HC Deb 06 February 1985 vol 72 cc935-6
17. Mr. Hicks

asked the Secretary of State for the Environment what has been the response of water authorities to the Government's decision to revise their financial targets in 1985–86; and if he will make a statement.

Mr. Gow

Mixed. If I should catch your eye tomorrow, Mr. Speaker, I hope to make a statement then.

Mr. Hicks

Can my hon. Friend explain the logic of the Government pursuing a strict anti-inflation policy and then deliberately imposing an increased scale of water charges on business and domestic consumers?

Mr. Gow

I understand my hon. Friend's point, but it is Government policy that a proper rate of return should be earned by assets in the public sector. As to the effect of inflation, a 1 per cent. increase in water charges would add one hundredth of 1 per cent. to the retail prices index. Mercifully, charges for water are a modest part of household budgets. Moreover, water charges are taken fully into account when calculating supplementary benefit, and 3 million households receive help in that way.

Mr. Harris

Will my hon. Friend think again, even at this late stage, as many of us do not see the logic of the Government's policy? What is more, many people outside will be angry when they receive their water rate bills in a couple of weeks' time.

Mr. Gow

I shall do my utmost to persuade my hon. Friend in the debate tomorrow.

Mr. Bermingham

Will the Minister come clean either now or tomorrow and admit that the Government are imposing a tax on users of water, whether private or industrial? There is a tax on gas and electricity for the benefit of the Government's coffers, and water authorities are now being used in exactly the same way.

Mr. Gow

I do not agree that the Government are imposing a tax on water. We are requiring a higher rate of return on assets owned by water authorities. A consequence of that higher rate of return will be higher investment and a reduction in borrowing. The latter is a central purpose of the Government's economic policy.

Several Hon. Members


Mr. Speaker

Order. We must move on, but in the debate tomorrow I shall bear in mind those hon. Members who wished to get in on this important question.

Mr. Winnick

On a point of order, Mr. Speaker.

Mr. Speaker

Order. Does the point of order arise out of questions?

Mr. Winnick

I cannot pretend that it does. If you cannot accept it now, Mr. Speaker, may I give notice that I intend to raise a point of order with you at the first opportunity?

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