HC Deb 09 June 1986 vol 99 cc5-6
3. Mr. Rogers

asked the Secretary of State for Wales when he next proposes to meet the chairman of the Welsh water authority to discuss privatisation of the industry.

8. Mr. Barry Jones

asked the Secretary of State for Wales when he next proposes to meet the chairman of the Welsh water authority to discuss the privatisation of the industry.

Mr. Mark Robinson

My right hon. Friend and I met the chairman of the Welsh water authority on 25 March and I met him again on 20 May. We will continue to keep in close touch on water privatisation matters.

Mr. Rogers

As the Government have abolished the water equalisation grant and as there are now wide differences in water charges between England and Wales, what proposals does the Secretary of State have to alleviate the problems facing the Welsh people, or is he going to let them down, as he usually does?

Mr. Robinson

Charges for 1987 and 1988 will be set in the same way as for the current year, with the financial target order subject to parliamentary approval. In subsequent years, under privatisation, the licence charges will fall to the control of the independent regulator, known as the Director General of Water Services.

Mr. Jones

The water industry should not be the source of profit. Does the hon. Gentleman accept that, following the Chernobyl disaster, when north Wales was contaminated, we need water under public ownership so that immediate and cohesive action can be taken in response to any emergency? What is the likelihood of the Secretary of State for the Enrvironment hurrying through privatisation of water so that the Chancellor has the means to make tax cuts? Does the Minister agree that, before these measures go forward, they should be put to the people of Wales at a general election, when the hon. Gentleman will find that there is no mandate for these proposals?

Mr. Robinson

It comes as no surprise to me that the hon. Gentleman should try at the Dispatch Box to claim that profit is a bad thing and not to be commended. We believe that the water industry, like any industry, should be managed so that it can produce a profitable return, which of course helps investment.

Sir Anthony Meyer

What can my hon. Friend say to reassure those of my constituents who are worried that privatisation may mean that tariffs for the very large users will be reduced and tariffs for the small users will be correspondingly raised?

Mr. Robinson

Those matters can be controlled when the licence for the new water companies is drawn up. Those aspects will come under the protection of the Director General of Water Services.

Mr. Gwilym Jones

What consideration has been given to the water authorities' charging system after denationalisation in the light of the Green Paper on reform of rates?

Mr. Robinson

We are, of course, looking at that matter. We are considering also the question of a wider extension of metering. Recently, we issued a consultation paper on that aspect.

Mr. Gareth Wardell

When the hon. Gentleman next meets the chairman of the Welsh water authority, will he be able to give him an assurance that tidal, drinking and river water will be considerably improved in quality as a result of privatisation? Will the hon. Gentleman accept the recommendation of the Royal Commission on environmental pollution and the result of the confidential review of environmental policy by the central policy unit of the Department of the Environment, that the current polution control functions of the water authorities should be transferred and monitored by a new environmental inspectorate?

Mr. Robinson

We believe that under these proposals the water environment regime will be strengthened. For that reason, we recently issued "The Water Environment: the Next Steps", which is open to consultation. There is no question of environmental standards being changed under privatisation. They will be maintained, and, indeed, strengthened.

Mr. Grist

Is my hon. Friend able to say how my constituents, particularly my poorer constituents, will benefit from the denationalisation of water?

Mr. Robinson

By allowing the water authorities to go to the capital market, denationalisation will enable them to raise more funds for capital development. It will also encourage a more efficient water regime, which should lead to lower costs and charges.