HC Deb 29 October 1987 vol 121 cc434-5
1. Mr. Nellist

asked the Chancellor of the Exchequer what is his latest estimate of the likely proceeds to the Exchequer of the privatisation of water authorities in England and Wales.

The Financial Secretary to the Treasury (Mr. Norman Lamont)

While the Government regularly publish plans for total privatisation proceeds over the next three years, they never reveal estimates for individual privatisations.

Mr. Nellist

Given the inevitable collapse of share prices, thus prefacing the third world economic recession, what guarantees can the Minister give that the water industry will not go the same way as British Petroleum —undervalued and underpriced—and lead to a second massive flop in the Government's attempt at electoral bribery?

Mr. Lamont

My right hon. Friend the Chancellor recently described an Opposition Member as "the surviving dinosaur". I can see that that hon. Gentleman was not alone.

Mr. Nellist

Just answer the question.

Mr. Lamont

I will answer the question. Water is not due to be privatised for several years. I am confident that when that moment arrives we will obtain good value for the taxpayer. We intend to press ahead with our privatisation programme, especially with regard to the water industry. [Interruption.]

Mr. Speaker

Order. We have some very important questions on the Order Paper. We are not helped by interruptions from sedentary positions.

Mr. Butterfill

Will my right hon. Friend confirm that the Severn-Trent water authority, which includes Coventry, is one of the authorities most excitedly in favour of privatisation?

Mr. Lamont

My hon. Friend is quite right. It has been made clear that the management of the water authorities strongly support the Government's plans.

Mr. Henderson

Does the Minister have a reserve price valuation for the water industry? Does he agree that if in his estimation that price is not reached it would be in the best interests of the nation to withdraw from the sale of water?

Mr. Lamont

As yet, the main legislation with regard to the water industry has not gone through the House. It is due in the 1988–89 Session. In asking questions about the precise price of the flotation of the water indusdry the hon. Gentleman is, perhaps for the first time, being a little quick.

Mr. Harry Greenway

Does not the prospect of water privatisation offer the chance to millions of investors of share ownership which market uncertainty may have denied them in British Petroleum? Is this not an excellent prospect for the British people?

Mr. Lamont

My hon. Friend is quite right. There are good industrial arguments for its privatisation. It is abundantly clear that there is ample room for improvements in efficiency in the water industry.

Mr. Barry Jones

Will the Minister exempt Wales? The measure has no friends in Wales. It will be unpopular and it will not work. Will he understand that we need Wales to be exempted and that we need major investment for the creation of manufacturing jobs, not this charter for speculation?

Mr. Lamont

The answer is no. There has been a substantial increase in investment in the water industry. Under this Government it has gone up by over 30 per cent., whereas under the Labour Government it fell by 35 per cent.