who were taken to court. I gather that the Caradon council, in the area of the South Western Water Authority, was not prepared to see how the matter went, and it brought cases against individual ratepayers. The Liskeard magistrates' court was not prepared to adjourn the proceedings. Some people, fearing that they might have the bailiffs in to take their furniture, paid up, but found themselves facing court cases for arrears.

This situation should be dealt with by the Bill, but there is no mention of it. I trust that the Minister will give us an assurance that these costs will be covered by an amendment to the Bill in Committee. If they are not, my hon. Friends will certainly table amendments to take care of the matter. This may seem a small issue, but it is of great importance to those who were asked to pay up and who later found that they had no need to do so.

The Minister said that the Bill was designed to deal only with refunds, and therefore did not extend to wider issues. In many ways I regret this, especially since the Government are expecting the water authorities to shoulder the bill themselves. In many cases the water authorities are not given much freedom of financial action—a point that was put forcibly at a meeting between officials of the South Western Water Authority and Conservative MPs and, I believe, MPs of other parties in the House recently. They explained that they could not set aside more than 2 per cent. of their revenues for a capital reserve—rather like the prudent housewife who prefers to save rather than incur hire-purchase debt.

I understand that there are restrictions, either through the Water Act or Treasury directives, which in many instances compel the authorities to borrow longterm when they prefer to borrow short-term. They do not have the freedom of manoeuvre which they would otherwise enjoy, and they have asked that they should have the same freedom of action as do local authorities. It seems ironic that while we are expecting them to pay for the Government's error, the Government are stepping in and limiting the freedom of their financial manoeuvring.

The South Western Water Authority is not the most popular of public bodies. I do not know what is the standing of water authorities in other areas, but I think that my local water authority can be said to be the "top of the unpops". In some cases this is unfair, and in this instance I believe that the authority is more sinned against than sinning. I hope that the Minister will indicate that the Government will look to the financial powers of water authorities, at least in their consultative document, if not in the Bill.

6.59 p.m.

Mr. Tony Newton (Braintree)

I am grateful to my hon. Friend the Member for Daventry (Mr. Jones) for agreeing that I should have a moment or two of his time, and I shall try to be brief. I also declare an interest in that I am non-connected sewerage ratepayer, and, therefore, that I stand to gain financially by the passage of the Bill.

I intend to disturb the general bonhomie which seems to surround the Bill, in spite of reservations, from both sides of the House. I have listened to virtually every word of the debate, and I am far from satisfied that we should not adopt a far more aggressive line towards some of the points which have emerged about the way the burden will be distributed among those who will have to foot the bill.

I welcome the Bill's basic purpose. I supported very strongly the view that it was contrary to natural justice that people who had no sewerage should have to pay sewerage charges. I am very glad that the House of Lords reached its decision.

The technique proposed in the Bill for remedying the situation is probably right. There should be no general charge levied on unconnected ratepayers, and charges on them should fall in respect of specific services, such as the emptying of cesspits. There might be a case for doing it the other way round and making the charge and then deducting specific charges for emptying. However, I suspect from experience in my own area, where some septic tank and cesspool systems need virtually no maintenance and others require considerable maintenance, that such a scheme would continue to leave a sense of injustice.

I have two substantial reservations about the Bill. The first is whether we have got the balance anything like right. Certainly the previous situation was wrong. I made that clear to my constituents last year, but I also made clear my view that the compromise of a 50 per cent. charge was probably about right. Although my home is not connected to the sewerage system, I enjoy the advantages of the drainage system in the surrounding towns where I shop and on the roads where I drive. It would be quite unfair if I made no contribution to that system and to the interest charges and cost of any extension of the system. It would be unfair if that fell only on connected ratepayers.

If this Bill means that virtually no charge will fall on unconnected ratepayers, the balance is wrong. I hope the Minister can say more about this in winding-up.

My anxieties about financing increased as I listened to the debate. Like my hon. Friend the Member for Plymouth, Drake (Miss Fookes) I do not think it is fair that the cost of remedying this mistake should fall, over a short period, on unconnected sewerage ratepayers. It will cause great injustice. My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) asked whether the Liberal spokesman though there should be an increase in taxation in this situation. I have to say that I believe that is how the matter should have been dealt with. I do not like saying that, but it would have been fairer than what is proposed in the Bill. There is no merit in curing one clear injustice by creating another in the burden these proposals will impose on connected ratepayers.

The force of that argument is strengthened if, as I understand, a substantial part of this £60 million is going to big firms and public sector industries. It will be quite intolerable if my constituents and those of other hon. Members, many of whom are not at all well off, are to be expected to pay a swingeing increase in sewerage charges in order to provide rebates to the electricity boards and Government bodies such as the Royal dockyards. If that is the situation I shall have to think very carefully about whether I can support the Bill., I hope the Minister will tell us how much money is going to large industrial concerns, and especially to the nationalised industries and other parts of the public sector.

