HC Deb 02 February 1981 vol 998 cc9-10
9. Mr. Wigley

asked the Secretary of State for Wales when he next plans to meet the chairman of the Welsh Water authority to discuss the effect of Government policy on water charges.

Mr. Wyn Roberts

My right hon. Friend sees the charirman whenever necessary. He has no plans to do so in the immediate future. I addressed a meeting of the Welsh water authority on 18 November last, when I drew its attention to the need to employ its manpower and assets as efficiently and economically as possible.

Mr. Wigley

Is the Minister aware of the wide-scale concern in Wales about the reports last week of a 21.6 per cent. increase in water rates for the coming financial year? Does he agree that, in view of the proposals put forward by the authority, and in view also of the effect that the end of equalisation will have on water charges—an enormous increase in costs—the Government should explore the sale of water from the Welsh authority to the Severn-Trent authority? If such proposals are put forward by the Welsh water authority, what will be the Government's attitude?

Mr. Roberts

The hon. Gentleman's question is premature, because the actual rate of increase has not yet been fixed by the Welsh water authority or by any other water authority that I know of. With regard to equalisation and the loss of it in Wales, the hon. Gentleman will be aware that the Government have taken some account of the loss of equalisation by fixing a lower target rate of return for the Welsh water authority next year than for the English water authorities. In fixing the target rate, and in allowing the Welsh water authority a longer time to achieve the 1¼ per cent. target rate required, it is estimated that the target that has been set will allow the authority to raise about £5 million less revenue in 1981–82 than if the English formula had been applied.

The question of charging commercial rates for the bulk transfer of water between authorities is one of a number of issues that are being considered in the context of the introduction of current cost accounting in the water industry.

Mr. Delwyn Williams

Is my hon. Friend aware that I am concerned about the 69 per cent. increase in the staffing of the Welsh water authority since 1975? Is my hon. Friend concerned about that, and what steps does he propose to take to make the authority face reality?

Mr. Roberts

I expressed my views to the authority on 18 November and, in drawing its attention to the need to make good use of manpower I said that I should return in the spring to discuss the progress that it had made.

Dr. Roger Thomas

Does the Minister agree that without the water equalisation charges and the setting of cash limits the charges in Wales for the coming year could be between 30 to 40 per cent. lower than they will have to be?

Mr. Roberts

As I explained in answer to an earlier question on the subject, while there is a loss as a result of no further orders being made under the equalisation Act, nevertheless the target set for the Welsh water authorities means that it will not have to raise the additional £5 million that would have been necessary if we had set it the same target over the same period as we are setting the English water authorities Account has been taken by the Government of the loss of money from equalisation.