Water Rates (Hansard, 27 February 1980)

§ 12. Mr. Parry
asked the Secretary of State for the Environment if he will seek to take powers to control proposed increases in water rates.

§ Mr. Fox
No, Sir.

§ Mr. Parry
Is the Minister aware that on Merseyside the proposed increases in water rates include 28 per cent. for Ellesmere Port, 25 per cent. for the Wirral, and 25 per cent. for Liverpool? These increases, with increases in the general rate of more than 50 per cent., and coupled with large increases in rents and gas and electricity charges, are knocking the consumer and the householder punch drunk. Do the Government have any genuine intention of trying to control inflation?

§ Mr. Fox
I shall restrict my observations to water charges. Of course, my right hon. Friend the Secretary of State is concerned about the increases and is to see one chairman of a water authority to discuss the high increases. However, much of what the water authorities have had to do relates to what happened before 3 May and to the unrealistic assumptions that they took last year. An example was the assumption that wage costs would be about 5 per cent., when the industry eventually had to settle for 16 per cent. That factor had a considerable bearing on the situation.

§ Mr. Chapman
Will my hon. Friend spell out most clearly that the main reason for the vast increases in water rates this year is to counter the deficit caused by the calculation last year based on wages rising by the 5 per cent. norm of the previous Government?

§ Mr. Fox
I thought that my hon. Friend would have realised that that was exactly what I was trying to say. It is apparent that in future I shall have to give longer rather than shorter answers. Of course, my hon. Friend is entirely right.

§ Mr. Straw
Is the Minister aware that in the North-West employers face massive increases in water charges for equipment which is connected with sprinklers and other fire-fighting equipment? Is the Minister willing to take this matter up with the chairman of the North-West water authority, because the increases represent a penalty on good employers?

§ Mr. Fox
The hon. Gentleman is a little late in the day. Some 40 other hon. Members have already corresponded with me about this. I am happy to say that already the authority has reduced the expected charge by some 50 per cent., and I hope that it is reconsidering even that.

§ Mr. Costain
Is my hon. Friend aware that the practice of the water companies of engaging in direct billing is rubbing salt in the wound and is causing great financial embarrassment to consumers? Cannot he do something to reduce the level of the charge?

§ Mr. Fox
Direct billing was well under way under the previous Administration, and it would have been wrong for us to prevent it when we came into office. The water authorities claim financial advantages for the system. My hon. Friend is clearly as concerned as we are about the matter. I can assure him that we are looking carefully at all the costs that the authorities are passing on to their consumers.

§ Mr. Denis Howell
Since the Conservatives did not support the Labour Government, either in the wages policy they were trying to pursue or in the 16 per cent. settlement for the water industry, why have they agreed to a settlement of 22 per cent., which most people regard as reasonable in comparison with awards to gas and electricity workers? As the Prime Minister said last week from the Dispatch Box that water bills are too high, what are the Government to do about them?

§ Mr. Fox
The right hon. Gentleman can hardly claim success when, under his Government, a 5 per cent. wage increase ended up as 16 per cent. The difference between our policy and that of the Labour Government is that we believe that wage increases are a matter for the employer —the National Water Council.