Mr. Speaker

Mr. Arthur Jones.

Mr. Keith Stainton (Sudbury and Woodbridge)

Do I not count, Mr. Speaker?

Mr. Speaker

The hon. Member for Sudbury and Woodbridge (Mr. Stainton) counts very much. Is the Opposition spokesman giving way?

Mr. Arthur Jones (Daventry)

indicated assent.

Mr. Speaker

In that case, I call Mr. Keith Stainton.

Mr. Stainton

I have been here for some time, and I got to my feet before the Opposition spokesman—

Mr. Speaker

Order. That is not the point. The hon. Member must not try that with me. The winding-up speeches were due to begin five minutes ago. The Opposition Front Bench spokesman was kind enough to give way to allow the hon. Member for Sudbury and Woodbridge a few minutes of his time. I know that, as an experienced hon. Member, he will co-operate.

Mr. Stainton

I shall certainly cooperate, Mr. Speaker, but with the reservation, made in all respect and regard, that I stand here as the equal of any other hon. Member, wherever he may sit. I am told by various persons that this is a non-party matter. It is certainly a matter of aggrieved rural residents. Many of my constituents feel that this has been a complete muck-up, right from the start—

Mr. Speaker

Order. I am sorry to interrupt the hon. Member. He knows that it is a long-established custom of the House in these circumstances that he should take only one minute. He would then be playing the game with everyone.

7.4 p.m.

Mr. Keith Stainton (Sudbury and Woodbridge)

Having prefaced by remarks with those cautionary words and reprimands, I have two points of great substance to raise.

The first is that one can assume that industrial users of water have, in greater or lesser degree—and, I imagine, almost totally—recouped their payments through their own activities. I would not like to think they are going to benefit in any degree from the mechanisms of this Bill.

The second point concerns the financing of water authorities. I hope that in Committee, Back Benchers will ensure that the opportunity is seized to look afresh at the financing of these authorities, at the debts they have inherited—especially the Anglian Water Authority—the origins and definitions of those debts and the financing that is caused to be undertaken long term, via the Public Works Loan Board, which has gravely constricted the financial manœuvrability of these large and important authorities.

7.7 p.m.

Mr. Arthur Jones (Daventry)

This debate has been a somewhat rare occasion. Hon. Members on the Government Benches and my hon. and right hon. Friends are joined in a feeling of non-fulfilment in regard to the Water Act, its original intention and the defective drafting which has given rise to the under standable and deep sense of injustice that we have seen reflected in the debate. There are defects which must be put right, and the House is seeking ways of doing it as equitably as possible. Maybe we are using a rather blunt instrument in trying to solve these problems and, as my hon. Friend the Member for Braintree (Mr. Newton) said, this may lead us into other problems, but I am sure that it was the original intention that a general service charge should be payable in respect of all properties, whether connected or not. My right hon. Friend the Member for Crosby (Mr. Page) made this clear with the extracts that he read from the Second Reading and Committee debates on the Water Act.

I hope that my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) will not feel that I am being a little harsh if I say that he was making his judgment with the benefit of hindsight. Many of us recognised that it was inequitable that people whose properties were not connected to a sewerage system should pay the full charge. We had an Order last year which reduced the general service charge for those properties to 50 per cent. That was an endeavour to meet what was recognised to be an inequitable situation. However, the Order needs validation and I am not sure whether the Bill adequately covers that point.

The Daymond case revealed the inadequacies of the draftsman. It is a narrow decision, which has been described as wobbly, but nevertheless I am glad that is binds the Government. I am not sure that it would be wise for the general body of taxpayers to be required to meet the bill. It is said that the Government should find the money, but the Government can find money only at the expense of the taxpayer. There has been considerable advocacy in that regard, but it is against the basic philosophy behind the Water Act, which is that the consumer should pay for the services he receives. For the Government to meet the £60 million at the taxpayers' expense would mean a subsidy to the consumer. I am sure that I speak for most hon. Members in saying that we should not get involved in subsidies for services under the Water Act.

In coming to that reduction of 50 per cent. of the general service charge, it is recognised that the cost of meeting drainage facilities in highways and open spaces amounts to about 30 per cent. of the general service charge. I have some sympathy with what my hon. Friend the Member for Braintree said. If we take into account the common benefit element of 2 per cent. or 3 per cent. and add to that the highway drainage charge of 30 per cent. we reach 32 per cent. or 33 per cent. against the charge of 50 per cent. levied under the 1975 Order.

My hon. Friend the Member for Bournemouth, East (Mr. Cordle) advocated that the refund should be made at the taxpayers' expense. On reflection, I think that he will not regard that as the right decision, having regard to public expenditure and the purpose behind the Water Act.

