OVERSEAS ACTIVITIES OF WATER AUTHORITIES AND STATUTORY WATER COMPANIES (Hansard, 4 May 1983)

§ Mr. Giles Shaw
I beg to move, That this House doth agree with the Lords in the said amendment.
This is a small amendment in discharge of a commitment that I gave in Committee. Without it water companies would not have the power to set up subsidiaries for the purposes of any overseas activities. We have now corrected that and the amendment will allow that power to be held.

§ Mr. Wigley
May I ask the Minister to clarify something that has arisen in Wales and, I believe, recently in the north east of England and in Northumberland? No doubt the price of water in both areas is just as contentious. The local water authorites have been moving towards the possibility of selling water overseas, notably to the Arab countries. I think that the Northumberland water authority has done the pioneering work and that Wales is looking into it. Will the amendment have any effect on the right of water authorities to negotiate direct sales? Is the Secretary of State's permission needed to go ahead with such sales?

§ Mr. Giles Shaw
I think the hon. Gentleman will recall that in Committee an undertaking was elicited from the Government that arrangements for water authorities to operate overseas would be scrutinised carefully by the Secretary of State and would require direct approval for certain types of investment overseas. The amendment refers purely to water companies and therefore the hon. Gentleman's point is not strictly relevant.

§ Mr. Giles Shaw
I beg to move, That this House doth agree with the Lords in the said amendment.
When the Bill was in the other place it was put to us that the consent procedures under clause 5(2) were an important protection both for private sector consultants, who should be safeguarded from unfair competition, and for consumers, who should not have to stand the risk of irresponsible, or perhaps unlucky, overseas activities by water authorities and water companies. The hon. Member for Caernarvon (Mr. Wigley) referred obliquely to that earlier.
The first draft of the guidance was produced to show how the Secretary of State would exercise his consent powers under the clause. The intention was to provide just those two forms of protection. The draft was placed in the Library and has been the subject of consultation with the water industry and the consulting engineers. A broad measure of agreement has now been reached on the final text of the guidance, which will be issued shortly.
It was also put to us that the guidance should be underpinned by statute, thus imposing a requirement on the Secretary of State to issue it and inhibiting frequent amendments to it. We accepted that point, and that is the purpose of the amendment.