HC Deb 25 July 1979 vol 971 cc573-5
1. Mr. Whitehead

asked the Secretary of State for the Environment if he will refer recent water rate increases by the Severn-Trent Water Authority to the Monopolies Commission.

The Minister of State for Local Government and Environmental Services (Mr. Tom King)

No, Sir. However, when the Competition Bill is on the statute book it will be possible to decide whether the Monopolies and Mergers Commission should investigate the activities of this or any other water authority.

Mr. Whitehead

Is the right hon. Gentleman aware of the great hardship caused to many people in my area because of water rate increases in excess of 60 per cent. and 70 per cent., against which there is no appeal and for which no rebate can be paid? Does he realise that under the Labour Government it would have been possible to refer such behaviour to the Price Commission? What immediate investigation can be promised into the pricing policies of this adipose monopoly?

Mr. King

Although it might have been possible to refer this issue to the Price Commission, it is not possible to do as the hon. Gentleman suggests in his question, that is, refer it to the Monopolies Commission because the water authorities are exempt under the present legislation. Therefore, the quickest way to resolve the problem is for the hon. Gentleman to give his full support to the Bill to set up the new arrangements.

Mr. Alexander

Is my right hon. Friend aware of the widespread resentment within the Severn-Trent area at the increases to which we have been subject during the current year? Does he realise that it is extremely difficult for ratepayers, for councillors and even for Members of Parliament to make proper representations on these increases? Will he take time to consider making water authorities more responsible to the electors within the areas which they are supposed to serve?

Mr. King

I recognise that the particular problem faced by users and consumers in the Severn-Trent area has been the wide fluctuation. In fact, in the previous two years there was a reduction in the water rate and a sharp increase in the last year. Part of this arises from what constrains the authority in its treatment of balances for the year, and this is one aspect of the matter to which we are giving consideration. But I should point out to my hon. Friend that there is a majority of elected members on the authority. In the case of Severn-Trent there are 28 out of 48 members elected, although, obviously, indirectly elected, and it is open to them to make their representations as members of the authority.

Mr. Denis Howell

Does the Minister acknowledge that there is growing concern with every week that passes about the pricing policies and all that flows from the fundamental absurdity of the way in which this industry was established by the previous Conservative Government? Does he recall that we produced a White Paper with a view to tackling some of the worst features—such as the establishment of 10 separate nationalised industries—arising from this absurdity and to bring more central planning and overall financial sense into the system? Do the Government intend to proceed on the basis of that White Paper? If not, what alternative proposals do they have to meet the growing public disquiet?

Mr. King

It strikes me as a bizarre question from someone who had responsibility for the industry for five years to ask me, within three months, what we are doing about it. When one of the problems concerning a number of hon. Members is the very size of the authority involved—the hon. Member for Derby, North (Mr. Whitehead) and my hon. Friend the Member for Newark (Mr. Alexander) made the point—I do not think that the solution is to go for one simply massive or overriding authority, and we do not propose to go down that line.