The Minister said that the water industry is now a nationalised industry. On that I am in conflict with him. It is a public utility, regionally autonomous, under 10 regional water authorities. It is in no way analogous to a nationalised industry. There is a large content of the private water companies in the service. The Minister may be trail blazing. He promised us a discussion document in a few weeks' time and that may be a slight lifting aside of the curtain.

Grave concern for the level of water charges has been expressed in every speech. My hon. Friend the Member for Norfolk, South (Mr. MacGregor) dealt with the position in the area of the Anglian Water Authority, in which my constituency lies. He mentioned a 31 per cent. increase in the general service charge, which arises from the Daymond decision and increases the charge for 1976–77 to 51 per cent. instead of 20 per cent.

I entirely agree with my right hon. Friend the Member for Crosby, who dealt at length with the emptying of cesspools, that that matter should have been dealt with in the original Bill. There is great variation in the level of charges. The Minister will probably be considering that in his paper. For example, in my constituency, the district of South Northants charges £9.50 per load or part of a load consisting of not more than 1,000 gallons, but the Daventry district, which is also within my constituency, makes a standard charge of £20 for each emptying. It is a hardship that under the original Bill people were expected to meet the charges of cesspool emptying beyond the general service charge.

Health and social security are essentially dependent upon a proper water and sewerage service. What hope would the Under-Secretary of State for the Department of Health and Social Security have unless the regional water authorities were effectively carrying out their duties? I am delighted to see the Under-Secretary of State here. I am sure that he will deal with these points of detail.

Mr. Denis Howell

My hon. Friend is now in the Welsh Office.

Mr. Jones

I recently chaired a Committee in which the hon. Member for Rhondda (Mr. Jones) was performing his duties for the Department of Health and Social Security. I ask his apologies. He has wide experience of Welsh affairs as the hon. Member for Rhondda.

The problems of repayment, identification and the non-connected have already been mentioned, as have the questions of persons who have moved, the deceased, and companies in liquidation. Surely there is some limit to the scope of the exercise. Will there be a continuing liability on water authorities for an indefinite period? All the repayments could not possibly be made in the first year. Is it suggested that there should be a terminal date beyond which no more repayments will be made? Will the regional water authorities rely on the six-year limit under the Statute of Limitations?

The cost of recovery will be a serious matter. What about the refund arrangements? Will they be devised in such a way as to avoid problems in the payment of rates by instalment? That is an added complication that will have to be dealt with.

The common benefit element is only 2 per cent. or 3 per cent., and it covers pollution, recreation, conservation, amenity, fishing and navigation. There is a need to secure rising standards in our rivers and watercourses. Will the common benefit element be collected by the regional water authorities or will it be levied by the local authorities as part of the rate payment? The former is preferable. It is simpler, it moves towards direct charging—which is a likely decision by the regional water authorities—and it is in no way related to the rate demand.

We are awaiting the departmental review, which the Minister of State promised within the next few weeks. That will deal with the difficulties of regional and national equalisation. We hope to make progress on the method of charging on the basis of water used or effluent discharged, and the issue of cesspool clearing.

It is generally recognised that the Water Act 1973 provides a sound basis for the whole hydrological cycle, and I pay tribute to those who originally conceived and implemented it and are now operating it. The Act is rightly recognised as providing a sound basis for water resources policy, for the adequate provision of sewerage and sewage disposal, and for raising standards in our rivers and estuarial waters. It has proper regard to land drainage and flood protection. The new structure co-ordinates water recreation and amenity, including fishing, and the regional water authorities, with the guidance of the Water Space Amenity Commission, are actively pursuing these ends.

Clearly, there is a need to make progress, ease the administrative problems, and provide adequate time for the heavy work load that will be associated with the provisions of the Bill. I hope that the Bill will receive a fair wind.

7.20 p.m.

The Under-Secretary of State for Wales (Mr. Alec Jones)

Despite the fact that I have little time, I made a promise to my constituents that provided I am in order—and I trust you will so rule, Mr. Speaker—as the hon. Member for Rhondda, your home town, I would convey to you the first time I spoke from this Box the best wishes of all the people of Rhondda on your new office.

In the main the House has accepted that the Bill is necessary. I do not believe that everyone welcomes the Bill, because most of us wish that the situation which caused it to be present had not arisen. The attitude of most hon. Members is that the Bill is inevitable following the High Court ruling in the Daymond case. Time will not allow me to answer many of the questions which hon. Members raised or comments on the general aspects of water. Therefore, I shall confine my remarks specifically to the contents of the Bill in the name of haste, speed, and all the rest.

