HC Deb 07 March 1979 vol 963 cc1235-8
7. Mr. John Hunt

asked the Secretary of State for the Environment whether, in the light of his recent discussions with the National Water Council, he has yet reached any conclusion with regard to a possible amendment of section 30 of the Water Act 1973.

Mr. Denis Howell

I have at present nothing to add to the reply that I gave the hon. Member on 31 January.

Mr. Hunt

Although the right hon. Gentleman was not, of course, responsible for the 1973 Act, he has been the responsible Minister for several years now. Does he realise that if the Act is not changed the shift from industry and commerce to the domestic consumer by 1981 could lead to increases of up to 50 per cent. in water charges for domestic consumers in Greater London and elsewhere? Does the right hon. Gentleman not feel, therefore, that he is sitting on a water bomb, and when will he do something about it?

Mr. Howell

I entirely agree that this is yet one more consequence of the Water Act 1973, against which my hon. Friends and I voted at the time. It was piloted through the House by the hon. Gentleman sitting on the Opposition Front Bench now, the hon. Member for Henley (Mr. Heseltine)—

Mr. Heseltine

Wrong.

Mr. Howell

Well, since the hon. Gentleman was a Minister in the Department, if he was not seeking to pilot the Bill through the House he was certainly not dissociating himself from it. The fact of the matter, as the hon. Member for Ravensbourne (Mr. Hunt) says, is that in London in particular the switch of the weight of charges inherent in the Act will impose a considerable burden on domestic ratepayers in order to relieve commercial ratepayers. This is now being considered, but if it is to be put right and amending legislation introduced, we shall need the White Paper proposals. If the Opposition will give an undertaking that they will facilitate such proposals, we shall try to introduce them into the House at the earliest possible moment.

Mr. Spearing

Does my right hon. Friend agree that the reason why that was a bad measure was that it looked upon the supply and disposal of water virtually in a commercial sense alone, and will he confirm that after the Act was passed £100 million of rate support grant which would have gone to local authorities for sewerage works was removed by the Conservative Party?

Mr. Howell

That is certainly true, but I believe that the organisational changes which were brought about—in particular, removing from municipal control large authorities which had previously been very successful—are something which the country is still rueing.

Mr. Wigley

Will the Minister consider with sympathy the need to amend the Act to allow water authorities not to have a completely uniform system of charging so that they may provide a rebate for pensioners and others on low incomes—a rebate similar to the rent or rate rebates which they would get through the local rates?

Mr. Howell

I understand that consideration, but it is not the Government's view that the service industries such as gas, electricty, Post Office and water should proceed in the same way as local authority services.

Mr. Rooker

Will my right hon. Friend reconsider the answer which he has just given to the hon. Member for Caernarvon (Mr. Wigley)? Is my right hon. Friend so out of touch with reality that he does not appreciate how vast has been the imposition of water rate increases as a result of their being taken off local domestic rates, so that pensioners and the low-paid are being hit very hard by the new charge? These people do not look at it in the way of gas and electricity services, as my right hon. Friend suggests. This is a charge which has been removed from an area in which they could get a rebate to one where they now cannot. Will my right hon. Friend reconsider his answer?

Mr. Howell

I shall not reconsider it because my hon. Friend is totally wrong. Water charges have never been subject to rate rebates, and there is therefore no change in this situation. I could understand my hon. Friend arguing that they ought to be, but the fact is that water charges were never included in ordinary local rate rebates.

Mr. Heseltine

Will the Minister tell us the difference in the number of people employed in the water industry now compared with the number before the reorganisation brought about by the Act, and when he tells the House that there has been practically no increase in the number of staff, will he admit that the real reason why water rates have risen is, first, wage inflation over the past four years, and, secondly, the vast increase in interest charges on the capital investment of the industry?

Mr. Howell

The hon. Gentleman is wrong about the effect of wages. It is a capital-intensive industry. I agree that one of the factors is interest charges. The recent increase of 9 per cent. on the basic rate of pay for workers in the industry will produce an increase in the water bill of less than 1 per cent. Wage increases in the water industry are not responsible for the considerable increase in prices.