There is little dissent from the main purpose of the Bill, which is that people should receive refunds of any illegal charges which they paid during the years 1974–75 and 1975–76. It is right to say that those charges were not imposed by any malevolent act of any wicked water authorities, but were charges imposed by responsible authorities which believed that they were acting legally and in accordance with the wishes of this House. Although it is tempting, I shall resist the temptation to say that it is the fault of and blame Opopsition Members. All those who were Members of the House at the time the Act became law bear some responsibility for failing to see that what we thought we were passing was not, in fact, what we wanted.

I am glad that the hon. Members for Ashford (Mr. Speed) and Daventry (Mr. Jones), in accepting the Bill in general terms, reject any idea of retrospective legislation and any increase in public expenditure. By and large they believe that the Bill is on the right lines. The hon. Member for Ashford, together with other hon. Members, mentioned the phasing of increases. That was certainly considered, and the Bill will allow it. However, water authorities do not want to do this because it will increase total costs. If we agree that water authorities are responsible authorities, it follows that they must make a judgment in this case. The important point is that if the costs are spread over two or more years, the total cost will be much higher because it will result in deficits and interest charges to cover them. The water industry has paid its way so far, and it would not be wise to encourage it to get into a deficit situation.

The hon. Member for Ashford raised many technical points, and I assure him that we are thinking along similar lines because not only Ministers but all involved in the Bill are striving to ensure that we get it right this time and are not caught in a subsequent Daymond case. We are examining the specific and detailed points which the hon. Gentleman raised, many of which are in hand at present. He referred to the effect on those who have moved homes, which is of some concern to the general public. In most cases refunds will go to the present occupiers. People will get back only what they paid, so if previous occupiers submit claims—and Government publicity will be given to this—they will get their refunds and present occupiers' next bills will be adjusted accordingly. It is the intention to ensure that as far as possible those who move will not suffer as a consequence.

Concern was also expressed about local authorities. The refund schemes were discussed with local authority associations. They suggested that the refunds be made as credits against the 1976–77 rate demands, because that would involve the minimum administrative burden. Therefore, we have sought to devise a scheme which was acceptable to and easily administered by local authorities. I understand that hon. Members have expressed the view that there could be burdens on local authorities. We have consulted the associations and have adopted their views in this matter. The hon. Member for Folkestone and Hythe (Mr. Costain) was concerned that local authorities would have difficulty in deciding where these unconnected domestic properties are situated. We are advised that local authorities know where most of them are at present. Therefore, we do not consider that that is likely to present a difficulty.

I turn to the question of making the relevant date 1st April. Clause 1(1) says: On 1st April 1976 it shall become the duty of every water authority to refund—". That duty does not require to be instantaneously discharged, but we hope that there will not be any appreciable delay before these refunds are made for the sake of those receiving the refunds and for the sake of getting the whole matter cleared up.

I say to the hon. Member for Carmarthen (Mr. Evans) that as a result of my recent travels in Wales I believe that many Welsh people who live inside the boundaries of the Severn-Trent Water Authority will not be quite so enthusiastic about coming inside the boundaries of the Welsh National Development Authority. As a consequence of the Daniel Report, the consultative document will be published shortly and the hon. Member for Carmarthen will have the opportunity not only of judging, but of giving his own views about, the proposal contained in that document. The hon. Gentleman, in common with many other right hon. and hon. Gentlemen, referred to the high costs involved. He did not take fully into account the increase in the domestic rate relief as it applies in Wales.

In Wales that relief runs at approximately 30p in the pound. There was also a special rate relief paid in 1974–75 to domestic ratepayers whose water, sewerage or general rates would otherwise have been even higher than they are at present. There was some provision made to deal with the ever-increasing burden.

Several hon. Members referred to rate rebates. There are no rate rebates for water service charges. The poorest members of our society are taken into account through supplementary benefits. The hon. Member for Plymouth Drake (Miss Fookes) referred to compensation. The Bill is about the refund of sewerage charges and not about compensation for other costs. Her suggestion would take us into deep water. It is somewhat difficult to draw the line on this matter, but we shall examine the matters which the hon. Lady raised.

I was asked about the costs of emptying cesspools. I am not an expert on the emptying of cesspools, but I am advised that I cannot give a figure for this because it varies considerably throughout the country. In some cases cesspools are emptied by the local authority, in some cases the water authority, and in other cases they are even emptied by private contractors. I have tried to give the hon. Member for Bury St. Edmunds (Mr. Griffiths) a meaningful answer, but am unable to do so.

My hon. Friend the Member for Meriden (Mr. Tomlinson) made a fairly substantial attack on the Severn-Trent Water Authority. It is not for me to defend that Authority, or any other. The Government have no powers to make directions to water authorities about the levels of their charges. What we have shown quite clearly is that we have tried to introduce—

Mr. Speaker

Order. In accordance with the Business Motion passed earlier, I must now put the Question, That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Snape.]

Committee tomorrow.